SBE News

Capitol Update 7/11/2023

The Speaker is Dead, Long Live the Speaker

The reign of California Assembly Speaker Robert Rivas officially began Friday. His earliest moves: giving staffers the rest of the day off and making his first leadership picks, elevating now-Majority Leader Issac Bryan and Speaker Pro Tem Cecilia Aguiar-Curry (replacing Eloise Gomez Reyes and Christopher Ward). Rivas sounded unlikely to change influential committee chairmanships this session as he emphasized avoiding “disruption.” But there were some changes: Esmeralda Soria replaced Rivas as Agriculture Committee chair, Juan Carrillo succeeded Aguiar-Curry at Local Government, Gail Pellerin will take over Elections from Bryan, and Pilar Schiavo will fill Soria’s former slot heading Veterans Affairs. Akilah Weber is taking a Budget spot from Joaquin Arambula, who briefly tried to reopen the speakership fight. In his inaugural speech, Rivas warned that the cost of living was putting his poverty-to-prosperity arc out of reach for most Californians. He urged his caucus to focus “less on how many bills we can pass and more on the impact we are having,” but he told reporters afterward he wasn’t contemplating a bill cap. He didn’t advocate changes to the strong committee chair system Rendon enshrined. Several ex-speakers were on hand for the ceremony, including current and former Los Angeles mayors Karen Bass and Antonio Villaraigosa and US House Speaker Emerita Nancy Pelosi. But now-former speaker Anthony Rendon didn’t stick around, exiting the chamber partway through the proceedings. He’s moved to the legislative office building rather than the swing space, where almost all assemblymembers are located – a spot his office said he requested. [Politico]

Breathing Room for Employers as Court Enjoins Enforcement of California Privacy Rights Act Regulations

On June 30, 2023, a California court enjoined until March 29, 2024, enforcement of the final regulations implementing the California Privacy Rights Act (CPRA). Importantly for employers, this ruling prevents enforcement of only a portion of the web of requirements imposed by the new California privacy law. This Story explains the impact of the ruling on employers that are subject to the CPRA.

How Friction Between Two Major California Laws Impedes Housing Construction

Dan Walters writes,“Christopher Elmendorf, a law professor at UC Davis who specializes in housing issues, and Timothy Duncheon, a San Francisco attorney, focus on “the slow-motion collision” between two overarching “super-statutes,” CEQA and the Housing Accountability Act, or HAA. They demonstrate through case studies that, while the latter attempts to streamline housing construction, local interests and labor unions use the former to slow or even kill housing projects. Story

Complicated Minefield Awaits Employers After SCOTUS Religious Accommodation Ruling

Business owners and managers will need to consider religious accommodation requests from employees more carefully — and it could get very complicated, reports The Business Journals. The Supreme Court on Thursday issued a unanimous opinion that federal law requires employers to show the burden of a religious accommodation must result in “substantial” increased costs or expenditures not to grant one. “Employers are going to have to readjust their thinking to be more sensitive or have the red flags go off sooner,” said David Miller, an employment attorney at Bryant Miller Olive. “If somebody asks for a religious accommodation, then [employers] need to pick up their phone and call their lawyer and let their lawyer figure it out. Don’t do it alone — you are bound to get it wrong.” Story

Private Employers Added More Than Twice As Many Jobs As Expected In June

Bloomberg reports, “The US labor market showed fresh signs of resilience on Thursday, as private hiring surged, layoffs slowed and filings for unemployment benefits stayed relatively low. US companies added almost half a million jobs last month, the most in over a year, according to data from ADP Research Institute in collaboration with Stanford Digital Economy Lab.” Bloomberg adds that “a separate report from Challenger, Gray & Christmas Inc. showed announced job cuts by US employers fell in June to an eight-month low.” CNBC reports that according to ADP, “Private sector jobs surged by 497,000 for the month, well ahead of the downwardly revised 267,000 gain in May and much better than the 220,000 Dow Jones consensus estimate.” CNBC adds, “From a sector standpoint, leisure and hospitality led with 232,000 new hires, followed by construction with 97,000, and trade, transportation and utilities at 90,000. Annual pay rose at a 6.4% rate, representing a continued slowing that nonetheless still is indicative of brewing inflationary pressures.”  The AP reports that job openings “slipped in May but remained at levels high enough to illustrate that the American labor market remains resilient in the face of sharply higher interest rates. Employers posted 9.8 million job vacancies, down from 10.3 million in April, the Labor Department said Thursday.” However, the AP adds that “layoffs fell slightly, and more Americans quit their jobs – a sign they were confident they could find better pay or working conditions elsewhere.” Reuters reports that “the number of Americans filing new claims for unemployment benefits increased moderately last week. … Initial claims for state unemployment benefits rose 12,000 to a seasonally adjusted 248,000 for the week ended July 1, the Labor Department said.” The New York Times says, “The quits rate, which is often used to gauge a worker’s confidence in the job market, increased in May, particularly in the health care, social assistance and construction industries. A rise in quitting often signals workers’ confidence that they will be able to find other work, often better paying.”

Federal Reserve Bank Of Dallas President: More Rate Hikes Likely Necessary This Year

Bloomberg reports that Federal Reserve Bank of Dallas President Lorie Logan “said more interest-rate increases will likely be needed to spur meaningful disinflation and bring price-growth rates back to the central bank’s target. ‘I remain very concerned about whether inflation will return to target in a sustainable and timely way,’ Logan said Thursday in remarks delivered at the Central Bank Research Association’s annual meeting in New York.” Logan added, “I think more-restrictive monetary policy will be needed to achieve the Federal Open Market Committee’s goals of stable prices and maximum employment.” Reuters quotes Logan as saying, “It would have been entirely appropriate to raise the federal funds target range at the (Federal Open Market Committee)’s June meeting, consistent with the data we had seen in recent months and the Fed’s dual-mandate goals.” But Logan added that “it can make sense to skip a meeting and move more gradually.” Logan also said, “It is important for the FOMC to follow through on the signal we sent in June. … Two-thirds of FOMC participants projected at least two more rate increases this year.”

Payroll employment increases by 209,000 in June; unemployment rate changes little at 3.6%

Total nonfarm payroll employment increased by 209,000 in June, and the unemployment rate changed little at 3.6 percent. Employment continued to trend up in government, health care, social assistance, and construction.

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Infrastructure Streamlining Advances

As expected, the state Senate gave final approval on Wednesday to Gov. Gavin Newsom’s package of infrastructure bills — but not before Republicans voted no on two bills and critics questioned allowing harm to protected species, such as golden eagles and sandhill cranes, reports CalMatters’ The five bills would streamline the permitting process for bridges, railways, and other major projects (though the Delta water tunnel was exempted). They were the subject of intense, closed-door negotiations that held up the state budget deal. In a statement, the governor said he looks forward to signing the bills, which bring California “one step closer to building the projects that will power our homes with clean energy, ensure safe drinking water, and modernize our transportation system.” 

Senate Republicans voted no on SB 150, which embeds workforce and community benefit requirements in procurement and contracting for infrastructure and manufacturing investments related to the federal Infrastructure and Investment Jobs Act (IIJA), the Inflation Reduction Act (IRA), and the CHIPS and Science Act (CHIPS Act). An oblique provision requires community benefits in project labor agreements executed by a state agency for projects of $35 million and above in construction costs. But this provision is stayed until 2026 (it will take the State Building and Construction Trades Council time to phony up new arguments why excluding 80% of the construction workforce from working is a “community benefit.” SB 150 defines community benefits to include local hire provisions, partnerships with high-road construction careers programs, and other methods to promote the employment of individuals from economically disadvantaged areas and veterans.

Outlook bright for USACE civil works funding

The US Army Corps of Engineers’ civil works program appears to be on track as congressional appropriations committees take up funding for various federal agencies through fiscal 2024, writes Tom Ichniowski. Legislation includes $9.6 billion for civil works and $19.1 billion for military construction. Full Story: Engineering News-Record (tiered subscription model)

Construction spending increases marginally in May

Construction spending reached a seasonally adjusted annual rate of $1.93 trillion in May, up 0.9% compared with April and up 2.4% compared with May 2022, according to the Census Bureau. Spending on residential projects made the greatest gains, but nonresidential spending declined 0.2% in May compared with April. Full Story: The Construction Broadsheet  

Study examines cost of net-zero building codes

Communities in Massachusetts that adopt net-zero building codes risk adding $10,000 to $23,000 to the cost of building single-family homes, according to a study by the Home Builders & Remodelers Association of Massachusetts. However, environmentalists and others dispute the study, saying the conclusion fails to figure in energy savings and state incentives. Full Story: The Boston Globe (tiered subscription model) 

Flat materials prices predicted for construction

Steel and cement prices continued to rise in the first half of the year, but construction materials prices are likely to be flat for the remainder of 2023, says Chris Delaney, commercial manager for the Americas at consultant Linesight. Delaney predicts construction growth of 3.6% and 4.5% in the commercial and institutional sectors, respectively, with leisure, hospitality, retail and storage projects driving commercial gains. Full Story: Construction Dive

Stations envisioned for Calif. high-speed rail

Architects and engineers are designing four stations covering 119 miles for California’s high speed-rail project. The focus is on harmony with surrounding structures and elements common to each station, including an accordionlike, perforated metal canopy that incorporates solar panels Full Story: San Francisco Chronicle (tiered subscription model) 

Balfour Beatty finishes $300M Calif. water project

Balfour Beatty has completed the latest part of the $1.7 billion EchoWater Project by the Sacramento Regional County Sanitation District in California. The $300 million segment adds treatment processes at a wastewater facility and makes the facility the second-largest of its kind nationwide. Full Story: Construction Dive

Shimmick picked for $217M water reclamation project

Shimmick Construction has won a $217 million contract to build the third phase of expansion at the Regional Water Reclamation Facility in Lake Elsinore, Calif. When work finishes in 2026, plant capacity will rise to 12 million gallons daily from 8 million gallons daily. Full Story: Engineering News-Record (tiered subscription model) 

Calif. doles out $1.5B in grants for upgrades at ports

A $1.5 billion investment in California ports aims to achieve a smoother supply chain and cleaner air. The Port of Long Beach, with more than $383 million, and the Port of Los Angeles, with $233 million, are among recipients of upgrades such as facility expansions, improvements for train crossings and roadways, and zero-emission vehicles. Full Story: Long Beach Post (Calif.)