March 2026 Government Affairs

 March’s update highlights major risks and shifts impacting California contractors, including concerns over the DIR’s new Public Works Portal rollout, a tight gubernatorial race, and uncertainty around EV policy and gas tax funding. Key issues include a potential expansion of CARB’s authority over construction site emissions, Caltrans’ DBE re-evaluations, and a projected $31 billion transportation funding shortfall. Broader pressures—from fuel cost warnings and housing funding gaps to volatile state revenues—underscore a complex and high-stakes environment for the industry. 

Transcript

SPEAKER_00 0:02

Welcome to March's Heavy Civil Contractors Monthly Government Affairs Update. Brought to you by the Southern California Contractors Association. I'm Lori.

SPEAKER_01 0:11

And I'm Scott. Lori, it's been a busy month. DIR, gubernatorial politics, carb updates, you name it, we've got it.

SPEAKER_00 0:21

Let's jump right in. DIR is back with another Public Works Portal update. Scott, you remember the June 2024 upgrade disaster?

SPEAKER_01 0:30

How could I forget? The system crashed and basically froze electronics certified payroll submissions for a year. They went live on Friday, April 3rd, didn't they?

SPEAKER_00 0:39

Yep, and there's a new portal link, www.dir.servicenyow.com slash PW. They're also providing guides and live workshops. SCCA will share more details as soon as they have them.

SPEAKER_01 0:55

Moving from payroll to politics, the governor's race is open wide. A new survey shows Republican Steve Hilton is slightly ahead at 14%, Democrat Katie Porter close behind at 13%.

SPEAKER_00 1:07

And remember, California has that jungle primary. Top two, advanced to the general. The primary is June 2nd, so this race is going to heat up fast.

SPEAKER_01 1:18

On the environmental front, the legislative analyst office just recommended rejecting Governor Newsom's$200 million EV rebate proposal, which was meant to replace the$7,500 federal credit.

SPEAKER_00 1:30

That's right. And a recent EV article pointed out that insurance, charging infrastructure, and resale value issues are shifting manufacturers towards hybrids and gas cars. It's interesting because it could soften the blow on gas tax revenue shortfalls.

SPEAKER_01 1:45

Speaking of gas taxes, CalMatters highlighted the politics behind California's road funding debate. Rural areas, often represented by Republican legislators, seem to have the poorest roads, political theater at its finest, according to them.

SPEAKER_00 1:59

And Carb is back in the headlines too. AB 1277, introduced by Assembly Member Robert Garcia, could expand CARB's authority to regulate emissions from indirect sources, like highways, parking lots, and construction sites.

SPEAKER_01 2:15

That's huge. The passed, it could even cap emissions from construction equipment on job sites, similar to the cap and trade program for refineries and factories. And on workplace safety, a Bay Area sheet metal company got fined$212,850 after an amputation incident caused by a machine press without a guard. Safety never takes a holiday, folks.

SPEAKER_00 2:50

Shifting gears to Caltrans, they've started reevaluating certified DBEs. Owners now have to submit detailed personal narratives proving economic disadvantage. This followed an interim federal rule that tightened requirements.

SPEAKER_01 3:05

And for asphalt contractors, Caltrans allows 10% reclaimed asphalt in RHMAG mixes for projects under 10,000 tons, no cost change orders through the resident engineer. A nice little flexibility there.

SPEAKER_00 3:19

On the corporate side, Chevron sent a letter warning CARB's cap and invest program could raise gas prices by a dollar by 2030 and threaten refining reliability and jobs. That's a big deal and shows the tension between environmental regulation and energy reliability.

SPEAKER_01 3:36

On the legal front, SB 440, supporting a new private works change order process, got international attention.

SPEAKER_00 3:50

And in federal news, the Department of Justice said the Defense Production Act could preempt California's offshore oil extraction restrictions. Expect litigation. Lots of it.

SPEAKER_01 4:01

Housing remains another hot topic. CalMatters reported a$4.1 billion shortfall for affordable units ready to build, while San Jose's mayor and gubernatorial candidate Matt Mann is boosting market rate construction by cutting fees and letting developers self-certify plants. And don't forget the state's revenue volatility. Just 0.7% of filers contribute nearly a quarter of total revenue. If the market dips, the state budget feels it immediately. Keep an eye on the stock market and reserve accounts, about$35 billion set aside.

SPEAKER_00 4:35

Transportation funding is another concern. Transportation California predicts a$31 billion loss over the next decade if current trends continue. SCCA is pushing candidates to focus on long-term infrastructure funding instead of short-term gas tax suspensions.

SPEAKER_01 4:51

On the bright side, SCCA supported Caltrans director Dina Eltawansi's confirmation, emphasizing strong partnerships with contractors. Many consider Caltrans their preferred customer. Gavin Newsom leads with 28%.

SPEAKER_00 5:31

And UC canceled their gubernatorial debate under pressure over candidate selection and inclusivity concerns.

SPEAKER_01 5:38

Wow, Lori, that's a lot to digest. Between DIR, CARB, Caltrans, and the political landscape, contractors have a lot to track.

SPEAKER_00 5:47

Absolutely. Staying informed is key. That's it for this month's subject. Thanks for tuning in.

SPEAKER_01 5:52

We'll see you next time with more news that impacts California's heavy civil construction industry.