December 18, 2025 | CRA Member Newsletter Updates: Year in Review

Dear CRA Members,

This is a final reminder that we need your support by TOMORROW, DECEMBER 19 to make our application to serve as the Producer Responsibility Organization (PRO) for the implementation of California's Textiles Extended Producer Responsibility (EPR) Program stand out beyond the rest.

California passed (SB 707-Newman) in 2024, which established the first-in-the nation EPR program for textiles. Under this law, producers are required to form and join a PRO, which will be responsible for developing and implementing a program plan that complies with the legislation.

CRA, in partnership with the American Apparel & Footwear Association (AAFA) and the National Retail Federation (NRF), is finalizing our application, which includes establishing an independent 501(c)(3) PRO to fulfill these obligations. To put our application over the top we need to show strong support from producers.

We are asking our member companies that fall under this law (which most of you do) to submit a letter of support for our application to CalRecycle to serve as the PRO by no later than TOMORROW.

The process is fast and easy. We’ve drafted a letter of support that can quickly be signed via DocuSign. Please use the link below to access and submit the letter. 

Click Here to Sign the Letter of Support

We appreciate your support and will keep our members updated as our PRO application is finalized and submitted to CalRecycle. For questions, please contact Sarah at sarah@calretailers.com.

Update on AI

US President Donald Trump issued an executive order meant to override state regulations on artificial intelligence. The order is intended to boost the AI industry, which has been eager for a national law rolling back state regulations governing the fast-moving technology.

States and lawmakers from both sides of the aisle tried to dissuade Trump from issuing the order, with some questioning its legality. Bonta didn’t immediately say whether he’d sue the White House over the order, but he hinted that legal action is possible.

CA Governor Gavin Newsom called it a “con job,” and Florida Republican Gov. Ron DeSantis suggested the order could be an illegal attempt to usurp states’ power.

CA Sen. Scott Wiener, whose landmark AI transparency bill was just signed into law this fall: “If the Trump Administration tries to enforce this ridiculous order, we will see them in court.

All 50 states, Puerto Rico, the Virgin Islands and the District of Columbia have introduced AI legislation. Roughly a quarter of those bills are concentrated in three states — California, New York and Illinois.

In addition to Trump's EO, Republican members of Congress are considering a provision in the National Defense Authorization Act, the annual legislation to fund the military, that would preempt state authority to regulate AI. The proposal prompted more than 200 state legislators, including six Democrats from California, to fire off a letter opposing the idea.

California Attorney General Rob Bonta also urged congressional leaders to reject the proposed language, arguing that preemption would undermine states’ abilities to respond “swiftly and effectively to emerging technologies” and allow AI companies to “evade commonsense state law protections.” Thirty-two of the world’s top 50 AI companies reside in California, according to Bonta’s office.

The proposed executive order and bill language are the latest in a series of federal actions to prohibit states from regulating AI, following a failed effort earlier this year. In May Republicans from the U.S. House of Representatives advanced legislation that would have enacted a 10-year ban for states to enforce their AI laws, putting 20 state laws California passed in 2024 at risk. The U.S. Senate ultimately rejected that measure in July, after Democrats and a handful of Republicans arguing for state rights denounced the bill.

Newsom's Last State of the State Address

Gov. Newsom said he will deliver his final State of the State speech to the Legislature on Jan. 8. It would be his first in-person speech in nearly five years and comes as he prepares to launch a likely 2028 presidential campaign.

Newsom’s annual address to lawmakers has been a moving target in prior years, and he submitted his speech in writing this year. The state Constitution requires Newsom to update legislators annually on the state’s condition. But the format and timing of the address isn’t specified.

In a letter to CA Assembly Speaker Robert Rivas and the new Senate President Pro Tem Monique Limón, Newsom said he plans to talk about the state’s progress addressing some of its most significant problems — from combating homelessness to reforming mental health care and reducing crime — over the last seven years.

State Budget Update

The state faces a 2026-27 budget deficit of $18 billion, the Legislative Analyst’s Office projected November 19, even though revenue is running nearly $9 billion ahead of the expectations in the current budget. This gap is roughly $5 billion larger than the analyst’s June estimate. Looking further ahead, the state’s structural deficit – the difference between projected revenue and spending if no changes in law are made – is expected to reach approximately $35 billion annually starting in 2027-28. The analyst warned that ‘as it stands – with larger forecasted deficits and many fewer tools available to address them – California’s budget is undeniably less prepared for downturns.’ Many of the tools used to manage previous shortfalls, including withdrawing billions from reserves and using temporary solutions, are largely depleted, leaving fewer options to address future gaps, the analyst stated.

Federal Updates

Improve and Enhance the Work Opportunity Tax Credit Act

CRA signed onto a support letter sent to the author's of the S. 3265/H.R. 6231, the Improve and Enhance the Work Opportunity Tax Credit Act. The Work Opportunity Tax Credit (WOTC) is an important hiring incentive that has been utilized for three decades to build strong workforces in communities across the country. WOTC provides individuals in hard-to-reach groups experiencing poverty, stigma, or other barriers to employment with opportunities for meaningful work in the coalition members' industries. The legislation takes important steps not only to strengthen WOTC but also to preserve this vital lifeline for years to come. Unless Congress acts, WOTC will expire at the end of this year.

Read the letter HERE.

Tariffs Update – CIT Denies Preliminary Injunction Against Tariff Liquidation

The Court of International Trade denied the preliminary injunction motion in the AGS cases because “the Government has taken the “unequivocal position” that “liquidation will not affect the availability of refunds after a final decision” in V.O.S. Gov’t Resp. at 2–3. The Government would be judicially estopped from “assum[ing] a contrary position” in the future. New Hampshire v. Maine, 532 U.S. at 749.

Additionally, this court has the authority to order reliquidation in cases involving constitutional challenges to duties under 28 U.S.C. § 1581(i). Accordingly, we find that Plaintiffs are not at risk of experiencing irreparable harm as a result of liquidation.” The Court also indicates in an earlier part of the decision that protests would be futile at this time while the legality of the duties is being challenged, and that 1581(i) jurisdiction is available to claim refunds instead, in the event the Supreme Court ultimately rules the duties unlawful.

We now have to wait for the Supreme Court decision on the IEEPA tariffs. If the IEEPA tariffs are found unlawful, we will learn thereafter whether administrative procedures will be adopted to facilitate refunds, whether court actions will be required, or whether some combination thereof will be needed based on an entry’s status. 

Amicus Brief Filed Regarding CIPA’s Pen Register Provision

CRA signed on to an amicus brief in support of interlocutory review by the Ninth Circuit of a recent ND Cal order denying a Motion to dismiss Fregosa v. Mashable (jurisdiction is N.D. Cal). The Order in the MTD establishes that CIPA’s pen register provisions may extend to software processes that record addressing information in electronic communications, including technology that records users’ IP addresses and device identifiers and transmits that data to third parties for advertising and profiling.

The ask to the Ninth Circuit is to declare that CIPA’s pen register provision, or any other provision of the law, is not meant to govern online activity. The amicus brief’s goal is to lay out the legislative history of both the pen register amendment from 2015 as well as the legislative and enforcement history of the CCPA, as amended by the CPRA, to show the legislative intent and how the AG has enforced activity around online tracking technology.

View the Motion to Dismiss Plaintiff's Second Amended Complaint HERE.

View the Order denying Motion to Dismiss Second Amended Complaint Signed by Judge Charles R. Breyer HERE.

Local Updates

Los Angeles Draft CII Permit Update

On November 20, the Los Angeles Regional Water Quality Control Board (RWQCB) held a workshop to consider improvements to the draft CII Permit. After receiving a briefing from RWQCB staff and comments from stakeholders, the Board asked staff to engage with stakeholders to consider possible improvements to the Permit. Some of the provisions that the Board directed staff to focus on included:

• Who should be the permittee -- the facility owner or operator?
• What should be in the Option 1 contract between the permittee and the Watershed Management Groups?
• Permit implementation timing
• Exemptions for residential properties identified as mixed use
• Sampling requirements

The Board requested that staff report back on their progress in addressing these issues by the end of the first quarter of 2026. 

CRA is part of a coalition of industry and other impacted entities working on this issue including the development of white papers for the RWQCG's reference. Click HERE for white papers the coalition drafted. Coalition members are reviewing the documents so that the coalition can can update them as needed and provide them to Regional Board staff as a first step in the coalition's efforts to reengage and improve the current proposed permit. The white papers are intended to serve as the basis for workshops to dig into each of the issues outlined in the documents. If you have feedback and/or questions on these draft white papers, please send to sarah@calretailers.com by January 5.

The coalition will reconvene the second week of January to touch base and take assignments on red lines for various pain points within the permit. Click HERE for a list of issues of concern the coalition plans to address. The coalition's aims to develop a coalition redline of the permit to provide to the Regional Board early in the New Year.

Read previous coalition letter CRA is part of HERE and HERE.

National Non-Profit Demands $30 Minimum Wage in LA County for All Workers — Including Tipped Employees

One Fair Wage, a national organization representing nearly 300,000 restaurant and service workers, is currently advocating for a countywide minimum wage increase to $30 for all service employees, including those in tipped positions. This push is part of a broader national campaign to sharply increase minimum wages in a misguided effort to address the rising cost of living.

Paying tipped employees exorbitant wages would force restaurants to make difficult trade-offs, including cutting staff to control operating costs or shutting down entirely. Small and family-owned businesses would bear the brunt of the pressure, and the shift could shrink job opportunities for people just entering the workforce.

Currently, no specific ballot measures or legislation have been introduced. However, recent polling across four of the nation’s largest cities — including New York, Chicago, Los Angeles, and San Francisco — shows strong support for gradually raising the minimum wage for all workers, reaching $30 an hour over several years.

Ultimately, raising wages in select industries won’t solve the problems it aims to fix. Instead, it risks driving living costs even higher while reducing employee hours and eliminating jobs. That would be especially damaging for Los Angeles, a city still struggling to rebound from the pandemic and already strained by a series of recent anti-business measures, including the $30 minimum wage for hotel workers.

The California Retailers Association and National Retail Federation hosted our third annual California Retail Law Summit on October 26-28 at the Meritage Resort & Spa in Napa Valley. Aptly named the 2025 Retail Law & Policy Uncorked: The California Summit, Where California Sets the Standard—Navigating Retail’s Legal, Regulatory and Policy Frontiers Nationwide, this event was our first Summit that intersected legal, regulatory and legislative issues and priorities for the retail industry.

The premier three-day event set in the scenic Napa Valley, brought together national retailers, policy makers, regulators and legal experts in addressing the most pressing legislative, legal and regulatory issues impacting the retail industry in California and beyond.

Featured speakers included:

• The Honorable Rob Bonta, California Attorney General (video message)
• Director Zoe Heller, CalRecycle 
• Executive Director Tom Kemp, California Consumer Privacy Protection Agency 
• Assistant Majority Leader Diane Papan, Member of the Assembly Environmental Safety & Toxic Materials and Judiciary Committees 
• Vice-Chair Roger Niello, Senate Judiciary Committee 
• Assemblymember Chris Ward, Member of the Assembly Privacy Committee and Author of AB 446 Pricing Surveillance; Two-Year Bill
• Chairman José Luis Solache, Jr., Assembly Committee on Economic Development, Growth, and Housing Impact
• Assemblymember Rick Zbur, Assembly Caucas Chair; Member of the Assembly Natural Resources Committee 
• Assemblymember Tina McKinnor, Member, Assembly Environmental Safety & Toxic Materials 
• Assemblymember Josh Hoover, Member of the Assembly Natural Resources Committee 
• Assemblywoman Ali Macedo, Member of the Assembly Judiciary Committee 
• Assemblymember David Tangipa, Member of the Assembly Higher Education Commitee 
• Doug Kobold, Executive Director, California Product Stewardship Council (SB 707 sponsor) 
• And Legal Professionals from throughout the country

The event featured a memorable welcome dinner with California's policymakers in the resort’s wine cave and engaging panels on environmental compliance, consumer protection, privacy, and AI. Attendees gained valuable insights into California’s evolving legal landscape. The summit fostered open dialogue and provided practical guidance for navigating complex regulations and legal challenges.

This was a uniquely intimate setting where attendees had rare, direct access to California's decision-makers. We’re grateful to everyone who joined us. To explore more highlights and resources from the summit, click on the link below.

What People Are Saying About the Summit

"The California Retailers Association Legal and Legislative Summit exceeded expectations! Thanks to the entire team at California Retailers Association and National Retail Federation for hosting a lively and exciting policy forum. We look forward to continuing our partnership in 2026 and beyond."

"Kudos to Rachel Michelin and her team at CRA for putting together an incredible line-up of expert speakers, legislators and policymakers."

"Thank you to the California Retailers Association and the National Retail Federation for having me on their California's Workforce Mandates panel. It was a pleasure speaking with Assemblymember José Luis Solache, Jr., Assemblywoman Ali Macedo, and Assemblymember David Tangipa."

California Retailers for Environmental Innovation Coalition

We are excited to have officially launched our California Retailers for Environmental Innovation coalition. The coalition was launched during the California Retail Law Summit and is a transformative coalition dedicated to advancing sustainability and environmental leadership within the state's retail sector.

The coalition brings together retailers, service providers, local governments and industry partners to shape California’s complex environmental policy landscape through collaborative and practical solutions. This strategic coalition leverages collective expertise and advocacy to address issues ranging from sustainable packaging and textile recovery to e-waste management and extended producer responsibility (EPR) programs, always with consumer affordability at the forefront.

All current CRA members can participate in the coalition but need to register their interest. Learn more HERE and click HERE to be added to our coalition activities.

California Retail Grocery Coalition

CRA also launched our California Retail Grocery Coalition formed to assist members on regulatory and legislative advocacy issues such as SNAP and WIC funding (keep scrolling for more information on those programs). The Coalition represents a transformative opportunity for grocery retailers across the state to unite in addressing the industry’s most pressing challenges while maximizing their influence on policy and regulatory outcomes. To learn more about the coalition and join, click HERE.

Holiday cheer Filled the Target in El Dorado Hills as the Community Came Together for the Snowball Heroes and Helpers Shopping Event.

At-risk children received $200 each to shop for items on their Christmas wish list.

"What will stand out in my mind and in my heart forever is the very fact that you had a little boy that received the necessities that he needed, then he also picked out a book, he couldn't even wait to get out of Target," said Lisette Suder from the District Attorney's Office. "He sat down in the little entryway and started reading his book, and that just warmed my heart."

Deputies, officers, firefighters, and volunteers played Santa's helpers, witnessing firsthand that many children were not looking for toys or technology.

"They want shoes, they want a warm jacket, the things that all kids shouldn't have to go without, especially this time of year," one participant said.

Watch HERE and read more HERE.

California Retailers Association https://calretailers.com/

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