Prepared by: Precision Advocacy

The house of origin deadline for two-year bills passed on January 31, with several controversial bills having been left behind due to a lack of votes on the floor. The most high profile bill, which was the subject of several media campaigns both for and against, was AB 1400 (Kalra) Guaranteed Health Care for All, which would have established a single-payer health care coverage program in California provided a funding mechanism was passed by the Legislature and approved by voters. Due to the controversy, Assemblymember Ash Kalra (D-San Jose) chose not to bring the bill up for a vote rather than have it voted down by his colleagues.

The next big deadline is the Legislature’s bill introduction deadline on February 18.

Budget Early Action Package

As part of his January budget proposal, Governor Newsom requested the Legislature act on several high priority items early in the year. The Senate Budget and Fiscal Review Committee will consider the items on February 3, and the Assembly Budget Committee will follow suit on February 7. The measures are not yet in print, however should be by the time they are heard in committee. Below is an outline of early action items we anticipate will be taken up, including current year COVID-19 funding and an extension of paid sick leave.

COVID-19 Funding: The administration is requesting $1.4 billion in the current year to support continued vaccine distribution and administration, including booster shots, statewide testing, statewide hospital and medical surge efforts, precautionary measures in state institutions, contact tracing, and efforts to protect public health and the border. The total funding request, which includes funding for the 2022-23 budget year, is proposed at $2.7 billion General Fund.

COVID-19 Supplemental Paid Sick Leave: SB 95 (Skinner), Chapter 13, Statutes of 2021, which expired on September 30, 2021, required specified employers to provide COVID-19 supplemental paid sick leave to covered employees. Last week, Governor Newsom and legislative leaders announced an agreement on a framework to extend COVID-19 supplemental paid sick leave through September 30, 2022. The agreement includes up to two weeks of supplemental paid sick leave to recover from COVID-19 or care for family members with the virus, would apply to all businesses with 26 or more employees, and would be retroactive to January 1, 2022.

Employers would be required to provide up to 40 hours of flexible paid COVID-19 sick leave for full-time workers who are sick or caring for an ill loved one. It would also require employees to provide proof of a positive test to qualify for an additional 40 hours of paid time off. Part-time workers would be eligible for sick leave equal to the number of hours they typically work in a week.

Human Services

• Appropriates $27.5 million for reimbursement rate supplements to support family child care providers.
• Authorizes a social worker to place a child in the home of a relative in which the juvenile court has authorized placement, regardless of the status of any criminal record exemption or resource family approval, if the court has found that the placement does not pose a risk to the health and safety of the child.
• Authorizes the Department of Social Services, until December 31, 2022, to the extent permitted by federal law and guidance, to use federal funds administered by the federal Office of Refugee Resettlement to award contracts and grants to private for-profit organizations to support refugee resettlement efforts within the State of California. The bill would require the department to prioritize funding for qualified nonprofit organizations and counties over funding for private for-profit organizations, if practicable, and would require the department to track and document the funding provided to each type of service provider and the purposes for use of the funding.

Net Operating Losses/Tax Credits: The administration has proposed a number of changes to California’s tax system that must be implemented early in order to be utilized in the 2022-23 budget year.

• Net Operating Losses: $5.5 billion in 2022-23 to restore the use of net operating losses and business tax credits.
• Innovation Headquarters Tax Credit: A tax credit Administered by the Franchise Tax Board, beginning in 2022 for companies investing in activities and technologies mitigating climate change that are headquartered in California.
• Green Energy Tax Credit: A tax credit to fund pre-development costs for electric vehicle manufacturing and infrastructure; geothermal, lithium extraction, and battery manufacturing; long-duration storage; addressing methane emissions; and hydrogen technologies to reduce the use of natural gas. If the business becomes profitable, a share of profits would be repaid to the State.
• Elective Pass -Through Entity Tax: Statutory changes are proposed to assist California businesses in participating in an elective tax and credit program designed to allow certain business owners to fully deduct on their federal tax returns the California taxes they pay on pass-through business income. The administration is requesting statutory changes prior to the March 15, 2022 tax filing and payment deadline for pass-through business entities.
• State Small Business Credit Initiative: California will receive $1.2 billion through the American Rescue Plan Act of 2021. $1 billion will support the Capital Access Program for Small Business, California Capital Access Program Collateral Support at California Pollution Control Finance Authority, and the Small Business Loan Guarantee Program. $200 million will establish a Venture Capital Program at IBank for underrepresented venture capital managers, underserved entrepreneurs and business owners, socio-economically disadvantaged areas, and climate equity and climate justice. The application for funding through the State Small Business Credit Initiative was released December 10 and is due by February 11, 2022.

Felony Sentences for Certain Thefts Under $950

One of the initiatives that is currently being proposed for the November 2022 ballot is the authorization of felony sentences for certain thefts under $950. If passed, this measure would allow prosecutors to file felony or misdemeanor charges for thefts of any amount under $950, which is currently only chargeable as a felony in certain circumstances, against a person with two or more prior specified theft convictions. Additionally, this measure would allow sentencing enhancements for any felony resulting in significant property loss or damage and authorizes prosecution for theft in any county where the acts occurred.

Background

Current state law defines felonies as either violent and serious felonies (which include murder, robbery, and rape) or felonies that are not violent or serious (which include human trafficking and selling illegal drugs). People whose current or past felony convictions are serious or violent can be sentenced to state prison, while those who have no current or past convictions for serious or violent crimes are typically sentenced to county jails and/or supervision by a county probation officer.

People convicted of misdemeanors can be sentenced to county jail, supervision by a county probation officer, a fine, or some combination of the three. Misdemeanor crimes typically carry maximum punishments of six months to a year in county jail, and many times are supervised by a county probation officer for less time than felony convictions. But state law includes various sentence enhancements depending on the circumstances of the crimes or their criminal histories.

Some crimes, such as identity theft, can be sentenced as either a felony or a misdemeanor, commonly known as "wobblers." Sentencing decisions on wobblers is left to the court and based on the specific circumstances of the crime and the criminal history of the person being sentenced. In 2014, voters approved Proposition 47 which reduced certain theft-related crimes from wobblers to misdemeanors. Prop 47 further requires that the annual savings to the state resulting from the proposition's sentencing changes be spent on mental health and substance use services, truancy and dropout prevention, and crime victim services. The estimated savings for the 2020-21 fiscal year is about $116 million.

Proposal

If passed, this measure changes state law to make petty theft (theft involving property worth $950 or less) and shoplifting (stealing property worth $950 or less from a commercial establishment) punishable as wobblers rather than misdemeanors for people who have two or more prior convictions for certain theft-related crimes and could receive sentences of up to three years in county jail or state prison. Additionally, this measure creates sentence enhancements for crimes in which a high dollar amount of property was stolen or damaged.

When a person takes, damages, or destroys any property in an attempt to commit a felony, the court shall impose an additional term of one year if the loss exceeds $50,000, an additional term of two years if the loss exceeds $200,000, an additional term of three years if the loss exceeds $1,000,000, an additional term of four years if the loss exceeds $3,000,000, and an additional term of one year for every additional loss of $3,000,000 thereafter. Any pleading involving multiple charges could impose the additional sentencing terms if the aggregate losses to the victims from all felonies exceed the amounts specified above and arise from the common scheme that has been found to be true.

Under this measure, the jurisdiction of a criminal action for theft shall include the county where the offense occurred, the county in which the merchandise or property was recovered, or the county where any act was done by the defendant in instigating, procuring, or aiding in the commission of an offense. If the person has multiple offenses that occurred in multiple jurisdictions, then any of those jurisdictions are a proper jurisdiction for all of the offenses.

Fiscal Impact

It is estimated that the passage of this measure would increase costs to both the state and county criminal justice systems in the low tens of millions of dollars annually due to potential increases in state prison and county jail populations. This measure could increase the number of people sentenced to state prison with additional costs for state courts to try those with felonies involving high dollar amounts of theft or damage for sentence enhancements. An increased number of felony filings and reduced number of misdemeanors would result in an increased workload for state courts as felonies take more time to adjudicate than misdemeanors. Similarly, this measure would result in some people receiving longer county jail or probation terms, increasing county correctional populations and subsequently increasing county court-related costs.

It is possible for the state to reduce costs to the criminal justice system by partially offsetting the amount spent on mental health and substance use services, truancy and dropout prevention, and crime victim services. But because this measure would undo certain reductions in punishment for petty theft and shoplifting enacted by Prop 47, this measure would reduce the state savings attributable to Prop 47 depending on the methodology used to estimate the state savings. If the measure's increase in penalties reduces crime, some criminal justice system costs could be avoided. The actual number of people affected would depend on decisions made by courts.