Buenos días, California. 

“The number of unauthorized immigrants in the U.S. fell to its lowest level in more than a decade, according to new Pew Research Center estimates based on 2016 government data. The decline is due almost entirely to a sharp decrease in the number of Mexicans entering the country without authorization.” — Pew Research Center

An estimated 10.7 million undocumented immigrants lived in the U.S. in 2016, down from a peak of 12.2 million in 2007. The number of undocumented people living in California fell by 550,000, more than in any other state.

Thousands of Central American migrants, many fleeing violence in their home countries, were camped on Tuesday  in Tijuana, on the California-Mexico border, waiting to ask for American asylum.

Stars and Stripes, the U.S. military newspaper, reports that several hundred active-duty troops have been shifted from Texas and Arizona to California’s southern border in recent days to bolster border protection. About 1,800 of the 5,600 active-duty troops deployed to the Mexican border are in California now, the newspaper wrote. 

Attention holiday shoppers

Black Friday at Westfield Valley Fair mall in San Jose.

As consumers set about swiping, clicking and spending billions this holiday season, California tax authorities are preparing to notify online retailers that they are obliged to collect sales and use taxes and remit the proceeds to Sacramento.

Officials believe California state and local governments lose out on $1-2 billion annually from online sales.

  • In 2011, the Legislature required Amazon to collect and remit sales taxes. That law’s reach is limited.
  • In June, in a case involving the online retailer Wayfair, the U.S. Supreme Court Court upheld a South Dakota law requiring any online retailer with sales of at least $100,000 or 200 transactions into the state to collect sales taxes and give it to the state. That prompted every state with a sales tax to figure out how to expand collections.
  • Nicolas Maduros, director of the California Department of Tax and Fee Administration, informed legislators last month that he would send notices by the end of the year telling online retailers that they will need to collect and remit the taxes, probably starting in 2019.

The question: Who will be tapped first? The $100,000 retailers, the big players, or all of the above? Maduros said he believes he has the authority to aim at all retailers, but also said 2 percent of the retailers fail to collect 80 percent of the taxes due to Sacramento.

Maduro: “We have some very large retailers who are among the most technologically advanced companies on Earth who are not collecting and remitting use tax.”

Sen. Mike McGuire of Healdsburg and Assemblywoman Autumn Burke of Inglewood, who chair legislative tax committees, plan to meet with Maduros next week to discuss the notice, and will carry legislation early in 2019 to implement the Supreme Court decision.

McGuire: “There will be a path forward to modernize California’s antiquated tax system and focus on the world of online sales and internet sales.”

In other words, next holiday season, expect to pay all taxes on all your online purchases.

California's Republican Party remnants

House Majority—soon to be Minority—Leader Kevin McCarthy of the CA GOP

This year’s election ate away at what were thought to be solid Republican districts, leaving only a few more rural representatives surrounded by Democratic turf, CALmatters’ Ben Christopher found in his latest data dive.

  • In the lame duck Congress, Republicans represent 26 percent of Californians. When the new Congress is sworn in in January, only 13 percent of us will be represented by a Republican.
  • Those Californians are lower-income, less educated, white, and above all else, much bigger supporters of President Donald Trump than the current block of GOP-represented population.

Therein lies the rub: To rebuild, the GOP will need to distance itself from the president and his divisive politics, many experts say. But Christopher writes that remaining Republicans represent the most fiercely Trumpian corners of the state, and may have little incentive to moderate.

Meanwhile, two candidates are running to succeed Jim Brulte, who is stepping down as California Republican Party chairman:

  • David Hadley, a former assemblyman from the Torrance area who is seen as a moderate.
  • And Travis Allen, an outgoing assemblyman from Orange County. Allen failed to win the GOP nomination for governor when Trump endorsed John Cox. Allen nonetheless remains a Trump supporter.

This is the second of a five-installment series depicting the 2018 midterm election in five charts. See the first chart by clicking here.

Implications of artificial intelligence

Artificial intelligence can help mere mortals fight fires, provide health care, tend the elderly and much more. But California is lagging other states and nations in facing the implications of AI, a new report says.

  • “This void could leave California flat footed in a highly competitive race for AI superiority where only the winner takes all,” reports The Little Hoover Commission, a state watchdog.

Among its recommendations: the governor—presumably incoming Gov. Gavin Newsom—should appoint a cabinet-level adviser on AI.

Little Hoover Commission: “The threat of job loss stemming from an increase in automation and other AI-based technologies has elicited doomsday scenarios featuring job-stealing robots. Others predict a possibility that automation will create more jobs than it would eliminate. Ultimately, it appears likely that AI will accelerate the transformation of many jobs.”

Never-ending quest for a little (class) action

A California lawsuit points to regulatory impotence on dietary supplements.

In the august chambers of the U.S. Supreme Court, learned attorneys gathered Tuesday to argue the ins and outs of a class action suit over a product named Cobra Sexual Energy.

  • It’s a concoction of, as Stat News explains, horny goat weed, Yohimbe and, yes, “potency wood.” The marketer, Nutraceutical Corp., boasts that it would help with “animal magnetism,” and it’s vegetarian, the packaging notes.

Evidently, men were surprised when it didn’t work out as promised, and one Long Beach man used California’s far-reaching anti-fraud statutes to launch a class-action suit against Nutraceutical seeking no less than $210,000, attorneys’ fees not included.

  • Stat noted that the case points to the U.S. Food and Drug Administration’s limited authority to regulate dietary supplements, which range from vitamin C and workout stimulants to supposed sexual enhancements such as Cobra Sexual Energy.

Stat: “Because the FDA has limited power to police the industry, consumers are increasingly turning to class-action lawsuits to hold manufacturers accountable.”

The justices were uninterested in the FDA’s reach, but rather seemed intent on using the case to limit the reach of class-action litigation, Bloomberg Law reported.

Another senior scam: energy efficiency loans

Robert Unser, 74, ended up with four liens on his San Diego home.

Property Assessment Clean Energy Loans: The term may be new, but the dark side is familiar, writes KPBS’ Amita Sharma, in Part Two of CALmatters’ collaboration with public radio, the Califoria Dream Project.

So-called PACE loans are energy efficiency loans used solely to finance home efficiency projects; door-to-door peddlers have been pitching them to elderly homeowners who are often unaware that they have agreed, not only to often unnecessary energy projects, but to financing through a high-interest, high-fee, first-priority tax lien on their property.
“The lien gets priority above any mortgage, above basically any other lien on the property,” says San Diego Legal Aid Society lawyer Katy Box, who has a 74-year-old client saddled with four PACE loans he doesn’t remember taking out—and a debt that could cost him his home.

California Attorney General Xavier Becerra says the hot housing market has turned the elderly into easy targets for unscrupulous lenders:“They’re essentially sitting on a gold mine. Chances are they probably paid off most of the mortgage, and so they have a great amount of equity in that home.”.

Commentary at CALmatters

Maurice Hall, Environmental Defense Fund: Gov.-elect Gavin Newsom has the opportunity to chart his own course on climate change by addressing one of the state’s greatest challenges: the resilience of our water supplies. If Newsom can modernize the state’s water governance and provide clean drinking water to all, he would truly make his own mark in establishing California as a world leader by building resilience to climate change.

Dan Walters, CALmatters: Political conflicts are wars without guns, and ordinarily, they pit those of one political party against those of another. But what happens when one of the two major American parties becomes dominant in a city, a county, a state or the nation? Democrats enjoy political control of California, but are splitting into three factions that struggle for power within the party.

Please email or call me with tips, suggestions and insights, [email protected]org, 916.201.6281. Shawn Hubler, [email protected], edits WhatMatters. Thanks for reading, please tell a friend and sign up here.

See you tomorrow.