Assembly Standing Committee on Judiciary

Thank you. Well, good morning, everyone. We'll go ahead and get started as a Subcommittee. Thank you all for being here today working out a few microphone issues, but I think we've got that under control.

So welcome to the first hearing of the Assembly Judiciary Committee for the 2022-2023 session. We have several returning Members, Assembly Members Haney, Kalra, and Reyes, as well as Assembly Member Rivas, and then new Members. I'd like to give a welcome to our Vice Chair, Assemblymember Essayli, and also Assembly Members Connolly, Dixon, Pacheco, Papan, and Sanchez. Due to the state no longer being under the public health state of emergency, we've returned to our pre pandemic regular rules for witness testimony.

Each side will be allowed two main witnesses. Each witness will have two minutes to testify in support of or opposition to the bill. Additional witnesses should state their names, organizations, if any, and their position only as far as decorum and disruptions as necessary with any large crowds. As we proceed with witnesses and public comment, I want to make sure everyone understands that the committee has rules to ensure we maintain order to run a fair and efficient meeting.

In order to facilitate the goal of hearing as much from the public within the limits of our time. We will not permit conduct that disrupts, disturbs, or otherwise impedes the orderly conduct of legislative proceedings. We will not accept disruptive behavior or behavior that incites or threatens violence, or even veiled threats. Rules of conduct for today's hearing include no talking or loud noises from the audience.

Public comment may be provided only at the designated time and must be limited to your name, organization, and support or opposition of a bill. And no engaging in conduct that disrupts, disturbs, or otherwise impedes the orderly conduct of this hearing. Please be aware that violation of these rules may subject you to removal or other enforcement processes. So with that, we're ready to get started. Do we have a quorum? What? Okay, we do have a quorum.

And by the way, thank you all for being here on time. I am going to start these meetings on time and try to run them efficiently. I know everybody's busy, so we're going to to try, try to run these meetings in a precise and concise time that respects the members'time and respects the public's time. So with that, I'd ask the Clerk to please call the role.

[Roll Call]

Thank you. So we do have quorum. I'd ask for a motion for adoption of the Committee rules. We have a motion from Ms. Reyes. A second from Mr. Essayli. Any comments from the committee? Seeing none. Ask the Clerk to please call the role.

[Roll Call]

Motion passes. We are off to a good start. With that on that note, Mr. Arambula, keep it going. You're up. Bill is AB 222 by Assemblymember Arambula. Mr. Arambula, welcome. You may begin.

Good morning, Mr. Chair and members. I'd first like to thank by first like to start by thanking the committee staff for the recommended amendments, which I accept. AB 222 will strengthen the policies and laws that California provides for the civil rights protections for individuals with disabilities. The Americans with Disabilities Act, or ADA, was enacted under President George H. W. Bush in 1990.

Although these landmark policies of the past have made major strides for the disability community, many of the aspects of state laws need to be updated to adjust to the modern times, especially regarding the workplace. California is a nationwide leader in enacting landmark legislation focused on the rights of people with disabilities. AB 222 will continue that leadership by creating a work group to address the need for updating laws and services that aim to support all Californians with disabilities.

This legislation aims to bring people representing the many faces of individuals with various disabilities to the table for a much-needed conversation regarding labor, workforce, and employment. Testifying in support of AB 222 is Eric Harris, representing Disability Rights California.

Mr. Harris may proceed.

Good morning, chair and members. My name is Eric Harris, and I am the Director of Public Policy at Disability Rights California. California is the birthplace of the disability movement and followed great leaders like the late Judy Human and Ed Roberts. They fought hard to ensure that disabled people had civil rights and benefit the disability community even today.

California also has the Fair Employment and Housing Act Prevent Discrimination, the Lanternman Act for people with intellectual and developmental disabilities, and other crucial laws that help ensure that disabled people are provided equal treatment. Despite these laws, only 39% of Californians with disabilities ages 18 to 64 are employed, which puts us 35th in the country. We rank toward the bottom in employment for people with intellectual and developmental disabilities.

We rank towards the bottom for homeownership rates for people with disabilities, and disabled people are among the most likely in the state to live in poverty. We must do better, and AB 222 is an opportunity to do that. The Californians with Disabilities Act is a bill that gives California an opportunity to create a working group to reevaluate our laws and how they impact disabled people. California should be a leader on issues relating to the disability community, and Disability Rights California urge your aye vote today on AB 222 to help us move in the right direction. Thank you.

Thank you. Any other witnesses in support? Seeing none. Witnesses in opposition? Seeing none. Questions from the committee. Mr. Essayli?

Thank you, Mr. Chair. And thank you, Assemblymen Arambula, for bringing this bill. I support your goal of updating our accessibility laws to make sure that they fairly provide for the needs of people with disabilities. My only concern is that many small businesses sometimes struggle to cope with some of the predatory lawsuits that are filed by a very small group of people, and they often are shakedowns on small businesses. In Northern California, an attorney who filed thousands of disability lawsuits against local and state businesses over the last two decades, sometimes he filed as many as six or more a day, forcing many businesses to shut down. He recently pled guilty to federal tax fraud. So one of my concerns is addressing the predatory nature of some of these lawsuits so that way businesses, we can focus on businesses that are substantially violating these.

So my question to you, Assemblyman Arambula, is, would you be willing to include in the scope of the workgroup a provision that they look at how to combat the predatory lawsuits that have been filed, and I think they're abusing some of these laws?

I'm happy to let Eric Harris address if there's a space for us to be inclusive of that within the language with the law. But the real focus is the opportunity that's available for so many in our community, including our small businesses, to employ individuals with disabilities. The joy and benefits that we have as a state to be more inclusive allow us to make sure that we are focusing on what matters for all Californians.

I hear your concerns regarding accessibility and the lawsuits that have been pending, but this is more of a work group focused on how we increase labor participation, how we're increasing employment for individuals with disabilities. But I'll allow Eric Harris to answer more.

Yes, absolutely. Thank you, Assemblymember, this working group, one of the goals of the working group is to bring a lot of people to the table who haven't been at the table together. People with disabilities, people from the labor force, people from the unions, all the different spaces regarding workforce that are really important to have at the table, to be able to have this conversation and to really focus, as the Assemblymember mentioned, on employment for people with disabilities.

Of course, there are other issues that need to be looked at, but this specific workgroup is going to focus primarily on making sure that people with disabilities have the best opportunity to be employed, gainfully employed, the same way as people without disabilities are in the State of California, and to make sure that California is more of a leader on these issues in comparison to other states throughout the country.

I'll just note that the law, as drafted, talks about the minimum things the work group could do. One of them says improving the effective enforcement of civil rights laws. It seems to be broader in scope. And so my question might ask is if we're going to be looking at things like effective enforcement of the laws, can we also look at some recommendations on how to deter or protect, deter predatory lawsuits or at least provide some protections to those small businesses through the.

Chair, if I may? I'm happy to take those considerations going forward if this bill is to make it through this committee.

And I'd like to support it. So I just think it could be a win-win.

Ms. Reyes.

Thank you, Mr. Chair. Dr. Araumbla, thank you so much for bringing this bill forward. Oftentimes, we don't know the numbers or the statistics, and I think that once we recognize that the unemployment rate is so much greater, it's something we have to address. That's the important thing here. We're talking about a work group that's going to study this and how we increase employment and how we increase opportunities. So, I absolutely support this, and I'd like to move this bill forward.

Thank you, Ms. Dixon. Well, first we have a motion from Ms. Reyes. Do we have a second? Second from Mr. Kalra. Ms. Dixon.

Thank you, Chair. And thank you, Dr. Arambula, for bringing this forward. My mother was in a wheelchair for a number of years, so I'm very sympathetic to many problems that people who are handicapped face. It was a difficult time in our lives. I support your bill. Would like to know when you specifically talked about the workgroup and the composition of the work group, you specifically did not mention business owners.

Would you be open to specifying and including business, small business owners in the composition of the workgroup?

We're going to be as inclusive as we can to make sure it's representing the needs of individuals with disabilities, and that would be inclusive of small businesses.

Because just as Assemblymember Essayli was saying that a lot of small businesses are affected by this, and they should be a strong voice for how to make it possible for handicapped people, disabled people to be part of their workforce. So if you would be agreeable, amenable to that, then I am fully supportive of your bill.

I oftentimes have found they become the biggest champions for change and advocating in this space as well.

Thank you.

I would See the benefit.

Thank you so much.

Thank you. Any further questions or comments from the committee? Seeing none. Mr. Arambula may close.

Thank you. Mr. Chair. I respectfully ask for an aye vote.

Thank you. Thank you for this important bill to make sure that we're being as inclusive as we can in this state. I think you're showing your amenability to working with people really across the spectrum is important. So thank you for that, and I am pleased to enjoy a recommendation. The motion is do pass is amended to Appropes. I'd ask the Clerk to please call the roll.

[Roll Call]

Motion passes. Thank you. I'm looking for an author. We are too early in the year to not have an author. Yeah, Mr. Kalra, you're starting to look like the author of the next bill.

Okay, now we will take up Assembly Bill 357 by Assemblymember Maienschein. Sir, the floor is yours.

Thank you very much. Mr. Chair and members, I'd like to start by maybe not surprisingly, accepting the Committee amendments. AB 357 would update California's outdated animal testing facilities laws to reflect the improvements in science and updated guidance from governing bodies that have occurred since the original law was enacted 23 years ago. Under this bill, alternative animal test methods will be required when they are available, deemed acceptable by the regulating agency, and provide information of equivalent or better scientific quality than what the animal testing method provides.

If an appropriate alternative test strategy is not available, a testing facility may continue to use traditional animal testing methods following a set of standards, including using the fewest number of animals possible and doing the least amount of harm to those animals. The bill would also require manufacturers and contract testing facilities who use traditional animal test methods to report to the AG regarding their use of animal testing. I took amendments last week that addressed the opposition's concerns, including an amendment to protect researchers.

The amendments clarify that no personal information or confidential information will be shared as I've indicated to the opposition who first approached me yesterday, I look forward to continuing conversations with them. To be clear, AB 357 is not seeking to ban animal testing altogether. It will ensure that if an appropriate alternative test method is available, it is being utilized. I respectfully ask for your aye vote.

And here to testify is Jenny Berg, the California State Director for the Humane Society, and Monica Ingritson, head of public affairs for Cruelty Free International.

Thank you, Chair and Members of the Committee. My name is Jenny Berg and I'm the California State Director for the Humane Society of the United States, and I respectfully request your support for AB 357. This legislation updates California's outdated alternative testing laws. AB 357 would ensure alternatives to animal testing are utilized only when they are accepted by the relevant federal regulating agency and provide information of equivalent or better scientific quality and relevance for the intended purpose.

AB 357 also expands the types of products to which the law applies and requires reporting on the use of alternative test methods. The bill exempts biomedical research on animals done to investigate disease and expand fundamental scientific knowledge. The bill also, and this is key, does not prohibit traditional animal testing. If an approved alternative test method is not available or a federal agency still requires an animal test, the law allows the use of such tests, and this is in all circumstances.

So why is the update to the law important? Science is rapidly moving away from outdated animal tests as faster, less expensive, and more human-relevant alternative methods are available. As noted in the Committee analysis, animal tests are no longer the gold standard and contains scientific limitations. Different species can respond differently when exposed to the same chemicals, meaning that the animal tests may not accurately represent human health hazards.

More than 90% of human drugs fail during clinical trials after having completed extensive animal studies due to unexpected toxicity in human patients or lack of efficacy. Alternative methods, however, such as human cell-based tests and advanced computer models, are much more likely to provide results that predict human responses. AB 357 will ensure new testing strategies are used as soon as they are approved by federal regulators, solidifying California's position as a scientific and technological leader in nonanimal alternatives.

The opposition to this bill continues to cite commitment to the three R's, replace, reduce, and refine. The first, as listed in the opposition's letter, is to replace animal use in an experiment as long as adequate alternatives are available, which is precisely what this bill dictates. AB 357 simply asks industry to adhere to the three R's, which will ensure the replacement of outdated animal tests with modern methods as soon as they are scientifically appropriate. We kindly request your aye vote and thank you.

Thank you.

Thank you, Committee. My name is Monica Engebretson on behalf of Cruelty-Free International, an organization that works to promote nonanimal testing methods around the world, and we speak in support of AB 357. Nearly everyone can agree that when an alternative to the use of animal tests exists, that it should be used. And it may be commonly assumed that once a nonanimal alternative test is available, that tests no longer occur, or at least rarely in the animals.

The reality is that such animal tests can persist and even increase long after the adoption of a suitable alternative. For example, Cruelty Free International has created a list of 10 regulatory animal tests that are still conducted in the US despite having valid non-animal replacements, such tests are long overdue for replacement. The reasons why an animal test persists are often not scientific.

There may be uncertainty or confusion about the acceptability of the alternative method, or manufacturers and developers may assume that it's the quickest route to approval, or it may just seem easier and more comfortable to do what has always been done. But these are not unsurmountable and they do not alone justify the continued use of animals. For decades, the UK and the EU have had mandated alternative laws that require that those that perform animal tests across all sectors to apply for a project license.

Part of that permit is that the number of animals used and the reason for their use is recorded and publicly available. This includes rats, mice, and fish. This information is seen as key to driving the three R's and including the replacement innovation, and for meeting the public's expectation for the replacement of the use of animals in testing wherever possible. The reporting requirements required in this bill will identify if what and why outdated tests are still being used in California, and help to complete that replacement process.

For both scientific and ethical reasons, I urge your support.

Thank you. Are there any additional witnesses in support? Please approach the mic. State your name, organization and position. Thank you.

Hi, my name is Nicholas Sackett, representing Social Compassion in Legislation. In support.

Members Austin Webster with W Strategies on behalf of the Animal Legal Defense Fund in support.

Thank you.

Are there any main witnesses in opposition?

We'll take two witnesses in opposition.

Good morning, Mr. Vice Chair, members. Dean Grafilo, on behalf of the California Life Sciences, we have a position of opposed on AB 357. Thank you, Chair Maienschein. We appreciate your offer to work directly with us to address the issues we laid out in our pose letter.

In particular, we hope the same logic and reasonableness dealing with the same subject on recently passed legislation is a model that can be applied to your bill. Namely, exempting life sciences to avoid costly and lengthy delays in the development of life-saving cures and treatments to the bill at hand and per the committee analysis. Yes. Last year, the same sponsor led SB 879, which took into effect just 73 days ago.

Make no mistake, that bill was signed into law because the life sciences were exempted from the bill. In other words, just last year this Legislature has already opined that the life sciences should be exempted from prohibitions on animal testing. This Legislature has already carefully balanced being humane to animals in the most responsible and safe manner for testing while bringing to market treatments, medical devices, and vaccines for animals and humans that extend or save lives.

For these reasons, as well as the reasons in our letter, we oppose AB 357. And here to answer any potential technical questions is the director of policy at the California Life Sciences, Stephen Cutie, PhD in bioengineering from UCSF and Berkeley. Thank you.

Thank you, Mr. Chairman and members, I'm Moira Topp, on behalf of Biocom California, a trade association of life sciences companies, we share our concerns and our opposition with California Life Sciences. Our companies do not want to be testing on animals. When there are opportunities and approved valid tests, we use them. Testing on animals is expensive. It is not our first choice. But the safety and efficacy of our drugs and products is our number one priority.

And sometimes animal testing is absolutely required in order to ensure safety and efficacy. And in this bill, safety and efficacy purposes of testing are explicitly excluded from our ability to use animal testing, and we think that's hugely problematic. Again, we also appreciate we've had numerous meetings with the author staff. We look forward to continued dialogue. We very much appreciate the chair's willingness to work with us. We'll continue to do so. But for the moment, we do think the bill is problematic, and we ask for your no vote.

Thank you. Are there any additional witnesses in opposition? Please state your name, organization and position.

Emily Pappas, Animal Health Institute. We look forward to working with the author and the sponsors on amendments that hopefully address our concerns to this bill.

Dean Talley with the California Manufacturers and Technology Association respectfully opposed.

Thank you. Seeing no other witnesses, are there any questions from committee members? Yes.

So I want to thank the Assembly member for bringing this bill and for doing all that you can. But my question is, what are your thoughts as to the opposition? Is there a way to exempt the life sciences? Is there a reason for not?

Sure. We will continue to work with them. They approached me for the first time yesterday. We asked for amendments. They have not provided any amendments, so we're looking forward to seeing those, should they choose to do so. So we'll continue to sit down with them. This bill, there's not an intent to eliminate animal testing. In fact, the language that's chosen to date has been to exclude biomedical research.

If there's a more technical definition that gets at the same issue that they're raising, I think that's something obviously, that I would consider. So I've worked with them on these bills before that I've done during my tenure here, particularly for animal rights. I think it's important. I mean, the intent of the bill is, if there's a less cruel alternative, the State of California should use that. I think that's a reasonable position. We'll work with them on the technical parts of it. I'm glad to see their involvement at this point. So we'll look forward to sitting down with them.

Thank you. And I thank you for your willingness to work with them.

You bet.

Go to Haney and then Sanchez and then Dixon.

Thank you, Chair, and thank you, other chair, Assemblymember, for your leadership on this and your very noble efforts to protect animals from unnecessary testing. I definitely agree overall with the goal here. I had a similar question about some of the concerns that were raised and appreciate your willingness to work with folks around some of the impacts. Obviously, we want to protect animals. We also want to protect people.

And if life-saving drugs can help people, save people, keep people alive, we want to make sure that we're not doing anything that would get in the way of that. Questions that I also had related to the questions raised previously are on any potential delay that this could cause.

So if there is an urgency to come up with a drug or a life-saving treatment, and there needs to be some additional steps around approvals, is there an urgency or even not necessarily approvals, but determining whether alternatives are available, would this get in the way, in some way of us be able to move quick enough to be able to identify life-saving treatments?

First off, thank you for your comments. There's nothing in this that would in any way, the intent of this bill is to in no way inhibit the production, the discovery, and production of medicines that would prevent disease. We've actually spelled that out. That that's one of the intents is to make sure that we don't do that.

So again, as we continue, if there's definitions that we need to refine to make sure that that doesn't happen, whether it's the next COVID-19 or whether it's all the diseases. These companies, by and large, are in my district. So I'm proud of the work that they do. They do great work, and we want to make sure that they continue to be able to do that work.

The intent of the bill is to have a narrow focus, is if there is a less cruel alternative that should be pursued. Again, I think that's a really reasonable premise and something that I'm personally proud to pursue. So we'll make sure that there's not, as we go through this process, there's nothing that would come in the way of them producing life-saving diseases. We want to do that. We want these companies to produce more and more of them to make sure that we're protecting not just Californians, but we protect the world.

Absolutely. Thank you. Thank you for your commitment and leadership. Appreciate it.

Thank you. Assemblywoman Sanchez.

Sure. So actually, this is, my question is for the opposition, and I'd like to hear about the impact that this bll would have on our higher ed and research institutions that are heavily invested in biomed research.

The bill sort of says that it exempts biomedical sciences, but functionally, right, by carving out mice, other rodents, cold-blooded fish, that's the bread and butter of biomedical science, not just in industry, but also in academia. So that would pose a serious problem for just basic biomedical science in California, like our global leadership. So maybe in name biomedical sciences kind of exempted, but in practice, safety and efficacy testing, using those animals for drugs, for vaccines, for other medical products would be not counted. So that's a serious problem.

Assemblywoman, I'll just add the institutions that you're referring to, they don't have a formal position on the bill today, but they are looking at this very closely.

Thank you.

Thank you. Did you want to respond?

Are you looking at me, Mr. Essayli?

I didn't know if you wanted to.

Yeah, I actually would. I mean, just to be clear, it doesn't sort of say biomedical research is exempt. It says biomedical research is exempt. A, it actually says it specifically, but B, as I'll reiterate again, we will continue to work to refine the definitions as necessary, but it doesn't sort of say that.

I'll just say that universities and community college typically conduct biomedical research so they wouldn't be impacted by this.

Okay, going next, I have this Assemblywoman Dixon and then Reyes.

Thank you. And thank you. I am certainly enjoying many, many millions of people. I've always had dogs all my life, so I'm very sensitive to animals, but I also want to protect lives and make sure that we are not impeding medical research, even into orphan diseases. Actually, my mother had an orphan disease who was in a wheelchair. But other questions have addressed this, but specifically on veterinary medicine. Could someone comment? Will this impede the research on animals exclusively for veterinary medicine research? Because if you can't research animals to treat animals, will the alternative method suffice?

Go ahead.

So what they're talking about is the regulatory tests. So if veterinary drugs are, there's regulatory tests that are required for those drugs. If they required animals, the bill would allow that for the approval of the drug didn't require an animal test, and there was an alternative, then it would have to be used. So drugs are still tested on animals. And the approval bodies that require animal tests, if they're still requiring those tests to be used, then that would be the case.

But it would not change.

Right. Unless during the development of a drug for a vet, sometimes there's animal tests that aren't necessary. They can use the alternatives, and then that would be the case, like a veterinary batch testing.

Just to be clear in black and white terms. Can animals be used in the testing and development of research or animal science?

Yes.

Okay. And then could you just explain to me, somebody brought up the comment about the exclusion for rats, mice, and zebra fish. Is that a critical class to protect and not research? I mean, we just have gone through a pandemic, and there have been assertions of certain rodents that may have been contributing to the pandemic. So are we going to exclude them from testing those animals?

Only if there is an alternative method that exists.

But there may not be, then you.

They're not.

They're not excluded.

Okay. Okay. Very good. Thank you. Thank you for protecting animal rights.

Ms. Reyes.

Thank you. The questions and the comments that I had in my notes have been addressed. I appreciate that you have tried to craft the language in this as precisely as possible. I do appreciate, as others have mentioned, the fact that you recognize that now that a dialogue has started and there will be discussions. But I want to say thank you. I'm glad you're the author of this bill, especially because you recognize how important this is, especially in your district. I'm glad you're the author and want to end with that. Thank you.

Thank you, Ms. Reyes.

Ms. Papan.

Thank you for carrying the bill. I appreciate that. And I appreciate the balance that we're trying to strike here between effective research and protecting. I have, I think perhaps maybe a comment more than a question. But I want, as the author has illustrated, that he's very amenable to finding a working solution as we go forward. Some of the things that stand out to me in my mind are as follows.

The devil's going to be in the details as to who determines what a viable alternative test is within a reasonable time frame. I think somebody else asked about how long would it take. Science can be most helpful when it moves quickly. And so for me, I want it to move both effectively and quickly. And so in this bill, as it is right now, I'm not seeing who determines what a viable alternative test is. So I worry about that.

I worry about tests that get conducted, and then the FDA says, well, we don't consider that to be a sufficient testing. You're out. In the meantime, diseases need to be addressed. I know Assemblymember Maienschein, you are well aware of this. I know I'm preaching to the choir. I just wanted you to know my reservations in that regard. The other thing I'm worried about is this reporting idea, reporting to the AG, and what does that show us? That is confusing to me.

And I worry about, I appreciate the privacy of individuals. I'm well aware of that part of it, but I don't know about the reporting part. I want you to know I'm a bit uncomfortable with it. These industries are highly regulated. California has some of the strongest laws as it relates to animal testing. So within those confines, I appreciate you working together, but those are the things I'm going to be looking for. Thank you for your consideration of them. And if anybody wants to highlight that those shouldn't be concerns, I'm ready to be enlightened.

Assemblyman Kalra.

The last member would be Mr. Connolly. Do you have any questions? No. Okay.

Thank you, Mr. Chairman. Thank you, Chair Maienschein, for bringing this forward. I think that whenever we have the opportunity to reduce suffering, we should, and I also understand your sensitivity to ensuring we're not impeding medical research, ensuring our industries are healthy economically and in terms of innovation. And I do believe that legislation like this can also spur further use of technology and advances in research as well. And so for those reasons, I'll support the bill. And if it's okay with you, I'd love to join as a co-author. Thank you, Mr. Chair.

Mr. Vice, may I just ask a follow-up question?

Sure.

So I want to understand from the opposition, does this discussion satisfy you? I mean, the life sciences are not prohibited. I am concerned about the AG issue that Assemblymember Papan talked about. How do you feel about possibility for amendments going forward?

Thank you. We certainly look forward to the dialogue. The bill does include an exemption, but then there's an exemption to the exemption that is very troubling to us. And so we think that the language needs a lot of work, but we're early in the process and we look forward to the dialogue. But right now it does not.

Oh, it's not there?

Correct.

But, Assemblymember, will there be continued discussions?

Yes, there will be continued discussions. Yes.

That will resolve in some of these, resolve these disparate issues. Okay, very good. Thank you.

And then Assemblyman Maienschein, would you like to close?

Thank you very much, Mr. Essayli. Yes. As I've said, we'll continue to work through these issues. This is an important first step, I think, but we've still got some work ahead of us, and we look forward to engaging on this. And with that, I ask for an aye vote.

Thank you. Is there a motion? Moved by Reyes. Seconded Kalra. And then we'll call the vote.

[Roll Call]

Motion passes. Motion passes. Thank you. I see we have Mr. Ward here. Mr. Ward, if you're ready to present, we is here for AB 223. Thank you. Mr. Ward.

Thank you. And good morning, Mr. Chair and Members. This Bill, Assembly Bill 223. It is about youth safety, and it is about preventing bullying and harassment. As you know, California has provided the tools needed for persons to change their vital records to match their gender identity. However, the petition process and the resulting paperwork are a matter of public record and information, as we have always understood them to be.

Normally, that's been housed at our county facilities, which have required somebody to go down there and actually procure the document. But in this day and age, it's become common practice that many counties are digitizing them, which also seems on its face to make a lot of sense. However, that means that a lot of this information is now discoverable with a simple Internet search.

And what we are seeing from youth that are transitioned and have gone through the petition process to have their name or their gender marker changed is that we are having individuals such as a classmate or some other third party discover that information and outing them and being outed is an extremely traumatic event for any individual, especially for those under the age of 18.

According to the Trevor Project, transgender and nonbinary youth are two and a half times as likely to experience depressive symptoms, seriously consider suicide, and attempt suicide compared to their cisgender peers. So by allowing people to choose when and how they decide to share their personal information, this will give them the confidence to navigate their gender identity issues without fear of retaliation.

Assembly Bill 223 protects the privacy and mental health of transgender and nonbinary youth by making common sense changes to the process for persons seeking a gender or sex identifier change by placing the petition and the resulting paperwork under seal until that person is 18 years old. This Bill makes no changes to the actual name or gender change process, nor does it change parental or familial access during that process. It simply ensures that the resulting paperwork remains private.

For witnesses in support, I have Kathie Moehlig with the Trans family support services and Trans Youth Liberation, and Clarice Barrelet, a family law attorney.

Good morning. Thank you. My name is Kathie Moehlig. She, her, my pronouns and I am the founder and Executive Director of Trans Family Support Services. We serve families on the navigation of this journey and in our eight years, we have served 3500 Trans youth in their families. A large part of what we do is helping families to know how to navigate who needs to know this information, when they need to know this information about their child's transition.

For minors, getting their name and gender marker change legally is critical and a positive step in their transition. The state has made it much more accessible over the years. However, these records of what should be very private information are public and easily accessible over the Internet. The access to personal information is why many of our youth are being outed by their peers. A simple Google search of the youth's names show these court orders. I've worked with many different families that have had this scenario happen.

There are youth who maybe at a young age in elementary school, has legally changed their name, and then as this student moves up into middle school, their peers will do a Google search of their name, find these court orders, and out these students. This is spreading this information across peers, causing our students to have an extreme amount of distress. I've had many students who have dropped out of school and moved into homeschooling situations because of being outed. Often, these parents don't even know.

These court orders have become public records and are easily consumable, making this experience even more troubling for these families. No minor should have their private information shared in such a public way. So on behalf of the thousands of Trans youth and families, I urge your support of this Bill.

Next witness.

Good morning, my name is Clarice Estrada Barrelet, and I'm a proud parent of a Trans child. The advances we've made in technology test our expectations to privacy so that we must continually define what privacy means. Anyone with a smartphone can get information about almost anyone within a matter of seconds.

For parents of Trans kids like me, who lovingly sought to support them via a name and gender marker change and protect the privacy of a former name and identity that didn't match how our kids felt inside, we have subsequently learned just how easily accessible these court records currently are. In addition to being a parent, I'm a lawyer and I spend a lot of time in law school learning about and debating the right to privacy in many contexts.

In my practice of family law and restraining orders, I continue to face these issues on behalf of my clients. In response to the other side, I understand and appreciate the concept of an open judicial system as fundamental to our democracy, but in addressing that openness, even our U. S. Supreme Court acknowledges that this is not without anticipated exceptions. One such important exception is petitions for name and gender marker changes for minors.

My Trans child was only eight years old when he messily scrawled his signature, what was meant to be his signature on the petition I submitted on his behalf for a name and gender marker change. He certainly did not at that time and could not appreciate the details surrounding the petition, only that he was clear in his mind and in his heart that the feminine name and status of female did not accurately represent how he felt.

We had already been informally using his preferred name, but he was outed anytime his legal name was required. He suffered from gender dysphoria, a term I turned to Google to better understand. The same Google where the top hit is my son's case for his name and gender marker change.

And just as he and I believe that what is or is not in his pants is private, we also believe that a petition made on his behalf as a minor before he could give legal consent to its disclosure, should be kept private. We believe that this type of court proceeding is among those that are high court accepted, and we're confident that the State of California will continue to be a leader in codifying our right to privacy, especially with the young and vulnerable population of Trans youth. Thank you.

Thank you. Any other witnesses in support? Name and organization only, please.

Becca Cramer Mowder on behalf of ACLU California action and support.

Craig Pulsipher. On behalf of Equality California, in strong support.

Jonathan Clay, board Member of Trans Youth Liberation and Support.

Thank you. You're behind the guy who's 6'10.

Maddie Roby, with Trans family support services and support.

Yeah. Okay. Now I see. Seeing no further witnesses in support, witnesses in opposition.

Websites included links to buy binders and packers, find out where to obtain testosterone and access legal name change information. I thought I'd found both my problem and the solution. I hated my body because I was born transgender and transitioning would alleviate all my issues. I'm lucky I was not affirmed by my parents, teachers, peers or my pediatrician as I made it to adulthood without poisoning my body. My self hatred was never addressed and I continued to obsess about transition.

In my 20's, I decided to socially transition, changed my name and began dressing more masculine. I hated that I still looked female. So I called Planned Parenthood here in Sacramento and obtained a prescription for testosterone with no mental or physical health assessment required. Testosterone only relieved my distress for a very short time, but induced physical illness. I became more suicidal post transition than I was.

Pretransition AB 220 Three's intent is to prevent suicide, but hiding a child's real name and sex does not in any way prevent suicide. The only long term study on suicide in trans-identifying patients is a Swedish study which showed that those who underwent surgeries and wrong sex hormones were still 19 times more likely to commit suicide than the general population. Sweden is one of the most progressive and accepting countries in the world. Kids are going to change their minds like I did.

Hiding who they really are biologically is only going to make it more difficult for them to reverse course when transitioning fails to cure their mental illness like it failed to cure mine. Thank you.

Good morning. My name is Erin Friday and I'm a lifelong Democrat, a licensed attorney, and I voted for same sex marriage. I'm the co lead of Our Duty, a nonpartisan parent group that fights against gender ideology. AB 223 is a bill that will do more harm to the trans-identified minors than good.

First, by hiding and sealing the sex from their teachers, counselors and other adults, they will be stripped of their chances to pay special attention to these vulnerable kids to protect them from bullies and alike. Second, AB 223 will render it impossible to keep any type of accurate data keeping vital statistics will be rendered meaningless. The number of transidentified children who engage in self harm are victims of bullying, drug use, or runaway, live in poverty will no longer be able to be tracked.

In 2022, AB 1094 went into effect. California is spending $1.4 million to train medical examiners to record the LGBTQ status of those who died violently. How will the accuracy of that information be assured when crucially relevant records are sealed? Third, there are no studies, and I mean no, that show that suicidality or completed studies are more prevalent with those minors who are public with their Trans identity as compared to those who are not.

In my group of thousands of parents who have children who were not socially or medically transitioned, none of us have had our children commit suicide. I cannot say the same for those who have socially and medically transitioned their children. Since California started pushing gender ideology and gender identity in 2010, California's youth suicide rates have increased. The CDC shows that from 2010 to 2020, the California suicide rates for those under 24 have increased by 11%.

This bill assumes that every minor who adopts a gender identity that differs from their immutable sex will not change as they mature. The data belies that /detrans Reddit membership has grown from 8,000 in 2020 to 45,000 as of today. Last, what this bill does is hide the sex of a minor, which can be a very relevant fact in title nine cases. Vote no on AB 223. It harms Trans identified children.

Thank you. Any other witnesses? In opposition.

My name is Greg Burt from the California Family Council, in opposition. Thank you.

My name is Allie Snyder, concerned parent in opposition.

My name is Beth Bourne. I'm a concerned parent. In opposition.

Brandon Campbell, Northern California Director for the capital Connection for Baptist Churches and the pastor of the Faith Baptist Church. In opposition.

Thank you. Seeing no further witnesses in opposition, questions from Committee. We have a motion from Mr. Kalra, second from Mr. Haney. Questions or comments from the committee? Mr. Essayli?

Thank you, Assemblyman Ward. I just have a couple questions. This bill, is this strictly limited to sealing requests for minors?

Thank you, Vice Chair Essayli. Yes, it is.

So my question is, does this change the process to do name changes? So does a minor still need their parents consent or permission in order to file the name petition?

Nothing about the process change, including the requirement to have a parent present for a minor who is not emancipated.

Okay, I will just comment that I believe this is a very sensitive topic and it's one that should be reserved as a private family matter. And so I understand the concerns. But, I think generally, as a matter of public policy, we generally keep minor records private in court cases, especially juvenile cases. So I just want to confirm that this does not alter the process, that parents still have to file the petition and that this would remain a private family matter until they turn 18.

That is correct. And just to be transparent, we are working with the judicial counsel to be able to have technical amendments to ensure that it will work with existing court processes, including having the information kept confidential by the courts instead of requiring a separate petition from the minor.

Okay. And I know a lot of people are fighting on this Issue right now, and I just don't want to see the children used as pawns. Agree. And that would be my concern.

It's only one parent that's required to change the name.

Yeah. And I will say for the record, yeah, I don't agree with SB 179, that process laid out, and I would welcome the opportunity to revisit those requirements. But this bill, I think is very narrow and would just seal the records to protect the individual minor. And in that Regard, I would support it.

Any other questions or comments from the Committee? Ms. Dixon.

Just a question I wanted to ask the witness. Was your point of, what was it, 45,000 reversals? Is that what you were saying? I just wanted to clarify your point.

So /detrans Reddit is an online forum where detransitioners go to discuss the harms that were done to them, including desisters. Detrans Reddit blocks people like me from posting because I'm not a Detransitioner. It grows by now 60 people a day. That means that more people are detransitioning. Like Kat, there's also someone in the audience. As the number of kids say that they are transidentified, it's growing at a 5000% increase. The number of detransitioners is correspondently growing like that.

Okay, so then how does that fact relate to the provisions of this proposed bill?

Because as a parent of a child who is gender questioning, these children need an off ramp. They go to school and they say that they're a different gender. They can't just then go back to school and say, actually, no, I'm actually the sex that I was born, they need an off ramp. And so when you change their name, and by the way, it's only one parent that is required to change the name.

And we have a person in the audience who fought to not have her child's name. But once that is done and then those records are sealed. It's harder for that child to reverse course. They have gone through this whole rigmarole, and they need to be able to identify and experiment with who they are without the legality of changing their name. It's very difficult to go backwards in time.

Okay, thank you. Mr. Ward, just to clarify, what is the process to change the name back and forth, whether you're Trans or not? Is that difficult to do?

Thank you, Ms. Dixon. So there is a petition that you can submit through the judicial process, which is then agreed to by a judge for a name or a gender change, and then that is filed with the county facilities.

May I?

Yes, please. Of course.

It's just a new petition, a new $435 filing fee. Unless you have a fee waiver, and then it's nothing.

Okay, so that changing back the legal process to change back the sexual gender is not an impediment.

It is the same process as the original process.

All right, thank you very much.

Thank you. Ms. Reyes, just a procedural question.

Is it automatically unsealed on the 18th birthday?

Yes, it is the intent that it will be sealed for somebody until they are 18 years old.

Thank you.

Any other questions or comments from the committee? Seeing none, we do have a motion and a second. Mr. Ward, you may close.

Thank you. I understand that there is a lot of important conversation around the subject, but as has been stated, this is a very narrow bill with a specific intent, with the express purpose of making sure that we are protecting a youth's privacy that would otherwise lead to harmful incidences in the school environment. I respectfully ask for your aye vote.

Thank you, Mr. Ward, for your work on the support bill. Thank you, Ms. Molik, for the work that you have done for many, many years. The motion is do pass. I ask Clerk to please call the roll.

[Roll Call]

Motion passes. Thank you.

Thank you.

I do not see Mr. Holden. Mr. Koreo is here. And while Mr. Koreo is approaching, do we have a motion on the consent agenda? We are going to remove item 12, AB 554. Gabriel. From the consent agenda at the request of the Vice Chair in the Republican caucus. So do we have a motion on the remainder of the consent agenda? Mr. Kalra has a motion.

Ms. Reyes has a second on the consent agenda consent agenda includes AB 20 Gibson, AB 243 Alan S., AB 273 Ramos, AB 300 Papan, AB 561 Chen, AB 615 Maienschein. We have a motion a second seeing no questions or comments from the Committee, ask the Clerk to please call the role.

[Roll Call]

Consent agenda is out. Mr. Carrillo, welcome presenting AB 542. You may begin.

Thank you. Good morning Mr. Chair and members. Thank you for allowing me to present AB 542 and before I begin, I would like to respectfully accept the technical committee amendments and thank the chair and consultants for their hard work. This bill seeks to remove the unnecessary burden on many small California storage owners by allowing them to advertise lean sales for bidders on a public, accessible website. California consumers use self storage for many reasons, but all rental agreements have one thing in common.

They are a month to month tenancies that need to be renewed. What this means is that tenants can simply vacate if they are unable or unwilling to pay for the lease space. A little bit of statistics, 97% to 99%, are successful for both parties. According to national data from the Self Storage Association, goods are stored, and rent is paid on time. Still, there are those rare situations where consumers fail to pay their rent.

The California Self-Service Storage Facility Act was passed in 1981, and it provides a nonjudicial foreclosure process for these cases. Under this law, storage operators must sell the person's property to satisfy the lien for past two deaths and to recover the space for paying tenants when occupants are delinquent, the self storage operator must send at least two notices to the occupant and the occupant's alternative contact alerting them that the sale is occurring.

Before a lien sale may be conducted, operators must publish an advertisement in a newspaper to make the public aware of this upcoming sale. The advertisement, importantly, is not intended to serve as a way of alerting the delinquent tenant, as it is the case with notices. This key part of the lien sale is what this bill seeks to address.

In 1981, when this law was originally enacted by the legislature, print newspapers were by far the most common way people got their news and information, so the legislature at that time saw fit to require notices in print newspapers. Now, from 1981 to 2020, newspaper consumption has dropped nearly 62%. According to a few research articles, studies show that 86% of people get their news and information from a digital device, and only 10% say they get news from print publications.

This is no longer the primary way people get their news. This advertisement is intended to attract buyers from the foreclosure auction and it is in the storage facility's best interest to reach the most amount of people. If the facility is in a rural community with little to no interest access, this bill will still allow them to advertise in the newspaper if that is what people read.

In this age of the Internet and other electronic means of communication, print newspaper publication is no longer the best method of using a public notice in every community. California life has changed in 1981. 32 other states offer alternative mechanisms for advertisement of lean sales or have no advertisement requirements whatsoever. AB 542 will put California in line with these other states.

AB 542 provides additional options to advertise lien sales while still retaining the ability to advertise in a newspaper. And I want to thank the committee again for working with me on this, and I'm committed to keep on working with opposition to reach compromise that works for them. Joining me to testify in support of answering questions is Steve Mirabito and Kim Siclari with the Self Storage Association.

Good evening, and thank you. Good morning, honorable chair and members of the committee. My name is Steve Mirabito from Walnut Creek, California. I am the owner of Storage Pro Management in Walnut Creek and started in the self-storage industry in 1986. We manage more than 100 independently owned self-storage facilities throughout California, and I'm here to support AB 542, a common sense reform that will save money and generally enhance the public notice accessibility for all Californians.

As an operator for each storage unit sold in a lien sale auction, we have an average of $500 in unpaid rent, auction fees, and newspaper advertising costs that we incur but do not collect upon. Here is an important fact. Over 90% of our storage customers find us through the Internet or via phone that is posted on the Internet. Only 8% walk in from off the street.

The use of the newspaper for lien sale auction advertisements is outdated and undermines the principles of inclusivity, equality and unfettered access to the public notices we are required to print. The high cost of newspaper advertising denies most Californians the ability to view our public notices. For example, the San Francisco Daily Journal charges $887 a year for their online, not print, but online subscription. Now I ask you, can the average Joe afford this luxury?

Here is a common-sense solution and a fair solution. Storage Pro, like other independent owners and operators in California, utilizes an online auction website for advertising and selling delinquent storage units. This is a free online auction platform that is accessible to all Californians. Last year, our auction website was viewed by 600,000 interested parties just for our lien sales alone. Let me repeat: this is a free website open to all Californians and a common sense solution.

In conclusion, AB 542 makes public notices inclusive, free and accessible to everyone. And I respectfully ask for your support. Thank you.

Thank you. Any other witnesses in support?

Yes. Hello.

Name an organization only, please. You're the second witness. Okay. I apologize. Sorry.

It's your show.

Yeah, go ahead, go ahead. I'm sorry.

Okay. Back on track. My name is Kim Siclari. I work. I'm legal counsel for Devonsell Storage. We are an owner-operator based out of Emeryville, California. And I'm here on behalf of both the California Association and the National Association. And just because of time constraints, I'll kind of cut to the chase here. I think that there's and deal with some of the opposition's concerns about our request in AB 542 to change the public advertisement requirements.

We are not in AB 542 in any way, shape, or form trying to change, modify, or amend our notice requirements. California Self-Service Storage Facility Act is very detailed and does a great job of providing operators with a blueprint of what we need to do when we enforce our lien rights. First, it comes with a rental agreement, which most operators run from anywhere between 3 and 10 pages. That's your first notice. We're required to send a second notice, a preliminary lien notice.

We're required to send another notice, a final lien notice. With that lien notice comes an opposition to lien opportunity for any occupant who feels that this is an unfair auction or an unfair enforcement. If they respond and return that our lien rights cease and we need to go to court to have them evicted. What AB 542 simply is doing is providing flexibility for the small businesses, which, Steve is one of those small businesses.

There's about 6000 in the State of California, and 82% of those are nonpublic companies. So those are small business owners. And we want to give them the flexibility to run the advertisement for the sale, which is separate than the notice. And it's very important to understand that distinction. One is a notice to tenants and one is an advertisement of the sale. We want to get that to the broadest audience that we possibly can so we can reclaim the space.

It's not a profit center for us. We're not in it to make money. As Steve has explained, it's very expensive to advertise, it's very expensive to lien, it's very expensive to send the notices. Again, it's not a profit center. We're just trying to give the flexibility back to the small business owner so they can make a determination on how to advertise the sale. Thank you for your time.

Thank you. Now further witnesses in support, name and organization only.

Yeah. Thank you Mr. Chair. Matt Robinson with Shaw Yoder, Antwih Schelzer & Lange on behalf of the California Moving and Storage Association. One of our comments is reflected in the analysis. We just ask that at the appropriate time parity is provided for warehouse owners that have to enforce these same lien sales. And we've been working with the author, staff and the sponsors and look forward to further conversations. Thank you.

Any other witnesses in support? Seeing none. Witnesses in opposition?

You can, you can come up here, actually. There's a seat there. Perfect.

Thank you. Good morning, Mr. Chair, Members of the Committee. My name is Brittany Barsadi. I'm the General counsel of the California News Publishers Association here in opposition to AB 542. I want to clarify a few things. We, when it comes to the notice that's being provided, it's to the public as a whole. And we feel it's important to maintain that access and transparency to the public, as opposed to having it be on individualized websites.

We don't have any issue with these advertisements being placed online in addition to in print. In fact, we maintain a website, capublicnotice.com, where all of our Members, by our bylaws, are required to upload the legal notices that they publish in print. And they also maintain those notes are required by our bylaws to publish those legal notices online on their papers as well. And that is in front of the paywall. So to say that there's a barrier because of subscriptions just isn't the case.

To be fair, the other issue is that a newspaper of General circulation has been certified by a court to reach a substantial number of subscribers in the given area that it's designed to reach. While I can appreciate that these particular websites that advertise have good viewing, it still hasn't been certified to reach the public in the area that is designed to be notified via this public notice structure.

And so we feel that this is transparency and that it's important to maintain that, and that anything publishing online, in addition to, is great. However, we feel it's necessary to maintain those print notices to reach into the communities that are still suffering from the digital divide. And with that, I respectfully urge your no vote.

Thank you. Any other witnesses in opposition? Seeing none. Questions or comments from the Committee? Mr. Kalra?

Thank you, Mr. Chair. And I want to thank the author for bringing this forward and for our conversation regarding this. I do think that, look, ultimately, there are different motivations. Clearly, newspapers want ad revenue. I'm sure the storage companies want to reduce their costs. But I think that we need to look at the public policy reasoning as to why these rules exist. I do think they need some updating.

I think that we are in a different world in terms of notice, but I do believe that there is a value, especially when it comes to regionalization and being able to target an audience that actually physically lives in an area. And I think in many cases, those weeklies and rural papers have an ability to do that. I don't think the public policy should strictly be based upon who reaches the most people. I think that there is a value and a reasoning to have a public notice.

Even if numbers may dictate that you go online and maybe more people looking at it, you might have people crisscrossing the state just going to lean sales as part of what they do for a living. And so, yes, they may be going online more, but in conversations with the author, he's committed to continuing to work to try to find thread that needle, and it is a challenging one, but I do hope that both sides can continue to work together.

I'll be voting for this today, but any future votes will be under consideration based upon the ability for some kind of compromise that still allows for the value that I believe does exist in publication, but with the understanding that we are living in a different digital world now, and that the balance may be a little bit more different than it may have been 30/40 years ago. Thank you.

Mr. Connolly.

Yeah, thank you, chair, and also appreciate the author coming forward and also being willing to talk further about this Bill. I fully understand the intent behind it, and I think my colleague spoke to that as well. But I do have concerns on a couple of counts. One is, from an equity standpoint, the fact that we do have a digital divide. Not everyone is online. In my area, we have two significant regional newspapers.

Folks rely on those for public notice still, and it's not lost on any of us as well, just that those papers are struggling right now. There is a financial component as well as a public policy, and transparency as well as equity component to this. So for those reasons, I appreciate that the conversation will be going forward. I'm not going to be able to support it at this time.

Ms. Pacheco.

So I had a question to the opposition, and I actually had a conversation with the author of this Bill last night. So, reading the Bill and with the conversations with the author, it appears that this Bill would just allow an alternative method. So there's still a requirement that it be published or noticed in the local newspaper, but in addition to that, it would also be online. So my understanding is it's both. Is that not your understanding?

That is not my understanding. So it provides an either or option that doesn't allow for it to be published in print and online. Currently, they're allowed to publish these notices online. It just doesn't fill the legal statutory requirements for the print public notice.

So then I'll hand it over to now the author, who can chime in on that.

The language says that they are allowed to continue to do the newspaper once instead of twice. We also reached out to the opposition and discussed six different ways to compromise to find a meeting point where we could agree on it. And we never heard back as of Friday at 02:00 p.m. When we asked them to get back to us. And we did have six ways of having that dialogue to continue.

And if you recall, at the beginning, I did say that we're willing to accept any compromises as stated by two Committee Members. We're open to that. But again, we just never heard back from the opposition as of Friday at 02:00 p.m.

So it would be required to be in print and online. The online would be just another alternative. But the print would still be required, correct?

Yeah. We're not removing the newspaper component, just providing the alternative.

The alternative to add in addition. So it would be print. And in addition to that, the person can also do it online. And I did read the Bill, and the only thing that's been stricken is just, it says, shall be published once in a newspaper instead of once a week for two weeks consecutively. And I've seen that language is stricken. But again, my understanding is print is still necessary to make sure that notice is provided to a substantial number of individuals.

But in addition to the print, it would be online. And that's the conversation I had with the author?

Yes.

Mr. Carrillo?

Yes, that's the conversation we had. And we even provided the opposition an option to continue to do the newspaper ad by removing the content of the ad, newspapers charged by the line. And typically the way that they advertise these sales is by also including the contents of the storage units. So we did reach out to them.

We asked them if we can only advertise it on the paper, but limiting the number of lines that are going to be published, that's one of our compromises, that we reach out to them. We never heard back from them.

There's no question. Hold on.

I hope there's continued to be dialogue from the opposition and with the author of the Bill. I think the author wants to compromise. So hopefully you can reach out to him and create that compromise. Because I agree with you, the more people that know about the bill notices important. And so I agree with you as to what you're saying, but it seems like the author is willing to work with you, so hopefully there can be dialogue.

I thank you very much for having a conversation with me last night.

Yeah, just briefly. There's not really a question, but I'll let you go briefly. Because I've been watching you fidget. So go ahead.

Yeah, apparently I get a look on my face when I'm ready to jump in. So first I want to apologize for not reaching out to your office directly Friday. My understanding was that we spoke with Committee staff about that and so I do look forward to having those conversations and continuing. I hope that we can find a compromise. Honestly, my understanding of the amendments was that it didn't include the imprint, it was just the or option. So I'd ask for clarification on that.

Well the clarification then for that would be the or because again, we try to reach out to your office whenever back from you. We actually gave you six other options and as stated by Members here, we are willing to continue that conversation.

Okay, well it sounds like we need to get on the same page, so I will make sure and follow up immediately following this hearing.

I appreciate you. Thank you. Well, I'm jumping right into the confusion. So is it or and or newspapers and or is it and it shouldn't not be or shouldn't it be? And because we're talking about both newspapers and I'm glad you made the point of the legal certification of this notice, which is not required in the Internet web version.

The language it says or it's not both, it's or. And if we look at how people are really reaching out, there's 90% of homes that have access and it continues to increase. There's more participation in these sales by digital advertisement because people are able to see it more, about 90% more. When we look at the revenue from advertisement in a newspaper, it's been dropping.

Sure.

As we all know, access to Internet continues to grow. Our goal is to get it out throughout the state, obviously, but advertised in a newspaper, data shows that their advertisement is actually increasing. Doing digital advertisement. As far as revenue to the newspapers since, again, since 1981 we've seen that change and it's a different world now. More and more people are getting their news or accessing this data digitally and it's just increasing. And that's what our goal is here in the state, to provide.

Well, I certainly get that we all get our news in different ways, different platforms, but I know from a local and public government, I mean, legal notices are still required in print media. I know at the local level, certainly every notice from a local jurisdiction is still found in print media as well as perhaps the Internet. So all I'm interested in the transparency and just having access to both forms.

And if you're willing to do that, I think that would be a good solution to this to make sure. And then I think my staff did talk with you, Mr. Carrillo, that the Internet, originally you proposed the Internet ad placement would be for one week, but it would be good for two weeks, I guess, just to give it broader circulation. So I'm not opposed to Internet. I'm just trying to create two viable platforms of information.

Digital access will be available for two weeks.

Okay. All right. Thank you. So do we all agree that it's and no. It's or. Okay. All right. It is a little confusing. I think there's a little bit of a trend that there still needs to be a little bit of work on this language. I think the Committee is sort of communicating. It seems as if you're willing to do that. So as far as that language issue, Ms. Dixon, I believe it still is or so that's where that's at. We still have more comments, though, Mr. Essayli, than Ms. Papan.

Thank you, Mr. Chair. My comments are a little different. First, I think this brings up a good point and maybe we just need to look at public notices as a whole. I do think they're a relic to the old days when everyone used to read the same paper. And maybe the intent is just to get it out to the public. So maybe there should be just a government website or something that does that.

I don't know. But my concern here is the notice being moved from two weeks to one week. And because the intent of this notice is to get the highest bid for the storage lockers, correct? Is that correct? Okay. And the excess money that equity would go to the storage owner, correct?

No.

Yeah, I'm asking.

Okay, thank you. Good question. No. The excess money reverts back to the customer.

That's why I said the owner.

The customer. And in the event the customer is not found or does not claim it, then it sheets to the county.

Okay. But my concern is by removing it from two weeks to one week, you're going to lower the potential bidders and money that that customer would have otherwise got. So my question is, would you consider keeping it at two weeks possibly?

If it's online, yes.

Yeah. No, I think your Bill is to make online an option. I do support you guys working together. Maybe you post it on their website for something really cheap. I don't know. I think there's a creative solution, but I think it's really important that we maximize the number of bids because I want to make sure that customer is not shortchanged I think you want to respond. That's the end of my comments.

Thank you. If I can respond quickly. We want to compromise, okay? And I think we all agree it's archaic. Let's upgrade it to today's standards. And I appreciate that. Currently, right now, it's costing me. It's a tax of $102,000 each year in legal advertising. But then on top of that, I have to go out and advertise to get customers in on these online websites that drive the customers to bid up the sales. They're much more effective.

Just for example, if you Google storage unit lean sales near me, you're going to find the onsite or online web auction services are numbers 1, 2 and 3. I don't see a legal advertisement or a newspaper anywhere on multiple pages. So we're bringing out, we're advertising more to get more people. As I said, it's cost me a $500 loss every unit.

I don't disagree and I support modernizing it. I just want to make sure there's enough, sufficient time to get the highest bidders because like I said, that money is not going to you, it's going to go back to that customer. So I just want to make sure someone's looking out for that person in this chain. And that's all my comments.

Thank you, Ms. Pappen.

So three things. Number one, conjunctions matter. So let's figure out where we are with Andanor. Number two, you kind of touched on this. I'm wondering what it costs to advertise with you online. My local newspaper that I love dearly has an online eEdition that mirrors exactly what's in print. But then you can also just go online and just see what articles are there. They advertise there. So there may be something that you folks can talk about. That part of that component.

Maybe you do one week in print, you do one week online with your newspaper, because people do go to the newspaper for these notices. And I know that your online readership with most of your publishers, I would venture to guess, has gone up and up and up. And so maybe you do that for a cheaper rate than our storage owner here would prefer. And that might be something that you all can work out later. And I just don't want it to affect storage wars. So anyway, might want to work out something like that.

Any other questions or comments? Yeah.

So it seems like the opposition wanted to say something earlier, and I'm curious to hear what you wanted to say. It felt like you wanted to say.

I mean I just look forward to the opportunity to continue working with the author on think. You know, our point is that it should be seen by the most amount of people possible, and we feel that that has been verified by a court to be in a newspaper of General circulation. But we do understand the importance of technology and reaching additional folks via the Internet, which is why we have taken steps on our own as an Association to make sure that that is happening as well. So thank you.

Thank you very much. And I just want to add, I hope you can work together. I prefer the and not the or because I believe it should get to the most amount of people. So hopefully there can be dialogue and compromise, and I'm looking forward to see what comes out at the end. So thank you very much.

Okay, seeing no further questions or comments from the Committee. Ms. Carrillo, I think you've seen a General consensus desire on the part of the Committee to continue to work together. Obviously, maybe work out. Some of this language needs to be worked out as well. But to make sure, I think the issues raised, which certainly I share the viewpoint of, make sure that access and availability is available to a broad audience. So appreciate your commitment to continue to work on this issue. And with that, you may close.

Well, as closing, I was going to say that I thank you for your time and consideration. And this, my belief, would modernize the self service business in California, putting in line with what other states have done and similar policy. And I respectfully ask for your aye vote. Seeing the conversation, I don't know what the next step here will be.

Do we have a motion? So we have a motion from Ms. Reyes, second from Mr. Rivas. The motion is do pass as amended. Ask Clerk to please call a roll.

[Roll Call]

Motion passes. Thank you, Mr. Holden. Welcome, Mr. Holden. You may proceed.

Thank you, Mr. Chair. I'd like to thank the Chair and committee for working with my staff on this bill. I'd like to start by saying that I'm proud of being a part of a legislative body that takes hazing seriously. As many of you know, California already codified laws in 2006 that make engaging in hazing unlawful. Despite this, we continue to see hazing incidents occur around educational institutions, oftentimes proving to be fatal.

In fact, as I sit here before this member committee, I can tell you that between 2006 and now, seven of you have had hazing incidents occur in your district, and five of those seven occurred at a high school. It is clear that our laws are overlooking a key player when outlining responsible parties. The educational system itself. How is it that these institutions can promote and profit from students' participation in certain extracurricular activities but not share the responsibility when tragedy occurs?

AB 299 addresses this by incentivizing educational institutions to be more proactive in addressing hazing incidents before they happen. This bill allows for civil action to be brought against an educational institution that knew or should have known of the dangerous hazing practices of an affiliated organization. Additionally, it allows consideration to be granted to the institution, provided they had specified hazing prevention procedures in place prior to the hazing incident.

It's time to hold all parties involved responsible for these tragedies in hope that we come together to prevent them in the future. Here with me to testify in support of Assembly Bill 299 are Julie and Gary...Diversely?

DeVercelly. Close

Thank you for being here.

Thank you, Chair and members, for the opportunity to testify in support of AB 299. I'm Gary DeVercelly. It's my wife, Julie. We're proud parents of three children. We serve on the board of directors at the Cleary Center. We've created a short documentary, an educational documentary called We Don't Haze, and we're also proponents of the Reach Act, the national Bill, the Reach Act. This is our oldest son, Gary Jr. He was born and raised in Long Beach, California.

Whereas Gary would say, he was a product of the 562. So Gary was a left handed pitcher and a first baseman, and he was a young man who was driven to succeed. His goal was to be a GM of a major league baseball team. And to achieve that goal, he went across the country to Ryder University because they had an accelerated program for him to get an MBA in five years.

He partnered with other like minded students there at Ryder, and they called it team MBA. Unfortunately, Gary's life was cut short. On March 29, 2007, around 02:00 a.m. My family was awakened by pounding on our front door. We found eight to 10 Long Beach policemen out front. They told us our son had been in an accident, and they gave us a phone number to call of New Jersey hospital. When we called, the doctor told us that we had to hurry.

He was going to try to get Gary to live through the night so we could see him. That was the beginning of our worst nightmare. We packed our bags, and with our two younger children in tow, we flew to New Jersey to be with them. It was the longest plane ride of our life. On March 30, 2007, at the age of 18, my son, Gary Lewis DeVercelly Jr., died as a result of a hazing ritual.

No parent should ever have to go through what we have as parents. When something bad happens, you question yourself: how did I fail? What did I do wrong? What did I miss? And this was obviously no different. You see, Gary Jr. had asked us for permission to join the fraternity. He was 18. He didn't need to. But that's a relationship we had. He still came to mom and dad. Hazing was a concern of ours and of his.

When the possibility of being hazed was brought up, Gary was confident that he wouldn't be hazed, that it wasn't a problem at Ryder. The university had participated in Hazing Awareness week, and it was a felony in New Jersey to haze, just like it is here in California. We did research, really hoping to find a reason to say no. But we couldn't find anything.

After we got home from Ryder, we took an even deeper dive into researching hazing issues to see what we had missed. We found we hadn't missed anything. We, as a society, are failing our most precious resources, our sons and daughters. As we went through Gary's things, we found his high school english journal. In one of his entries, he wrote about hazing. He wrote, if you're a high school athlete, I can guarantee you if you haven't been hazed, you've seen it. Our broken hearts ached even more.

Gary's hazing death made national news. We were fortunate, which seems odd to say, because he died, that Detective Leck, who caught the case, recognized the crime seen as a hazing, and he worked the case from start to finish as one. Five people were indicted in the felony hazing death of our son. It was the first time university officials were indicted in the hazing death of a student.

Though those charges were dropped, precedent was set that University officials can be held liable in the hazing death of their student. The other three indicted were Phi Kappa's president, the pledgemaster, and the house manager, who happened to be a paid employee of the university who knew of the hazing rituals that went on. This put Ryder in a position of liability and allowed us to seek civil action against them.

As a result, we made over 20 precedent setting, non-monetary demands of Ryder, things that should have been in place prior to our son ever attending school. Last month, we went back to New Jersey, and we met with now Captain Leck. He shared with us that prior to Gary's death, the police were at Ryder several times a day. He said that since the non-monetary demands that we demanded of Ryder were made, they rarely, if ever, go back to the school.

It'll be 16 years on March 30. 16 years since our son was killed unnecessarily. 16 years since, Ryder has not made headlines for a hazing-related tragedy or death. We don't know of any other institution that can say that. Educational institutions have a duty of care to protect their students, our sons and daughters, against hazing. It shouldn't take a tragedy or a death to get them to do the right thing.

The passage of AB 299 will be a huge step forward in our fight to end hazing. We strongly believe that if a bill like AB 299 was in effect in New Jersey, our son, Gary Jr., would be alive today. We respectfully ask that you join this and give an aye vote for this bill. Thank you.

Thank you. And thank you for your testimony on behalf of the entire committee. We are all so sorry for your loss. Any further testimony and support? Seeing none, testimony in opposition.

Good afternoon. Tyler Aguilar. I'm at the University of California. The University does not have an opposed position on this Bill. And, in fact, we agree with the intent of the Bill, which is to prevent and hopefully eradicate hazing altogether. And I want to say personally, we're sorry for your loss as well. However, we have expressed some concerns to the author's office. We're working with their staff, and we look forward to working with in the future as the bill moves to its next Committee. Thank you.

Good morning. Alex Graves, the Association of Independent California Colleges and Universities, similar to my colleague from the UC, we don't have an official opposed position on this bill, but have also expressed some concerns to the author's office. I would also like to see if we can work towards something that we feel is reasonable and works. Thank you.

Thank you. Any other testimony in opposition positions? Seeing none. We have a motion from Ms. Reyes, second from Mr. Rivas. Any questions or comments from the Committee? Mr. Essayli.

Good morning. First of all, extremely sorry for your loss. I mean, I can't even begin to imagine what that's like, and I think we all sympathize with that. The concern I have about the language of the bill is one, is that, first of all, schools can currently be held liable under a negligence standard. Is that your understanding?

Okay. So if I understand this correctly, this is going to heighten the standards from a negligence standard to now the schools have an affirmative duty to prevent, to identify and prevent harm that might result in the hazing. And so I wonder about how practical that is. It might set up a kind of a strict liability standard. So I have some concerns in that regard. And what I'm worried is going to happen is that schools are just going to say, you know what?

It is.

It's just better not to have any sororities or fraternities or school groups, and I think those are important social groups at schools. So I'm hoping maybe we could look at that closer and figure it out. I just don't want to see student groups go away because the universities say it's going to be too much of a liability for us to have them. I just wanted to express those concerns directly. If you want to respond, please, yeah.

All I can say is that. No, I appreciate that. But at the same time, I think what this bill is trying to suggest is that there's an affirmative responsibility and duty for the educational institution to take every step possible, especially when there is an understanding that there is a potential for harm. And I think there are ways to do that, that can not only protect the students, but preserve these affiliate organizations.

They're part of the college culture, but it doesn't mean that they should exist and still put young people in harm's way, and that the University should have knowledge and understanding to the extent that they are taking affirmative actions to ensure that there's greater awareness and understanding and take a little bit more responsibility than I think that there should be, simply in the event that something happens and they have not done that.

And you're committed to working with the universities to address those concerns.

We're always open to having dialogue and understanding how we can make the Bill better.

Thank you.

So, actually, I had the same exact concerns as my colleague did. I'm concerned about it being like a strict liability kind of situation. So I'm also hoping that you'll speak with the UCs and to the parents. My heart goes out to you. I can't even imagine losing a child, especially to such a horrific crime. So my heart really goes out to you. And we do need to do a better job at preventing hazing.

But I also would like to see conversations with the UCS and higher education to make sure that this bill is crafted so that way it doesn't become a strict liability kind of situation. So thank you so much for bringing this bill forward, and I hope you work with the UCs to perfect this bill even more. Thank you.

Thank you, chair. And thank you. My heart goes out to you, I guess, if your son passed away in 2007.

Yes.

And so here we are. Have you been fighting this battle at some form of various legislative challenges? Could you just explain to me, Mr. Holden, the current law prohibits hazing, and it requires, according to my notes, any participant, Member, agent, trustee, manager, officers. So why is this necessary or what step further are we trying to get to?

We're trying to get to a place where the institution of higher learning takes some responsibility in the fact that there is an organization, affiliate organization, that they have sanctioned on their part of the University operation that has put a young person in a position where they are subjected to harm and in some instances, hazing, which leads to death, and there needs to be greater accountability in that situation. And this bill seeks to take this to that level of greater responsibility and accountability.

If I'm a homeowner and I have someone on my property, and there's a dangerous element of where they can hurt themselves while on my property, then I'm probably going to be held liable for that. So if you're a University and you have a young person who's part of the Greek system, and that system is known to employ hazing tactics.

Common knowledge happened before, and maybe no one was seriously injured, but in the case of San Diego State, there was a situation where a young person was injured that he was over intoxicated. He went back to his dorm. He fell out of his dorm and fell to the ground and basically was killed in that instant.

And so I think that what this bill is trying to do is to try to say to the University, you can't stick your head in the sand when you already know that these are a series of events that have taken place over an extended period of time, and you choose not to intervene and do anything to try to correct the situation and put greater safeguards in place. To the extent that they do not do that, then there should be conversation about what that should mean.

Well, that's where I guess my question would be, what is that? It's behavior that is contributing to the hazing activity. So there's education. How do you legislate behavior? I don't know. Is this part of how you'll work this out with the colleges and universities, how to define that? I agree with you. Everything you say, I agree with you. I'm just getting to the how.

Okay. Not only are we parents who had a son die tragically, unnecessarily, we have been on a mission since he was killed to create change. I'm an educator as well, and our duty as parents and as people of the community is to get our children healthy and through college so they can pursue their dreams. We're on the board of the Cleary center. The cleary act is from that. We have partnered with them and created an award winning documentary. We don't haze.

We have had our documentary and the companion material validated to be effective in both hazing education, prevention awareness, and bystander intervention. We also have a federal build a REACH act that we've been pushing through. It's getting ready to be reintroduced under this next Congress that also will require institutions to start documenting hazing. Because hazing is not considered illegal at all states. And hazing, it has different definitions. We have to all start looking at what we can do to make it better.

Our son obviously was hazed in high school. We have lots of headlines right now in our state of high school hazings that are happening, and there are no consequences to the institutions.

We know a lot of families, a lot of families in our shoes that have had sons and daughters killed from hazing in the State of California, where the universities have not been held liable because to prove a duty of care, especially when Greek life is a part of it, is difficult because they are governed differently. Institutions have more control over other organizations at their school than they do Greek life. But it happens across the board. This bill is not to say we don't want student organizations.

We want healthy, positive experiences. And we have proven that and shown that hazing is 100% unnecessary. It's 100% preventable, and there are positive, healthy alternatives to do what hazing attempts to do. And that's create team unity and team bonding, and it can be done. We need all stakeholders together on this.

And this bill will help move that instead of turning a blind eye to the hazings, that people go, zero, it must be that time of year, they're wearing their clothes backwards, or, why are they standing over there in the corner next to that person? Why are they carrying these books? It'll start addressing that so we can stop it before headlines are made and before tragedies happen, but also make a healthier, positive organization for students to be a part of.

Well, certainly there's not a word that you just spoke that I would disagree with. But just as my colleagues have said, I hope this doesn't lead to the colleges and universities taking a no risk approach and saying, well, we'll just ban all social organizations because that protects them. I hope that's not the outcome.

I think that's a fair concern, but I really don't see it that way in Gary's case. I'm sorry. I always project when I talk. I don't think I need a mic. But in Gary's case, everybody on that campus knew what was going on. The local police knew, the campus police knew. Admin knew. That's why they were indicted. Everyone knew what big little night was on the campus, and Ryder was a party school.

And we've all heard we have lots of party schools here in California, and it goes on, and big little night is the deadliest night, and everybody knew about it, and they turned a blind eye to it, and it went on year after year after year, and they're playing Russian roulette with our sons and daughters. It was only a matter of time. If it wasn't Gary, it would have been somebody else, because during big little night, they just haze them so horribly and they risk their lives.

They come so close every time people are taken to the hospital on big little night constantly for alcohol poisoning. Anyway, my point is, everyone knew about it, but they turned a blind eye to it, because we're letting the kids be kids. If a law like AB 299 had been present, then at least the administrators would have had a conversation. It's like, guys, we know what's going on over there. We got to do something about it before a tragedy strikes.

And there again, Ryder was not an outlier. I would say the majority of the fraternal organizations in our country right now, it's not about doing good works and serving the public. It's about booze and broads and drugs. And these kids, when they're bringing them in, they're hazing them more horribly every year. When Gary died, an average of one person per year was dying. Just a couple of years ago, it was five or six. It's accelerating. The problem is getting worse.

The kids are playing a more dangerous game. But the administrators, they know what's going on. And good gravy if they don't know what's going on, they're incompetent. I mean, it's their job to know what's going. I'm sorry.

Have you had your question answered? No, it's okay. Ms. Reyes.

Thank you, Mr. Chair. The current law already allows a victim, or the family of a victim, to file civil action against the person or the organization that requires hazing as a part of membership. And I think what is clear, though, is that existing law does not, however, explicitly impose civil liability on the educational institution, on the universities that grant recognition to that organization.

And I think it's clear that it's when the organization, when the institution, the University, knew or should have known, and it goes to everything that you're talking about. So this takes it a step further, so that, as Mr. Holden, as you've indicated, it puts a proactive position. They have to now say, okay, we could be liable. And it takes it to that level. And I appreciate it because of that. Thank you.

So, first of all, let's just all concur. Hazing is inane. I mean, it's unreal. I'm sure we'll have a very clear definition of what you define as hazing, because there might be times when a student does something voluntarily which has nothing to do with the organization they might be involved with.

So I just want to make sure we've got a tight definition that hazing is something that is being required, or I guess that's what some of our rays use, the word required of the students. That's number one. Number two, I'm okay with this. Is your typical negligence standard, right? You've got new or should have known. And when it should have known, it's would a reasonable person fall into that category of should they have known?

So maybe for greater clarity, you could put based on the reasonable person standard or something like that, which you find in many laws across the board. So that would be the only thing I would do to maybe tighten it up a little bit. And I'm assuming we have, because there's a difference between someone making bad judgment on their own and someone having something bad happen to them in connection with the organization that they're participating in.

So I just want to make sure you got that part wrapped up. And my condolences to you. What a nightmare. So thank you for being here and testifying in a way that you were pretty composed. So congratulations.

Thank you. Any other questions or comments from the committee? Seeing none. Thank you again for your testimony. All of us know can feel how difficult this was for you. We're appreciative of your testimony here today. As a fellow former left handed pitcher, I am particularly supportive of this.

Padres aren't calling yet, but I'm optimistic. So certainly the beautiful photo of your son means a lot to all of us. So thank you for bringing that and sharing that with all of us. With that, we do have a motion and a second, the motion is do pass to higher education. Mr. Holden, would you like to close?

Well, first of all, I'd like to thank the Committee for its consideration of this bill. And as was brought out, a couple of issues of concern that I think can or will be or have been clarified to some extent. We will certainly entertain additional conversations to see if there's additional ways that we can address those who are not opposed to the bill but have concerns to alleviate those concerns. I want to also thank you for being here in this legislative process.

Sometimes we pass a lot of bills, and there's no way to really sometimes put a face on what we are trying to accomplish. We may have an understanding of what the impact is, but it takes courage to be here. And I want to thank you for sharing your story and your son's life. And it is also clear that his life still lives in you.

And you have purpose and passion for bringing that to our awareness so that we can put in place, because that is what we are in a position to do. Laws that strengthen and protect and do a better job of making sure young people, when they're in these environments, have safeguards, and those who knew or should have known, did what they needed to do to make sure it prevented incidents like this happening. So with that, I respectfully ask for your aye vote.

Thank you. We have a motion a second. Ask Clerk to please call the roll.

[Roll Call]

Great.

Good morning, Mr. Chair and Members. I'm here to present AB 473, which will update the rules governing the relationship between auto dealer franchisees and their manufacturing franchisors under California's new motor vehicle franchise law. First, I want to thank you, Mr. Chair, and your Committee staff to help with the bill. These periodic updates to the motor vehicles franchise law can be very complex, and I will be happy to accept the Committee's suggested amendment clarifying when manufacturers must reimburse auto dealers for requiring or incentivizing digital services.

Welcome.

But to break this bill down in the simplest terms, AB 473 is about fairness. Specifically, global automakers, given their size, are in a much stronger position to negotiate terms of their agreements with local dealerships. So the franchise laws exist to create a level playing field between the two parties. And like any other complex law governing a dynamic industry, as the Committee's analysis points out, periodic updates are needed to address changing behaviors and conditions. I will focus my remarks on the provisions under this Committee's jurisdiction.

Under current law, manufacturers have the ability to take disputes specifically about California law and against a California dealer to courts outside the state. I feel it is patently unfair for a manufacturer to seek a forum where there may exist a lack of familiarity with or respect for California law. We therefore seek to restrict those proceedings if they are targeted at a dispute about California law with the California franchisee to the courts within our state.

Under AB 473, if a manufacturer requires or otherwise compels a dealer to use digital services that are ultimately determined not compliant with California law, we feel it is appropriate for the manufacturer to reimburse the dealer for any resulting losses. There are other provisions in this bill within this Committee's jurisdiction, such as limiting the use of first right of refusals and changing burdens of proof and fee provisions before the new motor vehicle board.

In the interest of time, I will not discuss those here as they are laid out quite clearly in the Committee analysis. But I am of course happy to answer any questions respect to those issues. Thank you very much, Mr. Chairman. With me today to testify in support of AB 473 is Kenton Stanhope of the new Car Dealers Association, Matt Broad, representing the California Conference of Machinists and California Teamsters in support, and Anthony Bento of CNCDA, also available to answer technical and legal questions. Thank you.

And just to clarify, only two will be testifying?

Correct.

Please proceed.

Anthony Bento is just here for technical questions.

Excellent.

From the Committee Members. Mr. Chair, Members, Kenton Stanhope on behalf of the New Car Dealers Association, sponsor of AB 473. First, I'd like to thank the author for carrying this important legislation and thank the Chairman, Members of the Committee, and staff for their work on the bill. CNCDA represents 1400 franchise, new car, and truck dealer members throughout California. These members employ more than 136,000 employees are Californians and provide over 12 billion in taxes that are used to support the communities you serve and they belong to.

CNCDA is in strong support of AB 473. The distribution, sale, and service of new motor vehicles in the state of California vitally affect the General economy and the public welfare. The new motor vehicle franchise system, which operates within strictly defined and highly regulated franchise laws, assures the consuming public of a well organized distribution system for the availability and sale of new motor vehicles throughout the state.

Without a new motor vehicle franchise law, there would be significant imbalance in bargaining power between large multinational vehicle manufacturers and locally independently owned franchise dealerships. This is why the Legislature in the past has updated and passed in a bipartisan fashion, franchise laws to address the latest manufacturer workarounds that negatively impact dealers, their employees, and the public. AB 473 is no different. The primary provisions of this bill include preventing manufacturers from shortchanging their dealers and technicians when they pay for warranty and recall work.

Simply put, it requires large multinational manufacturers to pay the same amount of labor time a normal California consumer does for the same exact job. The bill further protects the underlying intent of the vehicle franchise system, ensuring franchisors make cars and dealers sell them. It does this by precluding manufacturers from launching a new brand name of vehicles to compete directly with their franchise dealer network.

It also protects consumers by restricting the ability of manufacturers to offer postsell subscriptions that enable features that are physically built into the vehicle and finally, further protects dealers from manufacturer coercion, from coercing their franchisees into preferred pricing and performance standards through the use of unfair incentives.

AB 473 has been carefully crafted to assist dealers, technicians, and consumers in their communities, enabling them to continue to be a robust engine of the economic activity that employs over 136,000 Californians and generates over $12 billion in sales taxes statewide. CNCDA respectfully requests your aye vote on 473. Thank you.

Great. Mr. Chair, Members, pull this closer to me. Matt Broad, on behalf of the Teamsters and California Conference of Machinists, in strong support of AB 473. Both unions represent workers in auto body shops and dealerships across the state. Our members are amongst the most skilled in the industry and perform most of the recall and warranty work on vehicles in California.

Unfortunately, a significant loophole exists that is being exploited by large out of state manufacturers that puts our members and technicians across California at an economic disadvantage when performing crucial warranty and recall work. This loophole allows manufacturers to lower the time allowance at any time for warranty and recall work, thus lowering the amount of money they are paying our technicians. AB 473, amongst other things, would ensure that our techs are not shortchanged for performing necessary warranty and recall work by requiring manufacturers to pay for the same labor time as consumers do for this work.

It's fair and it brings stability to the workplace. This bill strikes a fair balance to the time warranty reimbursement issue and ensures that large out of state manufacturers are not shortchanging our members for their own gain. For these reasons, the California Conference and Machinists and the Teamsters are strongly encourage your aye vote. Thank you.

Thank you. Any further witnesses in support?

Thank you, Mr. Chair, Members. Cody Boyles on behalf of Carmax, in support. Thank you.

James Lombardo on behalf of the California Motorcycle Dealers Association, in support. Thank you.

Thank you. Seeing no further witnesses in support. Witnesses in opposition.

There's a chair there for you. Yep. You can sit there.

Can you sit there?

Here. Can you pull the chair around?

Sure. Okay. There you go. Good morning, Mr. Chair and Members of the Committee. I'm glad it takes four of them to take me on here. John Moffatt.

We'll see how you do.

John Moffatt, on behalf of the Alliance for Automotive Innovation. We're the trade group for all the major auto manufacturers selling 98 percent of the vehicles in the United States. As you saw from our letter, we are opposed to this bill. To be honest, I'm sorry that we're here today. We believe that many of these issues could be resolved and don't need legislation, but here we are. To the extent the bill is even necessary, we think as it's currently drafted, it's overly broad.

It's anti-zero emission vehicle, it's bad for consumers, it does not contemplate the automobile of the future. There are other witnesses who are going to hit on some of the technical aspects of the bill, but there's 13 major issues in the bill. I'd like to just focus on one: section two, the provisions of the bill dealing with the burden of proof flip on the warranty repair for the purposes of this Committee today. We are opposed to the language as drafted.

The approach that is in the bill right now was adopted in Wisconsin about ten years ago. Ever since that time, it has been tried in two dozen states throughout the United States and has been rejected in every state in the country. Republican--and it's a bipartisan approach--Republican controlled states like Idaho and North Dakota rejected that approach this year. Democratically controlled legislatures like Colorado and Washington just rejected these this year.

This specific provision was actually vetoed by Governor Brown in 2018 because of the consumer protection issues it raises. Why does it raise those issues? Because third party time guides are fiction. They are not real. If they were sold at Barnes and Noble, they'd be in the nonfiction section or they'd be in the fiction section of the store. You know, we have a sworn affidavit from the CEO from a particular time guide manufacturer who said this shouldn't be used for warranty repair. This isn't based on actual time.

For those reasons, we believe--and we're asking the Committee today--remove section two of the bill, and we'll continue working on the other 12 issues that still need a lot of work.

Thank you. Any further witnesses in opposition?

Hi, Mr. Chair and Members. Jaime Huff, on behalf of the Civil Justice Association of California, and I have to rise in respectful opposition to the bill for a few reasons. Our specific concerns relate to the unfair burden of proof shifting between the new car dealers and manufacturers, as well as the one-sided attorney fees and cost recovery for California dealers.

We believe the bill institutes overbroad indemnification requirements for manufacturers and creates unusual and unnecessary restrictions on change of any requests. As to the burden of proof shifting, forcing a respondent to have to prove that their policy doesn't violate a law before the claimant has to back up what they're alleging is contrary to normal burdens, and we would ask that that be struck from the bill.

As to one-sided attorneys fees and court costs, recovering a manufacturer--having a manufacturer pay for all of a dealer's court costs and attorneys fees and not extending the same courtesy if a manufacturer is successful in their defense is unfair, and we think the policy should be that whoever prevails should get the attorneys fees and court costs. As to a manufacturer indemnifying dealers against a liability for consequences arising out of a recommendation of a digital service, we think a mere recommendation shouldn't trigger indemnification, and it's further exacerbated in the bill because digital service is not actually defined.

So we believe that's creating a pretty vague assumption of risk for the manufacturers. And then lastly, the change of venue request, I mean, that's a very normal procedure. The judges get to make the decision based on the facts of the case and we think that that's where it should be left, not at a dealer's consent. So for the foregoing reasons, we respectfully oppose. Thank you.

Thank you. Further witnesses in opposition, name and organization only, please.

Good morning, Chair. Good morning, Members. Scout Motors. My name is Tal Eslick, and we're a small EV company that has one small issue with the bill, and we look forward to working with the author and have time scheduled with our office. Thank you.

Good morning, Mr. Chair and Members. Bret Gladfelty with Apex Group, on behalf of Nissan in strong opposition. Thank you.

Mr. Chairman and Members, Theo Pahos, representing the Ford Motor Company. We're also opposed to the warranty provisions of the bill. Thank you.

Mr. Chairman and Members, Eloy Garcia for Toyota, also in opposition.

Chair and Members, Dean Talley with the California Manufacturers and Technology Association, respectfully opposed.

Cliff Costa, on behalf of General Motors in opposition. Thank you.

Good morning. Amy Lilly with Mercedes-Benz, also in opposition.

Mr. Chairman and Members, Cory Salzillo, on behalf of Stellantis, a member of the Alliance for Automotive Innovation, in opposition. Thank you.

Thank you. Mr. Moffatt, you don't appear so outnumbered anymore. Seeing any questions--or excuse me--do we have a motion? Okay, motion from Mr. Kalra. Are you seconding it, Mr. Essayli? No? Okay. Second from--I was trying there--second from Ms. Reyes. Any questions or comments from the Committee? Mr. Essayli.

Thank you. Appreciate it. Thank you all for being here, and look, we all love our car dealers. They're members of our community and I take these issues seriously, but when you're coming to the Legislature asking for us to do so much, which I think this bill is really asking for a lot, I think we need to be persuaded or convinced there's a true impasse.

And ideally, we'd like you guys to work together rather than come with a sledgehammer, which is how I'm viewing this bill. And I'm also concerned with some of the language. I mean, it's accusatory. On the warranty reimbursement issue, you said they're shortchanging dealers. So I just want to be clear. Your issue is not with the rate of compensation. The amount they pay for their time is not the issue. It's the amount of time that's allocated for the work. Is that correct?

Correct.

Okay. Can you just give us a quick example of what they say a certain project should take? Like oil change is 20 minutes, and then what your industry is saying it should really take. I just want to understand the disparity.

We're paying on average, like 60 cents on the dollar compared to what we're getting paid for consumer work, where the consumer pays.

But we're talking about time, so I just--

Yeah, but if you lower the time, you're getting paid less.

But can you tell me, just give me an example of where they're giving you unreasonable times to do the work that you're--

We have numerous examples. Call any, any--check in with any of your dealers. We've heard from hundreds of our members. There are even examples when a recall is coming down from a manufacturer, that is when the time is then bumped down, and then they start paying less. The time allowances go from two hours to one hour, so they're paying for half the amount of time because they know thousands of recall jobs are going to be done at specific dealerships under those brand names.

And let me ask the manufacturer, how do you come up with the times that you then impose on the dealers?

So we use actual time and then add in additional. Individual companies will go through, have technicians actually make the repair on a vehicle. In many instances, they will use hand tools, not the power tools that are available at a dealership. They'll use hand tools, they'll take breaks, and then in the instance of one particular manufacturer, they add 20 minutes, and that is the time that goes into the time guide.

Are these mechanics you hire and then--I'm just trying to understand--

No, these are mechanics that are certified mechanics by the automaker who are also the same folks who certify mechanics at the dealership.

So they're all certified in the same way.

Okay.

Okay. I don't know where I stand in this. I just encourage highly both of you to continue this dialogue and maybe tone down the rhetoric.

Well, and if I could, when this issue came up in 2018 and the bill was vetoed by Governor Brown, we entered into negotiations with the dealers again and came to a compromise that is existing law and actually has been adopted in about a half a dozen states throughout the country. In those instances where a repair takes more time than the time guide allows, the dealer through the computer system--this isn't an appeal before the New Motor Vehicle Board--through the computer system, they enter that actual time.

That process is not being utilized in California based on the conversations we've had with the sponsors of the bill. One particular company, they're seeing about two percent challenges to the time guide rates. When those challenges come in, 90 percent of them for the higher rate are being approved.

Okay. Thank you for your response. Thank you, Mr. Chair.

Ms. Dixon.

So in 2018, Governor Brown vetoed this. Is this the same bill? Obviously, I wasn't here then. Is this the same bill that was--

The language is a little different. The concept is the same: reliance on third party time guides.

Well, maybe I should come over here.

Yeah. So Anthony Bento from the California New Car Dealers. I believe he's referring to AB 2107 from 2018, which was vetoed by Governor Brown. That contained a provision on warranty time that, frankly, I think was quite different than this provision. It contained a complex formula to recalculate a dealer's time allowances based upon a perceived shortfall.

This simply says that your customer--and that was borrowed from the State of Wisconsin, as the gentleman has stated--this bill instead borrows from the State of Montana current law there, which says that the time allowances that dealers should have for warranty work should be the same time allowances that dealers have for customer pay work. Much simpler, very different provision than what was included.

Okay, so that was not in the 2018 bill, and now it's been improved ostensibly?

Yes.

Okay. Could you talk about the digital services? I've heard some conversation about this. Is it in the bill, is it not, and what does it mean?

There's a provision in the bill that would require the manufacturers to reimburse the dealers for costs that they incur as a result of harm or exposure that the dealer has as a result of the digital service the manufacturer requires or recommends being noncompliant with California law. And what we're seeing in many circumstances is that there's a 50 state kind of solution that is imposed on a dealer.

For example, there might be provisions related to the way that a vendor might generate a repair order that uses acronyms or terminology that our state Bureau of Automotive Repair says is inappropriate for California consumers. This would say that if the manufacturer is imposing a requirement, then the manufacturer would need to defend the dealer in the event that a digital service does not comply with California law.

Oh, okay. And then on the subscription issue, it's interesting. Fees and add-ons are--at the federal level, we're seeing a lot of discussion on hotel bills and things like this--is this the same type of thing where, I know on my car I have a subscription issue for emergency, you push a button and AAA comes or something, so is this the same type of thing that we're going to begin to see, that a lot of these add-on services are going to be subscription-based?

We've already seen some of these subscription-based add-ons roll out in the UK, specifically in Europe. We've seen manufacturers do, for an example, airbags--I mean, I'm sorry, I'm sorry--heated seats, where the consumer--yeah, apologize for that.

Those are really different, by the way.

We caught your attention. Okay.

So the consumer rolls off the lot thinking that--unbeknownst to the consumer and the dealer--rolls off the lot thinking that they're going to have heated seats in their car, get pinged by the manufacturer, 'hey, do you want to turn on your heated seats?' It's going to cost you--

So this bill would prohibit that?

Prohibit that. We want to be very clear that we're trying to just get at stuff that's hardwired and part of the car. We don't want to touch the SiriusXMs, the emergency services, obviously not airbags.

Yeah. If there's a cost that--we believe that if there's an ongoing cost that the manufacturer has to maintain a service, for example, like an OnStar system or emergency services where someone has to be on the phone on the other end, it makes sense for them to charge a subscription fee to maintain that service.

But if we're simply talking about them activating or deactivating hardwire features in the vehicle in exchange for reoccurring payments, like the heated seat example or like CarPlay was another example--BMW had a thing where they would shut off CarPlay unless you maintained a subscription to maintain it on your vehicle--we think that those types of subscription services are inappropriate.

I agree with that. Now, just one final question: on the EV charging stations, what's contained in the bill and what are you trying to deal with?

So there's two provisions in the bill. One relates to manufacturer requirements vis-á-vis dealers. So the manufacturers, most notably Ford, has recently come out with a program where they're requiring dealers to install public DC fast chargers at their stores, and this is kind of a uniform requirement across the Board. These chargers can cost well over one million dollars to install. They're quite expensive and can require integration, complex integration with the grid.

And in automalls in particular, multiple dealerships that are complying with these requirements are placing unique stresses on the grid because these requirements don't allow a dealer, for example, to pool with another dealership to say, 'hey, let's just create a fast charger station that would satisfy all 15 of these stores in the automall so we can charge all of our vehicles.' Instead, these requirements are singular that they're imposing on each individual franchisee.

And strict adherence to these program requirements put, in our view, an unreasonable burden on the electrical grid, don't really serve anyone, frankly. And this would require a reasonableness standard to apply to those types of requirements that the manufacturers have on DC fast chargers, and if the manufacturers want the dealers to install public facing DC fast chargers at their stores, this would require a cost sharing of 50 percent.

I see. Okay. All right. Thank you very much. I appreciate it.

Thank you. Any other--Ms. Papan.

Thank you. I just want to see people get paid as close as they can to the work they're doing. He says your stuff is fiction on the third party. You say what, that it's not fiction, it's as close as actual? Because isn't it right now that you have a way of appealing if you go over--I mean, well, you're not going to appeal if you go under the time, right, because you have very qualified--but if you go over the time, you can get that money.

So my goal is to get you to get as close as you can to the work you're doing and paid for that work. So if there's an opportunity to get the amount that you go over, why don't you like that part of it? So that's where I'm kind of--if you could work on this together, that would be fabulous.

So our concern with that provision that's referenced in the bill is that if the entire time guide is problematic--it pays 60 cents on the dollar--the provision in the bill allows unilateral ability of a dealer to file singular challenges. It doesn't allow a dealer to say, 'this entire time guide is insufficient.'

And the way that technicians get compensated in the State of California and the way that hours are structured is that experienced technicians receive more compensation because they can flag more hours in a shorter period of time. So this idea--

That's the upside. That's the upside, right?

That's an upside, and frankly, that's--

And you don't have to give money back when you get that upside?

Well, no, no, no. So the upside isn't that--if I'm an experienced technician and I flag three hours and it only takes me two hours to do it, I get to earn three hours worth of compensation for it. It encourages productivity, it encourages efficiency, and it rewards people based on their experience.

Certainly. My concern really--because I love my local dealers, too, and I don't want them to come up short--so when you come up short, is there not a process to make that up? And may I suggest this, because you make a compelling argument that if it happens over and over again, it becomes very cumbersome for you to keep applying and applying.

So is it that we could provide something in the bill that would say, if it is that this happens on this carburetor adjustment that always has to happen under warranty, and it really does take more time, then you come closer to it, rather than this third party that he says you would find under fiction in Barnes and Noble. I mean, I want to get as close--I practice law.

I know what it's like when you got to eat your hours or you think it took too long or under--whatever. I want to see you get as close to the work as possible and paid for that. So is there a way that we can bring everybody together?

I think we've been working with the Alliance. We've met with them on all these issues and I'm sure the author is willing to work with them and we'll continue to do that.

And we submitted comments, well, I think in advance of the introduction of the bill as well, that we submitted--I'm sorry--the bill for comments, and to this day, to my knowledge, we've received none. We're certainly receptive to anything.

Go ahead. You can also add on something, too, Mr. Moffatt.

Yeah. Just related to that, we have had conversations with the author and the sponsors. We are developing amendments for the bill. On this particular provision, I think, yes, we are absolutely willing to talk about that process within the structure of what it is right now. If it takes more time, how can we work on that process? This 60 cents on the dollar is a shell game. They are using inflated rates to say they're getting paid 60 cents on the dollar.

Right now, we think that they're not utilizing the system that's here is because it requires the submission of some actual evidence that it took longer. And if you don't have evidence that it took longer, you're not going to submit it. So, you know, could we talk about the process? Absolutely. Let's talk about the process. But we cannot be talking about third party time guides.

Ms. Papan, were you done?

Yes.

Okay. Yeah. Ms. Pacheco?

So I do have some concerns about this bill, and I also have car dealers in my district, and I say concerns only because I feel like there needs to be more dialoguing conversations between the car dealers and manufacturers because I'm going to state the obvious: we need both of you. We need manufacturers and we need the car dealers, and you can't exist without each other.

So I really think that more conversations need to be had and there needs to be some kind of compromise so that way we can perfect this bill anymore--even more. So, I'm looking forward to both sides having conversations and look forward to seeing what's in the end.

And as we identified early on during this conversation, it's a complex bill. So we're by far--we're still going to work with them, and I still like them, and I like all those guys back there, too, but we want to get to a compromise, no doubt about it. But consumer protection, making sure dealers are taken care of is really important to me, and I've had dealers that have not been taken care of, and so I've had gone in to see them before and they're real upset and this is how much the cost charging me and I can't get it done in that time. So I've seen it on the ground.

Thank you. Any--seeing no further questions or comments from the Committee, and based on the amendments to the issues in the jurisdiction of this Committee, I definitely support the bill moving forward today. I do want to encourage the parties to work together, particularly on section two: the warranty service reimbursement language. We--I--and I'm sure everybody up at the Committee wants to ensure that the bill doesn't increase prices for new cars or maintenance services as a result.

And this issue is best addressed in the Transportation Committee as well, where this is headed anyway, but certainly given the impacts of computers, I'd like to see the bill progress. So with that, Ms. Aguiar-Curry, would you like to close?

Respectfully ask for your aye vote and thank the Committee for their work.

You bet. Okay, we have a motion and a second. Ask the clerk to please call the roll. Motion is 'do pass to the transportation--as amended to the Transportation Committee.'

[Roll Call].

The bill is out. Thank you. We have one further bill. I do not see the author. He is presenting another bill right now. While we have the time, we'll go ahead and do add-ons. Item Two. Ask the clerk. Call the roll.

Ask the clerk to call the roll.

[Roll Call]

Item five, add-ons. Ask the clerk to call the roll.

[Roll Call]

Thank you. We are all caught up.

Ms. Reyes, will you present it? Thank you, Ms. Reyes, for stepping in.

Thank you. AB 554 by Assembly Member Gabriel codifies a 2022 appellate court opinion to make it clear that nonprofit corporations established for the Prevention of Cruelty to Animals have standing to file civil actions to seek an injunction to prevent ongoing abuse to animals. It is supported by the Animal League Defense Fund and Social Compassion and Legislation with no known opposition.

Thank you. Any other witnesses in support?

Good morning, Chair Maienschein and Vice Chair Essayli and Members of the Committee. My name is Christopher Berry. I'm a managing attorney for the Animal Legal Defense Fund, where I've worked for 12 years. And in my capacity there, I've served as the lead litigator for several of our California based enforcement cases, spending thousands of hours to ensure California's animals have a voice.

In 2008, ALDF's partner, Karoo SPCA, was created, and as an SPCA incorporated under California Corporations Code 10404, Karoo has the authority to proffer a complaint for the violation of animal protection laws. While the intent of the current law is that societies for the prevention of cruelty to animals can effectively remedy and prevent cruelty to animals, it hasn't consistently worked that way in practice.

And I can tell you from personal experience that defendants often will try to exploit the archaic text of the current statute to dismiss meritorious complaints on procedural grounds, wasting critical court and attorney resources, and causing irregular and inconsistent applications of law. Two recent cases illustrate the value of this section 10404 authority and the value of a clarification in Lloyd v. Kenny.

That case involves operation serially alleging the sale of underage and terminally ill puppies, and in another case, Karoo SPCA v Anthony involves keeping dozens of dogs in unsanitary conditions. This Section 10404 authority was used in both cases over these sort of archaic procedural objections in order to ensure enforcement of the law. So with that, we thank you for your consideration of this important measure and respectfully ask for your aye vote. I'm also happy to answer any questions.

Thank you. Any other witnesses in support?

Nicholas Sackett, Social Compassion in Legislation in support.

Thank you. Seeing no further witnesses in support. Any witnesses in opposition?

Thank you, Mr. Chair, Members. Rick Travis, California Rifle Pistol Association, also representing California Houndsmen for Conservation, Safari Club International. We have some concerns. Obviously, we never want to see animals abused or any of this happen. But our concern is as written in paragraph B. It opens the potential for abuse by radical animal rights groups, not the SPCA. They simply amend their articles of incorporation, meet certain other statutory requirements.

The reason this is a concern is for sporting dog groups and people that work in that space, such as myself. We can have a common example that I can give you working with labradors. You have some labradors, as we all know, is the number one breed in this country is couch potatoes who jump in their backyard, go play, and get an ACL tear. And veterinarians will tell you that's quite normal.

At the same token, we have had cases where those of us working the sporting dog group space have had an ACL tear and have had groups try to sue us, try to seize our dogs, and do things. So ours is to work with the author on this. We came a little late to the game and we apologize for that, but we want to make sure we can see that that will not happen to those working in the sporting dog space.

Thank you. Any other witnesses in opposition? Seeing none. Mr. Gabriel, thank you. We had been advised you had just started a presentation at public safety, so we were unclear how long that might take. So Ms. Reyes did an excellent job filling in for you, but obviously.

I probably should have just stayed out of the room and let her finish the bill.

But welcome.

Thank you.

Okay, seeing no further witnesses in opposition, do we have any questions or comments from the Committee?

I just want to move the bill and would love to be joined in his co-author.

So we have a motion from Mr. Kalra, second from Ms. Reyes. Any other questions or comments from the Committee? Also, Mr. Gabriel, do you accept the Committee amendments?

Of course. Thank you. And thank you to your staff. Appreciate it.

You bet. A comment or question from Mr. Essayli?

Yeah, just a quick brief comment, question. Would you be willing to speak with the opposition to address that concern that they brought up about sporting dogs being unfairly targeted?

Yeah. So let me just say, first of all, I apologize. Just presenting two bills in public safety, so apologies. Yeah, we're always happy to have conversations with folks, and I think that some of this came to us at the last minute and haven't had a chance to fully have those conversations. But as with any bill, our door is always open. We're always happy to have conversations with anybody and try to figure out how we can get the best public policy for folks.

Yeah, and it sounds like this is something that shouldn't even be required. I mean, I think the law is pretty clear that these groups should be able to bring these lawsuits to protect animals. So this will just clarify the law and, I think, avoid unnecessary litigation. With that said, I'd love to be a co-author if allowed as well.

Yeah, absolutely. I appreciate that. And I think just based on some very quick hallway conversations I've had with a number of folks, there may just be a little bit of confusion about what this bill does that we can clear up. And it should be the kind of thing, I think, hopefully, that all of us could get behind and feel good about.

Thank you. Seeing no further questions or comments from the Committee, Mr. Gabriel, you may close.

Thank you very much. Apologies for my tardiness. Respectfully request an aye vote.

Thank you. The motion is do pass as amended to Banking and Finance. Ask the clerk to please call the roll.

[Roll Call]

Motion is out. Thank you. And we have all our add ons already, so thank you all very much. Meeting adjourned.