California Government Relations Update

California’s legislative session ended on September 1, after lawmakers passed hundreds of bills before midnight on August 31. In all, California lawmakers sent Governor Gavin Newsom 1,166 bills, of which he signed 997 and vetoed 169 before his September 30 deadline.

The 2022 legislative session represented a shift to the political left, moving California closer to the model of extensive social, education, and medical benefits associated with Western Europe. Ultimately, the more comprehensive the benefits become, the more expensive they become for the state budget. At some point, the state may not be able to rely on taxing high-income Californians, who currently provide the majority of the state’s revenue.

Mental Health Services

Newsom signed SB 1338 (21R), enacting a statewide plan to direct people who are homeless with severe mental illness into court-ordered treatment. The system, referred to as Community Assistance, Recovery and Empowerment Courts or CARE Courts, creates a new court system intended to provide an alternative to conservatorship or jail. The plan will roll out in its first seven counties by October 2023 and an overwhelming majority of California voters – 76% – have said they support the new law, according to a poll released by UC Berkeley’s Institute of Governmental Studies.

Technology

With relation to the tech industry, Newsom signed two pieces of legislation intended to regulate social media companies. One of the bills sets new standards for children-visited online spaces, such as YouTube and TikTok, including limits on push notifications late at night. Modeled after a similar measure in the United Kingdom, it also restricts the sharing and collection of children’s personal data, specifically information extraneous to the online platform’s services.

Newsom also signed a bill regarding content moderation, which requires social media companies to report data to the state on their enforcement actions against users. A first-of-its kind measure, the bill requires social media companies to publicize their policies for removing disturbing content, providing details on when and how they remove it.

Notably, one of the most contentious tech bills did not make it to the Governor’s desk. Following substantial opposition from the tech industry, lawmakers killed a bill co-authored by Assemblymember Jordan Cunningham (R-San Luis Obispo) and Assemblymember Buffy Wicks (D-Oakland) that would have allowed public prosecutors to bring civil lawsuits against social media companies for deploying products or features understood to addict kids. The bill was previously amended to remove a clause to allow parents to file civil lawsuits, but it wasn’t enough to overcome pushback from powerful industry players

Labor

Newsom solidified a major win for organized labor by signing AB 257, a highly debated piece of legislation that establishes a fast-food industry oversight body in California. AB 257 creates a franchise restaurant industry council that has the power to determine wage, hour, and workplace standards. The bill also empowers the state Legislature to reject proposed rules. The legislation was a priority for organized labor, partially modeled after the industry-wide work councils common in European countries.

Opponents of the bill – including the International Franchise Association and the National Restaurant Association – have already introduced a ballot measure seeking to overturn AB 257. Referendum backers have until December 5 to collect the 623,212 signatures necessary to qualify for the ballot. If the referendum qualifies, the law would not be implemented until Californians have an opportunity to vote on it.

Pay Transparency

Newsom signed SB 1162, a pay transparency bill. Introduced by Senator Monique Limón (D-Santa Barbara), proponents say it will help narrow the wage gap. The bill requires companies to report the pay data of their contractors, requires all employers with more than 15 workers to post the pay ranges for open positions, and adds state enforcement authority for businesses not reporting the data. Businesses with 100 or more employees are required to report pay data to the state, but the reports will not be available for the public. Previous bill language would have required the reports be published online for businesses with 1,000 employees or more by 2025 and 250 employees or more by 2027.

Climate

Additionally, Newsom signed a package of aggressive climate bills. The bills include: AB 1279, which embeds the policy goal of reaching statewide carbon neutrality by 2045 into state law; SB 1020, which sets benchmarks for the state electric grid to hit before sourcing its power from renewable sources by 2045; SB 905, which requires the California Air Resources Board to establish regulations for projects that capture, reuse, and store carbon emissions; and SB 1137, which bans the drilling of any new oil and gas wells within 3,200 feet of homes, schools, nursing homes, and hospitals – effectively banning new drilling from most developed areas in the state.

Signed Legislation

The following bills were signed by Newsom:

• A bill to protect those receiving or providing transgender health care in California from being prosecuted.
• A bill to seal criminal records for all felonies if an individual is no longer serving a probationary sentence, not currently involved in another case, and two years have passed since their last interaction with the criminal justice system.
• A pair of bills to reshape the local recall election process, including by increasing the number of signatures needed to oust a local official and blocking most cities and counties from holding an election to replace a recalled official, instead requiring them to fill the seat by appointment, succession, or another process.
• A bill to extend a 2020 law that allows a person charged or convicted of a crime to challenge racial bias in their case.
• A bill to make it more difficult for prosecutors to include rap lyrics as evidence in criminal cases.
• A bill to make it easier for the Medical Board of California to punish doctors who deliberately spread false information about COVID-19, vaccines, and treatments by classifying disinformation as “unprofessional conduct.” 
• A bill to eliminate the “pink tax”, which refers to the additional costs female consumers pay for substantially similar products. It prohibits an individual or business from charging a different price for a product based on the customer’s gender.

Vetoed Bills

The following bills were vetoed by Newsom:

• A billto require the state to align billions of dollars for transportation every year to climate-specific metrics. 
• A bill to significantly limit the use of solitary confinement in California’s prisons, jails, and immigration detention centers.
• A bill to launch a pilot program giving universal basic income to farmworkers who can’t work due to drought.
• Bills to increase the amount of money inmates receive upon leaving state prison and raise wages for incarcerated workers were also vetoed for cost reasons.