California's Legislative Session Wraps Up: What You Should Know

Groundwater, guns, and campaign ethics dominated the latest round of legislation completed by California lawmakers during their latest session that was completed at the end of August. We'll walk you through some of the important items discussed and how they can impact you. Some bills addressed constitutional issues, while other legislation more directly addresses issues tied to the health of the California economy for business. A couple key points discuss include:

  • AB 1014 allows empowers law enforcement officers and family members to petition the court for restraining orders to remove guns from potentially dangerous people. The bill passed the Assembly and Senate, and awaits the governor’s signature.
  • Most California businesses have little need for drones, although perhaps in the future they will be more common (think of Amazon.com). Nonetheless, the legislature took steps to protect privacy rights in light of the rising use of drone technology, specifically individuals’ privacy rights in terms of warrantless surveillance.

Federal Corruption Charges Result in Campaign Disclosure Bills

Who wouldn't want to be treated to sporting events and top celebrity concerts? In California, hopefully lawmakers will think twice before accepting such treats after passage of bills limiting what lobbyists can provide to candidates and delineating how much campaign money may be used for personal pleasure.

Most California businesses never contemplate directly lobbying a legislator. The Markkula Center for Applied Ethics at Santa Clara University used the following as a definition of lobbying: “…a deliberate attempt to influence political decisions through various forms of advocacy directed at policymakers on behalf of another person, organization or group.” However, they also made it clear that curtailing lobbying must be weighed against the First Amendment guarantee that the government shall not make laws limiting individuals’ right "to petition the government for a redress of grievances."

How does this connect with most California businesses? Many business owners belong to industry groups. Industry groups have agendas, seeking legislation favorable to their industry, whether it is environmental, tax, or employment related.

Keeping Hollywood Productions in California

Economic development got a shot in the arm with the newly signed Film and Television Tax Credit Program. According to Governor Brown, "This bill helps thousands of Californians - from stage hands and set designers to electricians and delivery drivers." Keeping movie and television production in the region benefits numerous California businesses, and may even staunch the flow of entertainment industry jobs out of the region and instead result in more businesses relocating to California. The bill, AB 1839, ups the tax credit for the industry and also implements a more balanced and fair system for choosing tax credit recipients.

According to the LA Times, the Film and Television Job Creation and Retention Act should remedy the significant drop in film production figures for California’s entertainment industry, resulting in increased job opportunities and improved California economic development across a variety of supporting industries such as prop makers and on site vendors. This means that even California businesses not directly associated with the entertainment industry may feel the benefits of the act, from food suppliers to warehouse and fulfillment centers.

Groundwater Regulations Aim to Maintain California Economic Development

California has a long, rather Byzantine legal history in terms of water rights and regulation. In the past, California steered clear of state control in deference to property rights. Several choice descriptions of California’s water history exist:

  • “The history of California in the twentieth century is the story of a state inventing itself by water.”
  • “California’s water system might have been invented by a Soviet bureaucrat on an LSD trip.

Self-invention and illicit substances aside (not to mention Soviets), the extended drought punishing California threatens not only the welfare of existing California businesses, but also dampens the potential interest of businesses relocating to California.

Groundwater makes up over a third of the state’s supply of water. Pumping too much out results in an “overdraft” of groundwater resources. Several serious issues arise from overdraft, from elevated saline concentration in the remaining water to loss of water in other areas due to low levels of streams used to “recharge” aquifers.

The groundwater legislation requires management plans adopted at the local level, with special attention paid to groundwater basins already in an overdrafted state. The legislation sets forth a series of steps and deadlines for groundwater management:

  • Management agencies identified by 2017
  • Sustainability plans created for overdrafted groundwater basins by 2020
  • Sustainability plans created for other basins by 2022
  • Sustainability for many groundwater basin by 2040

On September 16, 2014, the governor signed the bills creating a system of groundwater management. The extended drought resulted in many Ontario California businesses feeling the dearth of available water and increased costs associated with this. The new legislation improves business and economic prospects for the region, potentially creating a more attractive destination for businesses relocating to California and a more sustainable California economy for business in the long term.   

California Legislation is in the Bag

Sometimes the most mundane legislative issues seriously affect the California economy. For business in the retail sector, one such issue is the possibility of California banning the single-use plastic bags typically used by retailers for purchased items. If signed into law, SB 270 phases out single-use bags starting in 2015, and allows retailers throughout California to charge customers $.10 for bags.

Single-use bags create a HUGE amount of waste. However, Ontario California businesses involved in the manufacture, printing, and distribution of single-use shopping bags may need to rethink their business plans. Revamping existing production to create other reusable products may actually create jobs in Ontario California and other state areas with high production and distribution industry.

No one likes change, but at the heart of two pieces of recent legislation is concern for the environment. Nature flexed her muscles with the drought. California businesses may need to flex theirs and adapt to what may be some drastic changes in the law.