CalRHA Public Policy Update - May 2026

Budget Update

Governor Newson released his May Revise of the CA state budget on Thursday, May 14th.  He started by saying CA dominates in manufacturing, agriculture, innovation, referencing the three major IPSOs coming up later this year.  The state is experiencing higher than projected revenues, but the May Revise still proposes to cut general fund spending by $1.8 billion.  As far as revenue proposals, the May Revise includes a limit corporate tax credits to either $5 million or 50% of a company’s tax liability, depending on which represents a higher share of the entity’s tax bill, and extension of sales tax to software delivered electronically or “prewritten software”. The Governor is proposing small business savings by proposing to cut first-year LLC filing taxes from $800 to $400 for tax years 2027-29.  Release of the May Revise begins the real negotiations on the state spending plan.  The Legislature needs to pass the budget bill by June 15, which means it needs to be in print by June 12th to meet the 72-hour rule.

Here is the summary to the May Revise: https://ebudget.ca.gov/FullBudgetSummary.pdf

Legislative Update

We have now passed the policy committee deadlines.  Fortunately, two more bills that we were opposing, AB 1611 (Haney) - Taxation of Rental Properties and loss of 1031 Exchange Benefits for Owners of 50 or More Units and AB 2609 (Caloza) -  Tenancy: additional rents and securities: common household pets - were both held in policy committee.

The Appropriations Committees took up their Suspense files on Thursday, May 14th.  Of the bills that we were opposing, the following were held so are dead for the year:

• SB 1155 (Smallwood Cuevas) - Eviction Protection for Nonpayment of Rent due to Federal Government Shutdown

• SB 1246 (Durazo) - Eviction Protections for Immigrants

• AB 2064 (Sharp-Collins) - Criminal History Protection - This bill would have added “criminal history” to the list of protected characteristics in both the Unruh Act and FEHA.

Unfortunately, the bill that we were supporting to eliminate the resident manager for properties of 16 units or more, AB 1771 (Alvarez), was also held in the Appropriations Committee.

Finally, SB 1365 (Allen), regarding price gouging, was amended when it came off Suspense to set the city population cap at 900.

Here is an update of the legislation that will be working on the Floor during the end of May.

• AB 2350 (McKinnor) -  Consumer Loans - Rent Obligations - This bill would bar finance lenders, brokers, and program administrators from making consumer loans if a purpose of the loan is to pay any obligation under a residential rental agreement (including rent-split loans). CalRHA is opposed to this bill and is working in coordination with a large coalition.

• SB 1117 (Cervantes) - Lowering  ADU Costs -  Currently, impact fees cannot be charged on ADUs with 750 square feet or less of livable space. For ADUs larger than 750 square feet, fees must be proportional to the main dwelling's size. The bill proposes that fees for ADUs only apply to the area beyond 750 square feet. This bill would change how local agencies calculate these fees, creating a state-mandated local program, and asserts that these changes are of statewide concern, affecting all cities, including charter cities. CalRHA is supporting SB 1117.

• SB 1160 (Durazo) - Eviction Data Reporting - The bill proposes that the Judicial Council collect and publicly share eviction data, reporting it to the Legislature. Additionally, courts must supply monthly information on unlawful detainer cases, aggregated by ZIP Code, to be made available via a public records request. CalRHA opposes SB 1160.

• SB 1296 (Durazo) - Pet Mandates in Rental Property Advertisements and Applications  - Existing law prohibits landlords from requiring tenants to declaw or devocalize their pets as a condition for renting. The proposed bill mandates landlords to clearly include their pet policy in advertisements and rental applications. This policy must detail any breed and weight restrictions. Prospective tenants must acknowledge receipt of this policy. Furthermore, if a landlord charges an application fee without first disclosing the pet policy, they must refund the fee to the applicant. CalRHA opposes SB 1296.

2026 Legislative Deadlines 

• May 29th - Floor Deadline
• June 15th - Budget Bill Passage
• June 25th - Last Day for a Legislative Measure to Qualify for the November 3rd General Election Ballot
• July 2nd - Policy Committee Deadline in Second House and Start of Summer Recess
• August 3rd - Legislature Reconvenes from Summer Recess
• August 14th - Fiscal Committee Deadline in Second House
• August 31st - Floor Committee Deadline in Second House/End of Session
• September 30th - Last Day for Governor to Sign or Veto Legislation