Pub. 3 2021-2022 Issue 1

22 What Should Dealers Expect from the California Legislature in 2021? Alisa Reinhardt Director of Government Affairs D emocrats in charge of both houses of the legislature delayed the start of this year’s legislative session by one week due to high statewide COVID-19 case numbers. As of mid-January, the members are back and Governor Newsom has begun lifting some of the more strict COVID-19 stay-at-home orders. Unlike prior years when the start of a new legislative session meant throngs of lobby- ists and legislative staff descending on the Capitol, the Capitol is largely empty this year, as the building remains closed to the public and members are only allowed one essential staffer in the Capitol at a time. Both houses of the legislature have also put pandemic protocols in place that include man- datory temperature checks, masking, and social distancing, in addition to plexiglass installations at the Capitol’s entrance and extra cleaning. Email alerts to legislators and staff are sent almost daily at this point to inform them about yet another case of COVID-19 affecting the Capitol community. Policy Priorities During the last legislative session, in March 2020 when closures started being announced on a wide scale, leg- islators were directed to drop all bills that were unrelated to COVID-19. Some legislators followed that directive and some did not, which confused the legislature’s true policy priorities. This year, legislative leadership does not strictly limit the number of bills any given Assemblymember or Senator can carry. Members are being directed to keep legislation as limited as possible. At least for the first half of this year, much of the state’s business will continue to be done via phone and video calls until the vaccine is rolled out more widely. Now that we are collectively entering a brand-new year but still facing the day-to-day realities of COVID-19, the legislature’s focus will remain primarily on measures related to combating the negative effects of the pandemic, including expanding employee leave policies, extending eviction moratoriums, attempting to address homelessness, overseeing reforms to the state Employment Development Department, and promoting equal access to technology related to education. We know that other top of mind issues for legislators include criminal justice reform and efforts to combat wildfires and rolling blackouts. Due largely to Governor Gavin Newsom’s recent Executive Order to ban sales of new internal combus- tion engine vehicles in the state by 2035, we are also likely to see bills related to that effort and combat climate change more generally. CNCDA Sponsored Legislation As of January 25th, early in the new 2021-22 legislative ses- sion, lawmakers have already introduced 588 bills — 253 of which we are watching, with many more measures to come. CNCDA is sponsoring one bill this year, aiming to modify the California Uniform Electronic Transactions Act (“CalUETA”) to remove the prohibition on electronic customer signatures on vehicle sales and lease agreements. While many attorneys believe that the federal Electronic Signatures in Global and National Commerce Act (“E-Sign Act”) preempts CalUETA, this is a gray area in the law and needs to be addressed so that dealers can operate their businesses with certainty. CNCDA has attempted to run this bill in the past. Former Senator Hannah-Beth Jackson derailed our efforts on every attempt and was able to do so because she was chair of the influential Senate Judiciary Committee. This year, CNCDA was able to secure Senator Tom Umberg (D-Orange County) to author our bill — and he is the new chair of the Senate Judiciary Committee now that Senator Jackson termed out. This is our best prospect yet for cleaning up a provision in CalUETA that has complicated vehicle sales and lease paperwork for years. We will keep you updated on this leg- islation; please be on the lookout for Capitol Updates in the coming months. Political Breakdown Democrats have supermajorities in both the state Senate (31 Democrats and 9 Republicans) and state Assembly (61 Democrats, 18 Republicans and 1 Independent). Along with this political reality, we are seeing a mass exodus of both businesses and people fleeing California. The most recent companies leaving for Texas include Charles Schwab, Hewlett Packard, Oracle, and even some of Tesla’s opera- tions. New data shows that in 2020, more than 135,000 peo- ple left California than moved here, which is the third-largest exodus ever recorded for one year in our state’s history.