Last year, the California legislature enacted a bill, SB 54 (Skinner), that requires a "a venture capital" company to report annually to the Civil Rights Department on its funding determinations related to companies primarily founded by diverse founding team members. The bill was enacted notwithstanding its significant flaws, which Governor Gavin Newsom's signing message:

However, this bill contains problematic provisions and unrealistic timelines that could present barriers to successful implementation and enforcement. Within California's large and complex venture capital environment, this bill would require CRD [Civil Rights Division] to undertake significant and ongoing investigations just to determine whether any given entity meets the criteria set forth in the bill - and the department is not situated to perform this work. Additionally, establishing this expertise, as well as any resultant work from administering the law, creates significant, ongoing General Fund cost pressures .

"Trailers for sale or rent . . ."

Last week, I noted that the Governor is requesting over $1.5 million to fund and three positions to implement the bill. Despite the fact that the bill clearing saddles implementation of this law on the Civil Rights Division, the Governor is requesting funding for the Department of Financial Protection & Innovation. Thus, it appears that the administration will be looking for a "trailer bill" to shift responsibility to the DFPI.