Things To Know: Senator Hill Bills Passed This Session

Contact: Aurelio Rojas 916-651-4013 / 916-747-3199 cell

Hill Ends First Senate Term With 14 Bills Signed Into Law, Including Payday Loan Alternatives, Gas Pipeline Safety and Campaign Disclosure

Senator’s Budget Measures Also Help Reform State’s Runaway Enterprise Zone Program and Rein In California Public Utilities Commission’s Use of Ratepayer Money without Oversight

SACRAMENTO – Sen.  Jerry Hill, D-San Mateo, had 14 bills signed into law this year before the governor’s review period ended on Sunday. This was Hill’s first year in the Senate after serving four years in the Assembly, where last year 18 of his bills were signed into law -- more bills than any member of the Legislature.

Here is the complete list of Hill’s bills that were signed this year:

SB 318 - Payday Loan Alternatives
Provides an alternative to payday loans by increasing access to loans for people who are unable to obtain affordable credit from banks and credit unions.  Californians who lack credit scores or have very thin credit files currently have few options when they need to borrow money; credit cards and low-interest rate installment loans are commonly unavailable to them.  Californians with subprime credit scores also have few options, and typically go to payday lenders when their incomes fail to match their spending needs.  SB 318 would establish a four-year pilot program to increase the availability of affordable, credit-building loans with principal amounts between $300 and $2,500.  The bill builds on a small-dollar loan pilot program enacted during 2010, which has failed to significantly increase the availability of responsible, small-dollar loans in California.  SB 318 continues the successful aspects of the earlier pilot, modifies components that have not worked as intended, and adds consumer protections that were not included in the earlier pilot.  The goal is to increase the number of lenders offering responsible, credit-building loans between $300 and $2,500 and expand access to these loans.

SB 291 - CPUC Electric Safety Enforcement
Requires the California Public Utilities Commission (CPUC) to develop a safety enforcement program for gas and electric violations.  Following National Transportation Safety Board and Independent Review Panel recommendations, the CPUC has allowed staff to cite utilities for gas safety violations, but the CPUC has not developed a program to improve safety using this increased staff authority.  This bill also requires the CPUC to extend this staff authority to electric safety violations. Roughly 10 people a year are killed at high-voltage electric facilities, but the CPUC has not opened enforcement actions against utilities for electrical violations of anything short of a massive wildfire.

SB 594 - Nonprofit Campaign Activity Disclosure
Ensures that taxpayer-financed organizations are held to the same standards of accountability and transparency as any other political action committee. Improves the transparency of campaign activity by nonprofit organizations that receive at least 20 percent of their gross revenue from taxpayer dollars and that engage in political or campaign spending. The bill requires these organizations to deposit into a separate bank account and disclose on their website and to the Franchise Tax Board all sources of non-public funds that the organizations receive and spend on electioneering.  SB 594 clarifies that nonprofits cannot use public resources they receive for campaign activities. Public resources include funds generated from activities related to tax-exempt bond financing.  Finally, the bill requires the Franchise Tax Board to perform an audit when campaign activity by a nonprofit organizations amounts to $500,000 or more in a year.

SB 557 - High-Speed Rail Protections on the Peninsula
Limits the high-speed rail project on the Peninsula to a blended, primarily two-track system that minimizes impacts to communities along the Caltrain right-of-way. Puts to rest concerns on the Peninsula that the California High-Speed Rail Authority could revisit a four-track option that disrupts communities. Gives  local agencies like Caltrain veto-authority if a four-track option is ever revisited. The bill also closes a potential loophole by ensuring that funds cannot be transferred from the Peninsula segment to other segments of the project.

SB 132 - Mountain Lion Protections
Resolves dilemma that led to the fatal shooting of two starving cubs in Half Moon Bay on Nov. 30, 2012.  Requires that non-lethal procedures be used when the Department of Fish and Wildlife (DFW) is called to deal with a mountain lion that has wandered into a residential area and does not pose an imminent threat to the public. Authorizes the DFW to partner with wildlife groups and nonprofits in these cases.  Non-lethal options that may be considered include capturing, pursuing, anesthetizing, marking, transporting, hazing, relocating, providing veterinary care to and rehabilitating mountain lions.

SB 589 - Vote-By-Mail Verification
Allows voters to confirm their mail-in ballot was counted. Requires county election officials to establish a system allowing vote-by-mail voters to learn if their ballot was counted and, if it was not, why it wasn't. The 2012 general election was the first time a majority of voters in California cast their ballots by mail. This legislation was suggested by the winner of Hill's annual "Oughta Be a Law…or Not" contest, who wrote that he has voted by mail for more than a decade, but is not sure that his votes have been counted because he could not obtain confirmation from the registrar.
        

SB 538 - Investment Adviser Oversight
Increases consumer protections by empowering the Department of Business Oversight (DBO) to better regulate investment advisers and broker-dealers.  California does not perform regular examinations of its broker-dealers, their agents, or its investment advisers or their representatives, averaging a license review and examination frequency of once every 28 years compared to the suggested time frame of once every four years.  Licensed broker-dealers and investment advisers are reviewed once, upon their initial application for a license, and often never again.  SB 538 makes several changes to the state's Corporate Securities Law of 1968 to improve the state's ability to protect California investors.  The bill's provisions augment the securities law enforcement resources of the DBO and streamline the process by which DBO may collect judgments from securities licensees that violate the securities laws.  SB 538 will reverse the historic under-funding of securities enforcement with fees paid by the regulated community, which allows California's securities regulators to better protect California investors. California is home to 3,100 licensed broker-dealer firms, which employ 285,000 agents, and to 3,600 licensed investment adviser firms, which employ just over 50,000 representatives. 

SB 269 - Preventing Rental Scams
Increases the consumer protections available to people who obtain prepaid rental listing services (PRLS) from people licensed to provide those services and includes changes intended to make it more difficult for unlicensed PRLS providers to engage in business.  The high demand for rental properties has created a market ripe for prepaid rental listing service scams.  In recent months, there have been news reports in various regions of the state, documenting abuses, and the Bureau of Real Estate has issued a Consumer Fraud Alert and Warning to encourage consumers to check out their rental list providers before paying for services. 

SB 684 – Continued use of RDA signs

Provides a process through Caltrans and local governments to allow continued use of Redevelopment Agency signs. These signs are currently approved by RDAs, but since they were disbanded, legislation is necessary to allow for their continued use provided they meet specific standards. There are about 100 of these large signs (typically on the side of freeways / highways) directing people to various stores in the RDA boundary.

SB 407 – Prevents Extravagant Local Government Employee Contracts

Extends the compensation restrictions and Abuse of Power provisions (AB 1344, 2011) to all local agency executives who work under an employment contract.  These restrictions were put in place after the City of Bell scandal was reported in 2010. The bill’s expansion includes city managers or county executives, but will also include deputy county executives and city managers and any other employee who has an employment contract  with a local agency.  SB 407 will prevent extravagant rewards to local agency employees and reduce the liability of local governments to provide paid leave and legal defense costs for employees who are convicted of abuse of power charges.

SB 482 – Removes Sunset on Grocery Store Price Verification Audit

Maintains consumer and business protections by continuing criteria and methodology for local governments to measure and to verify the pricing accuracy of check-out stand scanners (a.k.a. point-of-sale systems).  The law reflects a consensus agreement between county officials and retailers, and created uniform, statewide standards and fees thereby avoiding a county-by-county patchwork of scanner accuracy verification programs. 

SB 139 – Extends Exchange Facilitator Consumer Protections

Deletes the sunset date on a 2008 bill (SB 1007), which defined the term “exchange facilitator” and established a series of allowable and prohibited actions for exchange facilitators.  By deleting the sunset date in existing law, SB 139 ensures that the consumer protections added to our law by SB 1007 will continue indefinitely.  Exchange Facilitators are persons who facilitate tax-deferred transactions known as IRS Section 1031 exchanges.  Section 1031 of the Internal Revenue Code permits individuals and businesses to exchange similar real or personal property without triggering a taxable event.  In order to defer the capital gain from the sale of property under Section 1031, the taxpayer cannot receive funds from the sale.  The United States Treasury identified several safe harbors that taxpayers could use to exchange like property and avoid a taxable event.  Among the safe harbors are the use of a qualified intermediary and the use of a qualified trustee or escrow holder, both commonly referred to as an exchange facilitator. In the 1031 exchange proceeds from the sale would to go the exchange facilitator who holds them until they are needed to acquire a replacement property, then the funds are delivered to the closing agent.  An exchange facilitator can generally hold distributed funds for up to 180 days while the exchange is completed. 

SB 762 – Secondhand goods:  lost, stolen, or embezzled items

Enhances existing laws governing the sales of unlicensed secondhand goods and provides additional due process protections to licensed pawnbrokers and secondhand dealers in order to limit the potential for criminal transfer of property.

SB 472 – Hollywood Park Card Club

Allows a three-year divestment period for Hollywood Park Card Club after the Sahara Hotel and Casino in Las Vegas opens due to the card club’s unique ownership situation.  Current California law prohibits entities from owning gaming interests within the state and outside of the state.  It is intended to provide a smooth ownership transition for CalPERS and the pension funds which own the card club and the City of Inglewood where the card club facility is located.  Language in the bill prevents Hollywood Park card club from utilizing Sahara funds during the divestment period and disallows cross-promotion between the two facilities.

Hill's Budget Reforms

Enterprise Zones

Senator Hill helped overhaul California's economic development program in an effort to encourage manufacturing and job growth in the state.  Changes spurred by Hill's SB 434 redirected about $750 million in business tax breaks that had been awarded for creation of low-wage jobs by employers that included temporary worker agencies, strip clubs, bars, retailers and restaurants.

Thanks to provisions that are now in place as a result of budget legislation this summer, the geographic boundaries of existing enterprise zones remain largely in place, but eligibility for hiring credits and other benefits has been limited to employers with higher-wage jobs. The new provisions also enable companies throughout the state that meet qualifications to receive hiring tax credits, which ends the incentive for companies to fire employees in one part of the state and hire replacement workers in an enterprise zone in another part of the state.

New incentive programs include a sales tax exemption for manufacturing and bioresearch companies. Also, the Governor's Office now has the ability to provide incentives in recruiting companies to come to California.  Further reforms end the practice of allowing contingency fees for tax consultants, which drove up the program costs with excessive claims. Finally, the reform increases transparency so taxpayers know where their money is going.  The old enterprise zone program was not required to disclose the companies that received tax breaks; investigative news reports revealed that strip clubs had received thousands of dollars in state funds thanks to the old program.

California Public Utilities Commission

At Hill's urging, the Legislature passed reforms to rein in the CPUC's runaway power, including:

Limiting the creation of off-book nonprofits - The CPUC has created and attempted to create nonprofits to funnel hundreds of millions of dollars to them so that commissioners could expend that money without any accountability to the governor or the Legislature.  This year's budget reforms prevent the CPUC from doing so without the Legislature's approval.

Curtailing conflicts of interest with nonprofits - In creating CPUC nonprofits, CPUC commissioners have appointed themselves to run those nonprofits, even though their positions with the nonprofits are in conflict with their duties as commissioners.  These reforms prevent CPUC commissioners from serving on nonprofits they help create.

Limiting non-competitive research grants - Last December, the CPUC awarded a $150-million research grant to Lawrence Livermore National Laboratory - a staggering amount for a single project - without a competitive process or peer review.  In a compromise with the Governor's Office, the Legislature has reduced the grant to $35 million.  A long-term solution to ensure competition and peer review in research grants is currently being developed in Hill's SB 48.

Enhancing ratepayer advocacy - The Division of Ratepayer Advocates is the state's in-house advocacy group responsible for keeping electric, gas, water, and telephone rates low.  The division's ability to fulfill its mission has been hampered as the CPUC has control of the division's funds.  Budget reforms have given the division the financial independence it needs to advocate for consumers.

Nate Solov

Office of Senator Jerry Hill

916-651-4013

www.senate.ca.gov/hill