SB137 - State government.

Amended IN Assembly June 24, 2025 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Senate Bill No. 137 Introduced by Committee on Budget and Fiscal Review January 23, 2025 An act relating to the Budget Act of 2025. An act to amend Sections 1798.155, 1798.160, 1798.199.55, and 1798.199.90 of the Civil Code, to amend Sections 25608 and 31500 of the Corporations Code, to amend Sections 408, 501, 1674, 2038, 4839, 14353.5, 16006, 16505, 17207, and 50401 of the Financial Code, to amend Sections 7929.011, 9795, 10242.5, 11040, 11041, 11042, 12012.85, 12100.63, 63035, 63048.91, 63048.92, 63048.93, 63048.94, 63048.95, 63048.96, 63048.97, 63048.99, 63048.100, and 65400 of, to amend the heading of Article 6.7 (commencing with Section 63048.91) of Chapter 2 of Division 1 of Title 6.7 of, and to add Sections 11011.4 and 11043 to, the Government Code, to amend Sections 25661.5 and 71340 of the Public Resources Code, and to amend Section 18997.51 of the Welfare and Institutions Code, relating to state government, and making an appropriation therefor, to take effect immediately, bill related to the budget. LEGISLATIVE COUNSEL'S DIGEST SB 137, as amended, Committee on Budget and Fiscal Review. Budget Act of 2025. State government. (1) The California Consumer Privacy Act of 2018 (CCPA) grants to a consumer various rights with respect to personal information, as defined, that is collected by a business, as defined, including the right to request that a business delete personal information about the consumer that the business has collected from the consumer. The California Privacy Rights Act of 2020, an initiative measure approved by the voters as Proposition 24 at the November 3, 2020, statewide general election, amended, added to, and reenacted the CCPA. The CCPA establishes the California Privacy Protection Agency with full administrative power, authority, and jurisdiction to implement and enforce the CCPA. The CCPA creates the Consumer Privacy Fund in the State Treasury and makes moneys in the fund available upon appropriation by the Legislature first to offset any costs incurred by the state courts in connection with actions brought to enforce the CCPA, the costs incurred by the Attorney General in carrying out the Attorney General’s duties under the CCPA, and then for the purposes of establishing an investment fund in the State Treasury, with any earnings or interest from the fund to be deposited into the General Fund, and making grants to promote and protect consumer privacy, educate children in the area of online privacy, and fund cooperative programs with international law enforcement organizations to combat fraudulent activities with respect to consumer data breaches, as prescribed. This bill would revise and restructure the Consumer Privacy Fund by creating the Consumer Privacy Subfund, the Attorney General Consumer Privacy Enforcement Subfund, and the Consumer Privacy Grant Subfund within the fund. The bill would require moneys in the fund and each subfund to be used for prescribed purposes, and make moneys in the fund and each subfund available upon appropriation by the Legislature. The bill would require 95% of any administrative fine recovered in an action brought by the agency for a violation of the CPPA, and of the proceeds of any settlement of those actions, to be deposited into the Consumer Privacy Subfund to be used exclusively by the agency in carrying out its duties under the CCPA, and 95% of any civil penalty recovered in an action brought by the Attorney General for a violation of the CCPA to be deposited into the Attorney General Consumer Privacy Enforcement Subfund to be used exclusively by the Attorney General in carrying out its duties under the CCPA. The bill would require 5% of any administrative fine recovered in an action brought by the agency for a violation of the CCPA, and of the proceeds of any settlement of those actions, to be deposited into the Consumer Privacy Grant Subfund, and 5% of any civil penalty recovered in an action brought by the Attorney General for a violation of the CCPA to be deposited into that subfund. The bill would require funds deposited into the Consumer Privacy Grant Subfund to be used exclusively by the agency to administer and distribute grants to promote and protect consumer privacy, educate children in the area of online privacy, and fund cooperative programs with international law enforcement organizations to combat fraudulent activities with respect to consumer data breaches. The bill would require the agency, subject to that provision, to make grants from the subfund by distributing 1 / 3 of the amount allocated for grant funding to specified grant recipients, including nonprofit organizations to promote and protect consumer privacy. The bill would require the agency to begin administering the grant program when the amount of funds within the subfund exceeds $300,000. The bill would require specified percentages of any remaining funds in the Consumer Privacy Fund that were not appropriated as part of the 2025 Budget Act to be transferred on a one-time basis in the 2025–26 fiscal year to each subfund, including that 45% is transferred to the Consumer Privacy Subfund, 45% is transferred to the Attorney General Consumer Privacy Enforcement Subfund, and 10% is transferred to the Consumer Privacy Grant Subfund. This bill would declare that the above provisions further the purposes and intent of the California Privacy Rights Act of 2020. (2) Existing law establishes the Department of Financial Protection and Innovation and gives the department the responsibility for administering various laws. Existing law establishes the Financial Protection Fund to support the department in the administration of these laws, and requires that all expenses and salaries of the department be paid out of the fund, upon appropriation by the Legislature for these purposes. Existing law provides that the chief officer of the department is the Commissioner of Financial Protection and Innovation. Existing law requires various entities to pay various fees to the commissioner for various services or licenses provided by the commissioner and the department. This bill would change some of those fees, as specified. The bill would also make other technical changes. (3) When a state or local agency is required or requested by law to submit a report to the Legislature, existing law requires submission of the report as a printed copy to the Secretary of the Senate, an electronic copy to the Chief Clerk of the Assembly, and an electronic or printed copy to the Legislative Counsel. This bill would instead require a state or local agency report to the Legislature to be submitted as electronic copies to the Secretary of the Senate, the Chief Clerk of the Assembly, and the Legislative Counsel. (4) Existing law requires a state agency to review all proprietary state lands under its jurisdiction, as specified, to determine what land is in excess of its needs, and to report on these lands to the Department of General Services. Existing law prescribes a process for the disposition of surplus state property. This bill would require the Secretary of the Department of Corrections and Rehabilitation, upon approval from the Department of Finance, to notify the Department of General Services and the Joint Legislative Budget Committee of any state real property under its jurisdiction that has been determined to be excess to its needs. The bill would authorize the Department of General Services, upon authorization by the Legislature, to sell, lease, exchange, or otherwise dispose of excess state real property under the jurisdiction of the Department of Corrections and Rehabilitation, as specified. Notwithstanding those provisions, the bill would authorize the Department of General Services to execute leases for those properties, as provided. The bill would require that revenues received pursuant to the bill’s provisions, except those deposited into the Deficit Recovery Bond Retirement Sinking Fund Subaccount and the Special Fund for Economic Uncertainties, and those used to reimburse costs and expenses incurred by the Department of General Services, be deposited into the Property Acquisition Law Money Account and be available for transfer into the Architectural Revolving Fund for expenditure by the Department of General Services to improve the likelihood of successful redevelopment of the property, as provided. Because the bill would require revenues to be transferred into continuously appropriated accounts and funds, it would make an appropriation. (5) Existing law generally requires a state agency to obtain written consent of the Attorney General before employing in-house counsel, as defined, to represent a state agency or employee in any judicial or administrative adjudicative proceeding, or contracting with outside counsel, as defined. Existing law exempts specified circumstances from these requirements, including the employment by certain state officers and agencies or when specifically waived pursuant to other provisions. Existing law specifies that provisions relating to legal representation of state agencies do not prohibit a state agency from obtaining legal services from the Attorney General for any purpose. This bill would also exempt the employment of outside counsel for specified purposes relating to civil discovery from the above-described requirement to obtain written consent of the Attorney General. The bill would revise and recast the latter provision to instead specify these provisions do not prohibit a state agency from requesting legal representation or legal services from the Attorney General for any purpose. Existing law prohibits a state agency from employing any in-house counsel to act on behalf of the state agency or its employees in any judicial or administrative adjudicative proceeding in which, among other things, the agency is interested, or from contracting with outside counsel or any purpose, unless the agency has first obtained the written consent of the Attorney General, as described above. Existing law exempts from this prohibition, among other state officers and agencies, the Regents of the University of California. This bill would also include the office of the Governor among the state officers and agencies that are exempt from the prohibition on employing in-house counsel without obtaining written consent of the Attorney General as described above, and would also exempt from that prohibition the representation of a state agency related to civil discovery in any action brought by the Attorney General in their independent capacity on behalf of the people of the State of California or the State of California, as specified. The bill would specify that nothing in the latter exemption prohibits a state agency from requesting representation from the Attorney General in any other proceeding, and specify that the purpose of the prohibition is to promote fiscal efficiency and economy. Existing law states the intent of the Legislature that the overall efficiency and economy in state government is to be enhanced by the employment of the Attorney General as counsel for the representation of state agencies and employees in judicial and administrative adjudicative proceedings. This bill would specify that it is the overall fiscal efficiency and economy in state government that is to be enhanced as described above, and make additional findings and declarations related to its provisions. The bill would specify, among other things, that the Attorney General has no possession, custody, or control over any state agency’s documents or electronically stored information for purposes of criminal or civil discovery or any other purpose. (6) Existing federal law, the Indian Gaming Regulatory Act, provides for the negotiation and execution of tribal-state gaming compacts for the purpose of authorizing certain types of gaming on Indian lands within a state. The California Constitution authorizes the Governor to negotiate and conclude compacts, subject to ratification by the Legislature. Existing law ratifies a number of tribal-state gaming compacts between the State of California and specified Indian tribes. Existing law creates in the State Treasury the Indian Gaming Special Distribution Fund for the receipt and deposit of moneys received by the state from Indian tribes pursuant to the terms of gaming compacts entered into with the state. Existing law authorizes moneys in the Indian Gaming Special Distribution Fund to be appropriated for certain purposes, including, among others, for programs designed to address gambling addiction, support of state and local governmental agencies impacted by tribal government gaming, and compensation for regulatory costs incurred in connection with implementing and administering tribal-state gaming compacts. Existing law establishes an order of priority for funding in the Indian Gaming Special Distribution Fund. This bill would delete the authorization for moneys in the fund to be appropriated for support of state and local governmental agencies impacted by tribal government gaming. The bill would authorize moneys in the fund to be appropriated for compensation for regulatory costs incurred in connection with implementing and administering class III gaming secretarial procedures. The bill would delete the order of priority for funding. (7) Existing law creates the California Small Business Technical Assistance Program within the California Office of Small Business Advocate, under the direct authority of the Small Business Advocate. Existing law requires the office to administer the program to provide grants to expand the capacity of small business development technical assistance centers in California, as specified. Existing law also requires the office, subject to appropriation of necessary funds by the Legislature, to establish a supplemental grant program designated as the California Dream Fund Program to provide microgrants disbursed through California Small Business Technical Assistance Program grantees to seed entrepreneurship and small business creation. Existing law sets forth the criteria that an applicant must meet to be eligible to participate in these programs. This bill would, if an applicant’s federal contract was canceled, frozen, or rescinded, except as specified, in the 2024–25 fiscal year, for grants made in fiscal years 2025–26 to 2027–28, inclusive, establish, until June 30, 2029, specified exceptions and modifications to the eligibility criteria. The bill would require the office to review and confirm that the applicant continues to meet state performance standards and provides high-quality, equitable technical assistance services, and to report its findings and actions to the Legislature. (8) The Bergeson-Peace Infrastructure and Economic Development Bank Act establishes the Infrastructure and Economic Development Bank (I-Bank) in the Governor’s Office [Text truncated for display. Full text available on Congress.gov.]