2021 Mid-Session Legislative Update

Local economic developers have had little bandwidth to track state legislation this year, as they appropriately focused on assisting their communities, businesses and residents meet the challenges of the pandemic. Now, however, with the expansion of vaccines, case levels are finally abating. For those of you looking to catch up on legislative activity, CALED has prepared this mid-session update, which includes upcoming deadlines, political dynamics, recap of CALED’s major efforts on some key bills and issues.

CALED Focus

Key Deadlines:  The Legislature is facing three deadlines that mark the midpoint of a Session:

  • May 21: The date by which all bills with a fiscal impact must pass the Appropriations Committees to the Floor. Many pending bills are stopped in this committee, or subject to major amendments to reduce costs.
  • June 4: The date when all bills must pass the house of origin. This means that Senate bills must move to the Assembly, and Assembly Bills move to the Senate.
  • June 15/July 1: These are the key budget deadlines. The Governor’s May Revise, which includes updated revenue projections and revised spending proposals, will be issued this week. Legislators must approve a budget by June 15 (or lose salary), and the Governor must sign the budget by July 1.

Political Dynamics:

  • Governor: The pandemic placed Governor Newsom in a larger political spotlight. Early on, he received widespread praise for his response, but criticism of his actions increased as infection rates spiked, businesses and schools remained closed, executive orders and sole-source contracts were questioned, and the revelation of his expensive dinner with a lobbyist in potential violation of his heath directives became a national story. He is now facing a recall election, but most expect him to survive.
  • Budget Swings: Last year, the state adopted an austere budget that anticipated massive revenue declines due to the pandemic. Oddly, however, the reverse happened. State  revenues spiked by over $15 billion in January, with even higher amounts anticipated to be revealed in the May Revise. Federal relief also continued to pour into state coffers, that will likely result in a state 2021-22 budget with the highest spending levels ever. While many legislators proposed bills in January with tax increases, none are likely to move due to elevated budget revenues and the Recall.

CALED’s Focus:

CALED has engaged on multiple legislative and policy related issues in 2021, including actively proposing amendments to resolve issues on several bills, and supporting and opposing legislation. Major areas of focus include:

  • CDBG (CARES Act) for Small Communities: CALED has been working to assist 160 small “non entitlement” jurisdictions get access to federal COVID relief funds under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law in March, 2020. Most large “entitlement” communities have already received and spent these funds, but smaller communities have received nothing, due to delays at the state Department of Housing and Community Development (HCD). For months, CALED has repeatedly raised concerns over this issue with Administration officials. Finally, some progress has recently been made.  CALED appreciates the assistance of Assembly Member Sabrina Cervantes, Chair of the Assembly Jobs, Economic Development, and the Economy Committee (JEDE), and her staff for helping pressure HCD to release these funds.
  • SB 780: Tax Increment Financing: CALED sponsored SB 780 (Cortese), which contains a variety of improvements recommended by CALED economic development practitioners to Enhanced Infrastructure Finance Districts (EIFDs) and Community Revitalization Investment Authorities (CRIAS).  Improvements for EIFDs include clarifying the appointment of alternates, allowing for consolidated notices, allowing project areas and streamlining the amendment process for adopted plans. Major changes to CRIAs are also included to remove previous concerns associated with financing and the protest process, and expanding areas where these agencies can be established to include sites deemed suitable for housing development and parcels zoned to allow transit priority projects. CALED engaged in significant negotiations with various stakeholders to resolve language issues. The bill has passed two committees unanimously, and is pending passage on the Senate Floor.
  • AB 106: Funding for Regional Collaborative Discussions: CALED engaged in multiple discussions with both the sponsors and staff to the Assembly JEDE Committee over the language in AB 106 (Salas), sponsored by California Forward. The bill proposes a program to fund regional collaborative discussions. Among CALED’s concerns with earlier versions were ensuring that affected local agencies were involved in discussions of regional issues, the focus was consensus-based solutions, and broadening eligibility of applicants for this funding. The bill was amended several times since its introduction; CALED is now Neutral on the bill in its current form. CALED encourages agencies that may be interested in this program to review the bill.

Next Steps:

CALED members are encouraged to review legislation on CALED’s bill list, which  reflects the status of bills as of 5-13-12. Next week, CALED will also produce a summary of the Governor’s May Budget Revise. If you want to learn more about CALED’s legislative positions and Legislative Action Committee, then click here.