California Leaders Respond to Report by Commission on Catastrophic Wildfire Cost and Recovery

Governor Gavin Newsom, Senate President pro Tempore Toni Atkins, and Speaker of the Assembly Anthony Rendon issued a joint statement after the release of the Commission on Catastrophic Wildfire Cost and Recovery’s draft report. California’s leaders reiterated their commitment to immediate decisive action to strengthen emergency response systems, mitigate wildfires, help achieve the state’s clean energy goals and support safe, reliable, and affordable power.

“The rise in catastrophic wildfires, fueled by climate change, is a direct threat to Californians. As the fifth largest economy in the world, California must have safe, reliable, and affordable power. This need for energy, however, must not endanger our state’s progress toward our clean energy goals,” read the statement.

The Commission on Catastrophic Wildfire Cost and Recovery, also known as the SB 901 Commission, was established as a result of ongoing and intensifying threat of wildfires caused by both utilities and climate change. The Commission was set up to hold public meetings and hear from the public and experts around the state in order to prepare a report of issues surrounding catastrophic wildfire costs and how best to reduce impact and damage from these events. Through their diligent work, the Commission submitted a draft report five weeks ahead of the July 1 deadline.

The state leaders proclaimed that they will pursue legislation to tackle the issues central to mitigating and preventing further catastrophe. They have committed to necessary improvements to our emergency response, firefighting systems, energy grid, and utility infrastructure to stabilize the energy market and utility deliverance. Legislative efforts will seek equitable resolution on the prudent manager standard, bridge financing, and allow cost recovery for electricity providers who act responsibly for the public’s best interest. However, Legislative leaders specifically rejected the idea of change inverse condemnation, the legal theory holding public utilities strictly liable for damage they caused by their activities or equipment. As such, it is likely that the legislature will continue to work on a Wildfire Fund and changes to procedure at the Public Utilities Commission to provide a timelier resolution as to whether utilities can pass the costs of fire damages on to their customers.

Insurance Commissioner Issues Notices on Insurance Expenses and Replacement Costs

This past Tuesday night while meeting with block captains and local officials in Santa Rosa, Insurance Commissioner Ricardo Lara issued two notices intended to assist survivors of the devastating 2017 North Bay Fires who are facing delays in rebuilding.

The Department of Insurance issued a notice to insurers requesting they extend additional living expense (ALE) coverage by a full year to survivors whose additional living expense benefits will expire within months. ALE coverage typically includes food and housing costs, furniture rental, relocation and storage, and extra transportation expenses while a home is uninhabitable. New state laws extended living expense coverage from 24 to 36 months but did not apply to survivors of the October 2017 fires that destroyed 5,300 homes and caused more than $12 billion in losses across five counties.

In response to receiving complaints from policyholders who chose to relocate, the Department issued a second notice requesting that insurers not deduct the land value when survivors who suffered a total loss choose to purchase a new home in a different location. California law allows those who suffer a total loss to utilize insurance to rebuild in the original location, rebuild in a new location, or to relocate to a replacement home. Many insurers deduct land costs, reducing the amount that a homeowner can receive, creating an additional complication.

Following the North Bay Fires in October 2017, Department staff met with more than 1,000 survivors, participated in many community meetings, and have received over 600 formal complaints resulting from the fires. Last year SB 894, AB 1800, and AB 1772 increased the 24-month mandatory ALE coverage period to a minimum of 36 months. However, the provisions became effective on September 21, 2018, meaning survivors of California’s 2017 wildfires do not benefit from the changes in law. It is interesting to note that the Commissioner issued these two notices as requests rather than directives.

CalChamber Provides Update on Select Job Killer Bills

Each year the California Chamber of Commerce releases a list of job killer bills to identify legislation that will decimate economic and job growth in California. The CalChamber tracks the bills throughout the rest of the legislative session and works to educate legislators about the serious consequences these bills will have on the state.

This week, leading up to the house of origin deadline, CalChamber made significant progress to remove two bills from that list and make the third a two-year bill. A fourth bill, which was a concern but not formally on the job killer list, was also made a two-year bill.

·     AB 673 (Carrillo) – JOB KILLER – The author amended out the new private right of action, so we removed our opposition and are now neutral on this bill.

·     AB 628 (Bonta) – JOB KILLER – Failed passage on Assembly floor 36-15.

·     SB 135 (Jackson) – JOB KILLER – Not taken up on floor/made into a two-year bill.

·     AB 555 (Gonzalez) – Not taken up on floor/made into a two-year bill. 

Governor Supports Legislation Suspending Horse Racing Licenses

In response to the increasing number of horse racing deaths in California, Governor Gavin Newsom announced support for SB 469 by Senator Bill Dodd that authorizes the California Horse Racing Board (CHRB) to suspend horse racing licenses to protect the health and safety of horses and riders. The announcement comes after the 26th horse death at Santa Anita Park.

“The recent horse fatalities in California are unacceptable,” said Governor Newsom. "We must hold the horse racing industry to account. If we can regulate horse race meets, we should have the authority to suspend licenses when animal or human welfare is at risk.”

In addition to supporting SB 469, the Governor also announced that his Administration has taken substantive regulatory actions through the CHRB in response to the recent horse deaths in the state. The Board has: 

·     Initiated special investigations into all fatalities at Santa Anita this year. Investigations are being conducted by a team of sworn CHRB investigators, an official veterinarian, and a safety steward.

·     Suspended authorization of 11 previously lawful corticosteroids and anti-inflammatory medications from being present in racehorses on race day at all tracks in California. 

·     Increased official veterinarian, safety steward, and investigator staffing at Santa Anita.

·     Proposed five regulatory packages to:

·     Eliminate use of the riding crop in racing, except in cases of emergency.

·     Require trainers maintain records of all veterinary medications, treatments, and procedures performed on a horse in their care (for purposes of CHRB inspections).

·     Make the Board’s existing Postmortem Examination Review a mandatory requirement for all trainers who have a horse die in their care. This is currently a voluntary program.

·     Prohibit use of bisphosphonates which is a class of drug that prevents loss of bone density.

·     Restrict the amount of anti-inflammatory medications that may be present in a horse’s body when working out at a CHRB-licensed facility.

·      A new regulation going into effect July 1 will greatly expand out-of-competition testing and provide a means for the Board to prosecute offenders who abuse prescribed medications.

Legislative Update

In a shortened week due to the Memorial Day holiday, the Senate and Assembly took up the rest of the bills introduced in their house that will be moving forward this year. Any remaining bills in their house of origin (Senate Bills in the Senate, Assembly Bills in the Assembly) will be considered two-year bills or dead. Here are the notable bills that were acted on this week:

Labor-related

AB 5 (Gonzalez) – Codifies the decision of the California Supreme Court in Dynamex Operations West, Inc. v. Superior Court of Los Angeles (Dynamex) that presumes a worker is an employee unless a hiring entity satisfies a three-factor test (ABC test), applies the ABC test to the Labor Code and Unemployment Insurance Code for instances when a definition of employee is not otherwise provided. Recent action: Passed the Assembly, 59-15.

AB 628 (Bonta) – Extends employment protections for obtaining counseling or specified services to victims of sexual harassment, and those employment protections to specified family members of the victims for taking time off from work to provide assistance to the victims when seeking relief or obtaining those services and counseling. Recent action: Failed passage in the Assembly, 36-15

AB 1296 (Gonzalez) – Establishes the Tax Recovery in the Underground Economy Criminal Enforcement (TRUE) Program in the Department of Justice (DOJ) to combat underground economic activities. Recent action: Passed the Assembly, 77-0.

AB 1303 (O’Donnell) – Specifies that the purpose of the California Career Technical Education Incentive Grant Program is to encourage, maintain, and strengthen the delivery of high-quality career technical education programs, and that, upon appropriation by the Legislature, $450,000,000 shall be made available for the program. Recent action: Passed the Assembly, 77-0.

AB 1677 (Weber) – Provides that an employer of customer service employees in a call center that intends to relocate from this state to a foreign country shall notify the Labor Commissioner (LC), pay penalties for failure to do so, and forfeit state grants, guaranteed-loans, and tax credits for five years. Recent action: Passed the Assembly, 54-20.

SB 135 (Jackson) – Reduces the employee threshold for the California Family Rights Act (CFRA) from 50 or more employees down to five or more, repeals the New Parent Leave Act (enacted in 2017) and instead expands the scope of CFRA in order to provide leave rights to more employees. Recent action: Moved to Inactive File.

SB 707 (Wieckowski) – Provides that if an employment or consumer arbitration requires the drafting party to pay fees and costs regarding the arbitration and those fees or costs are not paid within 30 days after the due date, then the drafting party is in material breach of the arbitration agreement, is in default of the arbitration, and waives its right to compel arbitration, and authorizes the employee or consumer to the arbitration agreement to compel arbitration or proceed in court; and requires the court to impose a monetary sanction on the drafting party in material breach of the arbitration agreement and authorizes the court to impose other sanctions on the drafting party. Recent action: Passed the Senate, 29-8.

SB 730 (Stern) – Creates, until January 1, 2025, a six-member Commission on Tech Equity and the Future of Work to research and understand the impact of technology and innovation on workers, the workplace, and the economy. Recent action: Passed the Senate, 38-0.

Insurance-related

AB 740 (Burke) – Establishes the California Catastrophic Wildfire Victims Fund to ensure that victims of catastrophic wildfires are compensated in a timely manner, to provide reimbursements to victims for a portion of those wildfire losses, and to avoid lengthy legal proceedings; requires an electrical corporation and its shareholders to annually set aside funding that would be used to reimburse the fund if the electrical corporation is determined to be responsible for a wildfire. Recent action: Passed the Assembly, 73-0.

SB 182 (Jackson) - Imposes certain fire hazard planning responsibilities on local governments and requires cities and counties to make specified findings on fire standards prior to permitting development in the very high fire hazard severity zone. Recent action: Passed the Senate, 27-9.

SB 534 (Bradford) – Requires each admitted insurer with premiums written equal to or in excess of $100,000,000 to submit to the Insurance Commissioner a report on its minority, women, LGBT, veteran, and disabled veteran-owned business procurement efforts. Costs are minor, likely less than $50,000 to revise California Department of Insurance’s Conflict of Interest Code regulations in order to codify the Insurance Diversity Task Force. Recent action: Passed the Senate, 32-1.

SB 638 (Allen) – Reduces the amount of insurance coverage that a landlord could demand from a tenant requesting to install an electric vehicle (EV) charging station on residential rental property. Senate Floor amendments on 5/24/19 clarify that when landlords have the option to require personal liability coverage related to an EV charging station, such coverage does not necessarily need to be in the form of “renter’s insurance” but must cover any property damage or personal injury proximately caused by the installation or operation of the EV charging station. Recent action: Passed the Senate, 34-0.

SB 740 (Mitchell) – Requires life insurers to use the U.S. Social Security Administration’s Death Master File to match deceased Social Security recipients with insureds on life insurance policies and requires insurers to attempt to locate and notify the beneficiary about the policy. Senate Floor amendments on 5/24/19 revise the scope of policies impacted by the bill and eliminate a provision that would have affected contracts purchased outside of California. Recent action: Passed the Senate, 38-0. 

Privacy-related

AB 25 (Chau) – Clarifies the definition of consumer under the California Consumer Privacy Act of 2018 (CCPA) to exempt a person's personal information (PI) only to the extent that their PI is collected and used solely within their employee role, or in similar roles within the employment context. Recent action: Passed the Assembly, 77-0.

AB 1130 (Levine) – Expands the definition of personal information as defined in California’s Data Breach Notification Law as it applies to both public agencies and businesses to include government-issued identification numbers and unique biometric data generated from measurements or technical analysis of human body characteristics, such as a fingerprint, retina, or iris image or other unique physical representation or digital representation of biometric data. Recent action: Passed the Assembly, 46-19.

AB 1366 (Gonzalez) – Extends until January 1, 2030, the prohibition upon the Public Utilities Commission, a department, an agency, or a political subdivision of the state from regulating VoIP and Internet Protocol enabled service. Recent action: Passed the Assembly, 64-6.

AB 1416 (Cooley) – Specifies that the obligations imposed on businesses by the California Consumer Privacy Act of 2018 (CCPA) shall not restrict a business's ability to comply with any rules or regulations adopted pursuant to and in furtherance of state or federal laws; provides that the obligations imposed on businesses by the CCPA shall not restrict a business's ability to provide a consumer's personal information (PI) to a government agency solely for the purposes of carrying out a government program. Recent action: Passed the Assembly, 47-17.

SB 749 (Durazo) – Prevents public entities from refusing to release specified public records of publicly funded private industry employers and subcontractors by asserting the “trade secret” exemption.

Senate Floor amendments on 5/23/19 clarify that the public records for purposes of this bill are records that are prepared, owned, used, or retained by a state or local agency. Recent action: Passed by the Senate, 21-9. 

Health-related

AB 387 (Gabriel) – Requires a physician and surgeon, beginning January 1, 2022, to discuss with the patient the opportunity to opt in to having the physician and surgeon indicate the purpose for a drug or device on the prescription when prescribing the drug or device. Recent action: Passed the Assembly, 53-18.

AB 414 (Bonta) – Require a California resident to ensure that the resident and the resident’s dependents are covered under minimum essential coverage for each month beginning after 2019. Recent action: Passed the Assembly, 55-18.

AB 1085 (McCarty) – Authorizes for inclusion of youth development activities, within the educational enrichment element, that promote healthy choices and behaviors in order to prevent and reduce substance use and improve school retention and performance. Recent action: Passed the Assembly, 78-0.

AB 1088 (Wood) – Provides that an individual who would otherwise be eligible for Medi-Cal benefits, but for the state’s contribution to their Medicare premium, would be eligible for Medi-Cal without a share of cost if they otherwise meet eligibility requirements, and authorizes the State Department of Health Care Services to implement this provision by provider bulletins or similar instructions until regulations, required by July 1, 2021, are adopted. Recent action: Passed the Assembly, 78-0.

AB 1246 (Limón) – Requires large group health insurance policies, except certain specialized health insurance policies, issued, amended, or renewed on or after July 1, 2020, to include coverage for medically necessary basic health care services and, to the extent the policy covers prescription drugs, coverage for medically necessary prescription drugs. Recent action: Passed the Assembly, 58-19.

AB 1494 (Aguiar-Curry) - Requires Medi-Cal reimbursement for telephonic services and a broader availability for telehealth services when provided by an enrolled community clinic during and within 90 days of the conclusion of a state of emergency. Recent action: Passed the Assembly, 77-0.

AB 1642 (Wood) – Requires the Department of Health Care Services (DHCS), in setting Medi-Cal managed care capitation rates, to take into account beneficiary access to Medi-Cal covered services, including travel times to receive services, the ability of a Medi-Cal managed care (MCMC) plan to comply with the time and distance requirements and appointment availability standards, and alternative access standards approved by DHCS. Recent action: Passed the Assembly, 67-2.

AB 1759 (Salas) – Requires the Office of Statewide Health Planning and Development (OSHPD), upon an appropriation for the purpose of increasing the health care workforce in rural and underserved areas, to allocate the funds for the support of programs that effect that purpose. Recent action: Passed the Assembly, 78-0.

SB 29 (Durazo) – Extends eligibility for full-scope Medi-Cal benefits, beginning January 1, 2020, to undocumented adults ages 19 to 25, inclusive, and 65 years and older, who are otherwise eligible for those benefits but for their immigration status. This bill requires the age of eligibility for full scope Medi-Cal for undocumented individuals be expanded to the age of 26 on January 1, 2021, and to increase one year of age every calendar year thereafter. Recent action: Passed the Senate, 24-11.

SB 65 (Pan) – Establishes the Affordable Care Access Plus Program to provide California residents with household incomes below 600% of the federal poverty level (which is $72,840 for an individual, $98,760 for a couple, or $150,600 for a family of four) financial assistance to afford individual health insurance coverage through Covered California. Recent action: Passed the Senate, 30-7. 

Business-related

AB 1288 (Cooley) - Requires the information captured by the track and trace program for reporting the movement of cannabis and cannabis products throughout the distribution chain to additionally include the date of retail sale to a customer and whether the sale is on the retail premises or by delivery. Recent action: Passed the Assembly, 77-0.

SB 655 (Roth) - Establishes the California State Board of Pharmacy (BOP) within the Department of Consumer Affairs (DCA) to administer and enforce the Pharmacy Law, increases the hours requirement for a pharmacy technician externship program, authorizes a reverse distributor to acquire a dangerous drug or device from a previously licensed source, updates renewal requirements for an advanced pharmacist recognition, requires licensing fees for government entities. Recent action: Passed the Senate, 38-0. 

Governance-related

AB 1486 (Ting) – Expands the definition of “local agency” to include sewer, water, utility, local and regional park districts, joint powers authorities, successor agencies to former redevelopment agencies, housing authorities, and other political subdivisions of this state that is empowered to acquire and hold real property, thereby requiring these entities to comply with these requirements for the disposal of surplus land. Recent action: Passed the Assembly, 53-20.

SB 468 (Jackson) – Establishes the California Tax Expenditure Review Board to determine the schedule for a comprehensive assessment of major tax expenditures programs to be conducted by the Legislative Analyst’s Office. Recent action: Passed the Senate, 27-9. 

Environment-related

AB 1080 (Gonzalez) – Declares that it is the policy goal of the state that by 2030 manufacturers and retailers of single-use packaging and products achieve a 75% reduction in the amount of waste generated. Recent action: Passed the Assembly, 42-13.

AB 1583 (Eggman) - Extends the sunset, from January 1, 2021 to January 1, 2031, on the California Alternative Energy and Transportation Financing Authority (CAEATFA) financial assistance in the form of a sales and use tax exclusion, and CalRecycle's Recycling Market Development Zone (RMDZ) Loan Program to encourage California-based recycling businesses that prevent, reduce or recycle recovered waste materials through value-added processing or manufacturing. Recent action: Passed the Assembly, 78-0.

SB 54 (Allen) – Requires the Department of Resources Recycling and Recovery (CalRecycle) to adopt regulations that would require manufacturers and retailers of single-use packaging or priority single-use plastic products to source reduce those products and ensure that those products are recyclable or compostable. Recent action: Passed the Senate, 28-8