Biannual financial culling surprisingly tame: Most priority city bills pass off suspense file

Aug 17, 2022

Sudden death. Unceremonious end. Abrupt conclusion. None of those time-honored words truly applied to city priorities during last week’s annual legislative culling, the suspense file. Although over 200 bills were shelved for the year, most made it through the marathon appropriations hearings, including priority measures related to the CARE Court Program, organic waste recycling, and catalytic converter theft.

The League of California Cities scored several crucial wins during the process, such as securing amendments to two contentious transportation bills, and the passage of two sponsored bills: AB 1985 (Robert Rivas) and AB 662 (Rodriguez). AB 1985 would help cities with their organic waste requirements and AB 662 would provide better mental health care for first responders.

However, a handful of bills with positive effects for cities were held and some bills with negative effects passed off suspense. A bill that would alter local housing plans, AB 2011 (Wicks), has moved to the Senate floor for a vote, as did AB 1951 (Grayson), a tax exemption bill that could result in a significant revenue loss for local governments.

Led by the Senate and Assembly appropriations committees, the suspense file is one of the final hurdles for legislation expected to incur major financial costs. Once a measure is referred to the suspense file, the committees vote on whether to pass it to the floor for a vote or hold it on suspense, killing the bill.

Both houses have until Aug. 31 to pass any remaining bills and Gov. Gavin Newsom has until Sept. 30 to sign or veto any bills that reach his desk. Below is a breakdown of the top bills that made off suspense — and the few that met a grisly end.

Housing, Community, and Economic Development

Addressing California’s persistent housing supply and affordability crisis is a top priority for Cal Cities, many legislators, and the Governor. However, despite passing dozens of housing and local land use bills over the past few years, lawmakers are advancing dozens more, creating even more hurdles for cities still implementing newly enacted laws.

The most notable measures approved by the appropriations committees are AB 2011 (Wicks) and SB 6 (Caballero).  AB 2011 would require nearly all cities to ministerially approve certain affordable housing and mixed-use housing developments in areas primarily zoned for office, retail, or parking, regardless of any inconsistency with a local government’s general plan, specific plan, zoning ordinance, or regulation. 

Cal Cities has worked closely with the author’s staff to address cities’ concerns. Unfortunately, Cal Cities remains opposed to AB 2011 as the measure continues to overlook existing housing plans, bypass public engagement, and allow developers to build housing on parcels that may have never been considered for that type of development.

SB 6 also seeks to streamline the housing approval process for developments in office, retail, and parking zones. One key difference is that SB 6 would still allow the California Environmental Quality Act (CEQA) to apply, thus ensuring public review and input. Cal Cities has an oppose unless amended position on this measure. Cal Cities is seeking amendments that exclude zones not suitable for housing, such as surface mining or hog farms, limit the process to infill areas, and better align SB 6 with the existing streamlined application procedures.

Other priority bills include:

  • AB 2234 (Rivas, Robert) Planning and zoning: housing: postentitlement phase permits.
    Cal Cities Position: Oppose unless Amended (Status: Passed)

Transportation, Communications, and Public Works

Cal Cities has already scored two key transportation victories this year. Most of the remaining priority bills were significantly amended during the appropriations hearings to address Cal Cities’ concerns. 

The most notable measure is SB 932 (Portantino), a large, unfunded mandate that would require cities to adopt significant and costly bicycle, pedestrian, and traffic calming elements in their general plans. Earlier iterations of the bill included a new private right of action that would have created legal risks for cities, which was ultimately removed.

Although these new amendments are a step in the right direction, Cal Cities remains opposed unless amended to the bill. Cal Cities is seeking changes that would protect local flexibility and provide a funding source.

Cal Cities also secured critical amendments to AB 2953 (Salas), a bill that would require local agencies to allow the use of recycled materials in local streets and roads projects. The new language protects local flexibility and prevents potential cost pressures by exempting cities based on population instead of annual revenue, which allowed Cal Cities to move to a neutral position.

A parking violations forgiveness bill, AB 1685 (Bryan), also advanced off of suspense and now awaits action on the Senate floor. Cal Cities has an opposed unless amended position and is seeking changes that would provide state funding for implementation and backfill lost revenues for cities.

Community Services

Several key behavioral health measures with positive impacts for cities passed out of Assembly Appropriations. The high-profile SB 1338 (Umberg), which would create the new Community Assistance, Recovery, and Empowerment (CARE) Court program, is headed to the Assembly floor with a series of new clarifying amendments. Cal Cities has a support if amended position on this measure and is seeking changes to clarify cities' involvement in the development of CARE plans.

Several key measures included in Sen. Susan Eggman's behavioral health legislative package also passed off suspense. These measures focus on better coordinating existing systems and increasing access to statewide data about the behavioral health care system to ensure tangible results. These Cal Cities-supported measures include:

  • SB 929 (Eggman) Community Mental Health Services: Data Collection

    Cal Cities Position: Support (Status: Passed)

  • SB 970 (Eggman) Mental Health Services Act
    Cal Cities Position: Support (Status: Passed)

  • SB 1035 (Eggman) Mental Health Services: Assisted Outpatient Treatment
    Cal Cities Position: Support (Status: Passed) 
  • SB 1227 (Eggman) Involuntary Commitment: Intensive Treatment
    Cal Cities Position: Support (Status: Passed) 

However, one of the measures included in this package was held in the Assembly Appropriations Committee and will not move forward this year. The Cal Cities-supported SB 1154 (Eggman) would have developed a real-time database to facilitate the identification and designation of facilities for treating individuals experiencing mental health or substance use disorders. Cal Cities will continue to support efforts to create this type of database in the future.

Other priority bills include:

  • SB 513 (Hertzberg) Homeless and Domestic Violence Shelters Grants: Pets and Veterinary Services
    Cal Cities Position: Support (Status: Held)

Environmental Quality

Cal Cities’ co-sponsored bill, AB 1985 (Robert Rivas), passed off the suspense file and is now headed to the full Senate for a final vote. The measure would give cities an additional two years to comply with SB 1383’s (Lara, 2016) procurement requirements.

Unfortunately, SB 833 (Dodd), was held in committee. The measure would have created a grant program for cities to develop energy resiliency plans. This is the second time in two years that this bill has been held in the Assembly Appropriations Committee. Cal Cities will continue to fight for resources that create more resiliency during energy shortages and shutoffs.

SB 867 (Laird), which would require San Francisco Bay and Pacific Ocean facing cities to develop an approved sea level plan by 2033, passed off the suspense file with significant amendments. Cal Cities, along with the California State Association of Counties (CSAC), expressed concerns about the potential costs and timelines associated with the bill, which the new amendments go a long way to ameliorate. Cal Cities and CSAC are now neutral on the bill and thank Sen. John Laird for listening to local government concerns.

Other priority bills include:

  • AB 2142 (Gabriel) Income taxes: exclusion: turf replacement water conservation program
    Cal Cities Position: Support (Status: Passed)
  • AB 2247 (Bloom) Perfluoroalkyl and polyfluoroalkyl substances (PFAS) and PFAS products and product components: publicly accessible data collection interface
    Cal Cities Position: Support (Status: Passed)
  • AB 2440 (Irwin) Responsible Battery Recycling Act of 2022
    Cal Cities Position: Support (Status: Passed)

Public Safety

Another Cal Cities-sponsored measure, AB 662 (Rodriguez), made it off of the suspense file. This measure would require the California State Fire Marshal to develop and deliver a curriculum for peer-to-peer suicide prevention programming for firefighters and emergency medical personnel. This life-saving measure would be truly beneficial for first responders and the communities they serve.

Additionally, AB 1740 (Muratsuchi) and SB 1087 (Gonzalez) are also making their way to the floor for their final votes. These measures aim to address the statewide increase in catalytic converter theft by increasing record-keeping and transparency for all related transactions. Cal Cities supports both measures. Unfortunately, a similar measure, AB 2407 (O'Donnell), was held in the committee.

AB 1014 (McCarty) and SB 1186 (Wiener), which make changes to cannabis delivery and how local jurisdictions can regulate these products, also made it through. Cal Cities opposes both measures.

Lastly, SB 1000 (Becker), which was opposed by Cal Cities, was held on suspense. This measure would have required all law enforcement agencies to decrypt their radio communications to allow for public access. This would have created significant cost and logistical challenges for police agencies by contradicting a directive from the California Department of Justice regarding radio encryption.

Governance, Transparency, and Labor Relations

The Cal Cities-opposed SB 1127 (Atkins) continues to move through the legislative process with minor changes and remains problematic for local governments. The measure would fundamentally alter longstanding rules and timeframes for determining eligibility for workers’ compensation claims. The bill would reduce the timeline for employers to make a decision about covering a claimed injury, but it does not harmonize any of the other statutes and regulations, which could prevent employers from complying with the new abbreviated timeline.

AB 1751 (Daly) also moved off the Senate suspense file with few changes. The bill would extend the sunset date on the existing workers’ compensation presumption for COVID-19 by two years to Jan. 1, 2025. Cal Cities is opposed to this measure unless it is amended to extend the presumption for only one year.

Cal Cities also opposes unless amended SB 931 (Leyva), which passed out of the Assembly Appropriations with some positive amendments for cities. SB 931 would create new financial penalties for violating a section of the Government Code that governs employer actions and union membership. Recent amendments would now make the penalties based on the public agency’s budget, the severity of the violation, and prior violations.

However, the attorney’s fees would only be awarded to the labor representatives as the prevailing party. Cal Cities is seeking amendments that would equitably provide attorney’s fees and costs to either prevailing party, including the employer.

Other priority bills include:

  • SB 1131 (Newman) Address confidentiality: public entity employees and contractors
    Cal Cities Position: Support (Status: Passed)

Revenue and Taxation

The appropriations committees approved several tax-related measures with significant fiscal impacts against the backdrop of a record state budget. Although the $308 billion budget contained money for several key priorities, it missed the opportunity to invest in several shared priorities. Lawmakers also approved bills with new spending not allocated for in the budget, potentially setting the stage for last-minute financial brawls.  

AB 1951 (Grayson), which Cal Cities opposes, would expand the existing partial sales and use tax exemption for the manufacturing and research and development of tangible personal property. The bill would also make it a full exemption, including any local voter-approved transaction and use taxes, for five years. This measure would result in a drastic revenue loss for local governments.

The Cal Cities-supported SB 843 (Glazer) also passed off suspense. This measure makes strides towards providing financial relief to 2.4 million low- and middle-income Californians via a renter’s tax credit. The measure now requires the state to do an in-depth needs assessment for consideration in future state budgets.

Other priority bills include:

  • SB 1449 (Caballero) Office of Planning and Research: grant program: annexation of unincorporated areas
    Cal Cities Position: Support (Status: Passed)
  • AB 2622 (Mullin) Sales and use taxes: exemptions: California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project: transit buses
    Cal Cities Position: Support (Status: Passed)
  • AB 2887 (Garcia) Public resources: Sales and Use Tax Law: exclusions
    Cal Cities Position: Opposed Unless Amended (Status: Passed)

What’s next?

The legislative fight is far from over. The bills that passed off suspense will now go to the floor for a vote and potentially, to the Governor’s desk for his approval or veto.

As the legislative session progresses, updated sample letters and action alerts will be available in the Cal Cities Action Center. It is critical that the Legislature hears from California cities about how bills will affect communities, and cities are urged to submit position letters on these important measures.

Additional updates will be provided in Cal Cities Advocate or through the regional public affairs team.