Bills & Budgets: Legislative Update

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Edelstein Gilbert Robson & Smith

June marks the halfway point in the legislative calendar. By early June,  most bills must pass out of the house they were introduced in to keep moving. The only exceptions are urgency bills and constitutional amendments which must be passed on a 2/3 vote of the Legislature.

Consequently, the “house of origin” deadline is an important milestone in the legislative process. Every year it signals important changes in how the Legislature reviews and acts on bills. In 2021, it had more significant implications than usual.

Legislative Process Becomes More Serious

April and May are some of the busiest times in Sacramento. At the beginning of April, no bills have died. Essentially, if a bill is authored by a Democrat who wants their bill to be heard, it will probably get at least one hearing. Legislators, staff, and lobbyists run back and forth between meetings and hearings endlessly. Ironically, despite all the extra effort earlier in the year, the most serious work that happens in the Legislature usually happens after the house of origin deadline.

Democratic legislators usually don’t like to vote against bills authored by their colleagues. That’s especially true of Assembly members voting against their Assembly colleagues and Senators voting against their Senate colleagues. After the house of origin deadline, Assembly bills move into the Senate and vice versa. The entire process of policy committees vetting these bills starts over in the “second house.” Generally speaking, legislators are far more willing to dig into the issues and force concessions from an author in the second house.

Fewer Bills and More Focus

Inevitably some bills die in their house of origin. As a consequence, when policy committees begin to evaluate bills from the other house, they have a little less on their plate. So do the legislators who sit on those committees and the lobbyists trying to engage on those bills. While the work isn’t as hectic as it is in April and May, it’s far more important because there are more opportunities to get traction when trying to “fix” or kill a bad bill.

In 2021, the house of origin deadline resulted in a much more significant culling of bills. You will recall that at the end of 2020 several priority bills failed to pass simply because the Legislature, whose normal processes were upended by social distancing requirements, was unable to get to them before the end of session. To avoid the same problem in 2021, leadership in both houses agreed that members would only be able to send twelve bills to the second house. Far more bills failed to move forward this year in light of this limitation.

Less Time to Kick the Can Down the Road

The other reason policy committees rarely stop bills in their house of origin is that there is theoretically plenty of time left to work out any problems. That shouldn’t matter and legislators should still vote on the merits of a bill in its current form, but it simply isn’t how things work. It is extremely common for legislators to express concerns, but still vote for bills in exchange for loose commitments from an author to address concerns as the bill moves forward.

Half of the legislative process may be over after the house of origin deadline, but there is far less time for the second house to review bills. Bills introduced in January and February have until the beginning of June to pass out of their house of origin. In 2021 for example, in the second house, bills must be heard in policy committee, often in the Appropriations Committee, and pass off the floor between the beginning of June and the end of session on September 10. In that time, the Legislature will go on summer recess between July 14 and August 16.

What if a Bill Doesn’t Meet the House of Origin Deadline?

Bills that fail to pass out of their house of origin before the deadline in the first year of the Legislature’s two-year session won’t move for the rest of the year. While it’s usually a pretty good indicator that a bill is in trouble, if a legislator can marshal the votes to get their bill off the floor before the end of January in the second year of the two-year session, the bill will continue to move forward.

Budget

June is also the critical month for budget negotiations. California’s Constitution mandates that the Legislature pass a budget by June 15. For years, the Legislature and the Governor blew past this deadline like it wasn’t even there. In 2010, for instance, the Legislature did not pass a final budget until October.

That probably helped convince voters to pass Proposition 25 in November 2010. Prop. 25 dictated that if the Legislature didn’t pass a balanced budget by June 15, legislators would have to forfeit their pay. In 2011, Democratic leadership wrangled with then Governor Jerry Brown over steep cuts to services needed to balance the budget. They passed a budget viewed by many as being out of balance.

John Chiang, who was State Controller at the time, took it upon himself to enforce Prop. 25 and cut off legislative pay. The Legislature quickly reached agreement with the Governor on a balanced budget and has continued to meet the June 15 deadline ever since.

There is very little risk of the Legislature failing to meet the June 15 deadline in 2021. Even so, it appears that there are many outstanding items that have yet to be agreed to by the Governor, Assembly, and Senate. It is likely that the Legislature will pass a placeholder budget on June 15 that adopts certain spending limits but defers the finer details of budget negotiations to future budget trailer bills. For instance, a budget bill (SB 112) which went into print yesterday made a massive $17.8 billion appropriation contingent upon the enactment of future legislation. Included in this appropriation were multi-billion proposals on broadband deployment, transportation, and drought resilience funding. However, without agreement on exactly how the money should be used, the Legislature seems ready to appropriate the funds and work out the details after June 15.

We will keep you apprised of further developments.

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Since 1985, Edelstein Gilbert Robson & Smith LLC has been providing effective and aggressive representation on a wide variety of issues on behalf of a diverse mix of clients. Visit us online at https://www.edelsteingilbert.com/

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The California Alarm Association develops and manages programs to benefit members and to promote the growth of professionalism in the electronic security industry throughout the state of California. We exist to serve our members and associates by being the industry advocate and liaison with public safety agencies, government bureaus, and licensing, standards and regulation bodies.