News Blog - McHugh Koepke & Associates

Insurance Commissioner Orders Premium Returns During Coronavirus Pandemic

Early Monday, April 13^th, Insurance Commissioner Ricardo Lara ordered insurance companies to return insurance premiums to consumers and businesses during the COVID-19 emergency. The Commissioner’s office said the shelter-in-place order across the state has reduced the overall risk of loss. According to a UC Davis Special Report on the Impact of COVID-19 on California Traffic Accidents, reduced driving has resulted in fewer accidents, injuries, and fatalities on public highways and roads. The Department of Insurance (DOI) press release also stated, “Falling payroll and receipts due to closure orders have also dramatically reduced risk of a liability loss for businesses.”...

AG Becerra Urges Supports Phasing Out Use of Highly Potent Greenhouse Gas

Last week, California Attorney General (AG) Xavier Becerra urged support of the American Innovation and Manufacturing Leadership (AIM) Act to facilitate the phasing out of hydrofluorocarbons (HFCs), a refrigerant that is a potent greenhouse gas. More specifically, Becerra joined the attorneys general of Delaware, Illinois, Massachusetts, Minnesota, New Jersey, New York, Oregon, Vermont, Washington, and the District of Columbia in sending a support letter to Congress on the bipartisan legislation....

California Legislature Extends Recess Until May 4th Over Coronavirus Concerns

Last, Friday afternoon, Senate President pro Tem Toni G. Atkins and Assembly Speaker Anthony Rendon announced that they will now call the Senate and Assembly back to the Capitol on May 4^th. The released media advisory issued stated, “the date changes the previous target return date, April 13^th, under the guidance of public health officials who seek to minimize opportunities for COVID-19 infection.”...

Backers Submit 1.7 Million Signatures for November's 'Split roll' Ballot Measure

On April 2^nd, the Schools and Communities First Campaign, backers of the initiative to revise California’s Proposition 13 and allow for a split property tax roll, submitted 1.7 million signatures to get the measure on the November ballot. To qualify, a total of 997,139 signatures are required. Alex Stack, a spokesperson for the campaign, said the signatures being submitted to county registrars for validation underscore "the momentum and support for this initiative." According to their press release, the submission was “the most signatures ever submitted in California for a ballot initiative.”...

SWRCB Economic Feasibility Analysis for Hexavalent Chromium MCL Workshops

While the State Water Resources Control Board (SWRCB) currently has three scheduled workshops mid-April to present information and solicit public comment on the SWRCB’s white paper on “Economic Feasibility Analysis in Consideration of a Hexavalent Chromium Maximum Contaminant Level (MCL),” staff indicates that they are re-evaluating the timing of the workshops amid the COVID-19 crisis. In this regard, we are told they are considering moving forward instead with a single webcast workshop on one of the dates previously noted and expect to release a revised notice, likely including a short extension to the written comment deadline, in the next few days....

SWRCB & DTSC Issue Draft Guidance for Vapor Intrusion

The State Water Resources Control Board (SWRCB) and Department of Toxics Substances Control (DTSC) recently released draft joint supplemental guidance for screening and evaluating vapor intrusion. The draft guidance contains recommended improvements for vapor intrusion investigations and is intended to help promote consistency across the state, using attenuation factors recommended by USEPA....

Amid Public Health Crisis, Employers May Need To Reimburse Telecommuting Employees

In an effort to slow the spread of COVID-19, many employees are working remotely. While telecommuting during this crisis can be beneficial for public health, it also presents unique challenges for employers, such as ensuring compliance with applicable expense reimbursement laws. During this time, the employer may need to reimburse the employee for any additional phone, internet, or other expenses incurred....

SWRCB Issues Definition of 'Microplastics in Drinking Water' for Public Comment

In response to SB 1422 (Portantino, 2018), the State Water Resources Control Board (SWRCB) recently released its proposed definition of ‘Microplastics in Drinking Water’ for public review and comment. As you may recall, SB 1422 required the SWRCB to adopt a definition of microplastics in drinking water on or before July 1, 2020 and on or before July 1, 2021 to adopt a standard methodology to be used in the testing of drinking water for microplastics. The bill also included requirements for four years of testing and reporting of microplastics in drinking water, including public disclosure of that information....

More Severe Recession Expected In California Than Nation Overall

The UCLA Anderson School of Management recently revised a forecast published on March 12^th. The UCLA economists are now saying that the U.S. economy has entered a recession, ending the expansion that began eleven years ago in July 2009. Further, it is estimated California could be hit harder by this recession than the rest of the nation. The report specifically states, “For California, a state with a larger proportion of economic activity in tourism and trans-Pacific transportation, the economic downturn will be slightly more severe.”...

OEHHA Delays CIC Hearing on Acetaminophen

The Office of Environmental Health Hazard Assessment (OEHHA) announced today that in light of the developments related to Covid19, they do not intent to reschedule the Carcinogen Identification Committee (CIC) at this time to review the possibility of adding acetaminophen to the Proposition 65 list of carcinogens. As you will recall, the meeting was originally scheduled for December 5, 2019 but was postponed to allow for an extended public-comment period that has since closed....

Court Rules in Favor of California Cap-and-Trade Agreement

On Thursday, California won the first round in federal court against the Department of Justice who filed a suit in October. The lawsuit challenged California cap-and-trade agreement done in collaboration with Québec. According to the Department of Justice, California’s collaboration with an entity outside of the United States is unconstitutional. The Department claimed that the agreement is nearly identical to an “independent foreign policy” and therefore should be referred to as a “treaty” that only the federal government can impose....

2020 Bill Introductions

Last Friday, February 21^st, was the deadline for bills to be introduced for the 2020 Legislative Session. Notably, on this final day, 735 new bills introduced between the two houses. A total of 2,203 bills were introduced for 2020, of which 1,527 were Assembly measures and 676 were Senate measures. These figures do not include special session bills, constitutional amendments, or resolutions. It should also be noted that Committees can still introduce bills past the deadline....

DOF Figures Show Tax Revenues $1 Billion Ahead of Projections

Recently, the Department of Finance (DOF) published its February Finance Bulletin, which provides an economic update and cash report. The bulletin noted that preliminary General Fund agency cash receipts for the first seven months of the fiscal year are $1.066 billion above the 2020-21 Governor’s Budget forecast of $81.614 billion....

AG Becerra Urges Expansion of CCPA Through Federal Privacy Legislation

On Tuesday, February 25^th, Attorney General Xavier Becerra sent a letter to members of Congress with an update on the implementation of the California Consumer Privacy Act (CCPA). In the letter, Becerra urged Congress to use federal legislation to build on rather than preempt the consumer rights and privacy protections made possible by the CCPA or other state law....

AG Becerra Supports Legislation Amending False Claims Act

On Thursday, February 20^th, during a press conference, Assemblymember Mark Stone (D- Scotts Valley) introduced AB 2570 that seeks to amend the California False Claims Act (CFCA). The bill seeks to expand the CFCA authority to allow the attorney general and other prosecuting agencies to investigate and prosecute fraudulent claims filed under the revenue and taxation code...

Insured Losses from 2018 Wildfires Reach $9 Billion

According to preliminary data released by Insurance Commissioner Dave Jones, insurance claims from the Camp, Woolsey, and Hill fires are up to an estimated $9.05 billion in actual losses for commercial and residential coverage, personal and commercial vehicles, and agricultural and other coverages. The deadly Camp Fire accounts for the bulk of the claims, with just over $7 billion of the total. It should be noted that as more claims are filed and processed, the total is expected to rise...

CPUC Withdraws Plan to Tax Text Messaging Following Federal Ruling

Following a federal regulatory ruling, California's Public Utilities Commission (CPUC) is no longer pursuing a plan to place a tax on text messages. On Friday, state regulators announced that they were withdrawing the proposal “in light of” the Federal Communications Commission’s declaratory ruling classifying text messaging as information services, rather than telecommunications services. In their statement, the CPUC noted that the Federal Telecommunications Act limits state authority over information services...

PPIC Report Shows Californians Prioritize Health Services and Education

The Public Policy Institute of California (PPIC) recently published a survey that included information related to the policy priorities of Californians in advance of the next budget year. According to the key findings, four in ten people approve of Governor-Elect Newsom’s plans and priorities. In his campaign, Newsom highlighted a number of issues, including universal preschool, tuition-free community college, statewide universal health coverage, and building a high-speed rail system...

ARB Adopts Amendments to the Cap-and-Trade Program

On Thursday, the Air Resources Board (ARB) approved amendments to the Cap-and-Trade program, specifically pertaining to the implementation of AB 398 (E. Garcia). The amendments aim to streamline the program and contain costs through 2030. Several of the major changes included were sought by business and industry groups in order to help keep the companies in California competitive against those out of state who do not have Cap-and-Trade obligations...

Newsom Announces Plans to Strengthen Emergency Preparedness and Wildfire Response

On Tuesday, at a fire station in the Sierra Nevada foothills, Governor Gavin Newsom outlined $105 million in new wildfire-related spending, in addition to $200 million approved by lawmakers last year. The specific details of the plan will be included in the budget due later this week. However, Newsom has said the bulk of the money will go toward forest management and fuel reduction...

UC Berkeley Think Tank Identifies Shortcoming with Paid Family Leave Proposal

Governor Gavin Newsom is expected to include with his budget a proposal expanding the state’s Paid Family Leave (PFL) Program. Therefore, a research brief recently released by the University of California, Berkeley's Think Tank on Early Childhood Policy is particularly timely. While the Berkeley think tank supports expanding coverage and enrolling more parents, it does not one shortcoming of the current program...

Proposed "Skip the Slip" Legislation Requires Electronic Receipts By 2022

At a press conference on Tuesday, Assemblymember Phil Ting announced AB 161, also known as the “Skip the Slip” bill. As introduced, the measure would require businesses to issue receipts in electronic form by 2022, unless a customer specifically requests a hard copy of their proof of purchase be provided. If approved, businesses in violation would receive two warnings before being fined $25 for each day they are out of compliance, with a $300 cap annually. The penalties in Ting's bill are modeled on a similar bill seeking to reduce the use of plastic straws...

Additional Gubernatorial Appointments Announced, Top Business, Labor and Environmental Liaisons Among them

Prior to being formally sworn-in as California’s 40th governor, Gavin Newsom named Julie Su as secretary of the California Labor and Workforce Development Agency. Since 2011, she has served as state labor commissioner under Governor Jerry Brown. Newsom also named Lenny Mendonca as chief economic and business advisor and director of the Governor’s Office of Business and Economic Development. Mendonca has been the co-chairman...

As Brown Departs, Gavin Newsom and Family Move Into Governor’s Mansion

Last Friday marked outgoing Governor Jerry Brown’s final day of living in the historic governor’s mansion. Located at 16th and H in midtown Sacramento, near the state Capitol, the residence underwent a $1.6 million renovated in 2015. Brown and his wife, Anne Gust Brown, moved into the 142-year-old Victorian home subsequently after. He was the first governor to live there since Ronald Reagan in 1967. Now they are headed to their ranch in Colusa County...

Impact of COIN Investments Estimated to Reach $29 Billion

Last week, a report was released by the Department of Insurance (DOI) detailing the progress of the California Organized Investment Network (COIN) program from 2011 through 2018. The mission of COIN is to generate investments in underserved communities. However, the program, which includes the Community Investment Survey (CIS) Data Call and the COIN Community Development Financial Institutions (CDFI) Tax Credit, sunset...

Potential State Impacts of the 2020 Census

The Legislative Analyst's Office (LAO) recently published a report pertaining to the next Census which will be conducted in 2020. The results of the Census are used in several ways, including to distribute seats in the House of Representatives, to determine legislative districts, and to inform the amount of federal funds allocated to states for certain programs. With this...

Study Confirms Unprecedented Business Exodus from California

A recent study released by Spectrum Location Solutions, a firm that specializes in providing location advisory services, shows business flight out of California has accelerated. The findings indicate that in 2016, the year for which the latest data is available, about 1,800 businesses moved out or “disinvested” from the state. According to the firm’s principal...

In Rare Bipartisan Effort, California Legislature Extends California’s Cap and Trade Program

Early this week, state lawmakers approved a 10-year extension for California's cap-and-trade program. Cap and trade provides flexibility and a favorable market based approach for achieving the required reductions in greenhouse gasses. The legislation will continue the program until 2030. The extension was necessary to provide clarity and predictability to assist companies in complying with the required reductions. The legislation was fiercely opposed by some in the environmental community who say it is not aggressive enough for progressive California. Several Democrats who voted against the measure felt it did not go far enough in pushing for command and control climate change policies...

California Ranked as 6th Largest Economy in the World - Honing in on 5th Place Slot

In rankings released by Palo Alto economist Stephen Levy, head of the Center for Continuing Study of the California Economy, California’s economy ranked sixth in the world in 2016. The state has seen that ranking climb since 2010 when it was 10th and 8th in 2014...

Governor Signs 2017-18 Budget

Governor Brown signed the 2017-18 on Tuesday, opting not to utilize his line-item veto power. As such, the $125 million budget passed by the Legislature earlier this month remains intact. According to Brown, this budget provides money to improve infrastructure, pay down debt, invest in schools, fund the earned income tax credit and provide health care for millions of California...

Study Raises Questions about Minimum Wage Increase

A study released this week by the University of Washington analyzing the minimum wage increase in Seattle has found that jobs and work hours fell for the city’s lowest paid employees after the minimum wage was raised to $13 there last year. The study shows that jobs and hours for those workers declined faster in Seattle than in surrounding control areas where the minimum wage did not increase...

SB 562 (Lara): Single Payer – Shelved

Late last week, Assembly Speaker Anthony Rendon announced that SB 562 (Lara), which would have created a Single-Payer healthcare system in California, would not advance to a policy hearing in the Assembly, essentially ensuring that the measure would not be acted upon this year. Rendon called the bill “woefully incomplete,” noting that even Senators who voted for SB 562 noted fatal flaws in the bill. The bill failed to address several critical issues including financing, delivery of care, cost controls, and necessary action by the federal government to make SB 562 a reality...

DTSC Releases SCP AA Guide

A key component of the Safer Consumer Product Program and associated regulation is the Alternatives Analysis (AA), which entails a robust review of the chemical of concern(s) compared against any potential alternatives for a host of potential life cycle impacts. In order to help facilitate the conducting of such AAs, the Department of Toxics Substances Control (DTSC) has prepared and finalized its first iteration of its Alternatives Analysis (AA) Guide. The Guide is intended to be an evergreen document that will evolve as DTSC’s and stakeholders’ thinking, processes and science evolve...

House of Origin Deadline Passes, Updates on Significant Bills

The mid-point in the legislative process, last Friday was the House of Origin deadline in the Legislature whereby all measures had to move into the opposite house in order to remain active in 2017. The week saw a flurry of activity and some major upsets, largely focused on a few contentious environmental measures that were defeated and are now considered two-year bills. While considered dead for the year, all two-year bills are eligible for reconsideration in January when the Legislature reconvenes for the 2018 session...

Assembly Democrats Form Progressive Caucus

In an effort to bolster the party’s left flank in the California Legislature, nearly two dozen Assembly Democrats have signed on to form a Progressive Caucus. The ideology, according to the group, is that the members “value people more than money.” The caucus hopes to be a divergence from the informal group of centrist, business-aligned Democrats known as the Mod Caucus, that have been a pivotal bloc of votes on bills on taxes and environmental regulation...

PPIC Poll – “Californians and Their Government”

The Public Policy Institute of California (PPIC) recently released a new poll focusing on critical issues relating to how the public and likely voters view their government...

Board Announces Adoption of Drug Take-Back Regulations

The State Board of Pharmacy recently announced the formal adoption of regulations establishing requirements for pharmacies that wish to establish prescription drug take-back services. While pharmacies are not required to provide drug take-back services under the board’s regulations, for those that do the regulations establish requirements that are based upon U.S. Drug Enforcement Administration (DEA) requirements. With the rampant problem of prescription drug abuse, the board hopes to increase options for the public to safely dispose of unwanted, unused, or out of date medications. In addition to reducing the supply of prescription drugs available for misuse or abuse, providing collection receptacles and/or mail-back envelopes for customers also helps protect the environment...

Tax Increases Could be on the Horizon

Despite California voters adopting multi-billion tax increases in November through the passage of Proposition 55 (12-year extension of the Prop. 30 personal income tax increases), Proposition 56 ($2 tax imposed on each pack of cigarettes), and Proposition 64 (which includes several tax increases on marijuana and marijuana products), the Legislature continues to propose new tax measures....

Senators Introduce Juvenile Justice System Reform Bills

In a series of bills introduced this week, Senators Ricardo Lara (D-Bell Gardens) and Holly Mitchell (D-Los Angeles) are supporting a plan that would significantly reform the criminal justice systems. In a press conference this week, the lawmakers introduced four bills modifying how children are treated in California’s justice system. If passed, these bills could do away with incarceration for children under 12 years old and ...

Senator Patricia Bates Elected as New Senate Republican Leader

In an expected move, Senate Republicans have appointed a new leader, Senator Patricia Bates (R-Laguna Niguel). With her available term limit not coming up until 2022, Bates could serve as minority leader for an extended period of time – longer than many recent leaders. Current leader, Senator Jean Fuller, will be termed out in 2018, and the vote to switch leadership will give ample time to transition and prepare for the next election cycle....

Newsom to Introduce Universal Health Care Plan as Component of Bid for Governor

Current Lt. Governor and gubernatorial candidate Gavin Newsom is reportedly drafting a plan to create universal health care in the state as part of his platform for his campaign in 2018. Newsom’s ambitious plan to rein in rising health care costs, expand universal access to people across the state regardless of income or immigration status, and preserve coverage for the estimated 5 million Californians who risk losing their insurance...

Governor Appointments

Tam Doduc, of Sacramento, has been reappointed to the State Water Resources Control Board, where she has served since 2005. Doduc served in several positions at the California Environmental Protection Agency from 2000 to 2005, including deputy secretary for environmental quality, assistant secretary for air and chemical programs, assistant secretary for agriculture and chemical programs and assistant secretary for technology certification...

2016 General Election Wrap Up

Upcoming Important Dates:

December 5^th 2015-2016 Legislative Session Convenes
January 10, 2017 Governorâ€™s Budget Release

2016 General Election Wrap-Up

After a very heated, tense election cycle with national politics believed to be looming large over down-ticket races in California, the dust is beginning to settle this morning with significant policy changes ahead via the state initiative process and legislative Democrats poised to gain a two-thirds majority in the Assembly. Between the two major parties, over $29 million was spent in competitive California legislative races â€“ resulting in one of the most divisive and malevolent election cycles with accusations of racism, theft and destruction of opponentsâ€™ signage, harsh campaign messaging and more coming from all angles, even in inter-party fights.

Assembly Democratsâ€™ efforts, in particular, to gain a super majority was seemingly fruitful with three seats in range, pending final vote counts. Assemblyman David Hadley (R) currently trails former Assemblyman Al Muratsuchi (D), Assemblyman Eric Linder (R) trails Sabrina Cervantez (D) and Assemblywoman Young Kim (R) trails former Assemblywoman Sharon Quirk-Silva (D).

One of the most expensive legislative races in the East Bay between Assemblywoman Catharine Baker (R) and Cheryl Cook-Kallio (D) failed to produce a change of hands for Democrats, despite each side spending upwards of $2.5 million and independent expenditures coming in at about $2 million on both sides.

Relative to inter-party fights, former Assemblyman Raul Bocanegra (D) regained his seat from Assemblywoman Patty Lopez (D); and Assemblywoman Cheryl Brown (D) has been unseated by Eloise Reyes (D).

In the Senate, Democrats have come up short of a two-thirds gain so far, but managed to hold on to three of their potential target seats. Assemblywoman Ling Ling Chang (R) is holding a narrow lead against Democrat Josh Newman in the race to fill the seat vacated by termed-out Senate Republican Leader Bob Huff.

Overall, Democrats led in fundraising to the tune of roughly $21 million for their top ten races as compared to Republicansâ€™ $8.3 million in those races.

On the policy front, Californians have approved the use of recreational marijuana; affirmed a ban on single-use plastic bags; reformed, not repealed the death penalty; provided broad authority to the Governor and his secretary of the Department of Corrections & Rehabilitation to expand parole and credits for prisoners; and more. While a good number of the measures saw significant expenditures, Proposition 61 that would have capped drug pricing for veterans was the shining star in this regard with record spending on both sides. While the measure has been defeated at the ballot box, proponents are poised to again pursue legislation in 2017 that will likely be broader in scope and one of the biggest fights on the horizon.

As the dust continues to settle and the close races await confirmation of final vote counts, we now look to December 5th when the 2017-2018 Legislature will be sworn in to office. While some reports suggest a host of new moderate members will infuse the Assembly, the proof is in the pudding as we move into what is already shaping up to be a big year ahead on a number of policy fronts. A big unknown is how the two-thirds in the Assembly will play out â€“ will moderates feel empowered to stand together or will members fall in line with leadership and more progressive ideals? Time will tell... and weâ€™re waiting with baited breath...