Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Michael P. Callagy, County Executive
Connie Juarez-Diroll, Chief Legislative Officer
Subject: State and Federal Legislative Update # 3
RECOMMENDATION:
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Accept the April 2025 informational report on the 2025 State and Federal Legislative sessions.
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BACKGROUND:
Policy hearings are taking place in Sacramento, and bills are swiftly going through the state legislative process. Spot bills introduced earlier this year that contain intent language faced a March deadline and have now been amended to include more substantive policy language, some of which have become controversial gut-and-amend bills. The Intergovernmental and Public Affairs (IGPA) unit closely monitors these bills and others of interest to the County with our state associations.
Before adjourning for Spring Recess on April 10th, the Legislature took early action on SB 100/AB 100, also known as a “budget bill jr.,” which included provisions on wildfire recovery and resilience, Medi-Cal, and other minor and technical adjustments. It is important to note that this bill is not the 2025-26 budget bill; instead, it amends the 2023-24 and 2024-25 budget acts. The Legislature will reconvene on April 21 to resume its work and meet their spring legislative deadlines. Policy committees have until May 2 to refer bills to fiscal committees and until June 6 to pass bills introduced in their respective houses of origin. Similarly, the Assembly and Senate budget subcommittees will continue to meet weekly to hear various budget proposals in their relevant issue areas ahead of the May Revise, which is expected to be released in mid-May.
On March 27, 2025, a bipartisan group of state legislators unveiled the Fast Track Housing package, which contains over 20 bills to expedite housing production and make it more affordable. The package reflects recommendations from the Final Report of the Select Committee on Permitting Reform, which is chaired by Assembly Member Buffy Wicks (D-Oakland). Members of the Legislature are joining efforts to advance housing legislation in five core areas: applications, California Environmental Quality Act (CEQA) compliance, entitlements, post-entitlements, and enforcement. In the coming weeks, each house will move these proposals through their respective policy committees, and fiscal committees will consider the bills before the aforementioned deadline.
At the federal level, on April 10, 2025, House Republicans narrowly passed the Senate’s budget resolution in a 216-214 vote, effectively unlocking the filibuster-proof reconciliation process. No Democrats supported it, and only two Republicans voted against it.
DISCUSSION:
State Update
With committee hearings ramping up, below is a list of notable bills the IGPA unit is actively tracking:
The Brown Act
• SB 239 (Arreguin-D) would allow subsidiary bodies of a local agency to teleconference meetings without having to notice and make publicly accessible each teleconference location.
• SB 707 (Durazo-D) would make numerous changes to the Brown Act, including modifying existing and adding new types of teleconferencing flexibility, increasing public access, expanding language access, and other changes.
• AB 259 (Rubio-D) would eliminate and extend indefinitely the sunset date of a previous bill that allowed members of a legislative body of a local agency to use teleconferencing without identifying each teleconference location in the notice and agenda of the meeting and without making each teleconference location accessible to the public.
Housing & Homelessness
• SB 16 (Blakespear-D) would require the housing element assessment in the general plan for land use development to include specified data regarding the population of unhoused individuals and a description of key actions that will be taken to reduce unhoused individuals based on the data.
• SB 606 (Becker-D) would enact the Functional Zero Unsheltered Act, which would require a Homeless Housing, Assistance, and Prevention (HHAP) program applicant to provide information relating to its efforts to address homelessness in its jurisdiction, including an assessment of what would be required for the applicant to achieve functional zero unsheltered and information regarding the applicant’s implementation of local homeless housing incentives.
• SB 692 (Arreguin-D) would authorize a city, county, or city and county to adopt an ordinance for the abatement and removal of vehicles formerly used as shelter by persons experiencing homelessness, and would require an ordinance establishing procedures for the removal of abandoned vehicles to contain a provision making the ordinance applicable to public agencies operating specific vehicle buyback programs.
• AB 306 (Schultz-D) would prohibit cities and counties from altering building standards for residential units from June 1, 2025, to June 1, 2031, unless the commission finds such changes necessary as emergency standards for health and safety reasons.
Emergency Services
• AB 1403 (Hart-D) would authorize a county board of supervisors or the governing body of an entity or a joint powers agency designated as the local emergency medical services (EMS) agency by the board of supervisors to provide ambulance services to persons located within the county’s jurisdiction including assigning the duty of providing ambulance services to residents of the county to an existing county department.
Health, Mental & Behavioral Health
• SB 331 (Menjivar-D) would expand the definition of "gravely disabled" to include those with mental health conditions, based on the Diagnostic and Statistical Manual of Mental Disorders, allowing for court-ordered evaluations, and permit an original petitioner to remain as the petitioner throughout the Community Assistance, Recovery, and Empowerment (CARE) process.
• SB 367 (Allen-D) would revise and expand various processes throughout involuntary detention law related to initiating detention and initiating, investigating, establishing, and terminating conservatorship to clarify and align with recently enacted law and permit specified information throughout the CARE Act to be shared.
Water, Climate & Environment
• SB 601 (Allen-D) would require dischargers to demonstrate enrollment in state or federal discharge permits when applying for local permits, maintain stringency in drinking water and water quality standards, define “nexus waters,” and enact the requirements of the federal Clean Water Act for “nexus waters.”
• AB 514 (Petrie-Norris-D) would declare that it is state policy to encourage the development of emergency water supplies to be used during drought or unplanned service or supply disruption.
Local Government
• SB 299 (Cabaldon-D) would repeal the requirement that an ordinance be adopted at least five days after it is introduced and allow a local government to deem certain zoning ordinances or standards to be subject to a ministerial approval process.
• SB 413 (Allen-D) would clarify and add to the list of persons who may view a juvenile case file without a court order to ensure that counsel for parties in a case filed by a minor or former minor can expeditiously view the file.
The following bills, which the IGPA unit is monitoring, are included in the Fast-Track Housing package:
Applications
• AB 1294 (Haney): Planning and Zoning: Housing Development: Standardized Application Form.
CEQA
• AB 609 (Wicks): California Environmental Quality Act: Exemption: Housing Development Projects.
• SB 607 (Wiener): California Environmental Quality Act: Categorical Exemptions: Infill Projects.
Entitlements
• AB 357 (Alvarez): Coastal Resources: Coastal Development Permit: Exclusions.
• AB 920 (Caloza): Permit Streamlining Act: Housing Development Projects: Centralized Application Portal.
• AB 961 (Avila Farias): Hazardous Materials: California Land Reuse and Revitalization Act of 2004.
• AB 1007 (Rubio): Land Use: Development Project Review.
• AB 1276 (Carrillo): Housing Developments: Ordinances, Policies, and Standards.
• SB 328 (Grayson): Hazardous Waste Generator Permits: Housing Development Projects.
• SB 489 (Arreguin): Permit Streamlining Act: Housing Development Projects.
• SB 677 (Wiener): Housing Development: Streamlined Approvals.
Post-Entitlements
• AB 557 (McKinnor): California Factory-Built Housing Law.
• AB 660 (Wilson): Planning and Zoning Law: Post-entitlement Phase Permits.
• AB 782 (Quirk-Silva): Subdivision Map Act: Security.
• AB 818 (Avila Farias): Permit Streamlining Act: Local Emergencies.
• AB 1026 (Wilson): Planning and Zoning: Housing Development Projects: Post-entitlement Phase Permits.
• AB 1206 (Harabedian): Single-Family and Multifamily Housing Units: Preapproved Plans.
• AB 1308 (Hoover): Residential Building Permits: Fees: Inspections.
Legal Rights and Enforcement
• AB 610 (Alvarez): Housing Element: Governmental Constraints: Disclosure Statement.
• AB 712 (Wicks): Housing Reform Laws: Enforcement Actions: Fines and Penalties.
• AB 1050 (Schultz): Unlawfully Restrictive Covenants: Housing Developments: Reciprocal Easement Agreements.
• SB 786 (Arreguin): Planning and Zoning: General Plan: Judicial Challenges.
The attached April 2025 Legislative Activity Report details the bills tracked to date this session and the action taken by the Board. The IGPA unit will continue to monitor bills and engage as necessary.
State Budget Update
On March 12, 2025, the California Department of Finance submitted a letter to the Legislature indicating that it had approved a loan of $3.44 billion on March 4, 2025. This loan was intended to help the Department of Health Care Services make critical payments due to unprecedented cost increases in Medi-Cal. A few days later, Governor Newsom's Office announced that he would request an additional $2.8 billion from the Legislature to cover Medi-Cal cost overruns for the remainder of the fiscal year. The rise in pharmaceutical costs, expanded coverage, and increased enrollment are the factors that contributed to these financial challenges. Republicans are attributing this budgetary issue to the Democrats.
On Thursday, April 10, 2025, members of the Legislature voted on the budget bill jr., which included:
• Appropriation of $181 million from the climate bond (Proposition 4) passed in November 2024 for wildfire and forest resilience.
• Expansion of eligible uses for the $2.5 billion fund designated for wildfire response and recovery efforts.
• An increase in Medi-Cal’s 2024-25 General Fund appropriation by $2.8 billion and its federal funds appropriation by $8.25 billion to keep paying the program’s bills through June.
• Other minor, clarifying, and technical provisions.
Budget subcommittees in both houses will continue to review the Governor’s remaining
budget proposals and propose alternatives as the Legislature anticipates potential federal funding cuts to some of the state’s most essential programs that provide key services to Californians. The State is not likely to have a complete and finalized budget until further Federal action is taken. The Federal government’s budget action will heavily influence and determine the response at the state level.
Federal Update
The budget plan's instructions to committees in both chambers were a key issue for members of the House Freedom Caucus and other conservatives before the floor vote. These instructions direct one or more committees to recommend changes to existing law to achieve specified changes in spending, revenues, deficits, and/or the debt limit. In the House, the adopted budget resolution requires a minimum of $1.5 trillion in savings over ten years, while the Senate's amendments stated that only $4 billion would be needed to comply with the chamber’s “Byrd rule,” which governs what can remain in a reconciliation bill. Although senators included a statement in their amendment suggesting a target of up to $2 trillion in cuts, this target is nonbinding. On the other hand, moderate Republicans expressed concerns about the potential cuts to Medicaid and other vital social programs within the budget blueprint.
After several days of negotiations, Senate Majority Leader John Thune (R-SD) and Speaker Mike Johnson (R-LA) publicly committed that Republicans would achieve $1.5 trillion in savings over ten years while preserving essential programs. This public statement was necessary to reassure enough House conservatives concerned about the size of the budget cuts, and those in red states with high Medicaid enrollment rates, to vote for the budget plan.
The reconciliation bill is crucial for many of the top priorities for Republicans and President Trump. They aim to use it to pass a tax package that could exceed $5 trillion over the next decade, including extensions of the 2017 tax cuts set to expire at the end of the year. The plan would also allocate an additional $200 billion for border security and immigration enforcement funds, which Trump administration officials claim are running low, and up to $150 billion more for military spending. Additionally, it would open more public lands to fossil fuel exploration and development. Lastly, it seeks to raise the $36 trillion statutory debt limit by as much as $5 trillion, a change needed by summer.
The resolution's passage completes the reconciliation process's first step, allowing the Senate to bypass the 60-vote filibuster and proceed without Democratic support. However, the next phase will be more complex. In particular, committees in both chambers must draft legislation that aligns with the spending levels outlined in the resolution and addresses contentious issues such as the extent and duration of spending cuts and the cap on the state-and-local tax deduction. One major concern is the directive for the House Energy and Commerce Committee to identify at least $880 billion in cuts, which could significantly impact Medicaid. After the House and Senate committees finalize their respective sections of the reconciliation bill, the chambers must reach a consensus and pass a final version of the legislation.
Speaker Johnson has said he aims to pass the final bill by Memorial Day.
Federally Funded Program Update
The IGPA continues to work closely with departments to identify potential federal funding losses. According to our most recent departmental reports, the balance of County funds at risk has increased to $675.1 million from $612.6 million, reflecting an augmentation of $62.5 million since the February 11, 2025, Board of Supervisors report.
The potential funding losses are:
• High risk - $82.8 million
• Medium risk - $337.1 million
• Low risk - $255.2 million
Recent Key Updates:
• Health System-The funding at risk increased from $257M to $323M, an increase of approximately $66M. The increase was due to two Medi-Cal programs related to behavior health: the addition of a $60M amount for the federal match for the Behavior Health Medi-Cal reimbursement program (previously listed as $0) and a $6M increase in the federal match to the San Mateo Medical Center Medi-Cal Patient Net Revenue (from $75M to $81M).
The two Medi-Cal Programs provide direct patient care, including mental health and substance use disorder services. If the federal match is reduced, the state and local funds used to support Medi-Cal services would need to be increased. This shift in funding would reduce or eliminate non-Medi-Cal eligible services, causing negative impacts on current clients, possibly leading to worsening health status and/or being unhoused. Medi-Cal services are delivered by BHRS County clinics and Community-Based Providers (CBOs).
• Human Services Agency-Funding at risk has increased from $59.0 million to $77.2 million, resulting in a net increase of $18.2 million. Approximately ten new programs have been added, while a few other programs have seen their estimated funding amounts decrease.
The primary reason for this increase is the addition of the Medi-Cal/Medicaid Administration program, which provides benefits to individuals without satisfactory immigration status. The County is projected to lose $26 million for this program, which currently serves over 43,000 individuals.
The other nine new programs focus on children and families, including foster care, child welfare, and childcare services. Collectively, these programs are projected to result in a potential loss of $6.9 million for the County.
Conversely, funding at risk for the Housing and Urban Development (HUD) “Annual Continuum of Care” (CoC) and the “Unsheltered Continuum of Care” programs, known as Special NOFO, has decreased from $18.5 million to only $650,000. Unfortunately, significant federal funding cuts are anticipated in the 2026 funding cycle.
Additionally, at-risk funding for Foster Care Administration and Foster Care Assistance Payments has decreased from $11.1 million to $8.5 million. Federal support for foster care has been steadily declining for years, which is expected to continue.
• Housing Department-Decreased its estimated dollar amount at risk for the Home Investment Partnership (HOME) and Community Development Block Grant (CDBG) programs by $10.2 million.
• Sustainability Department-Secured funding from the EPA for a stormwater grant totaling $2.4 million.
• Public Works Department-Experienced a net decrease of $10.5 million, attributed to receiving funds for several programs. However, they also added three new programs to the at-risk category, amounting to $9.5 million. The new at-risk programs include $864,000 for FAA funding related to airports, $1.8 million for a NOAA grant focused on a culvert replacement and fish passage improvement project, and $1.3 million for the Highway Safety Improvement Program. The Department was also recently informed of the termination of a $1.5 million FEMA BRIC (Building Resilient Infrastructure and Communities) grant.
• Parks Department-Two potential programs, valued at $1 million and $400,000, were added to the at-risk list.
These estimates are subject to change as information from Washington, D.C., continues to evolve. Based on current information, they are the departments’ best estimation of potential funding losses. The IGPA will continue to monitor federal developments closely, collaborate with County departments, and provide updates to the Board of Supervisors as needed.