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Governor Signs the Budget, Legislature Continues Work on Trailer Bills

Cannabis Trailer Bill Approved; Housing and Homeless Trailer Bills in Print

July 1, 2019
Gov. Gavin Newsom formally adopted the budget, AB 74, on June 27.
 
Following its adoption, a series of trailer bills have been making their way to the floors of both the Senate and the Assembly. Among the trailer bill items approved last week was the cannabis trailer bill, AB 97, with key provisions related to provisional licensing, local equity grants, and penalties against unlicensed cannabis activity. The League released a detailed analysis of the first round of trailer bills two weeks ago.
 
Upon adjournment last Thursday, the Legislature released its housing and homelessness trailer bill, AB 101/SB 102. Language regarding the Governor’s utility wildfire liability bill, AB 1054, was also released late last Thursday and will require a two-thirds vote. Although budget trailer bills are not confined to a specific timeline for approval, both of these bills are expected to be voted on before the end of next week. The League is currently analyzing the contents of those measures and will be releasing a follow-up story this week.
 
Below is a list of trailer bills and their respective analyses that have been approved by the Legislature and are pending a signature by the Governor. Detailed descriptions of the key provisions of interest to cities, where applicable, are outlined below.

SB 75 (Enrolled) — Education Finance: Education Omnibus Budget Trailer Bill
 
This is the K-12 and Early Education Omnibus trailer bill which contains various statutory changes necessary to implement the 2019–20 budget. This bill appropriates funding for education programs totaling approximately $1.2 billion. Specifically, the bill:
  • Provides $300 million in one-time General Fund for the Full-Day Kindergarten Facilities Grant program.
  • Changes the eligibility requirements for the state preschool program to provide priority access to full-day state preschool program slots to income eligible families with a need for full-day care with remaining full-day slots available for other income eligible families.
  • Requires the Secretary of the Health and Human Services, in concurrence with the executive director of the State Board of Education to contract for research to create a Master Plan to ensure comprehensive and affordable child care and universal preschool.
  • Establishes the Early Learning and Care Infrastructure Grant Program to provide grants to child care and early education providers to build new facilities, or retrofit, renovate, or expand existing facilities. This bill would appropriate $142.7 million to be expended over five years in equal amounts per year in addition to $102.3 in federal funds appropriated through the budget act for this program.
  • Establishes the Early Learning and Care Workforce Development Grant Program to expand the number of qualified early learning and care professionals and increase education credentials for existing professionals. Appropriates $195 million for this program to be expended over five years in equal amounts per year.  
SB 78 (Enrolled) — Health
 
This trailer bill is an omnibus health trailer bill which makes statutory revisions affecting health programs. In brief, the bill:
  • Creates the Minimum Essential Coverage Individual Mandate to require an individual who is a California resident to ensure that the individual, and any spouse or dependent of the individual, is enrolled in and maintains minimum essential health care coverage for each month beginning on and after Jan. 1, 2020.
    • Requires the California Health Benefit Exchange (Covered California) to grant exemptions from the mandate for reason of hardship or religious conscience, and would require Covered California to establish a process for determining eligibility for an exemption.
    • Imposes the Individual Shared Responsibility Penalty for the failure to maintain minimum essential coverage, as determined and collected by the Franchise Tax Board, in collaboration with Covered California.
  • Establishes a program within the Health Benefit Exchange (Covered California) to provide state subsidies to assist individuals with incomes under 600 percent of the federal poverty level (FPL) afford health insurance.
  • Implements several grant programs to local health jurisdictions, with no less than 50 percent of the funding being provided to community-based organizations. These grants will be related to the prevention of sexually transmitted diseases, human immunodeficiency virus (HIV), and hepatitis C.
  • Creates a Value-Based Payments program to provide supplemental incentive payments to Medi-Cal providers to meet metrics related to behavioral health integration, chronic disease management, prenatal and postpartum care, and early childhood preventive services.
  • Extends the availability of $50 million in funding for the Health Home Program (HHP) until July 1, 2024.
    • The HHP is designed to serve eligible Medi-Cal beneficiaries with complex medical needs and chronic conditions who may benefit from a full range of physical health, behavioral health, and community-based long-term services and supports needed by eligible beneficiaries.  
SB 79 (Enrolled) — Mental Health
 
This trailer bill makes necessary changes to implement the 2019–20 budget related to mental health programs administered by the Mental Health Services Oversight and Accountability Commission. It allows a county to encumber Mental Health Services Act funds for innovative programs that provide local assistance for designated mental health programs so long as they are encumbered under the terms of the program plans or until three years after the date of approval. The bill also eliminates the prohibition on the use of state funds for early psychosis and mood disorder detection and intervention programs.
 
AB 97 (Enrolled) — Cannabis
 
This trailer bill contains statutory provisions related to cannabis which:
  • Extends the California Environmental Quality Act (CEQA) exemption through July 1, 2021:
    • Currently, CEQA does not apply to the adoption of an ordinance, rule, or regulation by a local jurisdiction that requires review and approval of permits, licenses, or other authorizations to engage in commercial cannabis activity.
  • Addresses provisional licenses:
    • Extends the repeal date for provisional licensing to Jan. 1, 2022.
    • Modifies the applicant requirements to provide evidence of compliance with local ordinances. These modifications include:
      • Requiring a provisional license to be valid for no more than 12 months from the date it was issued.
      • Requiring a licensing authority to include the outstanding items needed to qualify for an annual license if renewing a provisional license.
      • Authorizing a licensing authority to renew provisional licenses annually until the licensing authority issues or denies the provisional licensee’s annual license.
      • Authorizing a licensing authority to revoke or suspend a provisional license if the licensing authority determines the licensee failed to actively and diligently pursue requirements for an annual license.
      • Requiring a licensing authority to cancel a provisional license upon issuance of an annual license, denial of an annual license, abandonment of an application for licensure, or withdrawal of an application for licensure.
  • Addresses the Cannabis Appeals Panel statute:
    • The Medicinal and Adult Use Cannabis Regulation and Safety Act establishes the Cannabis Control Appeals Panel that reviews decisions of licensing authorities appealed by any person aggrieved by those decisions.
    • Clarifies that the Cannabis Control Appeals Panel is established in the Business, Consumer Services, and Housing Agency.
  • Enhances equity grants:
    • Authorizes the Governor’s Office of Business and Economic Development to administer on behalf of the Bureau of Cannabis Control (BCC) provisions related to the review and granting of funding for cannabis equity programs.
      • Eligible local jurisdictions may submit an application to BCC for a grant to assist with the development of an equity program or to assist local equity applicants and local equity licensees through that local jurisdiction’s equity program.
      • Local Equity Programs are programs adopted or operated by a local jurisdiction that focus on the inclusion and support of individuals and communities in California’s cannabis industry who are linked to populations or neighborhoods that were negatively or disproportionately impacted by cannabis criminalization.
  • Authorizes penalties against unlicensed activity:
    • Authorizes a licensing authority to issue a citation to a licensee or unlicensed person for any violations of existing law or regulations related to the Control, Regulate and Tax Adult Use of Marijuana Act of 2016.
    • Authorizes licensing authorities to assess administrative fines not to exceed $5,000 per violation for licensees and $30,000 per violation for an unlicensed person, each day.
      • Requires proceeds from citations to be used for the recovery of investigation and enforcement costs and to be deposited into the Cannabis Control Fund.
  • Requires the State Department of Public Health to establish a certification program for manufactured cannabis products no later than July 1, 2021. Previously, the Department of Food and Agriculture was the sole determiner of designation and certification for cannabis.  
SB 104 (Enrolled) — Health
 
This trailer bill makes statutory changes affecting health programs. In brief, it expands full-scope Medi-Cal eligibility for adults age 19 to 25 regardless of immigration status beginning July 1, 2019. The bill will also establish the Healthy California for All Commission effective July 1, 2019 which will serve as an independent body to develop a plan for advancing the progress towards achieving a health care delivery system including, but not limited to, a single payer financing system for all Californians.
 
SB 106 (Enrolled) — Budget Act of 2019
 
This is the Budget Bill Jr. which makes minor technical changes to the 2019 budget. This bill will increase appropriations in the 2019–20 fiscal year by $285 million. Provisions of most interest to cities include:
  • Appropriation of $428.6 million (an increase of $133.4 million) General Fund to Covered California to provide premium assistance subsidies to individuals with household income at or below 600 percent of the federal poverty level (FPL).
  • Appropriation of $5 million General Fund to California Health and Human Services for the Healthy California for All Commission.
  • Allocation of $5 million in one-time General Fund to California Health and Human Services to conduct research to inform the development of a Master Plan for Early Learning and Care to support comprehensive and affordable child care and universal preschool in California.  
Next Steps

The bill language regarding housing and homelessness was released Thursday afternoon. A more comprehensive summary of that language will be available soon.


 
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