As the final week of the 2019 Legislative session draws to a close, there are a number of significant bills that remain outstanding.

SB 1 (Atkins): Environmental Protections

We want to thank each of our members who made phone calls and wrote letters to their representatives on SB 1.  Your engagement is valuable!

After many discussions between the Pro Tem and the Governor’s office, SB 1 was amended late Tuesday evening to address some, but not all, of our concerns.  The most significant amendment is a very subtle, but critical change in verbiage from “shall” to “may” in the Endangered Species act session. This change allows Fish and Game to consider applying previous standards to species it chooses to list as endangered under the CA Endangered Species Act.  Previous versions of the bill required Fish and Game to apply the previous standards, which would have nullified any new biological opinions.

Late last week, the bill was amended to include language that would have thrown out a recently negotiated regulation relating to the definition of  “Waters of the State” which would have had implications for agriculture, water, and construction industries with regard to “dredge and fill” activities. These last-minute amendments were removed and the agreed-upon regulation will stand.

Unfortunately, the amendments do not remove the section of the bill that applies the California Endangered Species Act to the operations of the Central Valley Project.  If SB 1 becomes law, this provision could throw the federal government into litigation with the state and possibly jeopardize negotiations on the Voluntary Agreements.

While the current version of the bill is a significant improvement from previous versions, we are urging the Legislature to oppose SB 1 at this time.

In the past week, a number of state and federal representatives have publicly raised concerns about and opposition to SB 1.

Senator Hurtado and Senator Caballero sent a letter to the Pro Tem asking her to make SB 1 a two-year bill.  In a follow-up column in the Modesto Bee, Senator Caballero writes that “they [SB 1 proponents] want to roll back the science to rely on one outdated version that calls for greatly increased surface water being diverted to the Delta.” Both Senators signaled that they will be forced to vote no on SB 1 without substantial amendments.

Similarly, Reps. TJ Cox and Jim Costa sent a letter and penned an op-ed in the Fresno Bee.

Assembly Member Adam Gray made his opinion clear in an editorial for the publication CalMatters.

A coalition of 11 Democrat Assembly members sent a letter to the Pro Tem urging her to accept amendments.

AB 5 (Gonzalez): Independent Contractors

The Senate approved AB 5 (Gonzalez) after a very long floor debate, including Republicans offering amendments to carve out exemptions for certain industries and professions.  The bill passed on a party-line vote of 29-11.  The bill now moves to the Assembly, where it is expected to pass and then be signed by the Governor.  During the debate, several Democrat members brought up the concern with owner-operator truckers classified as employees and expressed the need to continue this discussion to provide further exemptions.  CCM and others are following up with these members to see if there is a path forward next session.

SB 54 (Allen)/AB 1080 (Gonzalez): Packaging Mandates

AB 1080 and SB 54 mandate a statewide 75 percent reduction of the waste generated from single-use packaging and priority single-use products through source reduction (less packaging), recycling or composting by Jan. 1, 2030.

If the legislation is approved by the Legislature and signed by Governor Newsom, producers, defined as under the definition of producer, one that manufactures, sells or offers for sale the single-use packaging or product in California will be subject to new requirements.

The bills had over 200 amendments in the past week in an attempt to address stakeholder concerns, however, significant challenges remain in the bills.  For example, new amendments extend the reduction requirements to all types of packaging materials, not just plastic materials.

Additionally, the bills now require producers of single-use packaging to ensure that the packaging offered for sale, sold, distributed or imported into California is recyclable or compostable by Jan. 1, 2030, thereby placing liability and penalties (up to $50,000 per day) on producers. Again, the definition of producers includes a business that sells the single-use packaging which is a gross expansion of the previous definition.

Notwithstanding the practical concerns with implementation challenges and costs, we argue that the bills should be held over until next year given the extensive, final-hour revisions.

SB 559 (Hurtado) Funding for Friant-Kern Canal Fix

Unfortunately, efforts to secure State funds to address damages to the Friant-Kern canal were unsuccessful this year.  SB 559 and subsequent budget requests were not approved, however, the Central Valley Caucus has indicated their eagerness to continue pushing for funding in next year’s budget.

CCM commends Senator Hurtado and the Central Valley Caucus for their work to bring this issue to the attention of the Administration and the Legislature.  SB 559 enjoyed bipartisan and bicameral support, which, speaking optimistically, is indicative of future opportunities.  We look forward to continuing these efforts with the Friant Water Authority and other partners.

You can read our joint coalition statement here:  SB 559 Joint Coalition Letter

A lot can happen before Friday at 11:59 p.m.  We will provide another update in next week’s Market Memo.  If you have questions, please contact CCM Director of Government Affairs Alyssa Houtby.