January 15, 2020

Perspectives and Insights for the 2020 Legislative Year

By Matthew Allen and Gail Delihant

The California Legislature will soon be returning to Sacramento to begin the second year of their 2019-2020 legislative session. The capitol hallways will be bustling with lawmakers, staff and lobbyists, as they scurry to meetings and committee hearings to address the thousands of new bills that will most assuredly be introduced. The second year of the two-year session also gets off to a much faster pace since those bills that became two-year bills in the previous year have to meet specific legislative deadlines by January 31st to remain active.

While it is still too early to have a complete picture of what the major legislative battles and bills will be for this year, we would like to provide some insight into those issues that we anticipate will be front and center with the Legislature and with Governor Gavin Newsom. This year could be quite interesting because legislators now have the benefit of knowing where the governor stands on issues since he has now signed and vetoed thousands of bills. Many of the policy goals for 2020 will be affected by the state budget.

The governor will release his 2020 budget by January 10th. While 2019 had a $21.5 billion surplus, the projected 2020 surplus is only $4 billion. The Legislative Analyst’s Office has recommended new ongoing spending be limited to $1 billion since the state needs to further prepare for a future recession. The Assembly released its “2020-21 Blueprint for a Responsible Budget” earlier this month.

Their budget goals highlight:

•   building reserves to protect programs against the impact of a recession;

•   higher levels of education funding;

•   healthcare and human assistance being maintained at current funding levels;

•   maximizing housing and homelessness investments;

•   expanding paid family leave;

•   further addressing wildfires and emergency power disruptions; and

•   making additional reforms to the corrections system.

The Assembly budget framework also places a priority on oversight of the Department of Motor Vehicles, the legal cannabis program and implementation of California’s new safe and affordable drinking water program.

The impacts of the Dynamex decision and the subsequent passage of AB 5 last year are becoming very real for California’s employers. The Dynamex decision was the result of a 2018 California Supreme Court case involving Dynamex Operations West, a package delivery company that reclassified its employees as independent contractors and forced them to use their vehicles and pay for gas and other expenses. AB 5 largely codified Dynamex and provides clarification about who is and who is not an independent contractor. Misclassification can lead to numerous penalties and expensive litigation for employers. WG took an ‘oppose unless amended’ position on AB 5 because we were asking for an amendment that would clarify that trucking owner-operators would be able to remain independent contractors and not employees. Unfortunately, this clarification was only provided for truckers who provide services to the construction industry. A lawsuit has been filed in federal district court by the California Trucking Association that argues that Dynamex and AB 5 are federally preempted. This court case could take years to litigate to a conclusion. In the meantime, it is expected that many industry sectors will continue to ask for additional exclusions or carve-outs to the law. At the time of this writing, an initiative proposal has been submitted to the Office of the Attorney General for title and summary by Uber, Lyft and DoorDash that challenges AB5’s impact on their business model.

Two bills (SB 54 Ben Allen/AB 1080 Lorena Gonzalez) that are intended to do away with “single-use” packaging failed to garner enough votes for passage the last night of session in September. The governor and legislature want to see legislation regulating single-use packaging passed early in 2020. Although SB 54 and AB 1080 represent laudable goals to increase recycling and composting, the current version of these bills has unrealistic timelines, heavy-handed regulations and significant penalties that have the potential to negatively impact food safety and food quality. Additionally, unintended consequences of these bills will result in food being thrown out and landing in landfills due to shorter shelf life. The agriculture coalition opposed the bills and has been working on amendments with the Administration and authors that will address our concerns. To complicate this process and put pressure on the legislature to pass a comprehensive recycling bill, an initiative proposal has been filed by Recology and environmental groups which would give California broad new regulatory powers and fee authority on California recycling and plastic pollution. The Governor wants one of these bills to reach his desk for signature and one likely will.

As outlined above, 2020 will be a busy legislative year. WG staff in Sacramento is always available to provide additional information to our members. We encourage you to reach out with any questions and concerns that you may have.