Loading...
HomeMy WebLinkAbout12 LEGISLATIVE UPDATEDocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 ,. AGENDA REPORT s� Agenda Item 12 Reviewed: DS ?ZB City Manager Finance Director N/A MEETING DATE: FEBRUARY 20, 2024 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: NICOLE BERNARD, ACTING CITY MANAGER SUBJECT: LEGISLATIVE UPDATE SUMMARY: Recap of 2023 Legislative activities by the City's advocacy consultant Townsend Public Affairs (TPA), consideration of 2024 Legislative Platform and updates on legislative activity at the state and federal level. RECOMMENDATION: 1. Adopt 2024 Legislative Platform 2. Receive and file legislative update prepared by TPA FISCAL IMPACT: Not applicable. DISCUSSION: 2023 Legislative Activities TPA has prepared a presentation with a recap of the 2023 Legislative session. 2024 Legislative Platform Each year, the City prepares a Legislative Platform that is designed to do the following: - Provide direction to the City's legislative delegation on priorities, projects and principles of the City Council - Allows staff and TPA to identify priority bills being discussed in Sacramento to create a targeted outreach plan DocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 Agenda Report — Legislative Update February 20, 2024 Page 2 - Allows staff and TPA to act quickly on priority issues being discussed in Sacramento The Legislative Platform includes guiding principles that give broad direction to staff and TPA when considering legislative issues: - Preserve Local Control - Promote Fiscal Stability - Support Funding Opportunities The Legislative Platform also includes more specific statements in various policy areas such as: - Local Governance - Economic Development - Land Use Planning and Housing - Parks and Recreation - Public Works - Water Quality and Water Supply - Human Resources and Risk Management - Public Safety Each City department was given time to review and recommend modifications to the draft Legislative Platform prior to City Council consideration. Adoption of the Legislative Platform does not mean that staff and TPA will focus solely on bills or issues that fall within the Legislative Platform, nor does it mean that TPA will not continually seek the City's input or positions on specific legislation. Staff and TPA will continue to keep the City Council apprised of legislation and proposals (whether specifically addressed by the Legislative Platform or not), and TPA will continue to seek input from the City as legislation of legislative proposals are discussed. DocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 Agenda Report — Legislative Update February 20, 2024 Page 3 Legislative Update TPA has created a summary of state legislative activity for the month of January that also includes updates on the Governor's budget proposal and previews the 2024 Legislative session. Attachments: - Draft 2024 Legislative Platform - TPA January 2024 update DocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 CITY OF TUSTIN 2024 LEGISLATIVE PLATFORM The Mayor and City Manager are authorized to submit advocacy letters on behalf of the City if the proposed clearly follows the City's adopted legislative platform. PURPOSE The City of Tustin's 2024 Legislative Platform confirms the City Council's position on current issues with the potential to directly or indirectly impact the City, thereby establishing guidelines to actively pursue pending legislation through monitoring and communications activities. Below are the Guiding Principles and Policy Statements that will allow City staff to address 2024 legislative and regulatory issues in a timely manner, without precluding the consideration of additional legislative and budget issues that may arise during the legislative session. GUIDING PRINCIPLES I. PRESERVE LOCAL CONTROL Preserve and protect the City's powers, duties and prerogatives to enact local legislation and policy direction concerning local affairs and oppose legislation that preempts local authority. Local agencies should preserve authority and accountability for land use planning, revenues raised and services provided. PROMOTE FISCAL STABILITY Support measures that promote fiscal stability, predictability, financial independence, and preserve the City's revenue base and maximum local control over local government budgeting. Oppose measures that shift local funds to the County, State or Federal Governments and/or make cities more dependent on the County, State or Federal Governments for financial stability, such as unfunded mandates or mandated costs with no guarantee of local reimbursement or offsetting benefits. III. SUPPORT FUNDING OPPORTUNITIES Support opportunities that allow the City to compete for its fair share of regional, state and federal funding. Support funding for programs including, but not limited to economic development such as infrastructure investment and housing, transportation projects including road resurfacing, bicycle and pedestrian safety, multi -modal transportation systems and transit -oriented development, air quality, water quality and local water reliability, parks and recreation, historic preservation, natural resources, hazard mitigation, public safety, public health and disaster recovery. DocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 POLICY STATEMENTS Local Governance 1. Oppose state or federal efforts to "borrow" local revenues and encourage the state to find other methods of balancing its budget. 2. Support local government action, rather than the imposition of state, federal or regional mandates upon local governments, as well as federal mandates placed on the state. 3. Support maximum flexibility for local government in contracting and contract negotiations. 4. Support open government initiatives as well as the principles of the open meetings provisions of the Ralph M. Brown Act at all levels of government. 5. Support legislation that facilitates the flexibility of local governments to share resources to increase efficiencies and decrease costs. 6. Support legislation that preserves the ability of local governments to determine the appropriate type of election and representation for their jurisdiction. 7. Oppose and monitor efforts to increase City contribution costs to CalPERS. 8. Support the reimbursement of local governments for disaster related expenses, including the need for essential public safety service overtime, personal protective equipment, public health response and small business relief. 9. Support and monitor efforts to increase the City's ability to recover payment related fees from customers. 10. Support efforts to provide local legislative bodies with additional flexibilities regarding remote meetings and Ralph M. Brown Act requirements. 11.Oppose policies that would increase the voter threshold for local revenue measures or would increase the potential for litigation over local taxes and fees. 12.Oppose efforts to de -localize the redistricting process. 13.Oppose efforts to further erode local control over permitting and enforcement of street vending. 1► DocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 Economic Development 14. Support international, statewide, regional, and local efforts to attract, retain and provide resources for current and future commercial and industrial businesses. 15. Support policies and programs that encourage working with other cities, counties and government agencies to jointly leverage resources and assets to create and strengthen economic clusters within the region. 16. Support economic development initiatives that preserve and enhance a positive business climate and maintain and grow the business tax base. 17. Support policies and initiatives that will facilitate development of City owned property, including Tustin Legacy and Pacific Center East. Oppose policies and initiatives that run counter. Land Use Planning and Housing 18.Oppose legislation, proposals, or regulations that impose regional, state, or federal growth development or land use planning standards within the City without the City's direct input. 19.Oppose legislation, proposals, or regulations that penalize local governments for noncompliance with their housing element or regional housing needs assessment requirements. 20. Support efforts to provide flexibility to local governments as well as resources for local governments to allow them to submit compliant housing elements and complete the required rezoning. 21. Support housing measures that promote the development and enhancement of safe and affordable housing and accessible housing within the City for all economic segments of the population, while retaining local control. 22. Monitor local, state, and federal actions related to medical and recreational marijuana regulatory changes. 23. Support local control over the licensure and regulation of alcoholism or drug abuse recovery or treatment facilities. 24.Oppose legislation that would erode local control over City owned property, including Tustin Legacy and Pacific Center East. 25. Support proposals that provide funding or tools to preserve historic neighborhoods and structures. 3 DocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 26.Oppose proposals that increase requirements and place undue burdens on the City with regard to the Surplus Land Act. 27.Oppose efforts that require the City to ministerially approve housing development projects without adequate input from local agencies or a robust public engagement process. Parks and Recreation 28.Oppose efforts that erode funding for vital regional and community services that negatively impact resident access to parks, open space, bike lanes and bike ways, after school programming, senior services and facilities that promote physical activity and protect natural resources. 29. Support efforts that strengthen policies to fund parks, open space acquisitions, bike lanes, and active transportation opportunities. 30. Promote local agency control over policies that recognize the benefits of parks and recreation facilities. 31. Support efforts to increase funding, accessibility and programs for seniors. 32. Support policies that foster the creation and sustenance of public art initiatives. Public Works 33. Support increased state and federal funding of transportation improvements with regional or sub -regional benefits for all modes of transportation. 34. Support protection of dedicated transportation -related tax revenues and enhance the ability of local agencies to finance local transportation programs and facilities. 35. Support all efforts to create efficiencies within the California Environmental Quality Act (CEQA). 36. Support measures and reforms which streamline the CEQA process for the development of housing and mixed -use infill projects that support transit. 37. Support legislation that allows local governments to continue to retain full authority to reject projects or to condition project approvals and impose mitigation measures. 38. Support efforts to facilitate public -private partnerships to complete development projects. 39.Oppose efforts to remove City representation on regional boards that oversee water, drainage and/or sewage. M DocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 40. Support efforts that fund broadband infrastructure. 41. Support efforts that assist the City in meeting its waste and recycling mandates and adding flexibility to comply with state regulations. Water Quality and Water Supply 42. Support and monitor legislation that increases the availability of, and funding for, water conservation, water reuse technologies, water recycling, local water storage and other water supply technologies such as the Groundwater Replenishment System project. 43. Support the enhancement of a reliable and sustainable water supply for California as well as measures that improve water quality in the region. 44. Monitor the development of a state framework for long term water conservation measures. 45. Support policy development, funding and research for water conservation, addressing urban runoff and beach closures and required programs associated with Orange County National Pollutant Discharge Elimination System (NPDES) permits. 46. Support efforts to address long term water resiliency and affordability without implementing a statewide water tax. 47.Oppose efforts that restrict or eliminate local permitting and enforcement of water quality measures. 48.Oppose efforts that unilaterally reduces the indoor water use standards without the input of local and regional stakeholders. Human Resources and Risk Management 49.Oppose measures that reduce local control over employee relations issues or mandate new or enhanced local government employee benefits. 50. Support pension reform measures designed to (i) control or decrease employer liability, or (ii) increase transparency in reporting, without imposing undue hardships or administrative burdens on local government. 51.Oppose redundant or unnecessary proposals (legislation or policies) that require excessive human resources burdens without sufficient reimbursement. 5 DocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 Public Safety 52. Support measures that encourage community safety and well-being including those which support state and federal reimbursement of homeland security related expenses. 53.Oppose legislation that places burdensome restrictions on law enforcement and limits their ability to protect public safety. 54.Oppose legislative attempts at early release of incarcerated prisoners and measures that would further de -criminalize non-violent offenses. 55. Support funding for local mitigation efforts related to Proposition 47 (The Reduced Penalties for Some Crimes Initiative — 2014) and Proposition 57 (The Public Safety and Rehabilitation Act — 2016) 56. Support initiatives involving county, state, and federal governments to reduce and prevent homelessness in Orange County. 57. Support measures that provide funding and local resources for wildfire fire prevention, suppression, and mitigation. 58. Support local control over adult entertainment facilities, alcohol establishments and properties where illegal drugs are sold. 59. Support local control for the regulation of cultivation, storage, manufacture, transport and use of medicinal and recreational marijuana and monitor legislative and administration activity to create a regulatory structure for medical and adult use. 60. Support legislation increasing resources and local authority for abatement of public vandalism, especially graffiti. 61. Support regional and state proposals to increase funding for locally operated homeless shelters. 62.Oppose efforts to limit the City's ability to enforce parking rules and regulations and recover the costs of implementation and maintenance. 63. Support efforts that add de-energization to the conditions that constitute a state and local emergency. 64.Oppose efforts that change the public safety personnel certification framework and subject the City to additional litigation. L DocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 65. Support efforts to address loud noise vehicles by providing public safety officers with resources to enforce state laws and local ordinances. 66. Support legislation that deters the distribution, sales, and consumption of controlled substances. 7 DocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 TOWNSEND TPA MEMORANDUM To: City of Tustin From: Townsend Public Affairs Date: February 6, 2024 Subject: January 2024 Monthly Report The State Legislature returned from interim recess on January 3 to begin the second year of the 2023-24 legislative session. As it is the second year of a two-year session, those bills that did not progress in the previous session and were marked as "2-Year Bills" had the opportunity to progress at the behest of their authors by the end of January. Critical issues on the forefront of Member's minds include matters such as housing affordability, climate change initiatives, disaster preparedness, and education reforms. Legislative trends that have emerged for 2024 include governing the deployment of artificial intelligence, Proposition 47 reform and theft prevention, and electric bicycle and firearm safety. New bills will continue to trickle in until the February 16 bill introduction deadline, which marks the final day for new bill vehicles. As always, Members will have the opportunity to amend or "gut and amend" existing bills into entirely new policies throughout the session, so long as their progress adheres to the 72-hour in print rule. Additionally, the month of January also included the release of the Governor Newsom's Proposed Budget for the 2024-25 fiscal year. The Proposed Budget, released on January 10, includes an estimated $37.9 billion budget shortfall. The Governor stated that the shortfall can be attributed to two main factors; the substantial decline in the stock market that drove down revenues in 2022 and the unprecedented delay in critical income tax collections. Below is an overview of pertinent legislative actions taken during the month of January. Governor Newsom Announces 2024-24 Proposed Budget On January 10, Governor Newsom released his 2024-25 State Budget. The Proposed Budget includes an estimated $37.9 billion budget shortfall. According to the Governor, the shortfall can be attributed to two main factors; the substantial decline in the stock market that drove down revenues in 2022 and the unprecedented delay in critical income tax collections. (NOTE: The Governor's shortfall estimate is significantly lower than the Legislative Analyst's estimate of $68 billion primarily due to differing accounting measures and more optimistic revenue estimates.) Last year, due to the unprecedented tax deadline delays, the majority of the State's revenues did not arrive until October and November of 2023. This means that the revision of the State's spending plan that typically would come as part of last year's May Revision is instead being made in the January 2024 proposed budget release. (� Pagel DocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 In June 2023, the State passed a budget that planned accordingly, setting aside record reserves of just under $38 billion. Now, the State faces a budget that must solve last year's shortfall while adjusting State spending to ensure continued fiscal stability for years to come. While the budget proposal includes various spending reductions and deferrals, it is important to note that the budget situation will continue to evolve over the next few months before its enactment. The Governor's proposal will be updated in May to reflect changes to tax returns, inflationary pressures, and federal monetary policy that could result in additional spending cuts or the restoration of spending programs. Looking forward, in late January, the Legislature's budget subcommittees will begin their hearings, reviewing and recommending changes to the proposed budget. After a few months of the Legislature's budget hearings, the Governor must present a revised budget by May 14 based on updated revenue estimates. After negotiations between the Governor and the Legislature, the Legislature's deadline to pass a balanced budget is June 15 and the Governor needs to approve a final 2024-25 spending plan before the new budget year beginning July 1. Assembly and Senate Hold Budget Committee Hearings On January 23, both the Assembly and Senate held their respective Budget Committee hearings. In both hearings Chief Deputy Director of the Department of Finance Erika Li and Legislative Analyst Gabriel Patek presented to the Committee members their perspectives and recommendations on the upcoming budget. Ms. Li laid out the basis for the Administration's deficit estimate and discussed broadly the Governor's solutions to the budget problem. Mr. Patek commented that, while the Governor's budget estimates are potentially accurate, his office believes that the revenue assumptions are quite optimistic and therefore the Legislature may need to find more solutions than the Governor has thus far outlined. Both presenters agreed on two points. First, that the State has done a relatively good job in building its reserve funds to address what may be a minor recession in the State's economy. Second, that it is likely that there will be budget deficits in the out years beyond this coming fiscal year and the Legislature must keep in mind that ongoing solutions could be in order. Most members of each Committee took time to ask clarifying questions from the presenters, as well as to discuss their priorities for the upcoming budget. Each Committee Char spoke of the many upcoming budget subcommittee hearings at which the work of compiling the balanced budget will take place. Legislation Update In January, legislators introduced many new bills, and will continue to introduce new bills until the February 16 bill introduction deadline, which marks the final day for new bill vehicles. Anticipations suggest that the Legislature will align with recent trends, introducing close to 2,000 new proposals in the ongoing session. (� Page 2 DocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 Notable introductions include the following: BILL SUMMARY/STATUS Would no longer limit the jurisdictional rules for theft crimes to criminal actions brought by the Attorney General, which would allow for the cross - AB 1779 (Irwin) jurisdictional prosecution of theft crimes that occur in more than one location. Status: Pending Policy Committee Referral Authorizes administrative office space to be utilized for the purpose of AB 1801 providing supportive housing to individuals experiencing homelessness. Jackson Status: Pending a hearing date in the Assembly Housing and Community Development Committee Authorizes a developer that submits a preliminary application for a housing AB 1820 development project to request a preliminary fee and exaction estimate, to Schiavo which a local government has up to 10 business days to comply. Status: Pending Policy Committee Referral Adds a wildlife connectivity element requirement to a city or county's AB 1889 general plan under the current Planning and Zoning law, by January 1, (Friedman) 2025. Status: Pending Policy Committee Referral Requires prior to any hearings are held on a measure that would affect an electrical corporation, a request will be made to the University of California AB 1912 Berkeley (UCB) to conduct a report regarding the measure. Additionally, (Pacheco) this measure requires UCB to develop and implement conflict of interest provisions. Status: Pending Policy Committee Referral Existing law defines the crime of burglary to include entering a vehicle when the doors are locked with the intent to commit grand or petit larceny or a felony. This bill makes forcibly entering a vehicle, as defined, with the intent SB 905 to commit a theft therein a crime punishable by imprisonment in a county Wiener jail for a period not to exceed one year or imprisonment in a county jail for 16 months, or 2 or 3 years. Status: Pending Policy Committee Referral States the intent of the legislature to authorize the Metropolitan Transportation Commission to propose a revenue measure to the voters in SB 925 its jurisdiction to fund the operation, expansion, and transformation of the Wiener San Francisco Bay area's public transportation system, as well as other transportation improvements. Status: Pending Policy Committee Referral (� Page 3 DocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 Requires Caltrans to make physical improvements like new crosswalks and SB 960 curb extensions on state-owned surface streets. Wiener Status: Pending Policy Committee Referral Requires all new vehicles sold in California to install speed governors, smart devices that automatically limit the vehicle's speed to 10 miles above the SB 961 legal limit. Additionally, this measure requires side underride guards on Wiener trucks. Status: Pending Policy Committee Referral Assembly Members Introduce Healthy Environment Constitutional Amendment On January 25, Assembly Members Bryan, Kalra and Muratsuchi introduced ACA 16, a resolution to amend the California Constitution that would enshrine the people's right to clean air and water and a healthy environment. The measure is coauthored by Assembly Members Friedman, Jackson, Lee, McKinnor, and Valencia as well as Senators Limon and Stern. If enacted, this measure could have significant impacts on all levels of government as it could essentially become a legal guarantee that all residents of California never be exposed to anything but a healthy environment — and if a resident is exposed to anything unhealthy, the government(s) with jurisdiction could be found liable for that exposure. This could open substantial courses of litigation and costs a variety of governmental entities. As with all proposed Constitutional amendments it must pass both houses of the Legislature with two-thirds votes and then is placed on the statewide ballot. The Governor has no involvement and therefore cannot veto if passed by the Legislature. It is unclear whether the authors of the measure intend to move forward with it or if it has the support of leadership in either house. AB 205 (2022) Repeal Efforts Assembly Bill 205 (2022), signed into law in June 2022, directs the California Public Utilities Commission (CPUC) to develop an income -graduated fixed charge to improve affordability and speed up electrification, and to look into more flexible rates that will encourage use of cheaper and cleaner energy. Specifically, AB 205 makes changes to the way utility taxes are applied by establishing a fixed charge based on income, not energy usage. This measure does not legislate an increase, rather, the CPUC is tasked with implementing this new utility rate application through the regulatory process. In June 2023, a CPUC administrative judge issued a ruling stating that the earliest the income -graduated fixed charge will be implemented in customer rates is the end of 2026. Various IOU companies are in the process of formulating their own utility proposals based on their service area, with the direction of the new policy to lower the average electricity rates for all customers, and then create an income bracket escalator that would be incorporated into residential bills each month. The goal of the Administration and the Legislature with this proposal was to effectively price energy to kickstart a transition away from fossil fuels. Many in the energy space view current (� Page 4 DocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 electricity rates as not tracking with reality or economic theory. The actual cost of adding one more kWh of electricity to the grid is much less than the per -kWh rate that is charged, which to some means the state is using too little electricity with too little pricing flexibility. The Administration says this causes too much gas demand and fluctuations of dirty electricity usage during times of peak demand. The basic idea behind the fixed charge is that if a utility collects more revenue in fixed charges, then it can offer lower per -kWh rates. Lower rates would then encourage electrification. The three investor -owned utilities collaborated on a joint proposal to implement the income escalator rate program. They suggest a substantial fixed charge that will lower rates by an average of 37%. To adjust the fixed charge by income, they specify four income levels. These use the federal poverty level as a benchmark to align with the guidelines for CARE and FERA discounts. Of note is that the federal poverty level benchmark does not include cost of living considerations from county to county, which would be different if it utilized something like AMI. Below is an overview of this proposal: Ineome Criteria ` PG&E S1)G&L SCE Rracket IGFC TGFC TGFC ($/month) (S{nionth) (tmonth) Average Fixed Charge 1 CARF (< 100% FPL) All Other CAREIFERA $53 $74 S49 SI5 15 $ 4 $30 $34 S20 3 Non-CARF/FERA <= 650% M, 51 $73 51 4 Non-C R -TERA >6501 o FPL W $128 SS5 Additionally, there are many other stakeholders engaging on this topic. Environmental groups argue that the IOU joint proposal doesn't go far enough to charge high -income earners their fair share. The solar industry, which relies on high electricity rates to justify the expense of installing rooftop solar, wants to shift toward time -differentiated rates to encourage flexible demand. Other groups, including local agencies, advocate for ratepayers holding lower fixed rates with sizable rebates for electrifying by certain dates. While IOUS have not yet fully implemented these income escalator fixed rates, the Legislature can act this year to amend the policy if it wishes. Senate Committee on Insurance Hearing on the Sustainable Insurance Strategy On January 24, the Senate Committee on Insurance, Chaired by Senator Susan Rubio, held an oversight hearing regarding Sustainable Insurance Strategy (Strategy). The Committee received an update from the California Department of Insurance Commissioner Ricardo Lara on the Strategy. The Committee also provided Insurance Commissioner Lara with feedback on his (J Page 5 DocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 progress toward his stated goals in his California Sustainable Insurance Strategy and asked many questions regarding the plan. Specifically, the implementation of the regulations and timelines to date. Additionally, the Committee is focused on how the Strategy is benefiting and protecting consumers. Commissioner Lara's Strategy sets forth three primary goals: • Accessible Insurance for Californians: This goal emphasizes the importance of making insurance available and affordable, especially in high -risk areas affected by climate change. • Creating a Resilient Insurance Market: The strategy aims to fortify the insurance market's resilience in the face of climate change and economic fluctuations, ensuring it can effectively weather these challenges. • Protecting Communities from Climate Change: Implementing measures to shield communities from the devastating impacts of climate change, such as wildfires and other natural disasters, is a paramount objective. Supreme Court Agrees to Consider Homeless Encampment Case In mid -January, the nation's high court agreed to review an appeal of a recent federal appellate court ruling holding the City of Grants Pass, Oregon, which prohibited local governments from fining or prosecuting people for camping on public property when there are no alternative shelters available. City of Grants Pass v. Johnson is one of the most significant cases involving the rights of homeless individuals to be taken up by the Supreme Court in recent decades and could have huge ramifications on the processes by which Western states approach the homelessness crisis. A Ninth Circuit Court of Appeals panel on September 28, 2022 ruled in favor of plaintiffs Gloria Johnson and John Logan in the class action against the City of Grants Pass. Johnson and Logan contend the City's ordinances amount to cruel and unusual punishment. City of Grants Pass officials enacted five ordinances against camping on public property including anti -sleeping, anti - camping and park -exclusion rules that levy fines of several hundred dollars for each violation and enable the city to bar violators from all city properties upon repeat offenses. Ultimately, a divided panel for the U.S. Court of Appeals for the Ninth Circuit agreed that the ordinances violated the Eighth Amendment, which prohibits cruel and unusual punishment if the local population of unhoused people was larger than the capacity of homeless shelters. The outcome of the decision brought together an unusual coalition of liberal and conservative leaders, including Governor Newsom, the San Francisco Mayor, and conservative Arizona legislators. In September, the Governor filed an amicus brief urging the Court to clarify that state and local governments can take reasonable actions to address the homelessness crisis creating health and safety dangers for individuals living in encampments and California's communities. The Supreme Court is expected to hear arguments in April, with a decision expected by the early summer. (� Page 6 DocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 Supreme Court Hears Case on Impact Fees Earlier this month, a dispute arising from a resident of Placerville over El Dorado County's imposition of $23,420 in impact fees rose to the highest court in the state. The legal saga began in 2016 when George Sheetz built a small, manufactured home on a vacant tract in the city of Placerville. The County imposed a development impact fee of over $20,000 which Mr. Sheetz paid before launching a lawsuit against the County for violation of property rights. Specifically, the lawsuit alleged that the county failed to prove that the impact fee accurately reflected the impact his project would have on the surrounding local infrastructure. Instead, the County should have completed a thorough, property -specific inspection and analysis of the local impacts to justify the fee. The State courts ultimately ruled against him, citing the decades -old California law that permits local governments to charge fees to builders for "costs attributable to the increased demand for public facilities reasonably related to the development project." Justice Elena Duarte, who presided over the initial case, iterated that the fee leveraged by the County was "imposed pursuant to a legislatively authorized fee program that generally applies to all new development projects within the County." However, upon appeal, the case rose to the ranks of the U.S. Supreme Court, which took up the issue on January 9. The plaintiff has since received support from various organizations and housing affordability advocates, including the California Building Industry Association and the National Association of Homebuilders. Ultimately, the outcome of the case will be incredibly consequential to how local governments can apply — and the steps they must take to justify — development impact fees. Local government advocates cite the potential for a dangerous decline in critical local revenues in a world with dwindling property taxes to subsidize infrastructure development, alongside the potential for permitting approval delays associated with the administratively burdensome fee justification process. Housing advocates, on the other hand, argue that impact fee reductions and transparency would eliminate cost barriers to build. A ruling is anticipated in February 2024. California Lawmakers — Including Governor Newsom — Focus on Addressing Retail Theft Crimes One of the early persistent themes of the 2024 legislative session has been reforming Proposition 47, a ballot measure that reclassified certain non-violent property crimes under $950 of damages from felonies to misdemeanors which was passed in 2014. Commercial burglary increased by 16% from 2019 to 2022 across California, according to the Public Policy Institute of California. A driving factor for this increase is the rise of organized retail crime. The acuity of the issue has caused a number of legislators to introduce measures aimed at reforming Prop 47 and its implications. On January 3, first day of the new legislative session, Assemblymember Carlos Villapudua introduced AB 1787, a referendum to address areas of (� Page 7 DocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 concern related to Prop 47. Similarly, Assembly member Kevin McCarty, the new Assembly Public Safety Committee Chair, introduced AB 1794, which also intends to make reforming measures to the Proposition. The Governor issued a statement proposing six ways the Legislature can crack down on theft, including expanding criminal penalties for those profiting on retail theft and auto burglaries. While it is unclear which Legislator(s) will carry this proposal in new bill vehicles, it does signal the Governor's willingness to act on the issue. In previous legislative sessions, proposals that sought to increase criminal penalties for crimes have failed passage, with many members of the progressive caucuses expressing concerns regarding the long-lasting impacts of higher incarceration rates. For instance, Assembly Member Mia Bonta and Assembly Member Isaac Bryan are both advocating for the Legislature to explore other solutions instead of making changes to a proposition that has been enacted for the last 10 years. Nevertheless, theft crime and Prop 47 reform measures will face their first policy committee hearings in February, which will offer insight into the priorities and actions of legislators. Congress was busy in January, first averting a government shutdown, continuing work on an ongoing border reform and immigration policy negotiations, and finally negotiating a bipartisan tax deal. The White House and executive agencies took crucial steps for electrical vehicles, aiming to accelerate charging station permits and provide tax incentives. Below is an overview of pertinent actions taken during the month of January. Lawmakers Agree to Temporarily Extend Government Funding On January 18, federal lawmakers avoided a government shutdown by passing a third continuing resolution (CR) to extend the previous fiscal year's funding for six more weeks. The CR continues to use House Speaker Mike Johnson's novel two-step funding approach, setting two new funding deadlines for different segments of the federal government. Under the newly passed CR a first wave of shutdowns would occur on March 1 and a second wave on March 8. Congressional leaders believe the six -week extension buys them more time to iron out the details of their previously announced topline spending agreement, and for Speaker Johnson to coalesce the House Republican Conference around full Fiscal year 2024 appropriations bills. A funding topline agreement was announced for each of the 12 spending measures on January 29. Appropriations subcommittee leaders can now negotiate the details of their annual government -funding bills. As lawmakers continue to move ahead on FY24 appropriations, the Fiscal Year 2025 budget and appropriations process is approaching with an anticipated release of the President's budget in early March to coincide with his State of the Union Address scheduled for March 7. (� Page 8 DocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 Border Deal and Ukraine Aid Progress Majority Leader Chuck Schumer, Minority Leader Mitch McConnell, Speaker Mike Johnson, and House Minority Leader Hakeem Jeffries, commonly known as the Big Four, met with President Biden on January 17 as he reiterated the importance of a national security supplemental spending package directed towards Ukraine, Israel, and Taiwan. That marked the first Big Four meeting with Rep. Johnson as the Speaker of the House. Ukraine aid has been supported in the past by the Congress, and there is still strong support in helping other U.S. allies. However additional aid has been delayed as immigration discussions briefly stalled. This placed a sense of urgency upon lead immigration negotiators Senator James Lankford, Senator Krysten Sinema, and Senator Chris Murphy. The final legislative text has not been published, but a small portion was sent to the Senate Appropriations Committee to estimate costs. Senator Susan Collins, Vice Chair of the committee, said funding will be more than the $14 billion that was requested by President Biden as negotiations are reaching the late stages. Majority Leader Schumer expects to announce the legislative text in the following days. Bipartisan Tax Deal Clears House Ways and Means Committee After its formal introduction, H.R. 7024 the Tax Relief for American Families and Workers Act of 2024 cleared the House Ways and Means committee 40-3 on January 19th after committee Chairman Rep. Jason Smith and Senate Finance chairman Ron Wyden announced a deal only two days prior. The $80 billion legislation would allocate $33 billion to Child Tax Credit (CTC) expansions and $33 billion in tax cuts for businesses that purchase heavy machinery or research and development projects. The remaining funds would go towards small tax relief initiatives included in H.R. 5863 the Federal Disaster Tax Relief Act, legislation cosponsored by Rep. Katie Porter (CA-47), Rep. Doug LaMalfa (CA-01), Rep. Julia Brownley (CA-26), Rep. Kevin Kiley (CA-03), Rep. Josh Harder (CA-09), Rep. Jim Costa (CA-21), Rep. Mike Thompson (CA-04) and Rep. Ted Lieu (CA-36). H.R. 7024 would be funded by eliminating the pandemic -era employee retention tax credit, offsetting $77 billion in policy costs. Multiple Democratic and Republican amendments were offered during the markup but all of them were rejected. New York Republicans advocated for a roll -back of President Trump -era state and local tax (SALT) deductions, and Democrats aimed to make the CTC fully refundable with monthly payments. House Leadership plans to put the legislation on the floor soon for a vote under suspension of the rules. Doing so will bypass attempts from lawmakers to add SALT amendments after failing to do so during the Ways and Means committee markup. A suspension vote neutralizes their opportunities to amend the bill as it evades a formal amendment procedure, however it requires two-thirds of the House to vote in favor of passing. Following the strong show of support in committee it is widely expected that the bipartisan measure will pass on the House Floor. (� Page 9 DocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 Department of Education Withholds Payments to Service Providers The Department of Education announced they are withholding payments to three student loan servicers to strengthen protections for student loan borrowers. Aidvantage, EdFinancial, and Nelnet did not send timely billing statements to a combined total of 758,000 borrowers for the first month of repayment putting the borrowers at risk of early penalties and fees. The Department is withholding payments of a total of $2 million from Aidvantage, $161,000 from EdFinancial, and $13,000 from Nelnet. These totals are reflective of the amounts that impacted borrowers. The Department of Education also directed each servicer to place affected borrowers into administrative forbearance until the issues were resolved borrowers will not owe payments and any accrued interest will be adjusted to zero until the challenges have been resolved. Department Of Treasury and IRS Releases Clean Vehicle Charging Guidance The Biden Administration and the IRS released additional guidance providing clarity on eligibility for tax incentives to install electric vehicle charging stations and other alternative fuel refueling stations. The Alternative Fuel Vehicle Refueling Property Credit (30C) is an incentive that provides a credit for up to 30% of the cost of a qualified alternative fuel vehicle refueling facility placed in service by the taxpayer. The credit is limited to $100,000 for business property, and $1,000 for personal property, and can be claimed for home electric vehicle charging and other refueling equipment and by businesses. Biden Administrations Proposes Bank Overdraft Fee Limits The Consumer Financial Protection Bureau (CFPB) announced a proposed rule to limit bank overdraft fees. According to a CFPB report, banks made $9 billion in overdraft fees in 2022 thus sparking the needed regulation and consumer protections. Under the proposed rule, large financial institutions can either charge a flat overdraft fee or provide the same overdraft protections that credit cards and other loan providers do. The agency has not decided on the flat fee rate, but it is reported to be between $3 and $14. The new rule would apply to institutions with more than $10 billion in assets which includes 175 banks and credit unions. The CFPB said they expect the rule to go into effect in October 2025. EPA To Publish Plan for EV Charging Station Permits The Environmental Protection Agency (EPA) published their plan to accelerate the permitting of electrical vehicle charging stations. The EPA will use the Department of Energy's categorical exclusions to quickly permit new charging stations, modifications, operations, and removals if needed. Categorical exclusions are decisions made for projects that do not harm the environment and can be used by other agencies. Although the announcement aims to accelerate the process, the EPA will ensure that a proposed charging station will not threaten the environment, release hazardous substances, or require major expansions of waste storage or disposal. EPA Announces Grant to Tackle Air Pollution in Schools On January 11, the EPA announced a new grant opportunity with availability up to $32 million in effort to reduce indoor air pollution. The funding opportunity is a subset of the EPA's Grant (� Page 10 DocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 Funding to Address Indoor Air Pollution at Schools Program which is funded through the Inflation Reduction Act. Between four and six schools will be awarded a $5 to $8 million grant over five years. Nonprofit organizations, state governments, and other eligible entities with experience administering indoor air quality programs are encouraged to apply. The deadline to apply for the competitive grants is March 19, 2024. EPA estimates that the grants will be awarded by fall 2024. Department Of Labor December Jobs Report In January, the Department of Labor released their monthly jobs report. It shows 216,000 jobs were created in December, keeping the unemployment rate under 3.7%. The overall job creation statistic was greater than the anticipated 160,000 that experts predicted. The key takeaway by experts is the current unemployment percentage has consistently been under 4% and is close to pre -pandemic rates which was 3.5% providing evidence that the job market is stabilizing. Despite the surprise showing in the report, analysts predict the Federal Reserve will cut rates in 2024 due to the market slowing. (� Page 11