REPORT TO COUNCIL
SUBJECT
Title
Action on 2021 Q1 Legislative Update and Proposed Amendments to the 2021 Energy Legislation, Regulations, and Issues and Public Safety Legislative Advocacy Positions
Report
COUNCIL PILLAR
Enhance Community Engagement and Transparency
BACKGROUND
On October 9, 2018, the City Council adopted Resolution No. 18-8611 to approve a Legislative Advocacy Position (LAP) Policy (Attachment 1). The purpose of the LAP Policy is to establish clear guidelines for advancing City goals and positions through legislative review and advocacy at the regional, State, and federal levels of government and to provide guidance for City officials who serve on regional, State, and national boards, committees, and commissions when they are asked to review public policy matters and issues. The LAP Policy requires Council to adopt or update the LAPs at the beginning of the calendar year to identify specific legislative priorities outside of the legislative guiding principles listed below:
• Support the League of California Cities and National League of Cities positions on priority bills that benefit Santa Clara
• Protect local revenue sources and prevent unfunded mandates
• Protect and/or increase funding for specific programs and services
• Protect and/or increase local government discretion
• Advance approved policies such as the City’s Statement of Values, the General Plan, or the Climate Action Plan
On February 9, 2021, the City Council adopted twelve (12) 2021 LAPs (Attachment 2) on the following key issues:
• COVID-19 Legislation
• Energy Legislation, Regulations, and Issues
• Engagement with Federal Aviation Administration Regarding Airplane Noise
• Housing
• Human Resources and Public Sector Employment
• Local Authority over Wireless Telecommunications Facilities and Cable Services
• Public Safety
• Regional and State-wide Water Supply and Conservation
• Regional Issues and Collaboration
• Regional Transportation Issues
• School Mitigation Fees
• Sustainability and Environmental Legislation, Regulations and Issues
In addition to requiring the City Council to adopt or update LAPs annually to identify specific legislative priorities, the LAP Policy also requires staff to provide quarterly legislative updates on public policy items of interest to the Council and provide Council copies of letters or summaries of actions on legislative items.
The City has an existing agreement with Townsend Public Affairs for legislative advocacy services, which includes tracking and monitoring legislation and advocating the City’s position on various legislation at the State and federal levels of government.
DISCUSSION
As part of the February 9, 2021 2021 LAP agenda item, Councilmember Jain requested to add additional position statements to several LAPs (Energy Legislation, Regulations and Issues LAP, Public Safety, Regional and State-wide Water Supply and Conservation, Regional Transportation Issues, and Sustainability and Environmental Legislation, Regulations and Issues). While staff was able to review and recommend adoption for most of the proposed position statements, there were several that required more review and analysis for their potential impacts to the City.
Based on additional research and discussion with Councilmember Jain on energy-related items, staff recommends Council approval to add the following position statements to their corresponding LAPs so staff and Townsend can advocate for the City in these key policy areas:
Energy Legislation, Regulations and Issues LAP
• Monitor and support transmission related activities focusing on enhancing the reliability and deliverability of clean energy resources and advocating for greater transparency and assurance that transmission access charges are allocated equitably between the various beneficiaries
Public Safety LAP
• Support background checks and training requirements for gun sales
A copy of the red-lined proposed amendments to the 2021 Energy Legislation, Regulations and Issues and Public Safety LAPs is attached for reference (Attachment 3).
Since the adoption of the 2021 LAPs, staff and Townsend Public Affairs has been tracking and monitoring various legislative items, which are highlighted and summarized in the 2021 Q1 State Legislation document (Attachment 4). The legislative items are grouped by their aligned LAP, guiding principle for legislative advocacy, or approved City policy (e.g. City Council Goals and Priorities). Each bill contains a summary and its status in the legislative process.
The City has acted on some of the bills that are included in the 2021 Q1 Legislation document (e.g. submitted a letter of support or opposition). Those actions are documented in the 2021 Q1 Summary of Legislative Actions attachment (Attachment 5).
State Legislative Update
Over the course of the last two months, the Legislature has been focused on conducting policy committee hearings, so that bills can advance ahead of the policy committee deadline. Assembly and Senate policy committees are required to consider bills with a fiscal impact to the State and advance them to the Appropriations Committees prior to April 30th. The policy committees have an additional week to consider bills without a fiscal impact to the State. Any bill that fails to meet the policy committee deadline will become a two-year bill and cannot be considered again until January. Typically, the first policy committee deadline results in one-third of introduced bills becoming two-year bills.
After the policy committee deadlines pass, the Legislature will turn its focus to moving bills through the Appropriations Committees prior to the fiscal committee deadline on May 21st. Many of the bills that will go before the Appropriations Committee will be referred to the Suspense File, which indicates that the bill is likely to have a fiscal impact to the State greater than $50,000. The Assembly and Senate Appropriations Committees will each consider all bills on the Suspense File at a single hearing just before the committee deadline. At that hearing, the committee will announce which bills are advancing out of committee and which are being held. Those bills that are held in committee will become two-year bills.
Assembly and Senate Budget Priorities
In anticipation of the Governor’s May Revise, both the Assembly and Senate Leaders announced their budget priorities for the FY 2021-22 budget. Both sets of priorities leverage significant funding from the anticipated State budget surplus, federal COVID-19 pandemic response funding, cap and trade auction revenues, and other sources to invest in the State’s economy. The plans outlined by both Houses touch on a number of economic sectors, as well as local governments, businesses, and individuals.
The Senate prioritizes items such as:
• Providing debt free college
• Expanding universal access to early education
• Investing in homelessness, housing affordability, and homeownership
• Protecting against wildfires and droughts
• Improving healthcare access and affordability
The Assembly prioritizes items such as:
• Preserving state services while preparing for future economic downturns
• Responding to essential services needs
• Protecting Californians most impacted by the pandemic
• Recover the economy through stimulus funding
Both the Assembly and Senate will need to work together, with the Governor’s Office, to develop the FY 2021-22 State Budget. The Governor is scheduled to release his May Revise in early-mid May which will include the Administration’s priorities for the upcoming fiscal year and how the Governor proposes to administer state resources. Once the May Revise is released, the Legislature will have until June 15th to approve the budget and send it to the Governor for his consideration.
Additionally, many of the proposals found in the Senate and Assembly budget priorities would require implementing legislation, if they are included in the final state budget. To that end, many of the proposals listed above may require additional legislation that would be considered through the traditional legislative path and not on the accelerated budget timeline.
Recall Election
While the Legislature has focused on moving bills through the committee process, many were focused on the political dynamics in Sacramento. On April 26th, Secretary of State Shirley Weber announced that the threshold of verified signatures has been met to trigger a recall election of Governor Newsom. Once the threshold of signatures was met, it triggered a 30-business-day period in which voters may submit written requests to their County Registrar of Voters to remove their names from the petition. Assuming that there are not enough signatories who elect to remove their names from the petition, the Department of Finance and Legislature are then required to assess the potential costs of a recall election. Once that step has been completed, the Lieutenant Governor will announce the date for the recall election, which will likely be in late-October or November.
To date several Republicans have indicated that they intend to run in the recall election. The most high-profile individuals that have expressed their intent to challenge Governor Newsom are former Republican gubernatorial candidate John Cox, former San Diego Mayor Kevin Falconer, former Congressman Doug Ose, and former Olympian and reality TV star Caitlyn Jenner. As of yet, no Democrats have indicated that they intend to run in the recall election. Those that wish to run as a candidate to replace Governor Newsom will have until 59 days before the election to pay the filing fee, around $4,000, or submit signatures from 7,000 voters.
New California Attorney General and Secretary of State
In April, Governor Newsom announced that he was submitting to the State Legislature the nomination of Assembly Member Rob Bonta as the next California Attorney General. On April 23rd, Governor Newsom swore Rob Bonta into office as the California State Attorney General, after being confirmed to the position by the State Legislature. Bonta was selected to fill the position vacated by Xavier Becerra, who was recently sworn in as Secretary of the US Department of Health and Human Services. Prior to becoming the Attorney General, Bonta served nine years as a Deputy City Attorney in the San Francisco City Attorney’s Office, before running for local office in Alameda County and eventually being elected to the State Assembly in 2012. Bonta becomes the first Filipino American in the State’s history to serve as Attorney General.
Attorney General Bonta was the second constitutional officer that has been appointed by Governor Newsom this year. Earlier in the year, the Governor nominated, and the Legislature confirmed, Dr. Shirley Weber as the new Secretary of State. Weber filled the vacancy that was created when former Secretary of State Alex Padilla was appointed to California’s vacancy in the US Senate. Prior to being appointed as Secretary of State, Dr. Weber served in the State Assembly for eight years and had previously served as President of the San Diego Board of Education and as a professor at San Diego State University.
State Coronavirus Response
Over the last several months, Governor Newsom and his Administration have continued to provide regular updates on the State’s progress in dealing with the coronavirus pandemic. Most recently, the has Governor traveled throughout the State to promote COVID-19 vaccines while also focusing the Administration on safely re-opening the state’s economy. The Governor announced June 15th as the projected reopening date of the State’s economy while still requiring masks and encouraging Californians to receive the vaccination. Additionally, the Governor has worked closely with the Legislature to approve legislation to provide resources to businesses and individuals impacted by the pandemic.
Federal Legislative Update
During the first months of the Biden Administration, the President has been focused on increasing the number of Americans receiving the COVID-19 vaccine and putting the nation’s economy on the path to recovery.
Coronavirus Aid Package
In March, Congress passed, and the President signed into law, the “American Rescue Plan Act” (H.R. 1319), a $1.9 trillion coronavirus relief and stimulus bill. This bill contained funding aimed at increasing public health and assisting those that have been financially impacted by the pandemic. Provisions of note, include:
• State and Local Funding: $360 billion for state and local government funding, including a $10 billion infrastructure fund to be controlled by the state. Eligible uses of funds include COVID-19 response, revenue loss, premium pay to essential employees, and broadband, water, or sewer projects. Language was also included in this funding that specifically allows state and local governments to grant a portion of these funds to special districts. Additional clarification and guidance will be issued from the Department of Treasury prior to the distribution of the funding.
• Homeless Grants
o Cities are slated to get $5 billion in homelessness grants. Permitted expenditures would include acquiring non-congregate shelter units, such as hotel rooms, that could be converted to permanent housing.
o The bill also has an additional $5 billion for emergency Section 8 Housing Choice Vouchers. The Housing and Urban Development Department would have to provide the vouchers through public housing agencies to individuals and families who are currently or recently homeless, and to those who are fleeing domestic violence, sexual assault, or human trafficking. Public housing agencies can’t reissue the vouchers after Sept. 30, 2023.
• Restaurant Support
o $29.6 billion for a Restaurant Revitalization Fund to be administered by the SBA.
o Eligible recipients would include restaurants, bars, food trucks, and caterers, including businesses in airport terminals and tribally owned entities.
• Homeowner Assistance
o $9.96 billion to establish a Homeowner Assistance Fund at the Treasury Department.
• Airport Support
o $8 billion for public agencies and private owners of public-use airports.
• Employee Retention
o The measure would extend an employee retention credit established by the CARES Act through the end of the year.
• Child Care
o $24 billion for grants to childcare providers to use for payroll, rent, personal protective equipment, mental health support, and other needs
o $15 billion to the Child Care and Development Block Grant
o $600 million increase to the Child Care Entitlement to States
o An additional $1 billion to Head Start
• Broadband
o Creates an “Emergency Connectivity Fund” in the U.S. Treasury and appropriate $7.17 billion into it to cover the purchase of broadband service and devices by schools and libraries for use by students, staff, and patrons at other locations.
• Child Tax Credit
o Expands the Child Tax Credit from $2000 per child to $3,600 for each child younger than 6 and $3,000 for other children.
o Makes the CTC fully refundable
o Allows the CTC to be received on a periodic basis
• Shuttered Venues: Congress eliminated the provision that forced eligible venue operators and museums to choose between the PPP and the Shuttered Venue Operators Grant (SVOG). They could now apply for both and just have their PPP deducted from the larger SVOG.
• Firefighter Grants: $300 million in grants to assist firefighters.
• Disaster Relief
o The measure would provide $50 billion for the Federal Emergency Management Agency’s Disaster Relief Fund to respond to Covid-19 and other major disasters and emergencies declared by the president. Funding would remain available through September 30, 2025.
o The funding could also be used to provide financial assistance for pandemic-related funeral expenses with a 100% federal cost share.
• Health Insurance: The bill would allow individuals who receive unemployment compensation in 2021 to qualify for reduced cost-sharing under the ACA, and would subsidize 100% of premiums for individuals eligible for COBRA continuation coverage if they lose their job.
After the passage of the American Rescue Plan, the Biden Administration unveiled two forward looking proposals that would invest an additional $4 trillion into the economy.
American Jobs Plan
In late March, President Joe Biden introduced a $2 trillion jobs and infrastructure plan referred to as the American Jobs Plan. The Plan seeks to address some of the country’s most pressing problems including overhauling the nation’s infrastructure and bolstering economic recovery efforts in the face of the COVID-19 pandemic.
Key elements included in the American Jobs Plan proposal are:
• Transportation Infrastructure: President Biden has long been a proponent of increased spending on transportation, especially public transportation and passenger rail, and this Plan brings to fruition part of that vision. It includes $621 billion aimed at upgrading, improving, repairing the nation’s infrastructure such as:
o $115 billion for the construction and repair of highways, bridges, and roads
o $85 billion for public transit
o $80 billion for passenger and freight rail modernization
o $174 billion to support research, development, and deployment of electric vehicles
o $42 billion aimed at building and improving airports, water transit, and ports
o $45 billion to rectify transportation inequities
o $50 billion to fortify infrastructure and make it resilient to climate change and wear and tear
o $30 billion for other transportation-related initiatives
• Infrastructure at Home: The Plan sets aside $650 billion for non-transportation infrastructure, also known as home-based infrastructure, including:
o $111 billion for clean drinking water
o $100 billion for high-speed broadband support and expansion
o $100 billion for electrical infrastructure
o $213 billion for affordable and sustainable housing
o $137 billion for public schools, early-learning centers, and community colleges
o $28 billion for other various projects
• R&D, Workforce Development, and Manufacturing: The Plan includes $580 billion for workforce development and manufacturing:
o $180 billion for research and development
o $300 billion for manufacturing and small businesses
o $100 billion to develop a next generation workforce
• Caretaking Economy: The Plan is also set to include $400 billion for home and community-based care for the elderly and individuals with disabilities.
• How will it be paid for: President Biden plans to fund the proposal through an increase in the corporate tax rate to 28% and as well as other measures designed to prevent offshoring profits by corporations to avoid paying taxes.
American Families Plan
In April, the Biden Administration unveiled another ambitious spending package aimed at expanding access to education and childcare, referred to as the American Families Plan. Altogether, this $1.8 trillion collection of spending increases and tax cuts along with the previously mentioned infrastructure package comes with a price tag of just over $4 trillion. President Biden spoke at length about the Plan during his speech at a joint session of Congress on April 28th.
Some of the key provisions of the American Families Plan include:
• The primary goal of the Plan is to expand access to preschool, community colleges, childcare, and other healthcare benefits. “Part two” of President Biden’s two-part spending package seeks to overhaul the nation’s social infrastructure.
• The proposal includes $1 trillion in new spending:
o Free Pre-K and Community College: The Plan promises universal Pre-K for all three- and four- year-olds and two years of free community college. Included in the Plan are $200 billion to build up the infrastructure to support universal Pre-K and another $109 billion over 10 years for community college enrollment.
§ $85 billion is also set aside to increase Pell Grant award amounts
o Funding for Minority-Serving Institutions: President Biden’s Plan calls for $39 billion over the next decade to fund two years of subsidized tuition at HBCUs for families making less than $125,000.
o Affordable Child Care: $225 billion is set aside to make childcare more affordable.
§ Under the Pan, families earning 1.5 times their state median income would pay no more than 7% of their income on childcare.
§ The Plan would also give childcare providers funding to maintain small class sizes and classrooms to help children with disabilities.
o Paid Family and Medical Leave: The Plan includes $225 billion invested over 10 years to create and maintain a nationally mandated parental, family, and personal illness leave program.
§ It seeks to provide up to $4,000 a month for workers on leave
o Unemployment Insurance Reform: In his proposal, President Biden announced his intention to introduce legislation to reform unemployment insurance so that it would automatically adjust the length, and amount, of benefits unemployed workers receive based on the condition of the economy
• $800 billion in new tax credits:
o Child Tax Credit Extension: With a cost of up to $400 billion, the proposal seeks to extend the Child Tax Credit and make it permanently fully refundable. This was expanded in ARPA.
o The Child and Dependent Care Tax Credit expanded from ARPA would be made permanent.
o Earned Income Tax Credit Expansion for childless workers would also be made permanent.
o ACA Premium Tax Credits: Expanded Affordable Care Act premium tax credits passed under ARPA would be expanded, as well.
• While the American Jobs Plan would be paid for through a corporate tax increase, the American Families Plan would roll back the 2017 Trump tax cuts and increase the top individual tax rate from 37% to 39.6% for those in the top 1% of income.
o Also included is an increase in the capital gains tax for households making more than $1 million
Both spending packages proposed by the Biden Administration are ambitious and will face tough roads to passage with slim Democratic majorities in the House and Senate. The President has indicated that he is willing to work with Republicans and Democrats to develop a proposal that can receive bipartisan support. At the same time, the President has indicated that if Republicans are not willing to work to address issues related to infrastructure and economic recovery, he will work with congressional Democrats to find a path forward that does not require bipartisan support.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
FISCAL IMPACT
The City has an existing agreement with Townsend for a not-to-exceed amount of $252,000. There is no additional cost to have Townsend provide these quarterly legislative updates as they are included as part of the monthly scope of work that the City is billed for.
COORDINATION
This report has been coordinated with Townsend Public Affairs and the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov>.
RECOMMENDATION
Recommendation
1. Note and file the 2021 Q1 Legislative Update; and
2 Approve the amended 2021 Energy Legislation, Regulations, and Issues and Public Safety Legislative Advocacy Positions.
Staff
Prepared by: Christine Jung, Assistant to the City Manager
Approved by: Deanna J. Santana, City Manager
ATTACHMENTS
1. Legislative Advocacy Position Policy
2. 2021 Legislative Advocacy Positions
3. Amended 2021 Energy Legislation, Regulations, and Issues and Public Safety LAPs
4. 2021 Q1 State Legislation
5. 2021 Q1 Summary of Legislative Action