Gov. Jerry Brown signed the budget into law on Wednesday, June 27 and finished activity on all trailer bills by Thursday, June 28. Details on the major budget appropriations and initial round of trailer bills were published in CA Cities Advocate
on June 15
Of interest to cities, this package contains several housing and economic development-related measures, including AB 1827, which places the No Place Like Home Act of 2018 on the November 2018 ballot, SB 856, which appropriates the state’s Greenhouse Gas Reduction Fund revenues, SB 871, which extends the existing $300 million film tax credit by five years, and AB 1838, which would pre-empt the ability of cities and other local agencies from levying any new tax, fee or assessment on groceries and soda for 12 years.
Significant activity also occurred related to several deals negotiated in order to pull measures from the ballot. Please see the League’s legislative trailer bills deal story “Legislative Deals Struck Prior to Deadline to Pull Ballot Measures
Trailer Bills of Significant Interest to Cities
These bills enact statutory changes to implement budget appropriations. Each of these bills have been passed by the Legislature and signed by the Governor. Detailed descriptions of the key provisions for cities are outlined below.
AB 1827 (Budget) — No Place Like Home
This trailer bill enacts the No Place Like Home Act of 2018 and provides for submission of the act to the voters at the Nov. 6, 2018 statewide general election. The voters are being asked to ratify the No Place Like Home program, which proposes to fund the construction of 10,000 housing units available for the homeless and mentally ill, as being consistent with and in furtherance of the Mental Health Services Act.
AB 1838 (Budget) — Local Governments Prohibition of Taxation on Groceries
AB 1838 is a comprise trailer bill deal that was supported by major soda corporations to remove the Tax Fairness and Accountability Act measure from the ballot. This proposal preempts the ability of cities and other local agencies from levying any new tax, fee or assessment on groceries and soda for twelve years.
The League submitted an oppose letter
on AB 1838 because of a provision that would withhold all sales taxes if a charter city, or their voters, exercise their existing constitutional right to address their municipal affairs.
On June 28, the Governor signed AB 1838 and subsequently the Tax Fairness and Accountability Act measure was removed from the ballot.
SB 856 (Committee on Budget and Fiscal Review) — Greenhouse Gas Reduction Fund and Proposition 56 Revenue Allocations
SB 856 appropriates a $1.4 billion GGRF expenditure plan for FY 2018-19.
As with previous expenditure plans, 60 percent of the Cap-and-Trade revenues in the Greenhouse Gas Reduction Fund (GGRF) will automatically be spent on continuous appropriations for High Speed Rail, the Affordable Housing and Sustainable Communities program, the Transit and Intercity Rail Capital program, and Low Carbon Transit Operations. The remaining 40 percent of GGRF funds are appropriated annually each year to numerous state agencies and grant programs.
Cities and other local governments are eligible for a number of GGRF-funded programs. In fact, the League has worked all year to secure additional GGRF funding for local fire prepositioning, waste diversion, the Transformative Climate Communities program, and the Beacon Program operated by the Institute for Local Government (ILG).
Some of the highlights for local governments of the $1.4 billion expenditure plan include:
- Local Fire Response — $25 million to the Governor’s Office of Emergency Services (CalOES) for local fire response to be used for procurement and maintenance of fire engines and support of the California Fire and Rescue Mutual Aid System.
- Waste Diversion — $25 million to CalRecycle for waste diversion, which fund infrastructure grants to help meet new organic waste diversion rules and address declining recycling markets.
- Transformative Climate Communities — $40 million to the Strategic Growth Council for the Transformative Climate Communities program, which fund grants for neighborhood-level innovative projects that reduce GHG emissions in the most disadvantaged communities.
- Urban Greening — $20 million to the Natural Resources Agency for urban greening grant program.
- Urban Forestry — $5 million to CAL FIRE for urban forestry grant program.
- Beacon — $2 million to the Strategic Growth Council for technical assistance to disadvantaged communities, including $1 million for which ILG is eligible for the Beacon Program.
- Healthy Forests — $160 million to CAL FIRE for healthy and resilient forests programs and projects primarily in or adjacent to state responsibility areas.
- Of this, $155 million may be used for grants to local governments, Fire Safe Councils, certified local conservation corps, qualified nonprofits for programs and projects primarily in or adjacent to state responsibility areas. It also includes funding for inspections by CAL FIRE and local fire departments for compliance with defensible space requirements around habitable structures in or near state responsibility areas and in Very High Fire Severity Zones. At least 10 percent of these funds must be granted to cities, counties, or special districts.
- Forest Carbon Plan — $50 million to begin implementing the Administration’s Forest Carbon Plan
- $30 million to CAL FIRE for prescribed fire and other fuel reduction projects.
- $20 million to the Natural Resources Agency for grants to expand the Sierra Nevada Conservancy’s Watershed Improvement Program model to additional regions for vegetation management, healthy forests, prescribed burns, or other fuel treatment and forested watershed projects.
- Low-Income Energy Efficiency — $10 million to the Department of Community Services and Development for low-income solar and multi-family weatherization programs, including at least $2 million for farmworker housing.
The chart below contains the full $1.4 billion GGRF expenditure plan:
SB 871 (Committee on Budget and Fiscal Review) Film Production Tax Credit
This bill extends the existing film production tax credit at $330 million annually for five years from Jan. 1, 2020, through the end of FY 2024-2025. Tax credits of 20 percent or 25 percent of qualified expenditures are offered for the production of a qualified motion picture in this state, with additional credit amounts allowed for productions that return to California, and for original photography occurring outside the Los Angeles zone, as specified.
SB 855 (Committee on Budget and Fiscal Review) Tax Credits: CalCompetes, Hiring, EITC
This bill extends and expands various state tax credit programs, as follows:
Other Trailer Bills
- Extends the California Competes Tax Credit Program, which provides incentives for employers to grow and retain high-wage jobs, until Jan. 1, 2030, and authorizes annual allocations of $180 million in credits until FY 2022-23. Contains additional modifications to the program.
- Extends the existing state Hiring Tax Credit program, which offers tax credits to employers hiring individuals facing hiring challenges in various census tracts, until Jan. 1, 2026.
- Increases the amount of the state’s Earned Income Tax Credit (EITC) and expands its application to additional individuals.
- Removes the sunset date of Jan. 1, 2019, for the program which authorizes the Franchise Tax Board (FTB) and local governments to enter into data exchange agreements with the object of improving collection of applicable state and local taxes.
Each of these bills have passed and been signed by the Governor.
AB 1808 (Budget) Education
This omnibus trailer bill makes changes to early childhood education and K-12 education administration.
AB 1809 (Budget) Higher Education
This higher education trailer bill makes changes to the University of California, California State University and California Community College systems. It also includes a one-time $10 million allocation to expand mental health services and training to community colleges.
AB 1810 (Budget) Health
This omnibus health trailer bill makes technical and clarifying statutory changes to the administration of health care and health care services. Several provisions, however, were included in this measure of particular interest to cities:
AB 1811 (Budget) Human Services
- Eliminating the sunset extension for needle exchange programs;
- Setting an application fee for certification to perform lead-related construction work in public and residential buildings; and
- Authorizes pre-trial diversion program for individuals with certain mental disorders alleged to have committed a misdemeanor or felony offense.
This omnibus human services trailer bill makes a number of changes to the CalWORKs program, Home Safe Program, and child welfare systems, and includes the following provisions:
AB 1812 (Budget) Public Safety
- Increases the daily rate for CalWORKs temporary homeless assistance from $65 to $85 per day for shelter for families up to four members. With additional family members at $15 each, the maximum allowable rate will be $145. County welfare departments have authority to increase these amounts to secure additional bed space needed by the family.
- Increases CalWORKs grants by 10 percent commencing April 1, 2019.
- Requires group homes to develop protocols designed to limit the frequency of law enforcement involvement arising out of incidents at group homes and other licensed residential facilities providing care for dependent children.
This public safety omnibus trailer bill that makes technical changes to Department of Corrections and Rehabilitation administration processes and the juvenile justice reform system, which include:
SB 847 (Budget) — Courts
- Allowing youths committed to the Division of Juvenile Justice on or after July 1, 2018, who would previously have been sentenced for up to seven years, to be released from custody in two years, or at age 23, whichever is later, unless an order for further detention has been made by a committing court.
- Establishing an innovation grant program to develop law enforcement trainings to reduce officer-involved shootings.
This court related omnibus trailer bill that makes technical and clarifying changes to the court system.
SB 849 (Budget) — Proposition 56 Medi-Cal Physicians and Dentists Loan Repayment Act Program
This bill makes technical and clarifying changes to heath related programs including:
SB 866 (Budget) — General Government (Civil Service)
- providing loan assistance payments to qualifying, recent graduate physicians and dentists that serve beneficiaries of existing health care programs; and
- authorizing a medical-dental integration pilot program for Medi-Cal beneficiaries in San Mateo County as part of the Medi-Cal 2020 demonstration project.
This bill authorizes the Department of Human Resources to provide training programs to any public employee or officer so that the quality of service rendered by those persons may be continually improved.
Other Ballot Related Legislation
The Governor signed the following bills into law on June 28 as part of legislative deals related to ballot measures.
AB 375 (Chau) Internet Privacy and Collection of Personal Information
This bill will give consumers the right to control their personal information or data collected by companies using or providing internet services and allow them to hold a company accountable for information that is compromised due to a data breach.
AB 807 (Chu) — Elimination of Daylight Savings Time
AB 807 (Chu) will give California voters the choice to ratify the repeal of daylight savings time on the November ballot.
Trailer Bills Still to be Acted On
When the Legislature adjourned on Thursday, there were two remaining trailer bills to be acted on. Action on these trailer bills could take place over the next several weeks.
AB 1823/SB 857 (Budget) — In-home Supportive Services
This bill makes technical and clarifying changes to the In-Home Supportive Services program.
AB 1836/SB 870 (Budget) — 911 Fee
This trailer bill has necessary statutory and technical changes related to public safety. This bill also requires a monthly surcharge of between $0.20 to $0.80 per phone line to fund current 911 system operations.