Senate Standing Committee on Agriculture

The Senate Committee on Agriculture will come to order. Good morning, everyone. The Senate continues to welcome the public in person and via the teleconference service for individuals wishing to provide public comment today, today's participant number is 877-226-8163 and the access code is 736-2834. We are holding our committee hearings here in the Capitol. I ask all the members of the committee be present in suite 1200 so we can establish our quorum and begin our hearing.

Today. We have two bills on our agenda, and before we hear, well, actually, there's no quorum. There's only two members. So we'll go ahead and move to start this committee as a subcommittee hearing. And so let's hear from our first author, which is Senator Alvarado-Gil, presenting on behalf of Senator Becker on SB 485.

Good morning, Chair Hurtado and members. Well, actually, I'm the other member, so staff of the committee, welcome. Thank you for the opportunity to present Senate Bill 485 on behalf of Senator Josh Becker today. Senator Becker is accepting all the proposed committee amendments to remove beef cattle from the program and limit this bill to only a voluntary incentive program for dairy cattle.

He also wanted to thank the opposition for working with him on the specifics of the legislation and has settled to tentatively limit the legislation to create the incentive program and to convene a working group to provide an assessment of the potential impacts of feed additives, which will inform the rollout of the incentive program. So moving forward, Senator Becker has agreed to continue negotiating the details of the workgroup participation, but has committed to working with industry to ensure the working group includes farmer representation.

The California agricultural industry has been a leader on methane emission reductions as Lara's Senate Bill 1388 set a target of 40% methane emissions reductions from the agricultural industry by 2030. However, this target excludes emissions from enteric fermentation. The 2022 scoping plan finds that to meet its admission goals, California should implement enteric fermentation strategies that are cost-effective, scientifically proven, safe for animal and human health, and acceptable to consumers, and that do not impact animal productivity and also provide financial incentives for these strategies as needed.

Moreover, the California Air Resources Board's most recent report finds that California may fall short of that 2030 target absent enteric strategy and sufficient public funding. SB 485 implements CARB's suggestions by creating an incentive program for dairy farmers eager to be early adopters of feed additives. The bill creates an incentive program once they are demonstrated scientifically to be safe and effective.

I also want to thank our industry partners that are working with us to ensure that legislation gives them enough certainty about the health and safety of their animals. Senate Bill 485's early adoption program will help bolster a much-needed technology to meet California's GHG reduction goals and to signal to market investors that California will help its agricultural industry get to net zero in a steady, thoughtful manner. To provide a testimony in support, we have Taylor Roschen on behalf of the California Dairies Incorporated.

Thank you, Senator. Good morning, Madam Chair. Taylor Roschen, on behalf of California Dairies Incorporated. CDI is a California-based dairy cooperative with more than 300 farming families. As such, they take their charge to voluntarily reduce methane emissions seriously, and we appreciate the author's effort to help when a new method becomes available, including the potential of feed additives. We look forward to working to continue on the remaining amendments, as Ms. Alvarado-Gil mentioned and respectfully request an aye vote. Thank you.

Thank you. Have any additional witnesses in support of the bill please come up. State your name and organization and position on the bill.

Megan Shumway, retired nurse in support.

If we have no additional witnesses in support, we'll now hear for those that are in support of the measure. Opposition, I'm sorry.

Madam Chair and members, Matt Broad here. On behalf of Western United Dairies, I wanted to thank the committee for working with us on getting a set of amendments that bring us to neutral. We appreciate all the help and we're looking forward to continuing to work on this bill and hopefully get to support. Thank you.

Katie Little with the California Farm Bureau, again echoing Matt's comments with Western United Dairies, thanking the author for working with us and addressing the concerns we had with the Bill, where we're moving our opposition.

Good morning. Kirk Wilbur, on behalf of the California Cattlemen's Association and CCA's feeder council, likewise want to thank the author, the author's staff and committee staff for working with us on this bill. We do have an opposed letter into you. I want to be clear that with the amendments that the author is agreeing to take, we are now neutral on the bill. Thank you.

Okay, if we have no additional witnesses in opposition to this Bill, we'll go ahead and move to our telephone public comment line for those that are waiting to state their opposition or support for SB 485.

Thank you. For support or opposition for SB 485, please press 1 then 0. And it'll be a moment while we get their number. And again, for support or opposition for SB 485, please press 1 and 0. First we go to line number 10. Please go ahead.

Thank you for the opportunity to testify today in general support of SB 485. My name is Chris Gambino. I'm an animal scientist and sustainable livestock analyst at the Breakthrough Institute.

Thank you.

I am in support of this bill and we are headquartered in Berkeley, California. And we believe that interfermentation as part of the cattle's digestive tract generates about 28% of methane emissions.

Thank you. We're just taking name and organization and position on the measure at the moment. We appreciate your.

And there is no more in queue at this time.

Thank you so much. Ok, we're going to take a little deviation here and establish quorum. So consultant, you please establish quorum.

Senator Hurtado. Hurtado present. Senator Grove. Grove here. Alvarado-Gill. Alvarado-Gill here.

Okay. Quorum has been established. Okay. Back to SB 485. Having heard from both sides, both on the telephone comment line and in the Committee hearing room, we'll go ahead and move the conversation back here to committee members. If there's any questions, comments on this measure. Okay.

Thank you. Thank you. And I realize this isn't your bill, but I just want to make sure that I talked to the author yesterday about taking amendments, and I know that there are some amendments that he did take and he's actually narrowed the text I got back says that he's narrowed the bill and took amendments.

I want to make sure that amendment that I requested on Section 39737.5 on number two says "implementation of the voluntary incentives program shall be consistent with the findings of the working group." That's one of the amendments I want to make sure is there?

Yes, that's correct. So earlier in the presentation, Senator Becker has agreed to continue negotiating the details of the working group participation and has committed to working with industry to ensure that the working group includes farmer representation and in that providing an assessment on the potential impacts of feed additives, which will inform the rollout of the incentive program. So the intent is to ensure that the input from the working group translates into an assessment with solutions that are then carried forward?

Yes. So my goal, I just found out that it does say that the implementation of voluntary incentives program shall be consistent with the findings of the working group. So that language is in there. It's going to ledge council today. There's also other amendments that he took. Are these all of them?

Yeah.

Okay. So I haven't had a chance to look at the other amendments. I'll let other committee members comment.

Sure.

But I am very grateful that he took that. At least CARB won't be able to run over all of our dairy and agricultural providers. I asked Senator Becker also how much dairy and cattle he has in his district. The answer is zero. Right. In the Central Valley and I, we have a lot of dairy and cattle in our district, and we provide beef and food and milk and dairy products, cheese and everything else that you could possibly imagine that comes from a dairy product.

So this drastically or disproportionately again, affects the Central Valley. So any amendments that we can help get to make sure that our people can work with this on the ground because we know you're going to pass it anyways, is beneficial, but I'll look at the other amendments. But thank you for accepting that amendment that I requested.

I don't have any additional comments or questions or concerns on this Bill. I want to thank the author and the stakeholders that were all involved and committed to making sure that this bill had everyone's invoice and input included. And with that, would you like to close?

Yes.

So, on behalf of Senator Becker, I respectfully ask for your aye vote.

Do we have a motion on SB 485? SB 485 has been moved with the amendments by our Vice Chair, Senator Shannon Grove, and consultant can you please call the roll.

SB 485 the motion is due pass as amended. But first, we refer to the Committee on Appropriations. [Roll Call]

And again, I know it's my fault that I was late this morning and you started right at 10:00 and I do apologize, but I just want to make sure that the amendment also that removed the cattle industry out of this bill was taken as well.

That's correct.

Correct.

Very good.

Thank you.

Thank you.

Thank you. And I will now move the gavel over to Senator, our Vice Chair. I will be presenting my bill.

Sorry. Senator Hurtado will present SB 224.

Permission to present from the dais? Okay. Thank you. So, good morning, chair and Members. As you know, we are facing the greatest threat to mankind yet. Climate change is here, and it's impacting us in ways we don't see, including impacts to our water availability and ultimately our food supply. Here in California, the accessibility and availability of our water creates challenges for our farmers and limits our food supply. Food and water scarcity can create social disruption that can lead to state failure, migration, crime, and other issues.

I believe we can overcome our challenges and help feed the world as we have, but it begins with maintaining control over our food supply, and sadly, I strongly believe we are not doing enough. General consensus is that two acres of land are needed to feed a family of four, and California uses about 43 million acres to carry out the state's agricultural operations. There is no doubt that California has the most fertile land, not easily seen in other parts of the country or the world.

But over the past few years, foreign ownership of California's agricultural land has steadily increased. Between 2019 and 2021, California lost over 70,000 acres of ag land to foreign government and entities. Foreign governments and foreign entities now own and control close to 1.2 million acres of California ag land across the state.

As water becomes scarce across the western United States, foreign ownership of California aglands threatens our water security as large foreign investors, including governments, through investors, engage in land grabbing to gain control and access to an already limited supply of water. This is an issue about food security for you, for me, for our constituents, and for the millions of people we feed across the world. This is not a Republican or a Democrat issue. This is a bipartisan issue that impacts us all.

This is why bipartisan efforts in Congress are also underway. And I want to thank our Vice Chair for being a co-author of this measure. As I said, this is not a Republican or Democrat issue. This is a human issue. This is an issue about food security here in California, in the U.S., and the world. Bloomberg Green recently released their findings on their investigation of groundwater, titled Wall Street is Turning Water Into Wealth, Leaving Californians Out to Dry.

I want to share with you four of their findings verbatim. The first. Since 2010, six major investors have quadrupled their farmland under management in California to almost 120,000 acres in all, equivalent to a third of the cropland in Connecticut. These companies have fueled the growth of permanent crops. Second, since the start of 2019, one of every six of the deepest wells in the San Joaquin Valley has been drilled on land owned or managed by outside investors. Of the top three, two are institutional investors.

Third, this land grab has given rise to a grab of an even more limited global commodity, water. In a bid to ensure thriving investment portfolios, some of the world's largest financial entities have places from California to Africa, Australia to South America, giving them outside roles in managing an endangered resource that's the basis for life here on earth. And fourth, among most active drillers along the California Aqueduct sinking midsection is Canada's Public Sector Pension Investment Board, known as PSP Investments.

The sinking midsection is expected to cost $900 million to fix. The issue at hand is not unique to our nation. The Guardian reported last year that 72% of England's water was owned by shareholders in 17 foreign countries, 10% controlled by companies in the UK, and 18% are unaccounted for. We are also seeing policymakers in 24 other states working on legislation to address this growing concern. So should we let it continue on in our own state?

Should we continue to use taxpayer dollars and tax brace for this? Now, I wish my Bill could do a little bit more to address some of the other issues, but I recognize that we have a big hurdle here to cross and that even getting a simple Bill like this is difficult to get past in itself.

But this is a first step towards greater transparency, and this Bill helps us as the implementation of the Corporate Transparency Act goes into place next year, SB 224 does just that, by prohibiting foreign governments, foreign governments from purchasing controlling interest in agricultural land. To be clear, this Bill does not seek to target specific countries or people, but instead provides a neutral approach that we want to take here in California.

And as a daughter of immigrant parents, I recognize the importance and contributions that foreign investment and immigrants make to this nation. My intention is not to prevent or block that, but to make informed policy decisions, we need full transparency and bold steps to protect our state's interest and the people of California, and this Bill does just that.

And in order to account for increasing trends of agricultural land loss, SB 224 directs the California Office of Emergency Services to compile an annual reporting highlighting various trends relating to foreign ownership of agricultural land, water rights, water desalination facilities, and energy facilities, and ensure California has up to date information on trends on foreign ownership of many of California's important resources. I'm specifically more concerned with illicit finance and purchases of ag land.

This Bill helps California as the implementation of the Corporate Transparency Act goes into place. The reports are a tool necessary to better inform decision-makers on how California can continue leading the nation and meeting consumer demands on produce without the interference of foreign entities. Collecting information is a part of informing the decision-making process around managing finite resources with almost limitless possibilities. I am committed to working with stakeholders on this issue, and I'm open to continuing to have conversations on potential amendments.

I also want to commit to having a moratorium on the prohibition to give the Legislature time to fully understand the severity of the consequences that foreign government-owned land brings to our state. But my number one priority throughout these conversations will be the people of California. And with me today, I have two lead witnesses to provide testimony on their important matter. First witness, Madonna Lang, family farmer and an ag land realtor, along with Jonathan that works in the same area. Please come on up.

Welcome. You have two minutes or four minutes if you have two witnesses.

Thank you. Honorable Chair and honorable Members of the Committee, thank you for the opportunity to express my support for Senate Bill 224. Today I am a family farmer in the Central Valley. My family has been farming in Kern County since 1935. Over the past 88 years, my family members have farmed various commodities from row crops to trees. Currently, we farm 630 acres of pistachios. We have farmed the land and provided jobs to many.

It gives our family great joy to see the successes of the families that have worked on our farms. The land represents history and stories. We care about the land and we strive to produce high-quality food that is safe for consumers. California has over 400 commodities it can grow. We are known as the food basket of the world. The difference between the family farmer and corporate farms is that we farm because we love it. We make sacrifices to stay in it.

Even when times are tough. We are in it to stay in it and not to become rich. Senate Bill 224 is an important Bill that empowers family farms just like mine. Our land is scarce. You can't make more of it. With growing issues regarding water, we are facing over a million acres of land that will be fallowed in the years to come. Many of these acres were productive farmland which people bought before their knowledge that they would lose the ability to farm it.

This is the beginning of food scarcity. Add to that the foreign governments coming into California and buying land that they control puts it at risk for greater food and water scarcity. Foreign governments are buying land and growing food for their people in preparation for food scarcity in their countries. During the COVID-19 pandemic, we found that we had outsourced too much of our products. Can you imagine having to negotiate with a foreign country for food that was grown here in California?

Along with the risk of foreign governments could use the land that comes with the risk of what their intentions would be with the water that runs with the land. As people explore water markets, this opens up the opportunity to exploit these markets and potentially send water to other locations. They are taking resources away from the California farmers. California family farmers are proud of our state and our contributions to it.

And I believe this Bill will support our goals to ensure that those that own the land and pay the taxes also have a stake in managing the land in the best interest of our state and our country. I urge you to support this Bill. Thank you.

Thank you. Next witness.

Good morning everyone. My name is Jonathan Romero, and I am the business manager for Laborde Land Company. And like my colleague said, her and her family have done so much for all of us, all their employees. They have given us a future for the company and for this Central Valley. I am a young farmer, 24 years old, and I hope to someday own my land, but it will be very difficult to compete with the prices that these foreign countries are paying.

And like her father, he has been my mentor for many years, and he has shaped my future to someday own that land. And he wants to secure that for me. But what's not secure for me is water. So I want to make sure that all these years of investment in the farm industry is secured. And the only way to do that is with water. So I won't take much of your time.

And I just want to let you guys know that I also support SB 224. Thank you very much.

Thank you. Witnesses in support in room 1200. Please state your name and your position on the Bill.

Megan Shumway, retired nurse, California citizen, in support.

Thank you, ma'am. Any others in room 1200 in support? In opposition? Welcome, Mr. Albiani. You have four minutes if you are the only one.

I believe there's two of us, but thank you.

Two minutes.

We'll do this quickly. Dennis Albiani, on behalf of the California Seed Association, and we unfortunately must oppose this unless amended today. The Seed Association, our whole goal is to address food security and insecurity and promote genetics and progress in research. Eight of the top 10 seed companies in the world have research facilities here in California, and that requires significant investment in both land as well as the facilities themselves.

And we choose California because of the climate, because of our higher education system, both the CSU and UCs that have invested so greatly in this research, and world-renowned professors and intelligence. And we use this as a hub to do worldwide research. And so we appreciate that. But financing gets very, very complex, and we pick from assortment of different entities. Several of the top companies in the world are also foreign-owned.

And so that requires some investment requirements across, whether it's different pension funds or whether it's government support. All those are combined in any of the actions that are done to finance these very significant investments. We're concerned that this Bill will have unintended consequences and dry up some of that financing, which would then create a problem that we could not expand and continue to grow in California as well.

And we do support transparency in the part of the Bill and some reporting in some of those areas that we further explore. We have also suggested narrowing it down to just the bad actor countries. But I know that's not been received at this point. But if it could be narrowed down, that would be a place to explore.

But with this, at this point, we have to oppose and want to just make sure that we don't have some unintended consequences that would dry up our financing with that. Thank you.

Thank you. Next witness in opposition.

Good morning, Chair and Members. I'm Brenda Bass with the California Chamber of Commerce, and we respectfully oppose SB 224 unless it is amended. And just at the beginning, I do want to acknowledge that we share the Senator's concerns regarding water supply and security in this state. It's a huge issue, and we're working to try to make sure that we have adequate water supply, but we don't think that this Bill is necessarily the way to achieve that.

Following my colleagues comments, I just wanted to highlight a couple of our concerns with this Bill that it will have on the viability of agricultural businesses and the many businesses that depend on agriculture in the state. First, this Bill appears to be directed at a problem that is speculative at this particular time. Our understanding is that there's not an overwhelming amount of foreign governmental ownership in agricultural lands in California, and that is consistent with the low percentage that's reflected in the Committee analysis.

Furthermore, when there is such ownership, it is often an entity, such as a public employee retirement fund, that simply owns the land and leases it back to a farmer. The goal here is to keep agricultural land in sustainable production and to support the fund's ESG commitments. Furthermore, the Bill targets only one type of land use, which is agricultural use. So in this way, it prevents farmers from accessing investment that is increasingly necessary as it becomes more and more expensive to do business in this state.

Other types of land are not similarly encumbered, which puts farmers at a competitive disadvantage. In addition, the Bill would prevent even the United States and California's closest foreign allies from investing in California agriculture. We're concerned that such an action would sour productive trade partnerships with our international partners and potentially lead to retaliation against California businesses. So for these reasons, we've urged that the Bill be amended.

Some potential pathways include increased data collection to determine what is the real problem and what are the best ways to address such a problem. And indeed, more data on this issue would satisfy the transparency goals in this Bill while avoiding the negative unintended consequences of an ownership prohibition. Alternatively, a narrowed scope of countries to which a prohibition in ownership would apply could also better protect our international partnerships. So, unfortunately, as the Bill is currently written, we must oppose SB 224 unless it's amended. Thank you.

Others in opposition, please state your name and a position on the Bill. Organization and position on the Bill, sorry.

Madam Chair and Members, Kris Rosa on behalf of CalForest. We also have an opposed unless amended position for the reasons previously stated.

Good morning. Taylor Roschen on behalf of various agricultural associations, in respectful opposition, unless amended. Thank you.

Madam Chair, Senators, Dean Graphilo, on behalf of BIO. We too are opposed unless amended on SB 224. Thank you.

Good morning, Madam Chair and Members. Tricia Geringer with the Agricultural Council of California, respectfully opposed unless amended.

Any others in room 1200 in opposition? Moderator, we'll go to the phone lines and have you queue up those in support or in opposition to state their position.

In support or opposition for SB 224, please press 1 then 0.

We're going to line 11. Please go ahead.

Hi there. Jamie Fanous on behalf of the Community Alliance with Family Farmers, in strong support of this Bill. Thank you.

Thank you. Moderator, next caller.

There are no more lines in queue.

Thank you, Mr. Moderator. I'm going to go ahead and bring it back to the dais for any questions or comments. Senator Alvarado-Gil.

Thank you, Chair Grove. And thank you, Senator Hurtado, for bringing this Bill forward. I'm really struggling with this one. So my struggle is really in what is the problem that we're trying to solve right now in terms of our agricultural land use and how it impacts my district. And when I was elected into this position to serve Senate District Four, I committed to being a voice for my district that has various ideologies, various politics.

But number one, the agricultural economy is the center of what unites us. And I appreciate, Senator Hurtado stating, this is not a Republican or a Democrat issue. This is a California issue. And our agricultural economy is the foundation to California's overall economy. And so this Bill, for me, although I understand what the intent is, I'm having difficulty landing on how this is going to help more than hurt the current environment.

So I'd love to get more information from both the author and co-author about the urgency of this Bill, because I see there's also an urgency clause in there. So if you can kind of help me understand that piece, I'd like to have more of an awareness on this Bill.

Would you like to respond?

Of course. Thank you. I appreciate your concerns. I know this is a very complex issue that it's very difficult to understand. Quite frankly, it took me a while to get to this point, to get to this Bill, because there's a lot of information that goes behind it. And so I think that's part of the challenge at the moment in terms of the concerns that are being brought forward, is that this Bill is simply about foreign governments. It's not about foreign investors.

Foreign investors can still invest in California Agriculture, can still buy land under this Bill. It's foreign countries. I also recognize the fact that we do California and other states, and we rely on sometimes the funds and support of friendly countries, our friends and neighbors. But I think that the reason why I put an urgency clause into this measure is because we really don't know to what extent there is land that is owned by foreign nations, whether they're adversaries or friends. There's a percentage and a number out there, but it's not a real number.

You can't be in support of more transparency and more data collection and believe that at the same time that the numbers are accurate. The reason why we ask for the transparency and the numbers and the data is because we don't have an understanding. And so in a time of drought, in a time of floods, in a time where we've already faced food shortages during the pandemic, at our grocery stores, there's urgency.

And so that's why in my statement, I said that I'm open to, similar to what Canada did, Canada put a two-year ban on any investors or anybody, friends or not friends, if you're from outside of Canada, if you're not from Canada, you cannot buy real estate land in Canada for two years.

And so I think that while we try to solve or figure out how deep of a problem this is, if there even is a problem, that we take at least a minimum, a pause on ownership of that. And the other challenge that we have is that we have shell companies out there that could be acting on behalf of a government. I mean, there could be one or two or far two removed.

And that's why I think that the implementation of the Corporate Transparency Act is going to be so important. But we got to let that implementation go into effect. And so it hasn't yet. It will in 2024. And that's why I think a ban is important. I think there's an urgency into implementing a ban. I think that I'm open and I think it's reasonable to implement a ban for 2, 5, 7 years while we figure things out.

But I do think that this is a national security issue, in my humble opinion. So I hope that in my comments, I addressed some of the concerns that you have, Senator./

Yes, you did address the concerns. I'm looking at section number four in the Bill that really speaks to requiring the Office of Emergency Services to get the data, to analyze the data, and really give us some answers to the concerns that you're putting forward. I think where I'm still stuck is on item number two, which actually, for me, puts the cart before the horse is making those prohibitions, before we actually have the data in front of us.

And what I heard you say is it's important for us to have that pause, for us to kind of understand where we're going. Unfortunately for me, that pause also means us not having the necessary data to make decisions in terms of how this Bill would impact us right now. So I still am reluctant. I want to make sure that I'm duly representing the interests of Senate District Four as well as California as a whole.

And I value very much your leadership as well as Vice Chair Grove. And so any other information that you feel is pertinent to helping to assess the importance of this Bill, I would be looking to support, but without number two. So I don't know if that's one of the amendments that you would be able to consider, but as written right now, I would not be able to go up on this Bill.

Thank you. You have any other comments? I'm going to bring it back to the dias, being the only other Member here and being a co-author of this Bill. The Bill got through the Legislature last cycle. No, No votes, I believe. No, No votes. And the Governor vetoed it.

And he vetoed it because it was going to CDFA, California Department of Agriculture, but he wanted it to be under the Office of Emergency Services because a lot of these things that were brought to our attention happened during the pandemic. I agree with my colleague from the Central Valley, where we together have the top five food-producing counties in the entire world, and I agree that we shouldn't have foreign-owned countries that own, especially bad actor companies that own land and use our land to produce.

Use our land in the Central Valley that has, and I know this encompasses the entire State of California, but uses our land in the Central Valley that has the most fertile soil to be able to grow the most wonderful food that we ship all over the world. Again, the top five food-producing counties in the world, I have three, she has two. Together we have five. I'd like to have the opposition come up. I have some questions regarding a statement that was made.

You were concerned about pension-owned investing. Do you want to come back up here and address that for me? It was from the Chamber, I believe. You said you had investors that were pension-owned investors that were concerned that with this Bill would be limited from land ownership, leasing back to small farmers. What countries have pension-owned investors in our state that are owning the land and leasing it back to small farmers?

My understanding is the largest one is Canada.

The largest one is Canada.

There may be others, but Canada is the one I'm most aware of.

So you're saying Canada owns land here in California and leases it back to our farmers to farm?

Potentially, yeah. I guess.

Potentially or does?

It does own the land. Whether it's all leases or some other kind of arrangement where the farmer manages the land, then that's, I guess, up for debate. But they do own it and they do keep it in production. And for them, it's part of a green investing portfolio for them.

It's a green investment portfolio for Canada?

Correct. It's about keeping land in production, you know, carbon sequestration, all of this stuff to kind of ensure that their own pension funds are quote, greener.

Okay, so we're concerned about Canada's assets in the State of California for greener land, but yet this state doesn't allow, I don't know, you get a carbon sequestration on a natural tree, but like almond trees, all these trees and pistachio trees and orange trees and citrus trees, we don't get a carbon sequestration thing like they do, a credit like they would in Canada. So Canada's pension funds are making money off of our California-produced farmland and we're not.

And you're opposed to this Bill because it stops Canada from doing that? I'm just trying to understand.

Yeah, it's not about Canada specifically, but it's more about.

Anybody. Pick a country.

Right. And I think this kind of goes to some of my retaliation comments where we're concerned that once you start banning a country from doing something, some kind of business in your state, then they can start hitting California with tariffs and other things that make trade less productive between the two countries. I mean, we've seen that in recent years with steel trade wars and that kind of thing.

So we are concerned that once you start limiting who can have access to California, you also limit California's then access to those markets.

I don't think the Bill is limiting access to companies coming into countries coming into California for good purposes. We just want to own our land, specifically our food production land. That's what the Bill is and that's the intent of the author, and that's why I joined her as a co-author. We don't want China, Iran. We don't want anybody really to come in and own property that's in our ag land, specifically ag land that's by, you know, naval air warfare centers or Lamore naval base or any of those things.

Those should be American-owned land by Americans is the way we see it. That's why we joined in again, representing the top five food-producing counties in the world. And I'm really trying to understand the opposition. I know, Mr. Albiani, you're sitting on the edge of your seat, and if you would like to come try to explain it to me, I will listen with great intensity.

We like to have a diversity of perspectives.

You were asking, for example, and I don't want to leave my friend abandoned.

I don't want to leave her abandoned either.

So there are examples, such as in the forage industry, down in Mr. Senator Perdilla's district, there's entities that have invested, countries have invested in the land we grow.

When you say invested, other foreign countries have invested and purchased land in Mr. Padilla's district?

Yes. And then Americans have jobs. They pay California taxes. There's folks that are doing the work. We process that.

I'm just going to make sure that I'm on the same page as you. American has jobs and they're employed by a foreign corporation to produce the food.

Actually, it's examples. One of them is a government entities as well. But yes, to produce the food, some of that stays in the United States. Some of the produced product stays in the United States. Some gets packaged and then sent to the government as well. Then some of our entities that I mentioned, the Seed Association, we have investments here in California, and then some California companies have investments in Europe and in other states.

And so the intellectual property travels across international borders and we share, and we share in the research that's developed. And so I think one of the concerns is if we stop allowing those investments into California, what, will it just stop with investments or will it shed to the actual commodities won't be able to be sold and there'll be retaliatory trade efforts or there could be even research being pulled back to say, hey, we can't share research with these entities on global food production.

And we think about the genomes. Seeds are developed all throughout the world. And the interesting part is there might be a seed that's developed. It does very well in Africa. You bring it here and we find out, hey, it does very well in a certain part of California, too. And so then we can share that and use their genome or exactly what ours is. Our genomes can be used in other parts of the world as well.

So that's, I think the concern is that both retaliatory against our products, but also where does it stop? Do we stop sharing research? Do we stop sharing cooperation? Do we stop sharing? We're talking about financing here. And these are very expensive endeavors. I mean, they're capital-intensive endeavors. And I think having the free flow of capital is very critical. And I think that's where the concern lies from the general business community and from the Seed Association.

Can you tell me and the Bill again? I've read it, and there's a lot of code section in here. I've read it. I've had staff brief me on it as well. I've talked to the author about this Bill extensively.

Our goal is to make sure that foreign countries, foreign governments don't own California ag land, can you point to the Bill or share with me what line item concerns you about us sharing seed ideas or taking something from Africa that may work here and may not work here or investments in the UC system or whatever? Where's that at in this Bill that says, the Bill before us, as I see it, is foreign governments cannot own California Farmland, period. That's what it says.

And you're saying that this Bill will address. I want to know where your concern is so I can look at the language really fast, if you don't mind pointing that out.

Yeah, I think that there are very significant. Again, I wanted to.

No, that's. Tag team it. I'm good with that.

I think the very big concern is that this is the first step. And there are very significant financial, complex financial entities that in the Seed Association, there are several of the entities are foreign companies, and they have very significant investments, both private, and they can use public funding to do that as well. And investing in California, they're very concerned that the financial arrangements in any one investment, and they could have different arrangements on every different plot that they use.

And I understand what you're saying, Mr. Albiani, but the language in the Bill specifically says it's foreign governments. So foreign governments cannot own California land. If John Doe from, I don't know, Australia wants to invest and John Doe is an individual or a private business, that's okay that they engage in investing with you guys or partnerships and you guys invest in Australia or whatever. I'm just picking a country out of the air. That's it.

But Australia, the government of Australia should not be able to own land in California. And I'm just picking Australia out of the air. The Bill says foreign governments cannot own California. With this Bill, they cannot own California ag land. And I fail to see your concern. I'm trying really hard.

If they want to invest in the United States, in California, and then for various reasons, and we have operations, significant operations in your district that are there, that also participate in Australia. There's some, using your example, there's cotton entities that are on both continents and are very significant on both continents. We are concerned that if we would prohibit them from investing in California, that they will prohibit us not only investing in land, but maybe even in trade in sharing of commodities. That's the concern. I believe that.

Just so that I understand, because I want a complete understanding, because I was alarmed by your concerns.

Okay.

So now I want to make sure I understand it completely before I have a serious conversation with the author of the Bill specifically because I'm a co-author. So you said that when investments are made. So you're telling me the United States government is investing in. Pick a country, any country, and that country either or is investing in California and you think that's going to disrupt that? Are you telling me it's government-owned, like the United States and Australia? Pick a country, any country you mentioned.

I forget the word you use, but heavily invested people in my district. You mentioned individuals in my district. Okay. Are they individual or farming companies? I know farmers that in my district that farm all over the world. They do. But it's not the United States of America, it's the individual and the company. Are you telling me that another country, pick any country, is concerned if this Bill passes that a private entity, I'll just throw it out there like Munger Farms.

They grow blueberries all over the world. Grimway grows all over the world. These organizations grow all over the world, but they're not the United States of America going to another country to buy land. This Bill is specifically prohibiting foreign governments, not John Doe Farmer, seed farmer in pick a country that wants to come here and help you guys develop seed ideas to see if things work and the research, it doesn't target them. Why are you concerned about prohibiting foreign countries, foreign governments from owning California land?

Well, this kind of goes back to the retirement funds, because even when it's like a subsidiary of the government, by the definition in the Bill, this includes things like pension funds. So I think if you're looking at the opposite direction where something like California or the United States is invested in land in other countries, and you can look at CalPERS, you can look at CalSTRS.

I would be shocked if those funds did not own property in other countries as a way of securing the debt for their pension obligations. Even though it's never like Australia government investing.

And we're not picking on Australia, right?

I'm just using Australia as our test case for right now. Apologies to Australia. It might be an Australian pension fund, it might be an Australian teachers fund, something like that, where it still meets the definition of a foreign government, and it's owning things to sort of ensure that there's coverage for financial liability for public employees.

I'm going to move the Bill and I'm going to vote Aye. But I commit to you that I'm going to have a conversation with you so that I fully understand this. When I say fully understand it, the author and myself and other people on this Bill want to stop. You name it, right? Foreign governments from owning land in the State of California. There are other states in our nation that we found out through public information and from news broadcasts that own our land.

Governments, not Mr. Albiani investing in something in Australia or wherever, but the United States of America investing in some other country and buying land and then leasing land to other farmers or whatever they do to whatever. That's what we're trying to prevent. And I'm just saying foreign governments. Foreign governments cannot own land in California if this Bill passes. And I'm deeply concerned, unless I've completely missed something, that some of our ag community, and specifically the Chamber of Commerce, is concerned about foreign governments, China, Iraq, you name it, it doesn't matter.

It doesn't matter. Canada. Are concerned about foreign countries owning our ag land. This is our food production. Could you imagine if the entire Central Valley was foreign-owned? How would we get that land? How would we get the food production from it? They could ship it out or do anything. They'd have our water supply to grow that food.

This is a huge concern that I have and that the author, you know, maybe I'm missing something and I'm open to a discussion. I am absolutely, positively open to a discussion and solving this problem because I don't want to hinder individuals or companies that operate all over the world and affect the global market and things like that. That's not the intention of this Bill. The intention is a foreign government. Am I correct or incorrect? Okay, thank you. Do you want to make a rebuttal?

Thank you, and we'll look forward to talk to you.

Great.

But we have offered to narrow it down to the foreign bad actors list, which were some of the ones that you articulated there. And that is part of the amendments that we have offered.

I appreciate that. And I read those amendments, but even if they're a good actor, I don't think another country should own ag land in our Central Valley. I mean, we have great relationships with several countries. We do have bad actors that are hostile to the United States of America. And I definitely don't think, and I'll say it, that China, Iraq, and all those countries, Iran, they should not own land in California, but I don't think any government could.

It's United States land, and it should be owned by Americans or American companies and corporations or individual farmers like the lady sitting behind you where I've known her father for 35 years. So if I am missing something in everything that I've read in studying on this Bill, I would glad to have a conversation with both of you. So we can address that, and then I will have a serious conversation about being a co-author on this Bill with my author, the author of the Bill.

If you guys can convince me that it has nothing to do with foreign countries that own our ag land. Deal?

Thank you.

Thank you. Yes, sir.

Thank you, Madam Chair. Thank you.

Mr. Padilla.

I do have a parliamentary inquiry, if that's in order. I'm not certain if even the acting Chair is able to move, but if you're not able to because you have to gavel, I'm happy to and would like to speak to it.

Absolutely, sir. Go right ahead. Thank you.

Thank you, ma'am. I appreciate the work that's been done to date on this, and I think I am understanding the protective intent here and that I do understand. I will also say that there are some, my appreciation to the author for the willingness to continue to work the Bill and to be open to amendments. I think one of the concerns also is to be careful to in those future potential amendments to be looking at the unintended consequences. And I'll be Frank.

While I do have some concerns about some of the overtone here, intended or not, that is being interpreted by folks, I think that's a great concern to this Member as well, to be candid. That said, I'm happy to continue to support the evolutionary process of the Bill and encourage you to continue to do the work to get it to a place where we can address those concerns. And with that, I'm happy to move.

Thank you, Senator Padilla. We appreciate that. Any other comments from the dais? Yes, Senator Alvarado-Gil.

One thing I just wanted to, this discussion has helped kind of move me in a certain direction. But I just want to know, I want to underscore the speculative problem. And for me, certainly I do not want foreign governments to own a speck of dirt, because I do see this as a national security issue, and knowing that our ag land and our control over our food production is the future of farming and our economy here in California.

In addition to that, I know that the U.S. government is doing a very poor job on collecting the data and reporting on the data of foreign-owned land in the US. And I see that there's a problem there, and I'm very supportive of the data. I see the urgency behind getting the data forward. But I'm looking at the numbers and I'm seeing that even doing research still only 2.8% of California agricultural land is owned by foreign investors. That doesn't say foreign governments.

So I still don't know what is that data set? What is that percentage of land in California that is owned by foreign governments? Is it less than 2.8%? Is foreign investors a different definition than foreign governments? I don't know. And so the urgency for me is certainly section number five. Let's get the data out there. And I'm disappointed that this Bill was vetoed previously because I know the support was there and I know the need was there.

I'm looking at this as two separate bills as the urgency clause is moving forward. Let's get the data, let's get CalOES to give us what we need to then go to the next step, which is prohibition of foreign governments owning land. I am a proponent of naming those bad actors, naming those foreign governments, because I also know that there are good actors. There are organic farming actors.

There are businesses that have been doing years for generation, have been doing business with us for generations in good faith. And certainly whichever decisions we make now are going to impact your family farm, your children's ability to farm on your land. And so I'm being cautious here and looking at the speculative problem, but also looking to see this rolled out in two separate bills. Thank you.

Thank you. Senator Hurtado, would you like to close?

I want to thank you, Madam Vice Chair, again, for being a co-author on this Bill. Last year, I didn't have any controversy at all. I moved through the Legislature very smoothly. I really appreciate the dialogue here because, quite frankly, I feel like we haven't really had this type of discussion here in the Legislature. And I'm excited. And, yes, I'm worried about the Bill dying, but at the same time, I'm really excited about having this conversation. And quite frankly, I'm really disappointed.

Part of some of the tactics that have been used to make this Bill seem like it's anti-anyone that's not American or that doesn't look American. And as a daughter of immigrant parents that came here from Mexico, I mean, I have constituents here today that. I want Jonathan to have an opportunity of owning land. And so that's really what it's all about. It's about foreign governments, again, foreign governments and really creating opportunities for, and making sure that our farmers here survive because they're struggling.

And there's a lot of concern with. The reality is that we don't know 2.8% or that's just a figure that really is inaccurate. And, yes, we have to do more data collection on our end here in California, but I also believe that we won't really have a full understanding until the implementation of the Corporate Transparency act goes into effect, because it will tell us who the beneficial owners are to x company. Because I could be the California cherry farm company. This is just.

I'm just throwing it out there. I don't know if it's a real farm, but the beneficial owners could be tied, one or two business entities down the road to a foreign government, and we don't know. So until that goes into effect, we won't have an understanding of how deep of an issue this is, if it even is an issue. But there's urgency, in my humble opinion, in making sure that we really protect the land that we have, because there's just so much tied to it.

It's not just land and tied to food. It's food. It's water, it's energy, it's health. It's our livelihood. And this is not a Bill aimed at trying to attack any specific country or any specific group of people. This is really about our livelihoods and our children and making sure that we have the resources to continue feeding the world. So with that, I respectfully ask for an Aye vote.

Thank you, Senator Padilla. I'm looking for a motion.

I'll move the Bill.

Thank you, sir. The Bill has been moved. Madam Secretary, please call the roll.

SB 224 by Senator Hertado. The motion is do pass, but first, re-refer to the Committee on Appropriations. [Roll call].

That has three Ayes and one No vote, and we'll leave the roll open. No, that's it. It's closed. One not voting. She not voted. Okay. Yeah, so the Bill is out.

So just on SB 485, do we want to open up the roll? Oh, it's all done. Okay, so the vote is four zero, and that Bill is out. Okay.

And with that, this concludes our Committee hearing for today. And I appreciate everybody for coming out. Thank you so much. And our meeting is adjourned.