CAPITOL UPDATE #30 August 11, 2022

This two year legislative session is nearing a close. Pending bills must be out of the legislature and on the Governor’s desk by August 31 and he has one (1) month to either sign into law, veto or allow the bill to become law without his signature. Bills that were in the suspense file were required to be removed by August 1. Up until August 15 there will still be policy meetings but from 8/15-31 there will only be floor sessions and August 25 is the last day to amend bills.

CFRW Legislative Analyst have reviewed over 80 bills in the Capital Update plus the propositions. Proposition 30, Tax on Income Above $2 million for Zero-Emissions Vehicles and Wildfire Prevention – Proposition 30 would increase the tax on personal income above $2 million by 1.75% and dedicating the revenue to zero-emission vehicle subsidies; zero-emission vehicle infrastructure, such as electric vehicle charging stations, and wild fire suppression and prevention programs. This would be in addition to the current tax rate of 13.3% and would take effect on January 1, 2023.

The initiative provides that the tax would end on the earliest of the following dates: January 1, 2043 or January 1 after three consecutive calendar years after January 2, 2030, of statewide emissions reduced by 80% of 1990 levels. Revenue from the increased income tax would be appropriated into the Clean Cars and Clean Air Trust Fund.

It would then be allocated to the following three sub-funds: Zero-Emission Vehicle Infrastructure Investment Plan Sub-Fund (35% of revenue, Zero Emission Vehicle and Clean Mobility Sub-Fund (45% of revenue) and Wildfire Green House Gas Emissions Reduction Sub-fund (20% of revenue). The sub-funds would fund zero-emission vehicles, charging stations, and infrastructure, as well as hiring and training firefighters.

Those in support include the California State Assoc. of Electrical Workers and California Environmental Voters. Proposition 30 has received opposition from Governor Gavin Newsom, the California Teachers Association, and the Howard Jarvis Taxpayers Assoc. The Governor called it a “special interest carve out, a cynical scheme devised by a single corporation fo funnel state income tax revenue to their company.”

SB 1084 – Property ownership: foreign ownership: foreign governments. Existing law provides that all property has an owner, whether that owner is the state, and the property is public, or the owner is an individual, and the property is private. Existing law requires the Department of Food and Agriculture to promote and protect the agricultural industry of the state. Existing law requires the department to enhance, protect, and perpetuate the ability of the private sector to produce food and fiber in a way that benefits the general welfare and economy of the state.

This bill would prohibit a foreign government from purchasing, acquiring, or holding an interest, as defined, in agricultural land within the State of California. The bill would exempt land held by foreign governments before January 1, 2023, from that prohibition. Since California began regulating groundwater in 2014, farmers have noticed a stream of outside investors – often hedge fund companies – buying up land to secure water rights in the San Joaquin Valley.

The fear is that these companies could undercut U.S. producers by controlling the water supply through developing pump stations and other infrastructure to move water to other properties. Local small rural farmers just cannot compete with the power or foreign investors for the scarce resource of water. Additionally foreign food processing companies are already seeking to vertically integrate their investments in the U.S. allowing them to control the food supply chain from field to processing. This bill is intended to stop that trend.

Status: Assembly Appropriations Committee hearing on August 3 rd placed bill on suspence file.