California Legislative Priorities

California Environmental Quality Act – SB 731 (Steinberg) – WATCH
The Leadership Group aims to protect CEQA’s fundamental purpose—environmental protection and public engagement.  The Leadership Group also wants to preserve the authority CEQA vests in local governments and, at the same time, minimize the abuse of CEQA by interest groups with agendas having nothing to do with the environment.

The Leadership Group supports Senate President Steinberg and is committed to working through the process he has established for negotiating CEQA reform this year. We appreciate the Senator’s commitment to enacting meaningful CEQA reform this session that stamps out misuses of the law that are preventing responsible projects from moving forward, often times for reasons that have nothing to do with the environment.  We view the language of SB 731 as a step forward in what will inevitably be a long and thorough vetting of the issues and negotiations over final language.

Capital Investments in Manufacturing and R&D/Tax Fairness

Tax Fairness for Startups and EntrepreneursSB 209 (Lieu) – SUPPORT:  The Leadership Group supports SB 209, a bill to repeal a retroactive tax on businesses that could be as high as $120 million. SB 209 would protect innovators and entrepreneurs from the Franchise Tax Board’s unprecedented call for a five-year retroactive tax that would hurt investors who support start-ups and small businesses that create jobs in California. A majority of the businesses that could be impacted are disproportionately California-based companies.

Sales Tax Exemption for Manufacturing and R&D equipment purchases – The Silicon Valley Leadership Group also supports SB 376 (Correa) and AB 486 (Mullin).  SB 376 and AB 486, as mentioned in the Governor’s May Budget Revise, would authorize a sales and use tax exemption for purchases of specified equipment, materials, and supplies by entities engaged in manufacturing as well as research and development.  The current practice of double taxation makes an employer’s decision easy when deciding where to expand operations and create more jobs – outside of California.  California is only one of three states which has yet to adopt some form of a sales tax exemption of this kind, leaving the California without a critical competitive advantage for economic growth and resulting jobs.

Cap & Trade Auction Revenue Use – Investment Plan Considerations

The Leadership Group supports a Cap & Trade Investment Plan that provides a clear nexus and direct link to verifiable greenhouse gas (GHG) reduction, leverages private investment, supports innovation and diffusion, and phases investments. We are concerned that loaning funds from the Greenhouse Gas Reduction Fund to the General Fund as outlined in the Governor’s May revise proposal would delay addressing a multitude of near-term needs that would yield large GHG reductions, help create jobs and improve air quality across the state and expose the program to lawsuits. The Leadership Group has identified areas where investments can achieve significant GHG reductions and yield meaningful co-benefits such as job creation and improved public health.  The areas include:

  1. Transportation and Sustainable Infrastructure Development – Through the increased availability of low-carbon and public and shared transportation, deployment of advanced technology vehicles and vehicle infrastructure, development of bike lanes and alternative transportation programs, and infrastructure that supports the implementation of SB 375 including transit-oriented development.
  2. Clean and efficient energy – Through energy efficiency, clean and renewable distributed energy generation, and related activities.
  3. Natural resource protection – Through measures associated with water use and supply, land and natural resource conservation and management, and sustainable agriculture.

Proposition 39 Implementation

In November 2012, California voters passed the California Clean Energy Jobs Act (Proposition 39), which made single sales factor mandatory to require out-of-state companies to pay taxes based on their sales revenue in California.  A portion of the increased revenue from this change is to be dedicated to energy efficiency and clean energy projects.  There are currently eight bills in the Legislature and a separate proposal from Governor Brown that all seek to address the energy projects investment issue for Proposition 39 implementation.

The Leadership Group believes that the following principles should be used in implementing Proposition 39:

1.  Funding should be provided for energy efficiency and clean energy generation.

2.  Public K-12 Schools, Community Colleges and Public Colleges and Universities should all be eligible for funding.

3.  Other funding should be leveraged to the greatest extent possible, including existing programs.

4.  Ensure accountability and a return on investment with auditing, benchmarking and/or other reporting mechanism(s)

Water Infrastructure – Support Bay Delta Conservation Plan and Water Bond

A reliable water supply is essential to maintaining California’s status as the world’s 9th largest economy. Yet, the statewide water supply system that supports most of California’s residents and businesses is facing unprecedented challenges and is in dire need of restoration, repair and upgrade.  This aging infrastructure – along with population growth, more frequent severe weather events, and an inability to move past age-old water wars – is pushing the state toward a new era of water scarcity.

The Leadership Group has been coordinating closely with the Governor and the Santa Clara Valley Water District to help define a politically workable and technically and fiscally practical solution to address the deteriorating situation in the Sacramento-San Joaquin Delta.  We are also supportive of a Water Bond solution which will support the BDCP while also helping to address important water issues here in the Valley.

Permanent Source of Funding for Affordable Housing – SB 391 (DeSaulnier) – SUPPORT

For many years, the Leadership Group has worked to establish a permanent source of funding for affordable housing.  With the elimination of redevelopment, this effort has become even more important.  Senator DeSaulnier’s bill would put in place a modest fee of $75 on document recordings excluding real estate transactions that result in a change of ownership.  The Leadership Group strongly supports this measure.

K-12 Education Finance Reform

The Leadership Group applauds the Governor for his leadership in raising the level of debate and reform in the state’s K-12 funding system.  The Leadership Group is also encouraged by recent action by the Legislature to dedicate itself to this major policy undertaking.  Our members believe that the time for K-12 funding reform is long overdue, and the state’s overly complex system can be streamlined and data, student outcomes, teacher quality and accountability can all be improved.

Investing in California’s Workforce: SB 594 (Steinberg) – The Dropout Reduction and Workforce Development Bond Act of 2013 – SUPPORT

California suffers from both a high number of high school dropouts and a shortage of skilled workers in high-growth sectors such as biotechnology research and development, engineering and construction, advanced manufacturing, health sciences and nursing.  Investing more in public-private partnerships will enhance the human capital of our workforce and lead to wage and employment growth.  SB 594 states the intent of the Legislature to appropriate $250 million to fund grants and loans to schools and community college districts to develop business-school partnerships in career pathways programs.

Advocate for Comprehensive Immigration Reform / Bolstering California’s Economy: AJR 3 (Alejo) – SUPPORT

For decades, the best and brightest from around the world have come to Silicon Valley and California to innovate. But U.S. immigration policies, along with growing opportunities in other countries, are now keeping them out.  Our economic success will rise or fall based on our ability to recruit and retain high-skilled workers.  It is urgent for Congress to quickly pass immigration reform so we can compete globally for these skilled workers in the crucial years ahead; the Leadership Group urges the California Legislature to pass AJR 3 and take an active role in this debate.

Protecting Online Privacy While Fostering Innovation: SB 383 (Jackson), AB 844 (Dickinson), AB 370 (Muratsuchi) and SB 501 (Corbett) – WATCH

The Leadership Group is monitoring a number of bills related to online privacy and use of personal information on the Internet. Our members are concerned about over-reaching state legislation that regulates the internet, online commerce and social media in such a way that adversely affects California employers, industries and consumers. The following bills are cause for concern: SB 383 (Jackson) and AB 844 (Dickinson) seek to limit the amount of personal information provided in online transactions that will hamper online retailers’ ability to protect against consumer fraud; AB 370 (Muratsuchi)’s Do Not Track legislation and SB 501 (Corbett)’s Social Networking Privacy Act would create burdensome requirements that will inhibit website operators’ ability to conduct business and discourage innovation.

Product Stewardship – Support Thoughtful, and Economically Rational Waste Reduction

As the need to address waste and promote reuse and recycling grows, Extended Producer Responsibility (EPR) has emerged as one route to decreasing the waste stream.  While the end goal of EPR is to increase product recycling rates, the text AB 488 (Williams) does not accomplish this in a targeted, cost-effective and efficient way.

Adopt Pension Reform Measures to Further Address Unfunded Liabilities

Following the enactment of modest public employee pension reforms in 2012, unfunded pension and retiree healthcare liabilities cast an enormous cloud over the state’s long-term fiscal health.  Even the most favorable estimates by California’s public pension funds themselves estimate unfunded liabilities of $60-80 billion after last year’s reforms – some independent analysts estimate the figure to be as high as $400 billion.  Meanwhile the state is carrying $62 billion in unfunded liabilities for retirement healthcare and dental costs and a $65 billion gap in CalSTRS funding not addressed by last year’s reforms.  Failure to address these shortfalls puts at risk the well-being of our state public employees as the danger.  Meanwhile, the state’s long term fiscal health – and the uncertainty that deters business investment – grows.  These issues are not going to be solved quickly or easily, but steps that continue to address these problems must be taken now.