CRA Member Newsletter
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February 7, 2023 | CRA Newsletter: Legislative, Political, Regulatory & Other Updates
Message from the President

We are off and running for the 2023 Legislative session! Last week CRA hosted member companies along with over 25 state legislators as well as senior leaders in the Newsom Administration for our Advocacy Days. It was a little different than past years, since legislators came to us, but we had great discussions on key issues CRA will be advocating for over the next year.

Last week we hosted our “Retail Champion of the Year” awards at our Legislative Reception and honored over 30 legislators as our “Friend of Retail”. It was a great few days and allowed CRA to proactively share the impact our members have on California’s workforce and economy. We will follow up with “micro” advocacy days throughout the legislative session focused on specific topics (PAGA reform, labor issues, environmental responsibility, etc.). I encourage member companies to engage in these important opportunities to tell the retail story in California.

Following our Advocacy Days the CRA board of directors met and set an aggressive agenda for 2023. I will be sharing exciting new initiatives and proposals that will increase CRA’s visibility and allow members of the state legislature to see how retail can thrive in environments that are not as heavily regulated as we are in California. Stay tuned to learn how your company can be part of this exciting new initiative.

As we look to the 2023 legislative session CRA will be sponsoring two bills – one to try and amend Proposition 47 to help curtail the impact of retail theft while ensuring individuals seek treatment for mental health issues or drug addiction through diversion programs and a “test and treat” bill to allow community pharmacies to not only test for certain sicknesses, but provide treatment as well. We are also monitoring a potential receipts bill, which would make the default an electronic receipt and a paper receipt only upon request, legislation on greenhouse gas emissions, a moratorium on warehouses, possible statewide predictive scheduling, additional paid sick leave and bereavement, a possible tax on pet food, a port container tax and there will be many more. The deadline to introduce bills is February 17th – after that date we will share all the bills CRA will be engaging on for our members. I encourage members to engage in a committee or work group and engage subject matter experts. We need your help as we strategize how to defeat, amend or in some cases support important bills making their way through the legislative process.

As always, 2023 will be busy, but I am optimistic we can be successful with our legislative priorities and activities. Please do not hesitate to reach out to me directly if you have any questions, concerns or if we can be helpful to you and your teams in California.

Best,

Rachel

In this Issue:
  • Legislative
  • Political Updates
  • Regulatory Updates
  • Chain Drug Updates
  • CRA Outreach, Activities & Other Updates
  • CRA In The News
  • Member News
  • Call for Committee Sign Ups
  • CRA Member Portal
Legislative Updates
CalTax Coalition Against ACA 1

CRA joined the CalTax coalition in submitting a letter to the bill’s authors opposing ACA 1, (Aguiar-Curry), which would allow local governments to increase taxes (e.g., parcel taxes, sales/use taxes, Mello-Roos taxes) with a 55 percent vote of the electorate – instead of the two-thirds vote currently required under the California Constitution – if the tax proceeds are earmarked for public infrastructure or affordable housing, as defined in the measure. 
 
Bill Introduction Deadline

The deadline for all bills to be introduced for his legislative session is Friday, February 17. We expect hundreds of bills to be included in our review process. The CRA team will be prioritizing legislation important to our members and engaging the legislative committee in an additional review process to get feedback on bills to support, oppose, remain neutral on and take any additional actions as deemed appropriate. All current CRA members get one representative to sit on the legislative committee. If you are unsure if your company has representation or have any additional questions please contact cra@calretailers.com.
2023-2024 State Budget Removes
UI Fund Aid for Businesses

The 2023-2024 state budget strips out all of the aid that was originally promised including:
  1. A commitment to .75 million in 2023-2024 towards the UI Fund’s insolvency.
  2. A commitment to provide $500 million in the 2024-2025 budget to provide tax breaks to small businesses to compensate for a portion of the unemployment-related tax increases those businesses will face.
 

RE UI FUND FRAUD/OTHER ISSUES: These other spending items around UI are maintained generally from 2022-2023 commitments.
  • Fraud: 
  • Per the 2022 budget, $313.4 million over 3 years to address fraud in UI/State Disability programs– which is maintained/continued in 2023.
  • In 2023-2024 – continued focus, with $85 million ($71 million General Fund) [specifically mentioned blocking suspicious IP Addresses, improving identity verification, and other claims issues.
  • Interest: $279 million one-time General Fund to pay the annual interest payment on the state’s Unemployment Insurance loan balance.
  • Modernization: 
  • In 2022-2023 - $136 million (68 mil from General Fund) in one-time for EDD Next (5-year modernization plan for EDD).
  • In 2023-2024 - $198 million ($99 mil General Fund) to continue EDD Next.
 
What does this mean for 2023?
Analysis is still underway, but there will likely be a push to restore some of the removed items regarding the UI Fund aid to the budget. CRA will keep members up to date on this issue. 
Political Updates
New CHP Commissioner Appointed

Governor Gavin Newsom announced his appointment of Sean Duryee as Commissioner of the California Highway Patrol following the retirement of Commissioner Amanda Ray in December 2022. Commissioner Duryee previously served as Acting Commissioner and has held several roles at the CHP since 1998.
US Senate ORC Bill Introduced

Senators Chuck Grassley (R-IA) and Catherine Cortez Mastro (D-NV) introduced the Combating Organized Retail Crime Act of 2022 (S. 5046). View the one-page summary here.

The bill recognizes the threat of organized retail crime to Americans. It seeks to make amendments to Title 18 of the U.S. Code, including adding a dollar value threshold of $5,000 or more in a 12-month period. The bill establishes a Center to Combat Organized Retail Crime to be led by Homeland Security Investigations (HSI). The Center is tasked with coordinating federal-level ORC investigations and intelligence sharing and supporting the retail industry and state and local law enforcement in their ORC-related investigative activities. Finally, the bill requires the Department of Homeland Security and Department of Justice to review their existing training and technical assistance programs and find ways to increase their prioritization of ORC within these programs.
Prop. 12 Update

After our last update of the adoption of regulations on September 1, 2022, it triggered the running of the 180-day stay, which was due to expire on February 28, 2023. The coalition pushed back on this and the judge has signed the order extending the stay of enforcement until July 1, 2023. (Read order HERE)
 
We are still in discussions with the AG’s office regarding the status of the appeal. The AG’s office was due to file their opening brief on November 7. Instead, the AG's office requested the appeal be held in abeyance, and the Court of Appeal has granted that request. (Read HERE) So, nothing will be happening with the appeal for the time being. The Court of Appeal has asked for a status update by February 1, 2023.
 
Finally, the Supreme Court did hold its oral argument in the federal case as scheduled on October 11. It’s always difficult to predict Supreme Court outcomes, but the Court at least seemed receptive to the arguments of the Pork Producers Council, so we are hopeful.
Statewide Ballot Initiatives Update

The 2024 statewide initiative ballot continues to grow with the Taxpayer Protection and Government Accountability Act turning in over one million signatures last week for official certification by the Secretary of State (SOS). The initiative gives voters the final say on all new or higher state and local taxes.

The SOS also certified the referendum challenging Assembly Bill 257, also known as the FAST Act, a law authorizing the creation of a council to set minimum wage and working standards for fast-food workers. The initiative submitted over 700,000 signatures and has qualified for the November 5, 2024 General Election. Earlier this year, a Sacramento judge ordered state officials to halt implementation until the SOS determined the initiative had qualified for the ballot. With official certification, the pause extends until voters can decide at the next general election.

Additionally, the SOS certified that the referendum challenging Senate Bill 1137, a law prohibiting new oil and gas wells within 3,200 feet of homes, schools and hospitals, submitted over 687,000 signatures and has qualified for the November 5, 2024 General Election.

We now stand at:
  • One Measure Qualified for the March 5, 2024 Primary Election,
  • Two Measures Qualified for the November 5, 2024 General Election, and
  • Four Measures Eligible for the November 5, 2024 General Election.
Rail Labor Strike

CRA joined over 420 groups in sending a letter to all offices on Capitol Hill urging Congress to act to prevent a rail strike from occurring on December 9. Reuters ran a story on the letter which can be viewed here - 400 groups urge U.S. lawmakers to take 'immediate steps' to block potential rail strike.
 
Read the letter here.
Regulatory Updates
CA Privacy Protection Agency Updates

The California Privacy Protection Agency held their February board meeting where they adopted the initial CPRA final regulations text. The regs now head to the Office of Administrative Law (OAL) for final review. OAL has 30 working days to conduct a review of the rulemaking record to ensure that the agency satisfied the requirements of the Administrative Procedures Act and OAL’s regulations. OAL will then either approve the rulemaking action and file the proposed regulation with the Secretary of State or disapprove the rulemaking action - they rarely disapprove. The CPPA board also began their preliminary rulemaking on the more complicated policy issues surrounding risk assessments, automated decision-making and cyber security audits. 

CRA submitted comments regarding round 2 of the CCPA rulemaking process. Read the comments here.
COVID-19 Prevention
Non-Emergency Regulations In Effect

The California Department of Industrial Relations announced the COVID-19 Prevention Non-Emergency Regulations requiring employers to protect workers from hazards related to COVID-19 are now in effect, following their Feb. 3rd approval by the Office of Administrative Law. The new regulations will remain in effect through February 3, 2025, with recordkeeping requirements in effect through February 3, 2026. Read more.
Important OSHA Updates

Permanent COVID-19 Rule for Healthcare
OSHA reopened its rulemaking for a Permanent COVID-19 Rule for Healthcare. In December 2022, OSHA delivered a final proposed rule to the White House’s Office of Management and Budget, and OMB spent January hosting stakeholders (employers, trade groups and unions) to hear feedback and concerns about the proposed rule. We are at the finish line for this rulemaking and expect to see the latest COVID-19 regulation out of OSHA any day now.

Heat Illness Rulemaking
OSHA continues to move swiftly on its rulemaking for a Heat Injury and Illness Prevention Standard for Outdoor and Indoor Work Settings. The National Advisory Committee on Occupational Safety and Health (“NACOSH”) Heat Injury and Illness Prevention Work Group (“Work Group”) reported out on their efforts to advance the OSHA’s heat illness rulemaking and efforts to update heat illness guidance.
Title 20 Requirements for
Portable Luminaires 

CRA submitted comments on the California Energy Commission's draft proposal to repeal the Title 20 requirements for portable luminaires. Read the comments here.
Labor Laws and Court Decisions Impacting Business in 2023

As typical, the California legislature had another busy year and labor issues were at the top of the list. The Legislature passed new employment laws ranging from protecting employee leaves of absence to extending statutes of limitations. The California courts are also shaping the employment world as we enter 2023. We are highlighting a few labor issues CRA is tracking that were passed last year and become effective on January 1, 2023, unless otherwise indicated including:
  • Minimum Wage
  • Pay Transparency and Reporting
  • Bereavement Expansion Under Assembly Bill 1949
  • Paid Sick Leave
  • COVID-19 Related Laws

We also highlighted court decisions that could impact the employee/employer relationship in California including:
  • Worker Classification
  • Gender Discrimmination
California AG Announces CCPA Enforcement Sweep Aimed at Mobile Apps and Authorized Agent Requests

On January 27, 2023, California Attorney General Rob Bonta announced a new enforcement sweep aimed at businesses with mobile apps and other businesses that fail to comply with the California Consumer Privacy Act (“CCPA”). The sweep focused on popular apps in the retail, travel and food service industries that allegedly fail to comply with, or do not provide a mechanism for, consumers’ requests to opt out of the sale of their personal information.

Predictive Scheduling Update

City and County of Los Angeles
The County Board of Supervisors at the end of 2022 approved the motion 5-0 for a possible scheduling ordinance aligned with the City of LA ordinance, which was signed last November. The motion asks for a report back to the Board in 120 days (late April). Mitchell and Horvath are the sponsors and spoke in favor. Horvath also mentioned she was part of a class-action suit against Abercrombie Fitch and knows something about how employers can abuse workers. The Fair Work Week Coalition, UCLA Labor Center, LA Dem Party and others spoke in favor. CRA spoke in opposition as did Abby King from VICA. Mitchell mentioned that the LA Chamber sent a letter on the issue and said they wanted to be part of the discussion. The CRA team will continue to provide updates on this issue as it develops.
Bounty Hunter Environmental Health Advocates (Prop. 65)

The bounty hunter Environmental Health Advocates ("EHA") quietly filed to depublish the case EHA v. Sream. EHA went after a water pipe (aka "bong") manufacturer for not providing a Prop 65 warning for the marijuana smoke that could be smoked in the pipe, aka an indirect exposure liability argument under Prop 65. EHA lost at both the trial court and appellate levels.
 
Notably, the ruling in Sream protects businesses from Prop 65 liability for indirect exposures well beyond bongs. There are at least two pending litigations involving products as diverse as air fryers and pesticides in which the Sream decision has already been argued to the court to protect businesses from Prop 65 liability. The Sream decision held that the manufacturer is not responsible for providing Prop 65 warnings for marijuana smoke because the products can be used with other substances. The bounty hunter attempted to set a “reasonably foreseeable” standard that marijuana would be smoked in the water pipes, and that this was the “predominant” use, but the Court of Appeal, relying on regulatory history and guidance from the AG’s office in various contexts, held that the exposure needs to be more direct and in fact the product needs to “necessarily” cause an exposure before a warning is required. In the air fryer context, bounty hunters are alleging that manufacturers must warn under Prop 65 for acrylamide exposures because of the "reasonably foreseeable" use of the air fryer for say French fries that could lead to an acrylamide exposure. Thus Sream is very helpful for mounting a defense.
 
CRA signed onto a a letter sent to the California Supreme Court in November opposing a Plaintiff's attorney attempt to depublish EHA v. Sream. Drawing a bright line from Sream is helpful, since it reduces the ambiguity that plaintiffs rely on to extract Prop 65 settlements from businesses. And here the line is about as far in the direction of businesses as we can imagine it being and thus worth protecting. Protecting the Sream decision weakens a number of Prop 65 bounty hunter theories trying to go after other products.

Read the letter here.
Chain Drug Updates
Thank you to our Chain Drug committee members for meeting with us in-person in Sacramento last week during CRA's Advocacy Days event. We discussed legislative and regulatory priorities for the new year and met with the California State Board of Pharmacy. There were several takeaways from the meeting including a new branding and public affairs campaign the CRA team will be launching this year. Stay tuned. Additional committee updates are below.
CRA Outreach, Activities & Other Updates
Staff Promotions


Congratulations to Ryan Allain who was promoted to
Director of Government Affairs for the CRA team!
Advocacy Days Recap

Thank you to all those who participated in CRA's 2023 Advocacy Days, which were held over the course of two days in Sacramento. Our members had the opportunity to meet with policy makers and representatives from the Administration to discuss issues such as Privacy, PAGA, Goods Movement, Retail Theft/ORC, Environmental Issues, Labor and Workforce Development. The event included a series of in-depth educational sessions focused on the latest issues impacting California's retail industry- a driving force for the state economy, soon to be the fourth largest in the world. CRA met with Christy Bouma, Governor Gavin Newsom's Legislative Secretary and Dee Dee Meyers, Senior Advisor to the Governor and Director of the Governor's Office of Business and Economic Development, as well as dozens of legislators from both the Senate and Assembly. The conversations were productive and included a lot of helpful insight and feedback between our member companies and elected representatives ahead of the bill introduction deadline, which is February 17. The CRA team is already planning followup advocacy meetings throughout this year. Stay tuned for more information.
Congratulations to CRA's 2023 Retail Champions and Friends of Retail Honorees

The California Retailers Association's Board of Directors and member companies also hosted a reception last week honoring legislators who have made a positive impact on California's retail industry. The event was packed! Congratulations to our 2023 Retail Champions Senators Anna Caballero and Brian Jones and Assemblymembers Blanca Rubio and Vince Fong. We also presented certificates to CRA's 2023 Friends of Retail. Thank you to the following legislators who showed a willingness to work with the retail industry during the last legislative session:

Senators: Brian Dahle, Bill Dodd, Steve Glazer, Shannon Grove, Melissa Hurtado, Janet Nguyen, Rosolia Ochoa Bogh, Kelly Seyarto, Nancy Skinner and Scott Wilk.

Assemblymembes: Ceclia Aguiar-Curry, Dr. JoaquinArambula, Marc Berman, Lisa Calderon, Sabrina Cervantes, Phillip Chen, Megan Dahle, Laurie Davies, Heath Flora, James Gallagher, Mike Gipson, Timothy Grayson, Tom Lackey, Brian Maienschein, Devon Mathis, Al Muratsuchi, Jim Patterson, Cottie Petrie-Norris, Sharon Quirk-Silva, James Ramos, Freddie Rodriguez, Carlos Villapudua, Marie Waldron and Lori Wilson.
Fresno Retail Theft Summit

CRA co-hosted a Retail Theft Summit in the Central Valley with Fresno City Councilmember Mike Karbassi and the Fresno Chamber of Commerce. CRA is proud to partner and collaborate with state and local leadership in working towards solutions to addressing organized retail crime and retail theft.
CRA In The News
In Case You Missed It...

CRA News
Cal Retailers Announces 2023 Board of Directors
California Retailers Association

State Budget
California Retailers Association Releases Statement in Response to Governor Newsom’s 2023-2024 State Budget Proposal
California Retailers Association

Gov. Newsom Unveils $297 Billion Budget Proposal With $22.5 Billion Deficit
California Globe

Retail Theft/ORC
California bill aims to protect retail businesses and the public amid spike in smash-and-grab thefts
ABC 7 Los Angeles

‘Sick and tired’: Karbassi rallies shop owners, law enforcement over millions in brazen retail thefts
 
Fresno holds Retail Theft Summit ahead of holidays
ABC 30 Fresno
 
"Retail Theft Summit" set to talk strategy on how to tackle theft across Fresno
KMPH Fox 26 News

Big Lots Just Announced 'An Accelerated Number of Closures'
CBS Sacramento
Additional coverage:

Retail theft on rise as holiday shopping season picks up
KNX News 97.1 FM, Audacy Los Angeles
 
Target Attributes $400M Loss to Organized Retail Crime
Newsmax

Major retail brands threaten to close stores over rampant retail theft
KTVU Fox 2
Additional coverage:

Supply Chain
Businesses face more supply chain issues as West Coast port negotiations continue into new year
Northern CA Record

Theft and supply chain issues could affect Black Friday shopping
KTXL-TV Fox 40 News Sacramento

Prop. 12 (Pork)
Prop 12 Enforcement Waits for SCOTUS
Progressive Farmer

Implementation of California Proposition 12 Delayed, NPPC Reports
Pork Business
 
Prop 12 implementation expected to be delayed until July 1, 2023
Feedstuffs.com

Predictive Scheduling
LA City Council passes ordinance providing schedule stability for retail workers
Daily Bruin
 
LA Gives Retail Workers More Scheduling Control
INSTORE Magazine
 
LA City Council considers ordinance to add protections for 70K retail workers – Daily News
Los Angeles Daily News
 
LA Council Approves Fair Work Week Ordinance Aimed at Helping Retail Workers
MyNewsLA.com
 
LA's 'Fair Work Week' ordinance passes first City Council vote 
CBS Los Angeles

LA Council Approves Fair Work Week Ordinance Aimed to Help Retail Workers
KFI AM 640
 
Los Angeles Moves to Implement Stricter Policies on Retail Employers 
The Epoch Times

Other
Permitting and red tape are major obstacles for small-business owners
Sacramento Business Journal

Retail industry legislation and policies to watch in 2023
Modern Retail

Think those bags are recyclable? California says think again
KSBY 6 NBC-San Luis Obispo
Additional coverage:
Member News
Commercial and Industrial Fans Regulatory Update

On November 16, 2022, the California Energy Commission (CEC) adopted a new standard for commercial and industrial (C&I) fans under the California Appliance Efficiency Regulations (Title 20). Title 20 sets minimum efficiency requirements for energy and water consumption in appliances. It is estimated that this standard will result in significant energy savings in California - about 1,755 gigawatt-hours per year according to a report by the CEC. This is equivalent to the electricity used by 242,000 homes in a year!

Under this new standard, manufacturers of C&I fans are required to test, mark and certify their products to the CEC’s Modernized Appliance Efficiency Database System (MAEDbS). However, everyone has a role to play in the compliance process – not just manufacturers. California retailers of C&I fans should verify the products they sell and/or purchase for their retail locations or commercial/industrial facilities are Title 20 compliant by confirming that the model number is listed in the MAEDbS. Manufacturers, retailers, distributors and installers will be required to comply starting in the fall of 2023.

Fortunately, Energy Code Ace has resources available to support you in the compliance process. The MAEDbS 101 fact sheet can show you how to navigate the database and ensure the products you are offering for sale are Title 20 compliant. For more resources on Title 20, the compliance process and more, visit Energy Code Ace or email title20@energycodeace.com.
Calling All CRA Members:
Committees and List Serves Review
We are updating CRA’s committees and list-servs for 2023. Those of you who have signed up for existing committees in the past, we will follow up under a separate email to confirm your participation for 2023. These groups are an opportunity for you to receive updates on CRA’s activities with respect to key legislation and other actions in areas of importance to your company and also to provide input on CRA policy positions. We encourage your technical experts and others to join subject-matter committees in line with their expertise. 
The following are CRA’s policy committees for 2023. 
  • Campaign
  • Chain Drug (new name coming soon)
  • Legislative Committee (*one representative per member)
  • Labor and Workforce Development
  • Environmental Responsibility
  • Online Marketplace
  • Privacy
  • Retail Theft
  • Supply Chain/Goods Movement
 
In addition, CRA operates list-serves for particular issues important to retailers. Those include:
  • Alcoholic Beverage
  • CalOSHA
  • COVID-19
  • Energy
  • Food & Grocery
  • Healthcare
  • Homelessness
  • Prop. 65/Green Chemistry
  • Retail Crime
  • Tax Issues

If you have any questions or need additional information please reach out to Ryan at ryan@calretailers.com.
CRA Member Portal
CRA members get access to CRA's exclusive online member portal, which contains coalition letters, floor alerts, regulatory comments and testimony that California Retailers Association authored or signed on to during previous and current Legislative sessions. The portal also contains newsletter, news alert archives, advocacy materials and important association governance documents for your reference. If you have not yet received your login credentials and access instructions please email cra@calretailers.com. We are also available to answer any questions you may have regarding portal navigation.
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