Assembly Standing Committee on Governmental Organization

Okay. I'd ask the Committee just to give us a couple of more minutes while a couple of more Members told me that they were headed down. Usually I would start on time, but I want to give it them a couple of minutes if it's okay with everyone. Thank you.

The Assembly governmental organization Committee is now called to order. Good afternoon. Just a couple of housekeeping things in advance. Witnesses will be able to testify in person or by phone. The number to call is 877-692-8957 I'll repeat that again. 877-692-8957 and the access code is 1850-1100 again, that's 1850-1100 this number can also be found on the Committee's website and it will be displayed on your screens as well. For those calling in, please mute yourself while in the queue to eliminate any background noise.

I'll repeat this again. Just mute yourself while you are not the person being asked to speak. For each Bill heard today, there'll be an opportunity for two witnesses in support. Two main witnesses in support. I'll correct myself and two main witnesses in opposition. Generally, I allow it for two minutes each and we'll allow for additional witnesses to be calling in. If you're on the phone, obviously you'll be placed in the queue and be able to provide for public comments. Support.

Additional support and opposition will be alternated. Or whenever you come up, just to move the meeting a little bit quicker. When is your opportunity to provide comment? If you're on the phone, you'll be asked to press one, then zero and unmute yourself in order to speak. Please be brief to your comments and your name. But for additional witnesses, those are those who are not the main witnesses. I want to emphasize, and I have to stick to this. So I'm saying this several times at the beginning.

I'm only going to allow you to do your name, organization and position only. So much as it may pain me to stop somebody. I want that agreement now, that name, organization and position only. I'm going to have to do that for all additional witnesses. So I beg you for your indulgence in advance. With that said, sergeant, please call the absent Members. Noticing a quorum we have above 12. Madam Secretary, please call the role.

[Roll Call]

We have a quorum. And as customary to this Committee, the Vice Chair is now able to do his incoming speech. I'm just kidding. But you're welcome to any comments if you'd like.

You're going to love me, because I don't have much to say. So it truly is an honor to join in the leadership of this very important Committee, and I'm very much looking forward to the new relationships that I'll be able to develop. And I think we have a lot of very important issues to address this upcoming legislative year. One of them is very, very big today, and we'll be addressing it, I think, in a very professional way. And we look forward to a successful discussion.

Thank you. Thank you. As this customary, and the Members will indulge me, I'm going to try to move this as quick as possible on the first couple of pieces. First orders to adopt the Committee rules, I would need a first and a second. Mr. Mathis. I didn't see the second, and Mr. Ramos is a second. Madam Secretary, please call the roll.

[Roll Call]

Committee rules are adopted. I'm going to move this now to the measures on consent. I need a first and a second. Agar Curry, Joan Sawyer. The voices I heard, the ones I didn't hear, were fair. It's still a true comment. Madam Secretary, please call the roll.

[Roll Call]

And we'll leave it open for members to add. And it's passed. I want to take this up in order. If Mr. Ramos is ready, we'd like to have AB 341 presented. At this point we'll call all the two main witnesses in support up with Mr. Ramos as well. Thank you, Mr. Ramos.

Well, thank you, Mr. Chair and members. Today I'm presenting AB 341, a bill that has brought together a working group consisting of co sponsors from car clubs and tribal governments. This working group set aside differences to work on a common goal of preserving jobs economic vitality in the State of California. This bill would allow for mutually agreed upon growth for card clubs with 20 tables or less while creating a moratorium to protect the economic stream of economies that rely on the gaming industry.

The hard work of compromise by the co sponsors of this bill shows that when setting aside areas of disagreement and focus on the areas of agreement, the art of give and take to reach an agreeable agreement is possible and to their testament, to move in one accord to present a Bill of compromise that sits in front of this committee today.

The hard work on this bill by the working group of the bill's co sponsors, the Viejas Band of Indians, Hawaiian Gardens, Morongo Band of Mission Indians, Commerce Casino, Ringcon Band of Lucento Indians, King's Card Club, San Manuel Band of Mission Indians, Sannyones Band of Chumash Indians and the Saboba Band of Lucento Indians all worked together as a working group to come together to present AB 341.

This act should not be taken lightly and represents a responsible and reasonable approach towards future gaming expansion in the State of California. With me today to testify in support is Chairman Charles Martin from the Morongo tribal government and Joy Harn, general counsel of the Commerce Casino and Hotel.

Good morning.

Good morning. And I want to just remind everybody since we said two minutes, so I respectfully just remind everybody. Thank you.

Yes, sir. Good morning, Chairman Santiago, members of the committee, my name is Charles Martin. I'm Chairman with the Morongo Band of Mission Indians. I am here today as one of the six tribal co sponsors of AB 341 by Assemblymember James Ramos. In addition to our tribe, the other tribe co sponsors are the Band of Indians, the Morongo Band of Mission Indians, the Recon Band of Lucento Indians, the Samoa Band of Mission Indians, Saninez Band of Chumash Indians and the Soboa Band of Lucento Indians.

In addition to our tribes, many of the tribes are also in support including California Nations Indian Gaming Association, CN, which is comprised of 47 of the 71 gaming tribes in California. You will also hear from the cardroom industry whom we work with on creating this compromised measure.

Our coalition came together in order to provide a compromise on the reinstatement of California's longstanding cardroom moratorium after it unfortunately expired at the end of last year's legislative session, the moratorium should have never expired because it provided California with a sensible policy as it relates to cardroom expansion, tribal exclusivity, and oversaturating California's gaming market.

For over 20 years, California voters have consistently opposed unfettered expansion of gaming across California and have stood with Indian tribes in support of gaming on federally recognized tribal lands, which is why we believe the rationale for the original card room moratorium still exists today. That is why we came together to introduce this measure, which we believe is a compromise that provides a balance by allowing measured growth of the card room industry.

We will look forward to working with the Legislature, the cardroom industry, and the tribal community on finding a balance that is consistent with California voter support of tribal gaming. Thank you, Achama.

Thank you very much.

Good afternoon, Chairman Santiago and members of the committee. My name is Joy Harn and as general council of Commerce Casino and Hotel, I appreciate the opportunity to speak today in support of AB 341. AB 341 has accomplished what only last year seemed impossible, unifying tribes and card rooms to protect against unlimited expansion of card rooms while allowing measured growth for our smaller card rooms and protecting local revenues critical to our host cities. Without this well reasoned Bill, gaming throughout the state will expand unfettered.

This bill provides security to those in the gaming industry and is consistent with previous legislation that permitted incremental increases in the number of licensed tables subject to government approval. This Bill recognizes that stability in the gaming industry is important to card clubs, tribes, and local communities dependent on revenues and jobs created by our industry. California card clubs are fundamental assets in many local economies, serving as the largest single source of tax revenue for several city general funds.

Card room revenue funds fund essential public safety and health services, senior and youth services, gang prevention and transportation systems, while also generating significant employment and secondary business activity throughout the state. The legislature has a long history of limiting the expansion of local gambling with the predictable growth of gaming tables over time. Since 1995, the legislature has acted to restrict the expansion of existing gaming. Beginning in 1995, moratoriums have been enacted without interruption until last fall.

It is now time to put a moratorium back in place to assure the viability of existing card rooms, the economic security of their cities, and allow for healthy growth of smaller card rooms. Since it has been 10 years since any increase in the number of tables of a local ordinance may permit, so it is time for the modest growth that is set out in AB 341.

Extending the prohibition with a modest increase in tables will provide the needed financial stability to local governments and will continue the state's commitment to limit the number of gaming facilities operated in the state. It provides certainty for tribes and card clubs and avoids the need to ask the legislature to enact legislation on this topic every few years. For those reasons, we are very pleased to cosponsor this legislation. Thank you.

Thank you very much. Now, we'll have main witnesses in opposition, and if there's room there, they may stay. Depending on what the author would prefer, main witnesses in opposition may come up. Oh, sorry about that.

Oh, thanks. That'll work.

Mr. Chair, members of the committee, good afternoon. My name is John Lovell, and my client is the Players Casino in Ventura, California. We were excluded from any working group and severely harmed by this mean. First of all, the retroactive effective date just strains constitutional credulity. But moreover, what came out of this bill is language that directly harms our card room. The limit for when a card room can expand. Only two tables a year, by the way. But that limit is collusively set at 20 tables.

Our card room has 22 tables, which means for the entire 20 years of this moratorium, we will not be able to grow at all. Understand that the players casino has been a significant contributor to public safety in the City of Ventura and to a whole host of other programs. Notwithstanding that this bill has excluded us from any working group and has caused us affirmative, collusive harm, we strongly oppose this. We respectfully urge a no vote on this bill.

I've got to tell you, I've been here since 1985. I have never seen a bill that picks out one card room and with the affirmative intent of harming them. Thank you.

Thank you. We have an additional witness in opposition. You may also sit if it's more comfortable for you. It's your pleasure.

This point. I'm fine. Thank you. Mr. Chairman and members of the committee. Carolyn Veal Hunter, on behalf of our clients, Yocha Dehi, went to nation and the Shingle Springs Band of Mewk Indians. We, too, were not invited to the working group, and for that reason, I must issue a position of opposed unless the bill is amended to address only the underlying. What is the underlying intent of the bill? To extend the moratorium on gaming.

Unfortunately, AB 341 would also expand gaming to card rooms with less than 20 tables. For years, the tribal community has fought to stop the illegal play of banked games such as baccarat and jackpot and blackjack at California card rooms. Our clients oppose any expansion on the number of tables at card rooms until the California Bureau of Gambling Control stops the illegal play of banked games, while both Yochadehiwinta Nation and Shingle Springs Band of Mewalk Indians support the underlying goal to extend the moratorium.

Again, I must reiterate, they must oppose AB 341 until it is amended to preclude the expansion of illegal games and is modified to simply restore the moratorium on new gaming establishments. Thank you.

Thank you very much. Now we're going to go to public comment and support that may be in the room. I'll start off with that. And again, I'm just going to remind you, name, organization and position only.

Victor Farfan, mayor, pro temp, State of Hawaiian Gardens, in support.

Pamela Lopez, on behalf of the Tule River Tribe, in support.

Keith Sharp, General counsel, Hawaiian Gardens Casino, in support.

Juan Herrera, with the San Manuel Band of Mission Indians, as a sponsor.

Mr. Chair. James Jack, on behalf of the Santa Ynez Band of Chumash Indians, as a co sponsor, in support.

Mr. Chairman. Luis Marquez, here. On behalf of the Ringcon Band of Louisiana Indians, in support. And co sponsor. Thank you.

On behalf of Oceans 11 and Crystal Casino, in support.

Sean Flanagan. On behalf of Sequan Tribe in San Diego, we're in support of amended.

Trent Smith, on behalf of Artichoke Joe's Casino, in support.

Holly Fraumeni De Jesus with Lighthouse Public Affairs, on behalf of Park West Casinos, in support.

Good afternoon. Jason Bryant, on behalf of Players Edge Services and Kings and Westlane Casinos in Stockton, in support. Thank you.

Alex Allen is on behalf of the habumatal pomo of Upper Lake, in support.

John Mickasich, representing Limelight Card Room, in support.

Heather Garina, general counsel for Seven Mile Casino and Stones Gambling Hall, in support.

Kevin Barclay, 500 Club Casino, in support.

Mr. Chairman and members. Brian Lungren, on behalf of the Communities for California Card Rooms, in support.

Mr. Chairman and members. Mike Belote, on behalf of Club One Casino in Fresno and the Deuce Lounge in Visalia, in support. Thank you.

Mr. Chair. members. Kermit Schultz, partner, Stones Gambling Hall, Seven Mile Casino, in support. Thank you.

Susan Jensen, executive director of the California Nations Indian Gaming Association, in support.

Good afternoon. Roman on the behalf of the United Auburn Indian Community, in support.

Marvin Pineda on behalf of California Cities for Self Reliance, in support.

Rogelio Garcia, Rogelio's Casino, in support.

Kevin Powell, in support of Rogelio's casino.

Clark Rosa, with Capitol Casino, in support.

Thank you. Now we'll go to public comments in opposition of those who are in the room.

Yes. Ladies and gentlemen, if you are in support of AB 341, please press one, then zero on your phone. Once again, that's in support of AB 341. One, then zero. And we do have a few queuing up here. It'll be just a moment while they get their line number.

I'll just reinstate that name, organization, and position only for those who are gearing up.

Okay. And we do have about five that are queued up. So it'll be just one moment here. All right, we will go to line number eight, please go ahead. Your line is open.

Hi, good afternoon. This is Daniel Salgado, Chairman for the Cahuilla Band of Indians. Co-sponsor for the Bill. In strong support of 341. Thank you.

Thank you. Next, we will go to line number 12. Please go ahead.

Hello. Isaiah Vivanco, Chairman for the Soboba Band of Luiseno Indians. Co-sponsor and in support of AB 341.

Thank you. Next, we will go to line number 13. Please go ahead.

Brian Altizer, Napa Valley Casino Owner, in support.

Thank you. Next, we will go to line number 11. Please go ahead.

Donna Tyson, Napa Valley casino, in support.

Thank you. We will go to line number 15. Please go ahead.

Travis Tyler, Livermore Casino, in support.

Okay, if there's any more support for AB 341, it's one, then zero. And I do not have anybody queuing up. Mr. Chair, you may continue.

Love to go to opposition. Comments again, name, organization and position only.

Ladies and gentlemen, if you are in opposition of AB 341, it is one, then zero on your phone. Once again, that is one, then zero for opposition of AB 341. Okay. I do not have anybody in opposition on the phone. You may continue, Mr. Chair.

Now, I'm going to go to Committee Members. If there's any questions from Committee Members. I think Mr. Mathis had the first question up.

Thank you, Mr. Chair. Mr. Almas, I want to thank you for your work on this. It's not easy trying to bring tribes and cardrooms together. And to build a coalition. It's been something many have tried before. And it's fascinating when you look at the opposition on this. You still have some cardrooms in opposition. And some tribes in opposition.

And I hope, moving forward, that we can kind of bring some folks in and iron out some of the other details and see what's going on. I know for me back home, I've got my local card rooms. I've got one of my tribes is there. One of my tribes is still working through some heartburn on it.

But I would like to come on as a joint author with you, if you'll have me, to add some bipartisanship to this and move this forward and help you work on this very difficult issue. And thank you for bringing everybody together and providing leadership on this.

Thank you so much, Assembly Member. And I did enjoy having you as a joint author.

Mr. Low. I'm sorry I missed you.

Mr. Chairman, I moved the Bill on that.

First by Mr. Mathis, and then Gibson was the second, and then Mr. Low. Sorry about that.

No worries. Thank you very much. Mr. Ramos, I know that you and I had shared conversations with respect to the concerned of the area of jurisdiction that I represent, which is the City of San Jose specifically. You were kind enough to follow up specifically on that, addressing a number of the issues.

I know there's still some outstanding issues that you're equally committed to being open to addressing for the technical amends. Is that right as well?

Certainly, this Bill is still in its working format. We are open to any comments and any suggestions moving forward.

Yeah. Thank you. And part of the clarifying question specifically is on legislative intent. The City of San Jose, for example, has an existing allowance of two card rooms. Is it the intent of the Bill to allow for an expansion of card rooms with any of the jurisdictions that currently allow the card rooms?

So currently, the Bill has retro language back to January 2023. It does not go back to 2022 when the mortitorm expired. So we believe that that answers some of the questions that are there. We will be looking at clarifying some language, technical amendments moving forward.

Thank you. And I'll be supporting as well today and want to reaffirm the appreciation for working collaboratively on this effort.

Thank you so much.

Mr. Brian, did you have a question, or did I misunderstand that?

No, I just want to thank the author and everybody who's put in a lot of work in this effort. I know that it's been over a year conversation and even longer than that for many others. I know there's still some things that you need to work out in this process.

This is the first Committee hearing. It's a long process to move legislation. But again, I want to thank you for all of your work. I know we're still answering questions about illegal gaming. We're still answering questions about making sure that this is as impactful and effective as possible. And I know that's your goal, and so I will be supporting it today. And I just want to thank you for all of your work.

Thank you so much.

Ms. Quirk-Silva. I apologize then, Ms. Aguiar-Curry. I apologize to Ms. Agar Curry.

I wanted to bring it back to the conversation of the impacts that these cards clubs have in the cities that they sit in. I happen to represent Hawaiian Gardens now, and it's the smallest city in the cities that I represent. And yet the card club actually works with the city to contribute almost 80% of their revenue, of the city's revenue. And that impact means everything from city services to sports to youth engagement. So although these are not easy collaboratives to build that, you built this.

And we were all here last year as we ended the session, and one of the asks was to work together and that this is in front of us already as one of our first bills of the session. I think it's a tribute to your relationships in getting these groups. But again, we want to see if we can iron out some of the remaining difficulties and we'll look forward to what comes ahead. But thank you.

Thank you.

Thank you. Ms. Aguiar-Curry, please.

Now, I have a quick question. Assemblymember, I thought I overheard you say that there were amendments on this Bill. There's none.

There's no amendments at this time.

Do you intend on taking any amendments.

As legislation moves forward? In each Committee we go to, there's always opportunity to have amendments moving forward. This particular Bill still has a ways to go, and so conversation is still being had.

So I'm going to take it as you will take amendments if given to.

You when we're looking at amendments moving forward in the different committees. Yes.

Thank you.

Mr. McCarty, Please.

Thank you, Mr. Chair, and good to be here for the first time. I think this is my first time, literally in this Committee in nine years as well. I do have a question for the author you talked about. One of the tenets of the compromise was the modest growth for the smaller card clubs, which I have a number here in my area of Sacramento. I just wanted to ask you, and I know it's under 20 tables.

They can go 10 more, two per year in the discussions. Was it at all thought about that? Could go up to 10 at a faster clip than two per year. Was that as part of the equation at all? And if not, is that something that could be in the equation going forward?

It definitely was something that was discussed within the working group, and this group has been assembled since the end of session last year. So conversation as far as where we reached now today, where we're at with a 20 year moratorium and two tables every four years, up to 10 tables over that 20 year moratorium has been something that's been discussed. There has been discussion of more or less within both of those parameters. So it has been something that's been discussed. But thank you for the question and we'll continue to look at this issue.

Okay. Thank you, Mr. Villapudua.

Thank you, Mr. Chairman. Just a comment to the author. It's just that I felt like I ran out a little bit of time. I will be voting on this today, but I just want to make sure that because there was other folks that were trying to get a hold of me that were more on the. And I'm not accusing anybody, it's just that there were maybe some illegal issues. So I just want to make sure that site is heard. Also, I know there's not been any complaints.

I looked that there was any complaints with the Attorney General's Office. There was none. But I don't know if there's anything coming, but want to just make sure that that is heard also. Thank you.

And just to clarify, that was a comment meant towards arguments about the games, to be clear so we can clear that up. Ms. Rubio?

Yes. Thank you. We've been doing, this is my 7th year on the GEO Committee, and I know that this is a constant fight, if you will. And I do want to commend the author for attempting to do something to resolve this issue. I've gotten the same thing about complaints, how this is not fair to some tribes or to some folks, but at this point, this is the only option before us.

I haven't seen anything like this in the last six years that comes close to some kind of resolution. So I do appreciate all of the work that you've done, and I do understand that there's some work still to be done, but at this moment, this is the only thing before us. I think the only other option is to leave it alone. The moratorium expired, and so to those that are in opposition, I hear you, but not doing anything doesn't resolve any issue whatsoever.

And at least this is a starting point for us to be able to have some consideration over this. And again, I understand those that are in opposition, but at this moment, this is the only thing that we have before us, and this has been attempted many times before and has failed. So I do appreciate the work that you've done and look forward to being part of whatever additional work has to be done on this Bill. Thank you.

Thank you so much.

Mr. Gipson. Please.

Thank you very much. First of all, I want to preface my statements by commending the author. What has been said is that this author has worked diligently, and I have not seen one piece of legislation come through here since I've been elected to serve that has been perfect. And we're going to pick there's winners and losers. And I realize that that's the name of the game, not to make people losers.

But in this case, I know that you've worked extremely hard. You have brought a coalition together to hammer out something that I'm not sure who could have done this, but you. And I want to say I appreciate your leadership that has been displayed through this piece of legislation.

And I also heard him say that his willingness to open his mind and collaborate and take suggestions and so knowing that I support this and I look forward to seeing this Bill on the floor, and I think that it's going to help all of us move forward. But most of the things, as I conclude, is bringing the cardrooms and the tribes together. And I have not seen that since I've been in this position.

And I think this is a great documentary of today moving forward, displaying that kind of working together. And I think we can accomplish so much when we work together, and I think this Bill represents that. So thank you very much.

Thank you so much.

Any other Members making comments? I miss anybody? Well, first of all, I to want say that the Bill enjoys a yes recommendation.

And this is ongoing work that we had from, this is ongoing work that we had from last year where we engaged in a conversation. And I'll say this, the conversations did begin towards the end of last year. And I have to say that it's pretty impressive that you've gotten a conversation this far.

The hard work, the endless amounts of hours, the places that you've gone to meet with people, and at the end of the day, love it or hate it, you've got to be able to appreciate the work that's gone into this. I'm of the column of appreciating the work because I know how hard it is to build compromise within this particular area. And it's been a tough position because everywhere in this universe of policy conversation, there are those who want a little bit more.

But to get to a point where you've brought the most amount of people together, created the least amount of pain amongst people, has been in itself, pretty admirable. So I recognize that there are going to be groups of people or folks who are very upset in both worlds. I want to say that from the beginning, but I know the amount of work that's gone into this to understand that this is probably as tight as it's going to get, given the subject area.

So we could hope for a lot more and we should work towards it. And that's why I'm encouraged that you'll still continue to work with opposition, continue to meet with people like you have done so continue to take suggestions, but ultimately, this has got to land and you've got it in a way that doesn't make everybody happy who is supportive.

And I recognize that many of the groups who are supportive today have been opposed to some of the elements in this Bill for a significant amount of time. And that's hard to do. That's hard to do. The fact that you can have a conversation. So we're looking to working with you and as you're working with others, support or opposition to make sure that this lands. But I didn't want it to go unrecognized about your hard work.

And also the fact that for those who may be not so close to the conversation, there still is a lot of hopes and wants from groups of people on either side of the conversation. And even folks who are supportive still want more. Even folks who are opposed wish there was elements in or out of it. So I don't want that to go unsaid. So I want to thank you for your hard work. I think we have a first and a second already.

If I remember correctly, this enjoys a yes recommendation. And Madam Secretary, please call the roll.

AB 341, the motion is do passed to the Committee on Appropriations. [Roll Call].

The bill has the votes. We'll leave it open for absent members.

Chairman, committee members, thank you.

Thank you very much. And the Republican caucus has something. So I want to open the roll really quickly to allow some of them to add on. If you would indulge me that really quickly.

I moved the day before. 116 pass. Second.

And then we're going to add the other bills. I apologize. They're complete with their bills, so we'll continue. Mr. Muratsuchi?

Thank you very much. Mr. Chairman, going from a more complicated bill to a very simple proposal here. I am here to present this bill to ask for equal treatment for Japanese shochu versus Korean soju. You may ask, what is the difference between shochu and soju? Well, I look forward to hosting a shochu tasting for the California Legislature.

And I want to invite all of you to appreciate the fact that shochu actually is more popular in Japan than the more famous sake. In 1998, California granted the exemption allowing those with a beer and wine license to sell Korean soju. So this bill is simply asking for the same treatment for Japanese shochu. There is historical, and it's kind of like, I would compare it to asking, right now, in order to sell shochu, you have to label it as soju.

And I would compare that to saying that you can only sell tequila by calling it whiskey. It's not recognizing the cultural and the important cultural heritage of these distinctive and unique drinks specific to the culture. I appreciate the popularity of shochu being exhibited. I have here, appearing by phone John McCarthy and Chikako Ichihara with the Japanese Sake and Shochu Makers Association. Testify and support. Thank you. Just a reminder, two minutes is what we're hoping people land at. Thank you.

And I believe you said phone to Madam Moderator.

Yep, their lines are open. Go ahead. And whoever's going first.

Okay. This is John McCarthy of McCarthy Hospitality. Good afternoon, Chairman Santiago, Vice Chairman Lackey and members of the committee. I'm a professional chef, restauranteur, and lawyer. I come to you today before you on behalf of the Japanese Sake and Shochu Makers Association and there are more than 1000 members. I also bring many supporters of the bill who are comprised of numerous California-based importers and distributors.

Nearly 60 letters have been filed in support by several trade organizations that represent hundreds of shoshu distillers large international importers and distributors located and based here in California and dozens of California Japanese restaurants. This legislation is a very straightforward attempt to allow Japanese shochu distillers to properly label their products as quote, unquote, Japanese shochu.

Currently and for the last 25 years Japanese shochu distillers have been required to mislabel their product as soju, which is a Korean distilled product in order to sell to type 41 liquor license holders. This is a result of a decision by the California ABC, an erroneous one that's resulted in what can only be called a cultural flight.

In 1999, following a 1998 exception for Korean soju, the ABC said that shochu with an ABV less than 24% could be sold to such license holders if they included the words soju on their bottles. AB 4116 does not seek to alter amend any aspect of 23398.5 as it respects Korean soju. In fact, what we're looking for is just the same exception being extended to Japanese shochu.

Finally, it should be noted that the State of New York had a similar exception for Korean soju based on California's law passed in 1998. Last summer, Governor Kathleen Hoeckle of New York signed a law accepting Japanese shochu that is identical to the one being sought here, and also provides for proper labeling.

I thank you for your consideration of this bill, and thank you on behalf of the hundreds, if not thousands of Japanese shochu distillers, importers, distributors, and restaurants that will be positively impacted by the recognition of this culturally significant issue addressed in the legislation.

Thank you. There was one other support witness. Madam Operator

Ms. Ichihara?

Yes. Hi. Good afternoon. Chairman Santiago and Vice Chairman Racy and a member of the committee. My name is Chikako Ichihara and I am with the Japan Sake and Shochu Makers Association. I appear before you today to give some background regarding Japanese shochu and Korean soju and urge you to approve AB 4116. Korean soju and Japanese Shochu are very distinct and a different product in their own right. However, for our purpose here, there's some very stark similarity that merits passage of AB 4116.

As a starting point, the name and names and the description of the product are quite similar. In fact, Chinese characters used for both products indicate they are burned alcohol or distress product. Despite similar names, the products are unique to each respective culture. In fact, in Japan, shochu is considered to the native spirits. The prime minister of Japan, Kisida Humio, asserted that he would seek universal recognition of the shochu as a cultural resource, as it is a uniquely Japanese product.

As for their production, the distribution of each product is quite different. Both products can be made on mass production scale, but the traditional distribution differs. As a general mother, shochu is typically manufactured using one pot disturbed method, whereby there is no further distribution of the product. Further soju distribution is involved using koji, which is mold to assist in the process. Soju is generally disturbed more than once and sometimes flavor to achieve a particular flavor profile.

Further, modern soju distribution generally no longer employs koji in production, thus leading to different flavor and final product. As for the current State of the law, the current exception under the law provides the Korean soju with ABB of 24% or less can be sold to type 41 license holder if their product is made with agriculture product. Similarly, Japanese shochu is a Japanese product.

Just going to interrupt. We've gone a little bit over the two minutes. We might want to wrap it up.

Yes. Most common rice and berry and sweet potatoes. And it's made with the ABPM of 24% or less. Those same characteristic requirements are met under the law of the exception, sort of AB 4116. Thank you for your consideration of the AB 4116. And then thank you on behalf of the many Japanese and Japanese American supporter of the culturally important registration. Thank you.

Thank you. Do we have any main witnesses in opposition? I don't see any. So we'll continue. I don't see any public comment and support. Who is in the room, name, organization, and position only. Any public comment, opposition, who is in the room, name, organization, position only. I'll go to the phones in any particular order. Again, name, organization, and position only. Madam moderator.

You say it is opposition or support?

Either or whatever comes.

Okay.

Makes it easier for everybody.

All right. So if you are in support or opposition of AB 416, please press one, then zero. And that's AB 4116. We do not have anybody queuing up. Mr. Chair, you may go ahead.

Any question from committee members? All right, we've got five motions. I think I'd talk to you about the importance of this bill, and I appreciate your hard work and would appreciate being able to be added as joint author. Thank you. We have a first and second if you'd like to close.

Thank you very much. I look forward to. Well, next time you're at a Japanese restaurant, instead of asking for sake, ask for shochu. I respectfully ask for aye vote.

Thank you, Madam Secretary please call the roll

AB 4116. The motion is due pass to the Committee on Appropriations. [Roll Call]

The bill passes. We'll leave it open for roll call for add ons. And Madam Secretary, when you're ready, let's let others add on.

On the adoption of the Committee rules. The Committee rules were adopted on the consent calendar. I will call the missing Members. [Roll Call] the consent calendar is adopted for AB 224. To be passed to the Committee on Appropriations on recommended consent. And AB 261 to be passed as a do pass. Recommended consent.

And we're going to leave the roll open for some of the Members to come back and open up. And I'll leave the discretion to the Vice Chair as to how long we leave it open.

The Committee rules were adopted. The consent calendar passes with 22 ayes. File item three, AB 341. Ramos. Passes with 21 ayes. And one no vote. For item four. Opening the roll file. Item four, AB 416.[Roll Call]

Now be closing the roll for item four. We will now adjourn this Committee meeting.