Contributors

Christian Scali

Founder and Managing Shareholder

Halbert B. Rasmussen

Shareholder

Eric P. Weiss

Principal

Jasmin B. Bhandari

Principal

Jennifer Woo Burns

Of Counsel

The 2023 legislative session touched on a wide array of business topics. The new laws do not affect all businesses, but are nonetheless worth every business owner’s attention, as they may shape you conduct business in California in the future. In particular, California continues to pass legislation aimed at minimizing the impact of climate change.

SB 446—Nonprofit and cooperative corporations: ratification or validation of noncompliant corporate actions

What the law currently requires

The General Corporation Law regulates the organization of and operation of specified corporations. The Nonprofit Corporation Law regulates the organization and operation of nonprofit public benefit corporations, nonprofit mutual benefit corporations, and nonprofit religious corporations. The Cooperative Corporation Law governs the organization and operation of cooperative corporations.

The General Corporation Law requires the Secretary of State, upon receipt of any instrument for filing, to file and provide the date of endorsed filing, if that instrument conforms to law. The law permits an instrument that does not conform to law to be resubmitted in accordance with specified procedures. The law permits an agreement, certificate, or other instrument relating to a domestic or foreign corporation filed under the General Corporation Law to be corrected with respect to any misstatement of fact contained therein, as provided. The Nonprofit Corporation Law and the Cooperative Corporation Law contain similar provisions.

The General Corporation Law, except as provided, authorizes otherwise lawful corporate actions, as defined, not in compliance, or purportedly not in compliance, with the General Corporation Law or the articles, bylaws, or a plan or agreement to which the corporation is a party in effect at the time of a corporate action, to be ratified, or validated by the superior court, in conformity with certain procedures.

The law requires, among other things, that the ratification of a corporate action pursuant to these provisions be approved by the board and, as applicable, approved by the shareholders or approved by the outstanding shares in accordance with the General Corporation Law and the articles, bylaws, and any plan or agreement to which the corporation is a party in effect at the time of ratification, except as specified. The law requires a corporation, if a corporate action ratified or validated would have required the filing of an instrument with the Secretary of State or if the ratification or validation would cause an instrument previously filed with the Secretary of State to be inaccurate or incomplete in any material respect, to file a certificate of ratification or certificate of validation to make, amend, or correct those instruments.

Neither the Nonprofit Corporation Law nor the Cooperative Corporation Law contains similar provisions.

How this bill changes the law

In 2022, the California legislature enacted amendments to the California General Corporation Law allowing corporations formed under that law to ratify or validate otherwise lawful corporate actions. (See Cal. Corp. Code § 117.) The 2022 legislation, however, did not include corresponding changes to California’s nonprofit and cooperative corporation laws.

This bill would add provisions similar to the above to the Nonprofit Corporation Law and the Cooperative Corporation Law. The bill would also make conforming changes.

SB 630—Contractors State License Board: regulation of contractors

What the law currently requires

1. Existing law, the Contractors State License Law, provides for the licensure and regulation of contractors by the Contractors State License Board in the Department of Consumer Affairs. That law requires an applicant, registrant, or licensee to provide certain information to the board.
2. Existing law, the California Public Records Act, requires a state or local public agency to make public records available for public inspection and to make copies available upon request and payment of a fee, unless the records are exempt from disclosure.
3. Existing law authorizes the board to take various measures as part of a decision in a disciplinary action, including impose conditions upon the licensee.
4. Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

How this bill changes the law

In general, SB 630 streamlines probationary process for contractors, ensuring contractors meet licensing obligations with fewer delays. Specifically:

1. This bill would additionally require an applicant, registrant, or licensee that has a valid email address to provide the board with that email address at the time of application or renewal, as applicable.
2. The bill would provide that the above-specified email addresses are not subject to disclosure under prescribed law, including the California Public Records Act, except as specified.
3. This bill would further authorize a decision to provide for a stay of execution of the decision, pending the completion of specified terms and conditions of probation. The bill would provide that the failure to fully comply with the terms and conditions of probation may result in the automatic termination of the stay of execution.

SB 740—Hazardous materials management: stationary sources: skilled and trained workforce

What the law currently requires

Existing law establishes an accidental release prevention program for the state. Under that law, stationary sources subject to the accidental release prevention program may be required to prepare and submit a risk management plan (“RMP”) to prevent accidental releases of certain substances. Existing law imposes criminal penalties upon a stationary source that knowingly violates the requirements of the accidental release prevention program. Existing law requires an owner or operator of a stationary source that is engaged in certain petroleum-related activities, and with one or more covered processes that require the preparation and submission of an RMP, when contracting for the performance of construction, alteration, demolition, installation, repair, or maintenance work at the stationary source, to require that its contractors and any subcontractors use a skilled and trained workforce to perform all onsite work within an apprenticeable occupation in the building and construction trades. Existing law defines "skilled and trained workforce" to include, among other criteria, skilled journeypersons who are paid at least a rate equivalent to the applicable prevailing hourly wage rate.

How this bill changes the law

In essence, SB 740 extends skilled and trained workforce standards to emerging green industries including hydrogen manufacturing, biofuels manufacturing, and carbon dioxide capture. Specifically, this bill would extend that workforce requirement to contracts awarded, extended, or renewed on or after January 1, 2024, by an owner or operator of a stationary source that is engaged in manufacturing hydrogen, biofuels, or certain specified chemicals, or in capturing, sequestering, or using carbon dioxide in specified conditions.

According to its sponsor, State Senator Cortese, “SB 740 will protect neighborhoods from hazardous factory accidents and open a bright future for California with good-paying jobs in our emerging sustainable industries. This law marks a new, bright day for the California economy!”

AB 231—Shareholders’ meetings: remote communication

What the law currently requires

Currently, the Corporations Code prohibits a California corporation from conducting a meeting of shareholders solely by electronic transmission by and to the corporation, electronic video screen communication, conference telephone, or other means of remote communication unless one or more of the following conditions apply:

1. all of the shareholders consent;
2. the board determines it is necessary or appropriate because of an emergency, as defined in Corporations Code section 207(i)(5); or
3. notwithstanding the absence of consent from all shareholders pursuant to (A) or subdivision (b) of Section 20, the meeting is conducted on or before December 31, 2025, and includes a live audiovisual feed for the duration of the meeting.

How this bill changes the law

This bill will authorize a California corporation, to offer in addition to remote audiovisual feed, an audio-only means by which a shareholder or proxy holder may participate provided that the choice between participating via audiovisual or via audio-only means is made by the shareholder or proxy holder and the corporation does not impose any barriers to either mode of participation.

AB 231 will also allow until December 31, 2025, a nonprofit corporation, a nonprofit mutual benefit corporation, a nonprofit religious corporation, and a cooperative corporation to conduct an annual meeting of members solely by live audiovisual feed and to offer, in addition to remote audiovisual feed, an audio-only means by which a member or proxy holder may participate provided that the choice between participating via audiovisual or via audio-only means is made by the member or proxy holder and the corporation does not impose any barriers to either mode of participation.

The bill also will require a nonprofit corporation, a nonprofit mutual benefit corporation, a nonprofit religious corporation, or a cooperative corporation to verify that a person who has voted—rather than participated—remotely is a member or proxy holder.

AB 1578—Insurance licensees

What the law currently requires

Existing law generally regulates the business of insurance in the state, including the conduct of insurance licensees. Existing law requires a specified licensee to include their license number in an email that involves an activity for which a license is required. Existing law requires the license number of an organizational licensee in an email to be included adjacent to or on the line below the organization’s name.

How this bill changes the law

This bill, instead, would require the license number of an organizational licensee to appear adjacent to or on the line below the organization’s name if the email is sent from the organization and not an individual licensee, and the communication involves an activity for which a license is required.

SB 264—Income taxes: deduction: disaster losses

What the law currently requires

The Personal Income Tax Law and the Corporation Tax Law, in conformity or modified conformity with federal income tax laws, allows various deductions in computing the income that is subject to the taxes imposed by those laws, including a deduction, for taxable years beginning on or after January 1, 2014, and before January 1, 2024, for disaster losses in any city, county, or city and county that is proclaimed by the Governor to be in a state of emergency, as specified. Existing law additionally provides that any law that suspends, defers, reduces, or otherwise diminishes the deduction of a net operating loss, other than those variations already imposed in existing law, shall not apply to a net operating loss attributable to these specified disaster losses.

How the bill changes the law

This bill would extend the deduction for disaster losses, as described above, to taxable years beginning before January 1, 2029, and would extend for those taxable years the provision prohibiting any law that suspends, defers, reduces, or otherwise diminishes the deduction of a net operating loss, as described above, from applying to these specified disaster losses.

AB 1404—Disability access: internet website-related accessibility claims

What the law currently requires

Existing state law, the Unruh Civil Rights Act, and federal law, the Americans with Disabilities Act of 1990, prohibit discrimination on the basis of various specified personal characteristics, including disability.

Existing law, the Construction-Related Accessibility Standards Compliance Act, requires an attorney to provide a written advisory with each demand letter or complaint, as defined, sent to or served upon a defendant or potential defendant for any construction-related accessibility claim. Existing law also requires an attorney who sends or serves a complaint alleging that an internet website is not accessible to satisfy specified requirements, including, among other things, sending a copy of the complaint and submitting information about the complaint to the California Commission on Disability Access.

How the bill changes the law

This bill would require an attorney, with each demand letter or complaint alleging an internet website-related accessibility claim, to provide the defendant with a copy of a written advisory notice pertaining to disability access laws, as specified. The bill would become operative only if AB 1757 of the 2023–24 Regular Session is enacted and takes effect on or before January 1, 2025.

SB 666—Small business: commercial financing transactions

What the law currently requires

Existing law generally regulates the loaning of money, including the calculation of interest rates. Existing law, the California Financing Law (“CFL”), prohibits a person from engaging in the business of a finance lender or broker without obtaining a license from the Commissioner of Financial Protection and Innovation. The CFL generally regulates commercial loans made by licensees.

How the bill changes the law

This bill would prohibit a covered entity from charging specified fees in connection with a commercial financing transaction with a small business or small business owner, including, among others, a fee for accepting or processing a payment required by the terms of the commercial financing contract as an automated clearinghouse transfer debit, except as specified, a fee for providing a small business with documentation prepared by the covered entity that contains a statement of the amount due to satisfy the remaining debt, as specified, and a fee in addition to a loan origination fee that does not have a clear corresponding service provided for the fee, as specified.

If a covered entity violates these provisions, the bill would entitle a recipient to specified relief, including actual damages, statutory damages, and attorney’s fees and costs. The bill would make a waiver of these provisions contrary to public policy and void and unenforceable.

AB 43—Greenhouse gas emissions: building materials: embodied carbon trading system

What the law currently requires

The California Global Warming Solutions Act of 2006 (“Act”) requires the State Air Resources Board (“CARB”) to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the 1990 level by 2030. Under the Act, a violation of a rule, regulation, order, emission limitation, emission reduction measure, or other measure adopted by the state board under the Act is a crime.

Existing law requires CARB, by December 31, 2026, to develop, in consultation with specified stakeholders, a framework for measuring and then reducing the average carbon intensity of the materials used in the construction of new buildings, including those for residential uses.

Existing law requires CARB to develop, by December 31, 2028, a comprehensive strategy for the state’s building sector to achieve a 40% net reduction in greenhouse gas emissions of building materials, as determined from a baseline calculated using a certain 2026 report, if that report is adequate, or as specified.

Existing law requires that strategy to achieve this target as soon as possible, but no later than December 31, 2035, provides for an interim target of 20% net reduction by December 31, 2030, authorizes the state board to adjust the interim target, as provided, and requires the established targets to begin no sooner than January 1, 2027.

Existing law also requires CARB to form and maintain a technical advisory committee, as described.

How the bill changes the law

This bill would, among other changes, eliminate the interim target of 20% net reduction. The bill would require the baseline described above to be established based on either an industry average of environmental product declarations reported for the 2026 calendar year or on the most relevant, up-to-date information available, as determined by the state board.

The bill would also require the established targets to begin to apply no sooner than January 1, 2027, and 2 years after the baseline is established. The bill would delete the requirement that CARB form and maintain a technical advisory committee, and would instead require CARB to consult experts to advise the state board on methods to reduce the carbon intensity of building materials and covered projects, as specified. The bill would also exempt violations of these requirements from criminal penalties and authorize the imposition of specified civil penalties for those violations. The bill would express the intent of the Legislature regarding the applicable civil penalties.

AB 336—Contractors: workers’ compensation insurance

What the law currently requires

Existing law, the Contractors State License Law, establishes the Contractors State License Board within the Department of Consumer Affairs and sets forth its powers and duties relating to the licensure and regulation of contractors. Existing law generally requires, as a condition precedent to the issuance, reinstatement, reactivation, renewal, or continued maintenance of a license, an applicant for a contractor’s license or a licensee to have on file at all times a current and valid Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance, except as specified. Existing law makes a violation of these provisions a misdemeanor.

How the bill changes the law

This bill would require an active licensee who has on file a current and valid Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance, or is required to provide those certificates, to certify on the license renewal form the workers’ compensation classification codes endorsed on the licensee’s policy, as specified, and would prohibit renewal without that certification.

The bill would make its provisions operative on July 1, 2024. Because the bill would expand the scope of a crime under the Contractors State License Law and expand the crime of perjury, the bill would impose a state-mandated local program.

AB 418—The California Food Safety Act

What the law currently requires

Existing law provides for the regulation of the safety of food products, including adulterated and misbranded food, wholesale food, and food in retail food facilities.

How the bill changes the law

This bill, commencing January 1, 2027, would prohibit a person or entity from manufacturing, selling, delivering, distributing, holding, or offering for sale, in commerce a food product for human consumption that contains any specified substance, including, among others, brominated vegetable oil, potassium bromate, propylparaben, and red dye 3. The bill would make a violation of these provisions punishable by a civil penalty not to exceed $5,000 for a first violation and not to exceed $10,000 for each subsequent violation, upon an action brought by the Attorney General, a city attorney, a county counsel, or a district attorney.

AB 883—Business licenses: United States Department of Defense Skill Bridge program

What the law currently requires

Existing law establishes the Department of Consumer Affairs under the direction of the Director of Consumer Affairs and sets forth its powers and duties relating to the administration of the various boards under its jurisdiction that license and regulate various professions and vocations.

Existing law requires a board to expedite, and authorizes a board to assist, in the initial licensure process for an applicant who supplies satisfactory evidence to the board that the applicant has served as an active duty member of the Armed Forces of the United States and was honorably discharged.

Existing law authorizes a board to adopt regulations necessary to administer those provisions.

How the bill changes the law

This bill would additionally require, on and after July 1, 2024, a board to expedite, and authorize a board to assist, in the initial licensure process for an applicant who supplies satisfactory evidence to the board that the applicant is an active duty member of a regular component of the Armed Forces of the United States enrolled in the United States Department of Defense SkillBridge program, as specified, and would provide that regulations to administer those provisions be adopted in accordance with the rulemaking provisions of the Administrative Procedure Act.

AB 1097—Credit history of persons receiving government rent subsidies

What the law currently requires

Existing law, the California Fair Employment and Housing Act (FEHA), prohibits, in instances in which there is a government rent subsidy, the use of a financial or income standard in assessing eligibility for the rental of housing that is not based on the portion of the rent to be paid by the tenant. FEHA requires the Civil Rights Department to enforce specific provisions of the act, including the provision described above.

How the bill changes the law

This bill would additionally prohibit the use of a person’s credit history as part of the application process for a rental housing accommodation without offering the applicant the option of providing alternative evidence of financial responsibility and ability to pay in instances in which there is a government rent subsidy. The bill would require the housing provider to consider that alternative evidence in lieu of the person’s credit history in determining whether to offer the rental accommodation to the applicant.

AB 1175—Outdoor advertising displays: redevelopment agency project areas

What the law currently requires

Existing law, the Outdoor Advertising Act, provides for the regulation by the Department of Transportation of an advertising display, as defined, within view of public highways. The act regulates the placement of an off-premises advertising display along highways that generally advertises business conducted or services rendered or goods produced or sold at a location other than the property where the display is located.

The act does not apply to an on-premises advertising display, which generally advertises business conducted or services rendered or goods produced or sold at the location where the display is located. Until January 1, 2023, the act treats an off-premises advertising display developed as part of and within the boundary limits of a redevelopment agency project, as those boundaries existed on December 29, 2011, as an on-premises advertising display if it meets certain criteria for good cause, which includes, among others, that there has been no violation of certain provisions by the owner or operator of the advertising display, as specified.

How the bill changes the law

This bill would alter that good cause criteria to instead require that the department has not made a final determination of a violation of the same provisions, whether by a final administrative decision or by operation of law, by the owner or operator of the advertising display.

From January 1, 2024, to January 1, 2025, the bill would allow the applicable city, county, or city and county to request from the department a 2-year extension for treating a display in a redevelopment agency project, as described above, as an on-premises display if the display meets the criteria for a finding of good cause, was in use on December 31, 2022, and complies with specified provisions of the act, including, but not limited to, the act’s licensing and zoning requirements. The bill would authorize the department to provide the extension upon a finding of good cause.

AB 1415—Outdoor advertising: City of Los Angeles

What the law currently requires

Existing law, the Outdoor Advertising Act, provides for the regulation by the Department of Transportation of an advertising display, as defined, within view of public highways. The act regulates the placement of an off-premises advertising display along highways that generally advertises business conducted or services rendered or goods produced or sold at a location other than the property where the display is located.

The act exempts from specified provisions advertising displays located in certain geographic areas in the City of Los Angeles if those displays meet prescribed conditions and requirements, including the condition that the advertising display is authorized by, or in accordance with, an ordinance adopted by the City of Los Angeles that regulates advertising displays, as provided.

Existing law makes the City of Los Angeles primarily responsible for ensuring that an authorized advertising display remains in conformance with the ordinance and the requirements described above, and requires the city to indemnify and hold the department harmless if the city fails to do so.

How the bill changes the law

This bill would expand one of the geographic areas described above and add an additional geographic area in the City of Los Angeles as where advertising displays meeting prescribed conditions and requirements are exempt from the specified provisions of the act. The bill would additionally exempt an advertising display located within those geographic areas of the city from the specified provisions of the act if the display was in existence and legally permitted as of January 1, 2023, regardless of whether it meets the prescribed conditions and requirements in existing law.

AB 1305—Voluntary carbon market disclosures

What the law currently requires

Existing law imposes various limitations on emissions of air contaminants for the control of air pollution from vehicular and nonvehicular sources.

How this bill changes the law

This bill would require a business entity that is marketing or selling voluntary carbon offsets, as defined, within the state to disclose on the business entity’s internet website specified information about the applicable carbon offset project and details regarding accountability measures if a project is not completed or does not meet the projected emissions reductions or removal benefits, as provided.

The bill would also require an entity that purchases or uses voluntary carbon offsets that makes claims regarding the achievement of net zero emissions or other, similar claims, as specified, to disclose on the entity’s internet website specified information.

The bill would require an entity that makes these claims to disclose on the entity’s internet website all information documenting how, if at all, a claim was determined to be accurate or actually accomplished, how interim progress toward that goal is being measured, and whether there is independent third-party verification of the company data and claims listed.

The bill would make a person who violates these provisions subject to a civil penalty of not more than $2,500 per day, as specified, for each violation, not to exceed a total amount of $500,000, which would be assessed and recovered in a civil action brought in the name of the people of the State of California by the Attorney General or by a district attorney, county counsel, or city attorney in a court of competent jurisdiction. The bill would additionally require that disclosures be updated no less than annually.

AB 1697—Uniform Electronic Transactions Act

What the law currently requires

1. Existing law, the Uniform Electronic Transactions Act, provides that a record or signature may not be denied legal effect or enforceability solely because it is in electronic form. The act exempts from its provisions, among other things, specific transactions, including an authorization for the release of medical information by a provider of health care, health care service plan, pharmaceutical company, or contractor and an authorization for the release of genetic test results by a health care service plan under the Confidentiality of Medical Information Act.
2. Existing law requires that the authorization for release of medical information contain a specific end date.

How the bill changes the law

1. This bill would delete the exemption for the above-described authorizations (i.e. genetic test results) under the Confidentiality of Medical Information Act and would make conforming changes.
2. This bill would, instead, require that the authorization contain an expiration date or event, as defined, and would limit the duration of the authorization to one year or less, except as provided. The bill would also require that the person to whom the medical information pertains receives a copy of the authorization for that authorization to be valid.

This bill would incorporate additional changes to Section 56.05 of the Civil Code proposed by AB 254 to be operative only if this bill and AB 254 are enacted and this bill is enacted last.

SB 33—Commercial financing: disclosures

What the law currently requires

Existing law requires a provider who extends a specific offer of commercial financing to a recipient to disclose specified information relating to that transaction to the recipient and to obtain the recipient’s signature on that disclosure before consummating the commercial financing transaction. Existing law, until January 1, 2024, requires a provider to disclose the total cost of financing expressed as an annualized rate.

How the bill changes the law

This bill would require providers to continue to include in the disclosures and alternative disclosures the total cost of financing expressed as an annualized rate, as described above, indefinitely.

SB 38—Battery energy storage facilities: emergency response and evacuation plans

What the law currently requires

Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations. Existing law requires the commission to implement and enforce standards for the maintenance and operation of facilities for the generation and storage of electricity owned by an electrical corporation or located in the state to ensure their reliable operation.

Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.

How the bill changes the law

This bill would require each battery energy storage facility located in the state and subject to the requirement described above to have an emergency response plan and an evacuation plan that covers the premise premises of the battery energy storage facility. facility, as specified. The bill would require the owner or operator of the facility, in developing the plan, to coordinate with local emergency management agencies, unified program agencies, and local first response agencies. To the extent the bill would impose new duties on local government agencies, the bill would create a state-mandated local program. The bill would require the commission to require the owner or operator of the facility to submit the plan to the commission.

Because the above provisions would be part of the act and a violation of a commission action implementing this bill’s requirements would be a crime, the bill would impose a state-mandated local program.

SB 48—Water and Energy Savings Act

What the law currently requires

Existing law requires each utility to maintain records of the energy usage data of all buildings to which they provide service for at least the most recent 12 complete calendar months, and to deliver or otherwise provide that aggregated energy usage data for each covered building, as defined, to the owner, as specified.

This bill would expand those requirements, beginning January 1, 2025, to include each utility that provides water service and its water usage data. By imposing new duties on utilities that provide water service, the bill would impose a state-mandated local program.

Existing law authorizes the State Energy Resources Conservation and Development Commission (Energy Commission) to prescribe, by regulation, lighting, insulation, climate control system, and other building design and construction standards, and energy and water conservation design standards, for new residential and new nonresidential buildings to reduce the wasteful, uneconomic, inefficient, or unnecessary consumption of energy.

How the bill changes the law

This bill would provide that it is the intent of the Legislature to enact subsequent legislation to create building performance standards for improvements in energy efficiency and reductions in the emissions of greenhouse gases in large buildings, including measures to ensure that making the necessary investments to improve these buildings will improve equity and avoid displacement or increased energy burdens, especially in disadvantaged communities.

This bill would require the Energy Commission and the State Water Resources Control Board, in consultation with the State Air Resources Board, Public Utilities Commission, and Department of Housing and Community Development, on or before July 1, 2026, to jointly develop a strategy for using the energy and water usage data described above to track and manage the energy and water usage and emissions of greenhouse gases of covered buildings in order to achieve the state’s goals, targets, and standards related to energy and water usage and emissions of greenhouse gases of covered buildings, as specified. The bill would authorize the Energy Commission and the State Water Resources Control Board, upon appropriation, to jointly establish energy and water usage building performance standards consistent with the strategy. The bill would require the Energy Commission and State Water Resources Control Board to triennially evaluate the progress of the strategy in achieving improvements in energy and water efficiency and reducing the emissions of greenhouse gases and evaluate the impacts of the strategy on disadvantaged communities, as specified.

SB 49—Renewable energy: Department of Transportation strategic plan

What the law currently requires

Existing law vests the Department of Transportation with full possession and control of all state highways and all property and rights in property acquired for state highway purposes. Existing law authorizes the department to lease, for up to 99 years, areas above or below state highways to public or private entities, as specified. Existing law also authorizes the department to issue certain permits for a state highway’s right-of-way necessary for telegraph, telephone, or electrical lines or of any ditches, pipes, drains, sewers, or underground structures, unless otherwise specifically provided in the instrument conveying title.

How the bill changes the law

This bill would require the department, in coordination with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, to develop a strategic plan to lease and license department-owned rights-of-way to public utilities or other entities to build and operate renewable energy generation facilities, energy storage facilities connected to renewable energy generation facilities, and electrical transmission facilities, as specified.

The bill’s intent is to encourage solar power infrastructure along California’s highways.

SB 253—Climate Corporate Data Accountability Act and SB 261-Greenhouse gases: climate-related financial risk

What the law currently requires

The California Global Warming Solutions Act of 2006 requires the State Air Resources Board to adopt regulations to require the reporting and verification of statewide greenhouse gas emissions and to monitor and enforce compliance with the act. The act requires the state board to make available, and update at least annually, on its internet website the emissions of greenhouse gases, criteria pollutants, and toxic air contaminants for each facility that reports to the state board, as provided.

How the bills change the law

The two bills, SB 253 and 261, apply to companies that do business in California, and require thousands of companies doing business in California to disclose their scope 1, 2, and 3 greenhouse gas emissions and climate-related financial risk information. The first disclosures will be due in 2026.

SB 253, the Climate Data Accountability Act (“CCDAA”) applies to companies doing business in California with annual revenue in excess of $1 billion. Over 5,000 companies doing business in California will be required to make disclosures. Emissions disclosures would have to be independently verified and would be housed on a new publicly available digital registry administered by an organization contracted by the California State Air Resources Board (“CARB”). This registry would enable users to review individual reporting entity disclosures and analyze underlying data elements in a variety of ways.

SB 253 authorizes the State Board to bring civil actions against subject companies and seek civil penalties for violations of the act, with a maximum fine of $500,000. Amendments in the Assembly have scaled back the liability for scope 3 emissions via the introduction of a safe harbor. Under the amended bill, businesses would not be subject to administrative penalty for misstatements about scope 3 emissions made with reasonable basis.

SB 261, the Climate-Related Financial Risk Act (“CRFRA”) applies to companies doing business in California with annual revenue in excess of $500 million. SB 261 requires certain entities doing business in California to prepare and submit climate-related financial risk reports that cover climate-related financial risks consistent with recommendations from the Task Force on Climate-Related Financial Disclosure (“TCFD”) framework. For example, businesses would have to disclose whether they’ve budgeted for increased compliance and insurance costs and quantified potential opportunities and strategic priorities. The first report is required to be prepared by January 1, 2026, with reporting then taking place biennially.

In addition to submitting these climate-related financial reports risk reports to CARB, subject companies will need to make the reports available on their websites. Companies subject to regulation by the California Department of Insurance or that are in the business of insurance in any other state would be excluded.

Though these bills focus on US companies that do business in California, they are part of a global movement towards legislation that requires robust climate reporting from companies, including the SEC’s proposed climate disclosure rule in the US, and the Corporate Sustainability Reporting Directive (CSRD) in the EU. And, like the EU, California took an expansive approach to capturing companies; instead of focusing on companies with headquarters or the majority of their business in California, the state will require disclosures from any company with business there.

SB 306—Climate change: Equitable Building Decarbonization Program: Extreme Heat Action Plan

What the law currently requires

Existing law requires the State Energy Resources Conservation and Development Commission (“Commission”) to establish the Equitable Building Decarbonization Program, which includes establishing a statewide incentive program for low-carbon building technologies and the direct install program to fund certain projects, including installation of energy efficient electric appliances, energy efficiency measures, demand flexibility measures, wiring and panel upgrades, building infrastructure upgrades, efficient air-conditioning systems, ceiling fans, and other measures to protect against extreme heat, where appropriate, and remediation and safety measures to facilitate the installation of new technologies. Existing law authorizes the commission to administer the direct install program through regional direct install third-party implementers, as specified. Existing law requires that the direct install program give preference to projects in buildings that meet specified criteria. The Budget Act of 2022 appropriated $112,000,000 from the General Fund for purposes of the Equitable Building Decarbonization Program.

Existing law establishes the Office of Planning and Research in state government in the Governor’s office. Existing law establishes the Integrated Climate Adaptation and Resiliency Program (ICARP) to be administered by the office to coordinate regional and local efforts with state climate adaptation strategies to adapt to the impacts of climate change, as prescribed. The Budget Act of 2022 appropriated $25,000,000 $50,000,000 for state operations or local assistance for the ICARP Extreme Heat and Community Resilience Grant Program.

How the bill changes the law

This bill would, among other things, expressly require the Commission, for purposes of the direct install program, to award grants through the program and also give preference to projects in buildings in specified regions of the state, as specified. The bill would require the Commission, on or before March 1, 2024, and annually thereafter until the moneys described above have been expended, to submit a report to the relevant policy committees of the Legislature that includes information about the progress of the direct install program, including the selected administrators and implementers and implementation progress, as specified.

This bill would require the office and the Natural Resources Agency, on or before July 1, 2024, and every 3 years thereafter, in consultation with relevant state agencies, to update the Extreme Heat Action Plan, as defined, to promote comprehensive, coordinated, and effective state and local government action on extreme heat, as provided. The bill would require the Extreme Heat Action Plan and subsequent updates to be posted on the internet website of the office and provided to the relevant fiscal and policy committees of the Legislature.

SB 601—Professions and vocations: contractors: home improvement contracts: prohibited business practices: limitation of actions

What the law currently requires

1. Existing law, the Contractors State License Law, defines and regulates the activities of contractors and provides for their licensure, regulation, and discipline by the Contractors State License Board within the Department of Consumer Affairs (department). That law requires a home improvement contract, as defined, to be in writing and include the contract amount, as specified, and prohibits any downpayment for that contract from exceeding the lesser of $1,000 or 10% of the contract amount. Except for a downpayment, existing law prohibits the contractor from requesting or accepting payment that exceeds the value of the work performed or material delivered. Existing law makes the violation of these provisions a misdemeanor and sets the penalty as a fine of not less than $100 nor more than $5,000, or by imprisonment in a county jail not exceeding one year, or by both that fine and imprisonment.
2. Existing law makes any person who commits specified acts involving a license, certificate, permit, or registration issued by the department guilty of a misdemeanor. Those acts include lending the person’s license to any other person or knowingly permitting the use thereof by another, and knowingly permitting any unlawful use of a license issued to the person. Existing law, except as provided, limits the time for beginning prosecution for commission of specified offenses to one year after commission of the offense.

How the bill changes the law

With regard to individuals licensed pursuant to the Contractors State License Law who commit the above-described acts, this bill would instead authorize prosecution for a misdemeanor violation of the provisions described above involving use of a license issued by the board to begin within 3 years after discovery of the commission of the offense, or within 3 years after completion of the offense, whichever is later. By extending the statute of limitations for a crime, the bill would impose a state-mandated local program.

AB 1366—Liens: general aviation aircraft. Unfair competition and false advertising: disgorgement

What the current law requires

Existing law generally regulates false advertising and makes it a crime for a person or a firm, corporation, or association, or any employee thereof, to engage in specified false or misleading advertising practices. Existing unfair competition laws make various unfair competition practices unlawful, including any unlawful, unfair, or fraudulent business act or practice and unfair, deceptive, untrue, or misleading advertising.

Existing law authorizes certain public officials, including the Attorney General, to take specified actions upon failure of the advertiser to adequately substantiate a claim within a reasonable time or if the requesting official has reason to believe that an advertising claim is false or misleading. Existing law requires a person who engages or proposes to engage in unfair competition to be liable for a civil penalty of not more than $2,500, per violation, which is assessed and recovered in an action brought by certain public officials, including the Attorney General.

How the bill changes the law

This bill would authorize the Attorney General, in an action brought under specified false advertising and unfair competition laws to obtain the remedy of disgorgement, in addition to the other remedies provided under prescribed law. The bill would require the funds recovered by the Attorney General under these provisions to be deposited into the Victims of Consumer Fraud Restitution Fund. The bill would establish the Victims of Consumer Fraud Restitution Fund ns the State Treasury and provide that the funds in the fund may, upon appropriation by the Legislature, be used by the Attorney General to provide restitution to victims of acts or practices for which consumer restitution has been ordered but not paid in an action brought by the Attorney General, as specified. The bill would authorize the Attorney General to promulgate regulations in furtherance of these provisions.

SB 68—Vehicles: safety regulations

What the law currently requires

Existing law requires the Department of the California Highway Patrol to regulate the safe operation of certain vehicles, including buses, truck tractors, and trailers, and to adopt certain rules and regulations pertaining to the operation of those vehicles.

Existing law requires these regulations to include certain maximum driving times within a work period, including a maximum driving time of 10 hours for a driver of a tank vehicle with a capacity of more than 500 gallons transporting flammable liquid, and to prohibit a driver from driving for any period after having been on duty for 80 hours in any consecutive eight days.

How this bill changes the law

This bill would authorize the department to, by regulation, allow a driver to exceed these limits during a declared state of emergency if transporting fuel used for refueling aircraft used in emergency-related activities, including fire suppression.

SB 244—Right to Repair Act

What the law currently requires

Existing law, the Song-Beverly Consumer Warranty Act, provides a comprehensive set of procedures for the enforcement of express and implied warranties on consumer goods, as defined.

Under existing law, every manufacturer making an express warranty with respect to an electronic or appliance product, including televisions, radios, audio or video recording equipment, major home appliances, antennas, and rotators, with a wholesale price to the retailer of not less than $50 nor more than $99.99 is required to make available to service and repair facilities sufficient service literature and functional parts to effect the repair of the product for at least three years after the date a product model or type was manufactured, regardless of whether the 3-year period exceeds the warranty period for the product.

Existing law also requires every manufacturer making an express warranty with respect to an electronic or appliance product, as described above, with a wholesale price to the retailer of $100 or more, to make available to service and repair facilities sufficient service literature and functional parts to effect the repair of the product for at least seven years after the date a product model or type was manufactured, regardless of whether the 7-year period exceeds the warranty period for the product.

How the bill changes the law

This bill would enact the Right to Repair Act. The bill would require, except as specified and regardless of whether any express warranty is made, the manufacturer of an above-described electronic or appliance product, in the above-described circumstances, and in those same circumstances but sold to others outside of direct retail sales, to make available, on fair and reasonable terms, to product owners, service and repair facilities, and service dealers, the means, as described, to effect the diagnosis, maintenance, or repair of the product, as provided.

The bill would also require a service and repair facility or service dealer that is not an authorized repair provider, as defined, of a manufacturer to provide a written notice of that fact to any customer seeking repair of an electronic or appliance product before the repair facility or service dealer repairs the product, and to disclose if it uses replacement parts that are used or from a supplier that is not the manufacturer.

The bill would also authorize a city, a county, a city and county, or the state to bring an action in superior court to impose civil penalties on a person or entity for violating the Right to Repair Act, as provided. The bill would make these requirements and enforcement provisions operative on July 1, 2024.

AB 947—California Consumer Privacy Act of 2018: California Privacy Protection Agency

What the law currently requires

The California Consumer Privacy Act (“CCPA”) grants California residents (“consumers”) various rights with respect to their personal information collected by businesses, such as the right to know what personal information a business collects about them, how it is used and shared, and the right to opt-out of the sale or sharing of their personal information. The California Privacy Rights Act’s (CPRA) amendments to the CCPA added “sensitive personal information” as a sub-category of “personal information” and the right for consumers to limit the use and disclosure of their sensitive personal information.

How the bill changes the law

Effective January 1, 2024, AB 947 expands “sensitive personal information,” which includes government identifiers, precise geolocation, information concerning sexual orientation, racial or ethnic origin, religious or philosophical beliefs, and union membership, to now include a consumer’s citizenship and immigration status.

This broadens the types of consumer information that might trigger a consumer’s rights under the CCPA and potentially expose a business to liability.

AB 1194—California Privacy Rights Act of 2020: exemptions: abortion services

What the law currently requires

Existing law, the California Privacy Rights Act of 2020 (“CPRA”), approved by the voters as Proposition 24 at the November 3, 2020, statewide general election, grants a consumer various rights with respect to personal information, as defined, that is collected or sold by a business, as defined, including the right to require the business to delete personal information about the consumer, as specified, unless those obligations restrict a business’s ability to, among other things, comply with federal, state, or local laws or comply with a court order or subpoena to provide information, or cooperate with a government agency request for emergency access to a consumer’s personal information if a natural person is at risk or danger of death or serious physical injury, as provided.

How this bill changes the law

AB 1194 will ensure that when a consumer’s personal information relates to “accessing, procuring, or searching for services regarding contraception, pregnancy care, and perinatal care, including, but not limited to, abortion services,” business are obligated to comply with CPRA, except in cases where the information is in an aggregated, deidentified form and is not sold or shared.

According to Governor Newsom’s signing statement:

I am signing Assembly Bill 1194 because it will provide stronger privacy protections pursuant to the California Consumer Privacy Act (CCPA), so that individuals searching for information related to contraception, pregnancy care, perinatal care, and abortion services will have their data protected. As access to abortions, contraception, and other essential health care services continues to be criminalized across the country, California will remain a leader in protecting women, their family and friends, and health care workers who seek or provide reproductive care.

SB 362—Data broker registration: accessible deletion mechanism

What the law currently requires

The California Consumer Privacy Act of 2018 (CCPA) grants a consumer various rights with respect to personal information that is collected or sold by a business, including the right to request that a business disclose specified information that has been collected about the consumer, to request that a business delete personal information about the consumer that the business has collected from the consumer, and to direct a business not to sell or share the consumer’s personal information, as specified. The CCPA defines various terms for these purposes. The California Privacy Rights Act of 2020 (CPRA), approved by the voters as Proposition 24 at the November 3, 2020, statewide general election, amended, added to, and reenacted the CCPA and establishes the California Privacy Protection Agency (agency) and vests the agency with full administrative power, authority, and jurisdiction to enforce the CCPA.

How the bill changes the law

Known as the “Delete Act” this bill will enable California consumers—with a single request—to opt out of the “sale” or “sharing” of their personal information or to require “data brokers” to delete their personal information.

Under the Delete Act, data brokers are defined as businesses that knowingly collect and sell to third parties the personal information of a consumer with whom the businesses do not have a direct relationship. The Delete Act requires data brokers to register with the California Privacy Protection Agency (“CPPA”) annually and disclose to the agency the type of data that they collect. Data brokers must also have a link on their website instructing consumers how they may exercise their privacy rights.

By January 2026, the CPPA will implement an accessible deletion mechanism that will enable consumers to instruct every data broker that maintains their personal information to delete that information with a single request. The deletion mechanism must provide a description of the types of data specified for deletion, the process for submitting a deletion request, and examples of the types of information that can be deleted. Beginning August 2026, data brokers and their service providers and contractors will be required to process all such deletion requests.

AB 1204—Contractors: contracts: restrictions

What the law currently requires

Existing law, the Contractors State License Law, defines and regulates the activities of contractors and provides for their licensure, regulation, and discipline by the Contractors State License Board within the Department of Consumer Affairs.

Existing law classifies the contracting business to include general engineering contracting, general building contracting, residential remodeling contracting, and specialty contracting.

Existing law authorizes the issuance of contractors’ licenses to individual owners, partnerships, corporations, and limited liability companies, and authorizes those persons and entities to qualify for a license by the appearance of specified individuals.

Existing law prohibits contractors from performing specified acts and provides that a violation of those acts may constitute a cause for disciplinary action.

How this bill changes the law

This bill would prohibit a specialty contractor, as defined, from entering into a contract for the performance of work on the same single project or undertaking with more than one subcontractor in the same license classification unless the subcontractor employs persons who are classified as employees to perform work in that license classification on the single project or undertaking or the specialty contractor is a signatory to a bona fide collective bargaining agreement, as specified. The bill would provide that a violation of this provision constitutes a cause for disciplinary action.