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Wild Year in Sacramento

By Michael Belote, UTA California Lobbyist, California Advocates

Mike Belote

The California Legislature returned to Sacramento on January 6 to begin the second year of the current 2019-2020 two-year session.  Under the state constitution, the Legislature must adjourn this year by midnight, August 31. 2020 promises to be a wild year in Sacramento right up to adjournment, and beyond, to the November general elections.

The deadline for introducing new 2020 bills was February 21, and almost precisely 2300 items were introduced.  Not surprisingly, an enormous number related to housing and homelessness.  In a very unusual move, Governor Newsom dedicated the entirety of his State of the State address to the Legislature to the housing situation, underscoring importance of the issue to all policy makers.

All 2300 bills have been read and analyzed for possible impact on trustees.  Nearly three dozen have been identified and added to the UTA electronic folder.  Ironically, one of the most significant items does not yet appear in the folder, because it has not yet been assigned a bill number. Here’s the story:  as part of his proposed state budget for 2020-2021, Governor Newsom has proposed renaming the current Department of Business Oversight as the Department of Financial Protection and Innovation. More significantly, the proposal would vastly increase the powers of the department over anyone providing financial products and services, even if already licensed.  The proposal would literally export the powers and authority of the Obama-era CFPB to California, with very broad authority to regulate what the department determines are unfair or deceptive acts and practices.

As a budget item, the Newsom administration plans to accomplish the change/expansion through a “trailer bill” implementing the budget, meaning that the proposal would bypass the usual policy committee process in the Capitol.  An enormous coalition of business entities and associations has formed a coalition to work on the issue, and meetings are being scheduled with key legislators and others.  The 34-page proposal constitutes one of the biggest regulatory proposals in Sacramento for decades, with definite implications for UTA.

At the same time, SB 908 has been introduced by Senator Wieckowski to create a new licensing program in the Department of Business Oversight (or presumably the new department if the budget proposal is enacted) for debt collectors.  As introduced, the bill defines “debt” and “debt collectors” so broadly that trustees would almost certainly be required to obtain a license.  This bill will go through the regular policy committee process, and UTA will be seeking an exemption for trustees acting under the California Civil Code.

UTA is also sponsoring a measure for 2020 in California.  SB 1148 (Jones) has been introduced to modify the publication statutes to create more competition amongst adjudicated newspapers.  We have been working on the issue for some time with the California News Publishers Association, and hope to achieve newspaper industry neutrality on the proposal. At this point the bill also clarifies that “declarations of nonmonetary status” filed with courts pursuant to Civil Code Section 2924l do not constitute answers or other responsive pleadings in the underlying cases in which they are filed.  This is intended to harmonize conflicting treatment of these declarations by various courts.

For 2020, the action will not stop when the Legislature goes home in September. The November general election ballot promises to be one of the larger and more controversial in memory, not only at the presidential level but also on ballot initiatives.  At this point it appears a virtual certainty that initiatives to allow greater local rent control ordinances will qualify for the ballot, along with the “split roll” proposal relating to Proposition 13.  Both will be enormously contested.  The split roll proposal alone, which would raise billions in higher taxes on commercial and industrial property, could easily consume $100 million in campaign costs, per side.

Hang on, it’s going to be a wild ride in California this year!

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