At City Hall Monday, referendum backers turned in an estimated 34,000 signatures calling for repeal, well above the 19,000 signatures the measure needed to qualify for the ballot. The city clerk has 30 days to verify signatures. If backers meet the threshold, supervisors will decide whether to repeal the law; schedule a special election; or hold an election in June 2018, the date of the next regularly scheduled vote. The latter course is most likely.

Although backed by the tobacco industry, the repeal effort focuses primarily on issues of tobacco “harm reduction.” That’s the idea that health officials ought to promote policies designed to reduce the harmful effects of tobacco and other addictions, rather than insist on a more idealistic, yet less potentially successful, abstinence-based approach. In other words, it might help people if they switch from dangerous behaviors to less-dangerous ones, even if the less-dangerous ones aren’t totally safe.

There’s no debate about the dangers of traditional cigarette smoking and, perhaps to a lesser extent, other combustible tobacco products such as cigarillos and cigars. But the wide-ranging city ban also defines electronic cigarettes as tobacco. Vaping liquids are not actually a tobacco product, but most contain nicotine. All of these liquids are flavored.

Under the new ordinance, retailers will no longer be allowed to sell vaping liquids, which will make it more difficult for cigarette smokers to switch to them. Public Health England, Great Britain’s main public-health agency, deems vaping to be 95 percent safer than smoking. For that reason, the vaping industry, well represented at a Monday news conference on the City Hall steps, depicted the city’s ban as a threat to the public’s health.

As they explain it, under the new law, cigarettes (although not menthol ones, or fruity cigars) can still be sold legally in the city. But less harmful tobacco-related products such as snus (spitless Swedish-style tobacco that is placed under one’s upper lip) and vaping will be outlawed. Those addicted to nicotine will find it easier to just grab a pack of traditional cigarettes, given that these safer alternatives will be off store shelves.

During the debate, city officials rebuffed such harm-reduction arguments. “We’re focusing on flavored products because they are widely considered to be a starter product for future smokers,” said Supervisor Malia Cohen, who introduced the unanimously passed ordinance. She argued that tobacco companies target poor, young and minority communities with flavored products to hook them on a lifetime of nicotine additions.

Ordinance backers depicted vaping as another tool in Big Tobacco’s arsenal. Yet a news story this week from San Francisco’s public-radio station KQED seemed to confirm at least some of the points the vaping supporters were making. “Electronic cigarettes may be a helpful tool for those who are looking to quit smoking, according to a recent study,” noted the report by Anna Kusmer. “This complicates the public health narrative around this new tobacco product, which have grown in popularity in the U.S. over the past decade.” Complicate, it does indeed.

And a new survey from Chris Russell and Neil McKeganey from the Centre for Substance Use Research in Glasgow, Scotland has rebutted the idea of vaping as a gateway to traditional cigarette smoking. The researchers found that: “More than 75 percent of American adult frequent (electronic vaping product, or EVP) users surveyed were cigarette smokers when they began using e-cigarettes and have now successfully quit smoking.” Yet less than “5 percent of current EVP users were non-smokers before beginning e-cigarette use.”

Referendum supporters also pointed to the economic impact of shutting down such a large portion of the city’s convenience-store industry. For instance, possession and use of menthol cigarettes and vaping products will still be legal in San Francisco, but consumers will have to travel to other localities or order the products online. The city’s Office of Small Business opposed the ban because, in part, of the ease of buying products other places.

CNN also reported on some recent data: The U.S. Centers for Disease Control and Prevention reported that tobacco use among high-school and middle-school students remained unchanged from 2011 to 2016, but that from 2015 to 2016, there were decreases in use of any tobacco product, e-cigarettes and hookahs among high school students. For middle-schoolers, rates of e-cigarette use dropped slightly as well. E-cigarette advocates say that’s evidence vaping is not becoming the teen epidemic that its proponents suggest.

However, California’s Tobacco Education and Research Oversight Committee, which oversees spending from the state’s recently enacted $2 a pack cigarette-tax increase, seems to view vaping as just another form of smoking. That’s a prevalent view among state and local health officials, who focus on vaping’s potential health concerns, rather than on the lower risks it creates in comparison to traditional cigarette smoking. They promote the use of medically approved tobacco-cessation devices instead, despite their low rates of success.

The new law’s backers also point to studies that suggest potentially bad health effects from the use of e-cigarettes. But referendum supporters note the irony that San Francisco, a city that has long pioneered harm-reduction policies when it comes to sexual behavior and drug use (safe sex programs and needle exchanges for heroin users), is instead taking a Prohibition-oriented approach when it comes to tobacco products, especially as the state legalizes the once-prohibited marijuana.

The scientific and public-policy debates aren’t going away. But this much is certain. The coming San Francisco referendum will show whether vaping’s supporters will be able to halt the wave of flavored-tobacco bans. If they don’t succeed, there will be little to stop Bay Area and other California localities from moving forward with similar bans.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

The Senate was less of a question, given that Democrats have a full supermajority in the upper house. As it turned out, the Senate passed the measure – and a companion bill that strengthens air-pollution reporting requirements – with all Democrats in support, as well as one Republican, Tom Berryhill of Modesto, who gained a concession (reduction of a firefighting fee for rural areas) he had sought.

But the Assembly vote wasn’t even close, as seven Republicans – including Republican Leader Chad Mayes of Yucca Valley – voted in favor of the extension. The other six Republicans were Catharine Baker of Walnut Creek, Rocky Chávez of Oceanside, Jordan Cunningham of San Luis Obispo, Heath Flora of Modesto, Devin Mathis of Visalia and Marc Steinorth of Rancho Cucamonga.

Mayes defended his vote, first by expressing how tired he is of partisanship, then noting that he supports cap and trade because “we believe markets are better than Soviet-style regulations.” He also posted on Twitter a large photo of Ronald Reagan with a recent quotation from former Reagan Secretary of State George Schultz: “Passing this bill on a bipartisan basis … is something Ronald Reagan … would be proud.” But despite his appeal to conservative icons, conservative activists and commentators were furious at the vote.

In a column Tuesday, Jon Fleischman, publisher of the Republican website Flashreport, ridiculed Mayes’ contention that the cap-and-trade system is a free-market approach to climate change: “Apparently Mayes believes that when the government creates Soviet-style limits on resources but leaves people with the freedom to exist in a world of artificial scarcity on their own terms, that is not command and control.”

Conservative former Assemblyman Tim Donnelly noted in an email blast that eight GOP legislators “voted for a (63 cents) per gallon gas tax, handing Gov. Jerry Brown another victory and a massive slush fund to spend on things like high-speed rail.” That number comes from the nonpartisan Legislative Analyst’s Office, which concluded that the cap-and-trade system could add 63 cents to a gallon of gasoline by 2021 if carbon credits sell for a high price.

Under cap and trade, established in 2012 by the California Air Resources Board and authorized by the Global Warming Solutions Act of 2006, the state caps allowable greenhouse-gas emissions by manufacturers. That cap then is reduced by 3 percent a year. Manufacturers who cannot reduce their carbon emissions immediately bid for “credits” in an auction system. The goal is to force companies to invest in low-carbon technologies, but the costs of the credits and those investments are expected to drive up costs in the meantime.

Some business groups backed the program, viewing it as a less-onerous means to achieve climate-change goals than the heavy-handed regulatory alternative. Some environmental and social-justice groups opposed the plan, which they view as going too easy on corporations. But few doubt that its passage will increase gas, food and electricity prices.

The issue is a hot button now, given that Republicans are targeting Democratic Sen. Josh Newman, D-Fullerton, because of his vote in favor of Senate Bill 1, a recently passed law that increases gasoline taxes by 12 cents or more a gallon and which also increased vehicle-license fees to pay for transportation projects. Most Republican legislators objected to a cap-and-trade driven gas-price hike so soon after this tax increase.

Because of the relatively large number of Republican votes for the cap-and-trade extension, the Democratic Assembly speaker “was able to let three of his targeted members, who are occupying seats the GOP would like to pick back up, either not vote at all or vote no,” added Fleischman. He called it a “a big strategic blunder” for the Assembly GOP.

It’s unclear whether the GOP legislators will suffer a political price for their vote. Berryhill is termed out of his Senate seat. “Because of the manner in which the party is currently run and funded, those legislators who voted for the bill will not be punished in any way by the party,” said Tom Del Beccaro, former California Republican Party chairman. “However, as (former Assemblyman) Eric Linder proved with his liberal voting record and loss due to low Republican turnout, Republican voters will be less likely to turn out for Republicans next fall.”

The Republicans who voted for the bill seem undeterred. Some of them joined Gov. Jerry Brown at a celebratory press conference after the bill’s passage. “We didn’t come here to Sacramento to just be Republicans and to hate on Democrats,” said Mayes. “We came here to Sacramento to make people’s lives better.”

Chávez noted that “we’re a very small component of the world on this but that doesn’t mean we shouldn’t be leaders on something that’s threatening the world.”

It remains to be seen whether the GOP, which was making political hay out of the recent gas-tax vote, can keep up its political momentum now that so many of its members voted for bill that may raise gas prices by far more than 12 cents a gallon.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

SACRAMENTO – The city of San Francisco filed suit last week against the ride-sharing service Uber after the company filed a motion in court to block the release of a drivers’ personal information. This sets up the latest battle between the city and one of the leading transportation network companies over an issue that has privacy implications beyond the ride-sharing industry.

San Francisco’s tax collector wants the home addresses and other information of drivers to post on a web site that includes a map that pinpoints the exact location of registered business owners in the city. Because these drivers are independent contractors, most of them use their home addresses as their official business address.

The web site is publicly searchable, which means that anyone can easily find where these drivers live. “We’ve asked the city to allow us to get the consent of drivers and to remove their personal information from the public web site, but they have refused,” said Uber Northern California’s general manager, in a statement last week.

The city’s treasurer, Jose Cisneros, portrayed Uber’s actions as an effort to “circumvent the tax laws that apply to all businesses in San Francisco.” He notes that 130,000 other businesses – ranging from big ones such as Pacific Gas & Electric to small hairdressers – must also provide the information.

“San Francisco needs this information to determine whether Uber’s drivers are complying with San Francisco’s Business Registration Certificate requirement and paying annual registration fees,” the city wrote in its legal brief filed in San Francisco Superior Court. In a statement, City Attorney Dennis Herrera referred to privacy concerns as a “red herring.”

But critics of the city’s legal approach see it as its latest effort to hobble these increasingly popular ride-sharing platforms. For instance, Cisneros seemed to suggest in a statement that the dispute goes beyond a simple business-registration request, as he ticked off a variety of unrelated complaints that he has with the company.

“Once again Uber believes they are above the law,” said Cisneros. “If Uber is so concerned about the financial well-being and privacy of their drivers, I recommend they raise wages, convert the contractors to employees, or push for their driver’s inclusion in statewide licensing like limousine drivers.”

If this is a question of registration, then why bring up pay rates or drivers’ independent-contractor status or unrelated licensing issues?

The city attorney’s office likewise brought up other issues. It alleges that Uber has engaged in a “pattern of obstruction” because it “has refused to share information with the San Francisco Municipal Transportation Agency about its operations, tested self-driving cars on the streets of San Francisco without a state permit, and has fought calls by the SFMTA and the San Francisco International Airport for stricter criminal background checks on its drivers.”

The city attorney’s office also complained that, because ride-sharing companies such as Uber are regulated by the California Public Utilities Commission, it has “limited the ability of cities to provide oversight.” The statement criticizes Uber for its backing of Senate Bill 182, which “would prohibit local jurisdictions from requiring a transportation network company driver to obtain more than one business license, regardless of the number of jurisdictions in which they operate,” according to the Senate bill analysis.

That measure has passed two committees with little opposition. As the San Francisco Chronicle reported, drivers are concerned that myriad cities will require business licenses, which means they would have to register and pay fees in every city where they operate. There are dozens of cities in the Bay Area alone, and drivers frequently pick up passengers in, say, San Francisco and leave them off in Oakland or San Mateo. Only a handful of cities now require business licenses, but the requirement could easily spread across the region.

As the ride-sharing companies’ defenders point out, these statements suggest the city isn’t just looking for a little registration information, but instead are pursuing broader regulatory efforts against the companies, which have shaken up the established taxicab industry.

City officials also have complained about the number of ride-sharing drivers on the streets, yet if these services weren’t available people would be using other types of vehicles. San Francisco officials often boast about the city’s role in the New Economy, yet are taking an antagonistic approach to this emerging industry.

City officials rebut the privacy concerns by noting that drivers can provide post-office boxes or separate business addresses on the registration forms, but drivers complain that it adds costs and hassles – above and beyond the $91 annual fee the city collects from drivers. Uber officials say they’ve heard from thousands of drivers who have expressed concern about privacy issues.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

As Gov. Jerry Brown’s administration turns toward tidying up California’s complex and still-unsettled marijuana laws, the massive market for money made from the plant’s products has begun to attract attention from financial services companies that want to take advantage without taking on too much risk. 

“Though federally prohibited, marijuana is now legal in some form in 28 states and Washington, D.C. But most banks remain loath to accept pot business accounts out of fear of federal money laundering laws that can consider such deposits as illegal transactions,” the Sacramento Bee reported. “Efforts in 2014 by the United States Treasury Department to ease rules for financial institutions wanting to service state-licensed marijuana businesses largely failed to diminish the uncertainty.”

From meetings to markets

“Now California officials, led by state Treasurer John Chiang, are hosting an ongoing series of ‘Cannabis Banking Working Group’ meetings that look to identify policies under which ‘the cannabis industry may fully avail itself of banking services … that every other business in California enjoys,’ Chiang said,” according to the paper. “California’s marijuana industry, valued at more than $6 billion, is expected to produce as much as $1 billion in state taxes after 2018, when recreational pot dispensaries open to the general public. But a lack of accessible financial services – including the ability to deposit funds or handle credit card transactions – continue to be the norm for marijuana businesses.”

Businesses and bankers have been leery of the gap between state and federal marijuana law. “Federal crimes often conjure images of ‘interstate’ activity, but with regard to marijuana, the Supreme Court has clearly spoken that even purely intrastate marijuana is subject to federal criminal regulation,” as California Lawyer recalled. “In Gonzales v. Raich, the Supreme Court held that because of its ‘aggregate’ effect on the interstate market, even purely intrastate activity is subject to regulation under the commerce clause of the Constitution.” At the same time, the White House and Attorney General’s office have continued to suggest that enforcement of federal marijuana law could be strengthened from where the Obama administration left it. 

Reconciling rules

The proposed changes would streamline environmental policies, standardize the more liberal of the state’s licensing regimes, formalize background check and disclosure requirements for cannabis-based business owners, and eliminate a provision that would have required continuous California residency for those affected by the rules since the first day of 2015.

Accrediting workers

At the same time, the cannabis industry has seen its workers brought into the state’s regulatory mainstream. So-called budtenders at the River City Phoenix dispensary in North Sacramento have become among the state’s first state-certified cannabis pharmacy technicians, a certificate program “spearheaded by the United Food and Commercial Workers union, which represents 1.3 million members and began reaching out to dispensary workers about four years ago,” according to the Los Angeles Times. “The apprenticeship program is yet another measure of how cannabis is professionalizing at a breakneck pace. Another sign: the unionization of the cannabis workforce. The UFCW, which represents workers at River City Phoenix, has organized thousands of them in eight states.”

It’s no secret that the state’s legislative leadership is less than thrilled about an open-government initiative that California voters passed in the November election, and are doing what they can to undermine its clear intent.

Yet, it’s a testament to the measure’s importance that the Legislature painstakingly followed its dictates as they passed last week a controversial bill to increase gas taxes and vehicle-license fees to fund $52.4 billion in transportation upgrades over the next decade.

Had they not followed the timelines detailed in the measure, the transportation bill would be subject to legal challenge. That reality showcases the “teeth” in Proposition 54, which passed statewide with 65 percent of the vote – and even had the rare virtue of receiving voter approval in every one of California’s 58 counties.

The proposition is simple, though arcane sounding. It mainly requires that all bills be printed in final form – and published online –72 hours prior to a final vote in either house of the Legislature. Good-government reformers had for years tried to get the Legislature to approve such a measure, but were consistently stymied.

That’s because legislators love to rush through those “gut and amend” measures at the last moments of a legislative session. That’s when the guts of a bill are stripped away and an entirely new piece of legislation is dropped into its shell. In these rush situations, most legislators are unaware of the details of what they are voting on and the public and media can’t see what’s in the bills. This situation breeds cynicism and contempt for the legislative process.

By contrast, the vote over Senate Bill 1, the transportation measure, was a model of openness, according to many observers. As observers have noted, there’s plenty of reason for criticism of the bill and other parts of the process – the size of the tax increases, the pork-barrel projects, the lack of reforms for current transportation programs – but there’s no doubt the voter-approved proposition made it easier to see what was in it, warts and all.

Prior to SB 1’s passage, an ideologically diverse group of Prop. 54 supporters, including the Howard Jarvis Taxpayers Association and California Common Cause, sent a letter to legislative leaders expressing their “concerns with the Legislature’s implementation to date, which could inadvertently result in the invalidation of bills that the Legislature wishes to pass.”

The bill seemed like a warning: The Legislature better follow the details of Prop. 54 in its consideration of SB 1 or potentially face legal efforts to overturn the measure if it passes. Indeed, the Legislature reportedly followed the 72-hour rule with nine minutes to spare.

But the warning was timely. As the San Francisco Chronicle’s John Diaz explained in an April 7 editorial, “Of particular concern was the Assembly’s attempt to interpret the 72-hour rule more narrowly than was presented to voters.” Assembly leaders interpreted the measure – which its authors say applies to all bills – “only to bills that had previously passed the Senate and were on their last stop before the governor.” That interpretation could eventually be challenged in court.

As the letter writers explained, “Each member of the Legislature is constitutionally guaranteed the right to have at least 72 hours to review the final version of any bill prior to a floor vote, regardless of the bill’s house of origin, and your constituents have the same right. We believe the Legislature’s rules should unambiguously reflect that right.”

The proposition also allows the public to record public meetings and requires the Legislature, beginning in 2018, to post videos of all such meetings online within 24 hours. The letter argues that the Legislature, however, is improperly adopting rules regarding such recordings.

“If the Legislature wishes to regulate the placement and use of recording or broadcasting equipment, it must adopt those rules in compliance with the Constitution’s requirements: that is, by a two-thirds vote concurring in each house, or by statute,” the signers explained.

As Diaz argued, the Legislature had for years “rejected any and all such reforms.” Supporters of the status quo had maintained imposing these “sunshine” rules would restrict the ability of legislators to get things done. But with the passage of SB 1, the Legislature passed one of its major and controversial priorities, despite having to operate with a new level of openness.

Legislators still are resisting the new rules, but they face grave risks if they push their recalcitrance too far. “If the Legislature does not adopt rules consistent with Proposition 54, there is a risk that the Legislature may schedule votes in violation of the Constitution’s 72-hour notice requirements,” according to the coalition letter. “Any such vote for passage will be invalid, and that bill will be ineligible to become a law.”

Ultimately, the Legislature understood what was at risk, which is why they apparently didn’t take any chances with their transportation bill.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

Continuing a years-long push, the California Air Resources Board cracked down further on emissions, sharpening the debate over the scope of its plans.

“The new rules, green-lighted [March 23] … seek to curb methane emissions at oil and gas production plants by up to 45 percent over the next nine years,” the San Francisco Chronicle reported. “The cuts will come from a combination of heightened efficiency requirements, inspection mandates and rules meant to ensure that leaks are discovered and fixed swiftly. The regulations apply to both onshore and offshore oil and gas centers.”

“The standards, which experts said mark the first major piece of environmental regulation passed by any state since the turnover of power in Washington, were hailed as a triumph by environmental activists, but criticized as cumbersome, costly and ultimately unnecessary by oil and gas producers.”

Federal fortunes

CARB’s actions took on a particular edge as political battles in Washington have concentrated around environmental standards put in place over the previous eight years. “In the works for over a year, the rulemaking comes as the Trump administration and Republican lawmakers work to unravel Obama-era measures to control emissions of the potent climate pollutant at oil and gas production sites nationwide,” according to Bloomberg BNA.

The foray into gas indicated CARB wasn’t satisfied with controlling vehicle emissions, although those make up the lion’s share of regulated pollutants. “The state’s proposal is its first attempt to reduce greenhouse gas emissions at its onshore and offshore oil and gas facilities and natural gas storage sites and is part of broader effort, now mandated under state law, to curb emissions of short-lived climate pollutants like methane,” the site added. 

The automotive industry, working to pivot toward lower- and zero-emissions vehicles without surrendering market share in a still-robustly gas-powered economy, was instrumental to the inside-the-Beltway shift. “The CEOs of Ford, General Motors, and Fiat Chrysler moved fast to cut a quick deal with Trump to reopen a review by the Environmental Protection Agency and the Department of Transportation of emissions and fuel-economy standards that had been closed under President Barack Obama,” Business Insider noted. “The automakers don’t like that California effectively plays by its own environmental rules and as a subplot in the Trump deal had argued for a single national standard to govern fuel-economy and emissions standards.” 

Fight for money

But California hasn’t budged. In fact, it has been rewarded for holding the line on its strict enforcement of auto emissions rules. “As part of its court-ordered payback for cheating on diesel vehicle emissions tests, Volkswagen might bring a heap of green – in the form of money and technology – to Sacramento,” observed the Sacramento Bee. “Under a settlement with federal officials and the California Air Resources Board, the disgraced automaker is poised to spend tens of millions of dollars promoting zero-emission vehicles in Sacramento and four other cities. In addition, Sacramento is the lead contender for Volkswagen’s first ‘Green City’ designation, which would bring the city $44 million between now and 2020 for public outreach and other programs related to zero-emission vehicles, according to a proposal Volkswagen has filed with CARB.”

Adding to the adversarial climate, automakers have grown frustrated with CARB’s unwillingness to loosen up on standards for zero-emissions vehicles despite what have become disappointingly flat sales. “With state rebates, federal tax credits and manufacturer discounts, the effective monthly payments in California for zero-emission vehicles including the Nissan Motor Co. Leaf and Ford Motor Co. Focus Electric can add up to zero – or less – a month, the Alliance of Automobile Manufacturers said in written comments to the California Air Resources Board,” according to Automotive News. “Yet the ZEV market share has remained at the 3 to 3.5 percent level,” the alliance said in its 80-page submission, asking the agency […] to ease up on plans to require more sales of the vehicles.”

President Trump on Wednesday launched the

At a ceremony at a Detroit-area auto facility after meeting with auto executives, Trump declared his intention to pursue “fair” regulations that “protect and defend” jobs.

Before his remarks, Trump staffers gave background briefings to reporters on his plans to scrap mileage rules approved by President Obama’s EPA in his final weeks on the job. The new rules would require cars and small trucks to average 54.5 miles per gallon in 2025, up from the present 36 miles per gallon.

Automakers were unhappy with the Obama administration’s speedy decision-making – new rules weren’t required until 2018. They believe the rules will require them to sell vehicles Americans don’t want to buy in an era in which gasoline prices are low and relatively stable because of a heavy increase in domestic oil production. Warning that the new rules would put more than 1 million jobs at risk, automakers have been lobbying Trump since they were enacted.

Brown administration officials have already filed a challenge to Trump’s directive, according to the Los Angeles Times. “Any weakening or delay of the national standards will result in increased harms to our natural resources, our economy, and our people,” the brief asserted.

13 states use California’s tougher standards

But while the president rattled state officials with his actions, he didn’t go as far as some environmentalists feared.

Under the federal Clean Air Act of 1970, California was given the right to waive federal vehicle mileage rules in favor of stricter standards because of the state’s severe problems with smog and ozone pollution in Southern California. The waiver allows other states to follow California’s tougher standards. Thirteen do, and as a result about 40 percent of the nation’s residents who buy about 40 percent of vehicles do so under California’s stricter rules, irking automakers who don’t like to have to deal with what are essentially two national standards.

The Trump administration could have tried to end California’s waiver entirely or prevent other states from using the Golden State’s rules. Instead, Reuters reported the administration hopes to work with the state on a compromise.

But that is close to certain to be a nonstarter, given Brown’s and the California Legislature’s approval of a law requiring the state to have greenhouse-gas emissions 40 percent below 1990 levels by 2030. Achieving that goal appears close to impossible without sharply cutting emissions from the state’s transportation sector, which generates 36 percent of California’s carbon emissions, according to the most recent statistics.

Vehicle emissions rule a potent weapon for state regulators

Stanford environmental law professor Michael Wara said tough vehicle mileage standards have been the state’s strongest tool in combating greenhouse gas emissions.

“California is going to fight, to deploy every resource it has, to keep this stuff, because this is big,” Wara told the San Francisco Chronicle.

Wednesday’s developments were foreshadowed by the January confirmation hearing of Environmental Protection Agency chief Scott Pruitt, like Trump a climate change skeptic and longtime EPA critic. Under questioning by Sen. Kamala Harris, D-San Francisco, Pruitt refused to say whether the Trump administration supported allowing California to continue to waive federal air pollution rules in favor of tougher standards.

Given that California’s waiver is written into federal law, it is unclear whether the Trump administration could force the state to follow federal rules. In 2008, George W. Bush’s administration challenged new state rules, prompting a lawsuit from then-Attorney General Jerry Brown that was joined by 15 other states. But no court decision was forthcoming before Barack Obama succeeded Bush the following year. The Obama administration quickly dropped the challenge.

The case, City of San Jose v. Superior Court of Santa Clara County, revolves around one question: “Are writings concerning the conduct of public business beyond (the California Public Records Act’s) reach merely because they were sent or received using a nongovernmental account?”

The superior court ruled that records concerning the public’s business should be turned over to the public upon request; the appeals court, however, found that agencies do not have “an affirmative duty to produce messages stored on personal electronic devices and accounts that are inaccessible to the agency,” or to even search for them.

The case goes back to 2009, when a local citizen, Ted Smith, sought records regarding the activities of the city of San Jose’s redevelopment agency, its executive director and some elected officials including the mayor and two City Council members, as the court explained. The city produced the requested documents from official phone numbers and email accounts – but would not provide information stored on the officials’ personal accounts.

The city offered a simplistic defense. Messages created on personal accounts are not public records because they are not within the control of the city. If the city had prevailed, the ramifications would be immense. Elected officials and governmental staff working for California’s numerous government agencies could legally shield sensitive information from the public merely by conducting such business on their personal email account or cellphone.

The appeals court exempted “huge swaths” of information based on where the information was located, not based on content, explained Jim Ewert, general counsel for the California Newspaper Publishers’ Association, which filed an amicus brief in the case. “If the Supreme Court had not decided (this way), it would have eviscerated the California Public Records Act,” he added.

A Los Angeles Times editorial captured the likely effect had the appeals-court decision stood: “As soon as a public official realizes that his constituents have no right to look at anything he says on his personal cellphone or laptop, he’ll simply do all of his sensitive or secret communications on those devices. With a flick of the wrist, public officials will exempt themselves from accountability.”

The state high court recognized the new reality of email and other electronic communications, even though the state Constitution and the public-records act were crafted in a time before such communications were envisioned. “It requires recognition,” the Supreme Court found, “that, in today’s environment, not all employment-related activity occurs during a conventional workday, or in an employer-maintained workplace.”

The appeals court was concerned about the problems inherent in capturing and turning over records that were out of an agency’s control. But the state high court, while not mandating any particular policy in dealing with such matters, offered some possible scenarios in dealing with a public records request.

For instance, as a Lexology article explains, an agency could require employees to search their own emails for relevant records or develop a policy requiring “all emails involving agency business, sent by an employee through a private account, to be copied to the employee’s agency email account.” The main point is the court upheld the idea that the public has a right to access a public record, even if the details of obtaining it are up for debate.

In fact, the court explained that because the city did not try to search for any particular documents in its employees’ personal accounts, “the legality of a specific kind of search is not before us.” But it found that agencies are obliged to at least try to locate and disclose any such public documents on private servers “with reasonable effort.”

The decision, however, does not change the complex balancing act that exists between public access and privacy rights. Some documents are protected from public exposure, but the court’s ruling finds that the location of those documents – on a public or private server – has nothing to do with whether or not those documents are legitimate public records.

The high court quoted from the state’s public records act, which defines a public record as “any writing containing information relating to the conduct of the public’s business prepared, owned, used or retained by any state or local agency regardless of physical form or characteristics.” Not everything produced by a public employee is public, of course, and it might take hair-splitting to determine where to draw the line.

Here, the court used an example to illustrate the point: An employee’s email to a spouse complaining that “my coworker is an idiot,” is unlikely to be considered public, whereas “an email to a superior reporting the coworker’s mismanagement of an agency project might well be.” The court agreed that public employees do not “forfeit all rights to privacy.” But the city of San Jose claimed an exemption for all communications from personal accounts, which was an open invitation for employees to evade the clear intent of open-records laws.

The high court was not persuaded by the city’s argument that the Legislature required public access only to records “accessible to the agency as a whole.” Many genuinely public documents, it explained, are stored in “filing cabinets and ledgers” that would not be accessible to all of an agency’s employees.

The question, of course, is whether the document was produced by employees who are conducting business on behalf of the agency. It’s not a matter of where the document is stored that determines whether the public should have access to it. If, for instance, an agency contracted with a consultant to produce a report, then the agency – and therefore the public – has a right to that document even if the consultant is retaining that document, according to the court.

The recent presidential election reinforces the significance of these distinctions. “Our concerns are not fanciful,” the newspaper association’s brief explained. “For example, former Secretary of State and … presidential candidate Hillary Rodham Clinton turned over 50,000 pages of government-related emails that she had kept on a private account, although federal regulations, since 2009, have required that all emails be preserved as part of an agency’s record-keeping system.” Many other states consider public records on private servers to be accessible to the public.

While local and state government agencies still need to come up with policies that detail exactly how such records must be maintained and disclosed, the court resolved the fundamental principle: A public document is a public document, even if it was created and stored in a private email account.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

This price system, critics say, results in unforeseen consequences. A recent investigative report found that California’s utility companies have been involved in a power-plant building spree, even though Californians have significantly cut their electricity usage over the same time period. In three years, the state is projected to be producing 21 percent more electricity than it needs, without counting the growth in rooftop-solar applications, reported the Los Angeles Times.

Last year, the California Independent System Operator had 24 percent in actual reserves – far above the targeted 15 percent goal. Even that 15 percent goal is 50 percent higher than what’s necessary to protect the system from disaster and blackouts, according to some experts.

As the Times’ report put it, “California has a big – and growing – glut of power.” It’s a matter of incentives. Because utilities are guaranteed a 10.5 percent rate of return on each new plant they build, regardless of whether customers actually need it, they can make more money building new plants than they could buying power from existing competing plants.

In an open marketplace, gluts of products or services lead firms to slash their prices dramatically. If, say, car manufacturers produce too many vehicles, they will provide rebates or be stuck with lots full of unsold inventory. With California’s regulated utility system, by contrast, gluts in electricity actually raise prices for consumers because of the way utilities are paid for their investments. They need only get the approval from the Public Utilities Commission to build new plants and pass on costs to ratepayers.

The regulated utility model, which dates back to the 19^th century, puts government regulators in charge of looking after consumers’ best interests. But a fairly recent California utility scandal has illustrated the dangers of what Nobel Prize laureate George Stigler refers to as “regulatory capture,” when the oversight agencies are dominated by the industries they regulate.

As the Mercury News reported in 2015 regarding the investigation of a deadly 2010 explosion of a PG&E natural-gas pipeline in San Bruno:

“Additional evidence of the close relationship between PG&E officials and leaders of the agency that regulates the utility emerged late Friday in a new batch of emails long sought by the city of San Bruno … .”

Some say the current system also crushes the emergence of a functioning electricity market. The Times article tells the story of an energy company that built a $300 million privately funded facility in Sutter County:

“Independents like Calpine don’t have a captive audience of residential customers like regulated utilities do. Instead, they sell their electricity under contract or into the electricity market, and make money only if they can find customers for their power.”

But soon after the construction of that plant, the California Public Utilities Commission approved PG&E’s application to build its own power plant. PG&E gets paid no matter the consumer demand, so it was hard for a true private enterprise to compete with that subsidized model. Calpine shuttered its facility halfway into its useful life.

“A monopoly franchise removes the incentive to innovate to increase market share,” explains my R Street Institute colleague Devin Hartman, in an August study of the nation’s electricity markets. “Guaranteed cost recovery for ‘prudently incurred’ expenses diminishes the incentive to control costs. The regulated model also insulates utilities from market risks and most policy risks, such as changes in fuel prices or government subsidies.” This provides a safe place for investors, he added, but gives them little incentive to manage risks or control costs.

These analyses also highlight a point that might seem counterintuitive to many environmentalists: competitive markets often lead to better air-quality outcomes. Here, we see utilities overbuilding natural-gas-fired power plants even as consumer demand suggests the plants aren’t necessary. Because of the utilities’ rate-of-return-based payment, they can stick with older technologies and avoid looking at alternative-energy models that might trim their costs.

The current distorted market is, to some degree, a reaction to the botched energy deregulation plan former Gov. Pete Wilson signed into law in 1996, which provoked a statewide crisis in 2000. The state deregulated the price of wholesale energy, but capped its retail price. The population had been growing and regulators had not approved the construction of new power plants for years. After a hot summer and market manipulations by energy companies gaming the new system, the state’s wholesale prices soared above those retail caps.

The end result: Rolling electricity blackouts, a statewide crisis that led to the bankruptcy of PG&E, and the recall of Gov. Gray Davis. Though Wilson signed the legislation, Davis was blamed for indecision as parts of the state went dark. Since then, state officials have avoided anything smacking of deregulation or market competition and have been cranking up supply even if it’s not necessary. Other states, such as Texas, deregulated their electricity markets and have watched electricity prices go down as California’s have increased.

The Times only touches on another issue of long-term importance: solar energy and the utility companies’ fear of a “death spiral.” California law allows for net energy metering. “Customers who install small solar, wind, biogas and fuel cell generation facilities … to serve all or a portion of onsite electricity needs are eligible for the state’s net metering program,” explains the Public Utilities Commission. “NEM allows a customer-generator to receive a financial credit for power generated by their onsite system and fed back to the utility.”

Utilities must buy back the electricity at market rates, but they still have this vast – and growing – infrastructure of power plants and utility lines to finance and maintain. The more the utilities raise their rates to pay for these “stranded costs,” the more consumers opt out and install solar panels. That raises the per-capita costs of maintaining that infrastructure, which raises electricity prices – and leads to more people opting out of the system. Advances in battery storage could further diminish the need for power plants that are financed 30 or 40 years into the future.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.     

Assemblyman Phil Ting, D-San Francisco, introduced legislation requiring the DMV to revoke registrations for self-driving vehicles in violation of the state’s Autonomous Vehicle Tester Program. The bill is a response to Uber, which last year began testing its vehicles without a permit, even picking up passengers, violating state regulations. And one of the vehicles ran a red light. 

Under Ting’s bill, law enforcement would have the authority to impound violating vehicles and the DMV could fine as much as $25,000 per vehicle per day. 

“I applaud our innovation economy and all the companies developing autonomous vehicle technology, but no community should face what we did in San Francisco,” Ting said in a statement. “The pursuit of innovation does not include a license to put innocent lives at risk.”

Permits

Twenty companies have 130 test vehicles on the road under permits, which cost $150 each. To get permitted, vehicles must be registered and insured. Documentation both certifying the vehicle is for testing only and describing the technology must be provided as well.  

Last year, Uber refused to get permits before debuting its pilot program. The DMV revoked the cars’ registrations and offered to expedite permits, but Uber packed up its driver-less car program and moved to Arizona instead. 

“We have stopped our self-driving pilot in California, but remain 100 percent committed to our home state and will be redoubling our efforts to develop workable statewide rules,” an Uber spokesperson told CalWatchdog. “Our cars recently departed for Arizona by truck. We’re excited to have the support of Governor (Doug) Ducey.”