The Legislature is back in session. These are the top pending bills for cities (so far)

By Cal Cities Staff

Lawmakers are entering the new year with a litany of problems - some new, some old, and some punted. For starters: a ballooning $18 billion budget shortfall. There is precious little left in the rainy day account and even fewer creative accounting maneuvers.

Legislators must also contend with more federal cuts and delays - including funding for the devastating wildfires in the Los Angeles area last year, high-speed rail, child care, and Medi-Cal - challenges to its climate policies, leadership changes, and an unresolved pledge to tackle the affordability crisis.

Cal Cities is entering the year laser-focused on cleaning up a bad housing bill from last year, advancing stalled sponsored bills, and finding new ways to advance city priorities.

This is the second year of California's two-year legislative cycle. If legislators want to get any outstanding bills across the finish line, they need to clear a major committee hurdle by Jan. 16.

-Brian Hendershot, Cal Cities Advocate managing editor

SB 79 clean-up and development fees in the limelight

Lawmakers are again tinkering with SB 79 (Wiener), a measure from last year designed to dramatically and forcibly ramp up housing near high-density transit stops. A groundswell of opposition from over 180 cities and other advocacy organizations compelled the author to amend the bill 13 times, narrowing the scope to cities in eight large counties.

SB 677, also by Sen. Scott Wiener, would expand the law to ferry stops while exempting mobile home parks and RV parking sites. SB 677 is an important opportunity to address several implementation challenges. However, it does not go far enough. As such, Cal Cities is opposing the measure unless it is amended. The requested provisions center around aligning implementation with the next housing cycle, as well as providing clearer guidance, standards, and expectations.

Another bill, SB 722 (Wahab), is seeking similar exemptions for mobile home parks and RV sites. Cal Cities supports this effort, as they are an important source of affordable housing.

SB 417 (Cabaldon) / AB 736 (Wicks) are the latest in a series of attempts to get a $10 billion housing bond before voters for approval. The investments would come at a critical time, as the last round of funding for the state's flagship affordable multifamily housing program was oversubscribed ten to one. In a statewide survey by Cal Cities, cities cited limited supportive housing options and lack of ongoing funding as the top two barriers to preventing and reducing homelessness. Cal Cities supports the measure, which, if successful, would place the bond on the June 2026 ballot.

AB 874 (Ávila Farías) is another run at the funds cities rely on to support new housing. The measure would require local agencies to adopt a 30- to 55-year fee-deferral loan program for 100% affordable housing projects or reduce mitigation fees to zero. These fees are cost-recovery tools - not revenue sources.

The bill comes as cities are working to comply with other changes to the Mitigation Fee Act. Proponents of AB 874 cite a few local ordinances as examples of how a loan-fee deferral program could work. However, there is a clear difference between how cities voluntarily implement such programs and what is proposed in AB 874: Many cities cannot absorb decades-long deferrals. Cal Cities and other local government associations have expressed concerns with the bill and will submit a formal coalition letter in the coming days.

- Brady Guertin, legislative advocate, and Brian Hendershot, Cal Cities Advocate managing editor

Co-sponsored nitrous oxide bill introduced

Cal Cities has teamed up with Sen. Tom Umberg and the California Narcotic Officers' Association to introduce SB 758. The bill would make it illegal for individuals with a tobacco license to sell nitrous oxide. It would also classify 7-hydroxymitragynine (7-OH) as a Schedule I controlled substance, except as it naturally occurs in the Kratom plant. The Senate Public Safety Committee will hear the measure on Jan. 13. Cities are encouraged to submit letters before the hearing using Cal Cities' sample letter.

Nitrous oxide is an odorless, colorless chemical used in food preparation and dentistry. It's also becoming an increasingly popular and dangerous recreational drug. At least 25 cities across the state have brought forth ordinances focused on restricting the sale of nitrous oxide in retail locations.

7-OH is a highly potent, opioid-like chemical that is often sold as a cure-all. At high and unnatural concentrations, it can cause significant potential for abuse and physical harm. The drug has been linked to at least six deaths in Los Angeles County.

The bill would establish a consistent regulatory baseline for both toxic substances, making it easier for cities to address the proliferation of recreational nitrous oxide and 7-OH-related deaths.

- Serena Scott, policy and legislative affairs analyst,and Jolena Voorhis, legislative advocate

Last chance for key property insurance and xylazine ban bills

Lawmakers will also weigh three familiar, Cal Cities-supported public safety bills this month: AB 75 (Calderon), SB 6 (Ashby), and AB 63 (Rodriguez, Michelle).

AB 75, which lawmakers held late in the session, would prohibit insurance companies from canceling policies based on aerial footage taken 180 days before sending notice of the decision to homeowners. The bill would also give homeowners an opportunity to dispute the image and remedy the issue.

Legislators will also review SB 6, which would add xylazine to the state's list of controlled substances. Xylazine is generally used in veterinary practices to treat large animals but can be mixed with fentanyl and other drugs. This marks the third year that Sen. Angelique Ashby has attempted to address the issue.

Building on a bill signed last year that makes it easier for law enforcement to address prostitution and human trafficking, AB 63 would make loitering in a public place with the intent to commit prostitution a misdemeanor. The measure would also require law enforcement officers to offer services prior to an arrest for prostitution.

- Jolena Voorhis, legislative advocate, and Brian Hendershot, Cal Cities Advocate managing editor

Sponsored recovery housing and encampment bills get a second chance

Three measures sponsored by Cal Cities have one last shot at becoming law. This includes two bills sponsored by Cal Cities focused on improving accountability and outcomes for recovery homes. A 2024 state audit found that the Department of Health Care Services has failed to thoroughly investigate complaints made against alcohol and drug treatment facilities. Without expeditious investigations, problems go undetected, threatening the health and safety of those receiving care.

For the past two years, Cal Cities has successfully pushed through a series of reforms. However, lawmakers did hold two of those measures last year, SB 329 (Blakespear) and SB 35 (Umberg), citing high fiscal costs. Both bills would speed up investigations and increase transparency. Cal Cities is collaborating with both authors and the department to cut costs. (Sen. Tom Umberg has reintroduced SB 35 as SB 490, which will be heard in the Senate Health Committee next Wednesday.)

Another measure by Sen. Catherine Blakespear, SB 569, would increase collaboration between the California Department of Transportation and local governments to address encampments on state property. The bill would require Caltrans to establish a dedicated liaison to, among other things, improve communication with local governments, set clear response timelines for encampment-related requests, and make it easier for cities and counties to take on delegated maintenance agreements.

Blakespear introduced the legislation in response to a 2024 executive order by Gov. Gavin Newsom that called upon cities to adopt policies and plans consistent with the California Department of Transportation's existing encampment policy.

SB 569 was withdrawn from consideration in the Assembly Transportation Committee after the administration introduced last-minute amendments that threatened to significantly weaken the bill. Cal Cities and the city of San Diego, which is co-sponsoring the bill, are actively working with Caltrans and the author's office to move a revised version of this measure forward.

- Serena Scott, policy and legislative affairs analyst, and Caroline Grinder, legislative advocate

What's next?

Expect a flurry of activity for the next two weeks, followed by a trickle of rumors and announcements. This Friday, Gov. Gavin Newsom will unveil his final budget proposal. After that, lawmakers have until Jan. 16 to get any two-year bills through their house of origin committee hearings and Feb. 20 to announce any new bills.

The session will begin in earnest sometime toward the end of March, as lawmakers race to get any new bills through their first fiscal hearing before a late April deadline. Be sure to keep an eye out for Bill Talk around that time, a weekly breakdown of the biggest bills, hearings, and legislative deadlines for cities, distributed early through regional public affairs managers.