Senate Standing Committee on Governance and Finance

The Senate Committee on Governance and Finance will come to order. So good morning, everybody. The Senate continues to welcome the public in person and via the teleconference service. For individuals who wish to provide public comment today, the participant number is 877-226-8163 and the access code is 736-2834. We are holding our Committee hearings here in the O Street building. I ask all Members of the Committee to be present in room 1200 so we can establish our quorum and begin our hearing.

I'm wearing the mask today because I just had a cold. And so I'm all about protecting other people who may not want to get sick. And so, in an excess of caution, I'm going to use my mask. We have 13 bills on today's agenda, with four proposed for consent. So if you're going to be making a comment today on the consent agenda items, they are item number three, SB 370, McGuire. Item number four, SB 736, McGuire. Item seven, SB 566, Senator Jones.

And item 10, SB 825, Senator Limon. There will be no comment on these bills. Item number nine, SB 751 by Senator Padilla, was pulled from the agenda was pulled from the agenda by the author, and it'll be set for a future hearing date. So we do not have a quorum, but we're going to start as a Subcommitee, and so we do not have any authors. Senator Rubio, I'm sorry, I didn't see you there.

Your first up, item number one on the agenda, which is SB 20 by Senator Rubio. Welcome.

Good morning. Let me see if my witness is here. As you can hear, I'm also struggling a little bit with my voice, so hopefully it's not too bad for all of you. Good morning. So let me just start by thanking the Chair and the Committee Members for the feedback, and I will be accepting the Committee amendments.

Today, I'm proud to present SB 20, which is an important bill that will help local governments. It gives them an innovative new option that they can use to address California's affordable housing shortage and homelessness crisis. The idea for this bill comes from the incredible success that the San Gabriel Valley Regional Housing Trust has had. In 2019, Governor Newsom signed my Senate Bill 751 into law, authorizing communities in the San Gabriel Valley to come together and create a regional housing trust.

Today, the San Gabriel Valley Regional Housing Trust is made up of 22 cities. They're working together as a region to maximize resources and make a real difference in the lives of those struggling to be housed. In just a few short years, the San Gabriel Valley Regional Housing Trust has opened up over 100 beds in tiny home sites for individuals and families experiencing homelessness. The regional Housing Trust has also provided millions of dollars in funding to 11 different affordable housing projects in multiple cities.

The success of the San Gabriel Valley Regional Housing Trust shows that local governments can work together and make a real progress if they're given the tools to do so. That is exactly what SB 20 will do. It creates a framework for new regional housing trusts modeled after the successful San Gabriel Valley Regional Housing Trust. This will allow local governments to create their own regional housing trusts without needing to come to the Legislature one by one to get it approved.

This bill is supported by over 20 pro housing groups, local governments, and community organizations from across the entire state. I also want to share that there are concerns with the realtors and I am fully committed to working through their concerns and will come to the table, and I can assure you we'll come to an agreement. So thank you. Today, I would like to invite two of my leading witnesses to come up.

Joining me today is Brielle Acevedo from the San Gabriel Valley Regional Housing Trust and Brian Wong, CEO of the San Gabriel Valley Habitat for Humanity. If I may ask him to step up.

Welcome.

Good morning. My name is Brielle Acevedo and I am the manager of the San Gabriel Valley Regional Housing Trust. The San Gabriel Valley Regional Housing Trust was authored by Senate Bill 751 by Senator Susan Rubio and was established in February of 2020. The San Gabriel Valley Regional Housing Trust is a joint powers authority which funds and finances the planning and construction of affordable and homeless housing.

The San Gabriel Valley Housing Trust is governed by a nine member board of directors, seven of which are locally elected public officials, and two are housing and homelessness experts, which is defined as five or more years of regional experience. The San Gabriel Valley Regional Housing Trust represents a portion of Los Angeles County and currently has 22 member cities.

The San Gabriel Valley Regional Housing Trust assists Member cities throughout the planning and development processes with technical assistance to design and finance projects and project funding for acquisition, construction, and permanent financing. Over the past three years, the San Gabriel Valley Regional Housing Trust has funded 690 units of affordable housing across 11 projects supporting seniors, families, and special needs populations.

The trust also funded the development and operation of 105 beds of interim housing for individuals and families experiencing homelessness, providing immediate respite and connection to services for the most vulnerable constituents of the San Gabriel Valley. The creation of a housing trust enabled the San Gabriel Valley Cities to access funding which can only be accessed by housing trusts and that they could not access individually, which includes the local Housing Trust Fund Program, a one for one matching source which effectively doubles the investment of housing trusts in eligible affordable housing projects.

The San Gabriel Valley Regional Housing Trust has been successful in securing funding through the local Housing Trust Fund Program for the past three years, providing funds to support four projects and the development of over 246 affordable units. The San Gabriel Valley Regional Housing Trust developed a revolving loan fund to support acquisition, predevelopment, and construction of affordable housing. Predevelopment is often expensive and an ineligible use for other funding sources.

This program provides short term, three to five year loans with below market rate interest rates to support projects during predevelopment. This fund has allowed the San Gabriel Valley Regional Housing Trust to support affordable home ownership opportunities as well. The revolving loan fund was started with an initial investment of $8 million and will support the San Gabriel Valley in perpetuity as loan repayments will be lent to future projects.

The San Gabriel Valley Regional Housing Trust Board maintains the San Gabriel Valley project pipeline, a list of affordable and homeless housing projects in need of gap financing. There are currently eight projects on this list representing over 440 units of affordable housing. And with an average investment of 27,000, every dollar invested by the San Gabriel Valley Housing Trust leverages $20 of additional investment in public and private dollars.

The trust provides technical assistance through its housing incubator, which specializes in financial modeling, site assessment, grant writing, and community engagement. Earlier this year, the trust board authorized the creation of a land trust to separate the land value from the improvements and increase development opportunities in the San Gabriel Valley to maintain affordability and perpetuity. Together, these programs enable the San Gabriel Valley Regional Housing Trust to support cities from project inception through completion.

And in a short period of time, the trust has established itself as a valuable resource to the San Gabriel Valley and continues to grow to expand to meet the needs of member cities in addressing housing and homelessness. The San Gabriel Valley Housing Trust supports SB 20 to enable other cities and councils of governments to create housing trusts and increase regional capacity to support affordable and homeless housing efforts. Thank you.

Thank you very much. Next, please.

Chair. Sorry, yes, there's a distracting echo coming from this phone right here, and I don't know if that's something that we could deal with in some way, but otherwise I feel that I need to move away from it.

Is it the mic?

As everybody's speaking. It's coming out right here with a slight delay. I'm sure that the author here is also experiencing that.

They do that so they can hear the people on the line.

Yeah. Maybe there's a way to turn it down or otherwise. No, I feel that I've been in committees in this meeting. I've not experienced this before, but maybe it's just particularly irritating.

If we can like a problem, the technology, but the Committee isn't that large, we can probably have you move and avoid the distracting feedback. Okay, thank you very much. You may proceed. And if you could make it a little briefer, that would be terrific.

Absolutely. Good morning. My name is Brian Wong. I'm the CEO of San Gabriel Valley Habitat for Humanity. Our service area is about 400 square miles and covers about 2 million people. We address the housing crisis by providing affordable home ownership and home preservation repairs to low income families. The median home price in LA County last year was about $850,000. For a mortgage to support this home, it would take an annual salary of about $192,000 along with a 20% down payment.

Unfortunately, the median income in the area is only about $85,000. So you can see where this problem comes in. Homeownership provides many benefits. It's well documented that children of homeowners are 11% more likely to graduate from high school than children from renters of the same income. Additionally, homeowners have a 400% higher net wealth than renters with similar demographics and earnings. Our relationship with the San Gabriel Valley Housing Trust is an integral part of the solution.

The trust has provided funding to help us build 32 new homes that will provide first time home ownership to low income families. There's only one state program currently that provides funds for low income housing construction, Cal Home, and it's currently oversubscribed by about 100%. The predevelopment financing that the trust provides is critical. The flexibility on rates and terms can be the difference on having a project pencil or not.

We have partnered with the trust to help them construct two tiny home villages designated for about 73 people, and we are about to launch an ADU program focusing on low income families as well. This partnership has been vital to our ability to serve the San Gabriel Valley. Thank you for your time.

Thank you very much for being here today. I'm going to check and see if there's anybody in room 1200 that would like to speak in support of this bill. If so, please come forward. Seeing no movement, we'll move on to lead opposition witnesses in room 1200.

Good morning, Madam Chair and Members. Vanessa Chavez, on behalf of the California Association of Realtors. CAR will continue to oppose SB 20 unless it is amended to include negotiated amendments outlined in our letter. To restrict the newly established multi-jurisdiction joint powers authority from purchasing parcels with existing single family, one to four residences.

Because SB 20 seeks to allow for two or more cities to enter into a joint powers agreement for a new bonding authority, these entities should be required to construct new housing supply and not convert existing housing stock to deed restricted corporate ownership. We look forward to working with the Senator to address our concerns. Thank you.

Thank you very much. Is there anyone else in opposition in room 1200? Seeing none. We'll move on to witnesses via the teleconference line. Moderator, if you could please tee up the line and indicate that we're ready to take testimony on SB 20. We may have turned that line down so much we can't hear. Let's see if we can get the moderator on the line.

You're looking for--

Yes.

For participants on the line. Okay. I apologize. I did miss that. Go ahead and press 1-0 at this time. Give me just a moment here as we gather some numbers here.

Thank you.

You're welcome. Again, I apologize for that. Pause there. And we've got line number 19. Please go ahead.

Good morning, Chair and Members. Rebecca Marcus, on behalf of Leading Age California in support.

Thank you.

And one more holding here. Just a moment.

Okay, we've got line 18. Please, go ahead.

Good morning, Madam Chair and Members. Roger Dickinson on behalf of CivicWell, formerly the Local Government Commission, in support. Thanks very much.

Thank you very much.

And currently none further in hold.

Thank you. That concludes our testimony. Bring it back to the Committee. Senator Blakespear.

Thank you. Thank you, Chair. And thank you to the author for bringing this bill. I'm really excited about this bill, and I would be honored to be a co-author if you need or would like co-authors. The examples that have been given and the history of the success of this, I think, is the testament to why we need to take it statewide.

And I know, coming from the County of San Diego, that there was an effort last year to get legislation through that would allow it in San Diego. But as many things do, it became bogged down in a lot of different controversies about what could or should happen and different ways to address this problem. So handling it at the state level and allowing these to form throughout the state and have that same success is really great. And so I'm just really grateful.

I wanted to address the concern about the Realtors. First, just to note that one of the amendments is that nothing in the section prohibits a local agency from asking for an exemption if it believes unique local circumstances exist. Like if for some reason there is a lot of available single family homes and not a lot of available multifamily, there could be some part of the state where there could be a reason that there would be a need for that exemption. So I just want to point out that's there. But also just ask the author, could you just explain the policy reasons behind not wanting to include the one to four units?

Well, we haven't got there yet, so I do understand the concerns of the Realtors. I will have to say this. If we're trying to create affordable housing, we don't want to be taking housing off the market. So the goal is to create more housing. So we're not there yet in our discussions. And I really said that I would commit to getting there with them as we're moving through the process. We just ran out of time, but I want to make sure that we address their concerns.

Senator Seyarto.

So thank you, Senator Rubio, for a good bill. We've been piecemealing... And they are, I think, best described as opportunities for cities and regions to work together on mandated housing from state policy. And it's a lot easier for our communities to work together to achieve the goals that are mandated on each one of them through different tools. And this is one of those tools, I think, on the Realtors' concerns, it doesn't mean they're going to form a JPA.

It doesn't mean they're going to have a housing trust. Right now, we have the bill that enables them to do it in Riverside, but they have not yet done that. Whether they choose to do that is a local control decision between the communities. And there are some people out there that have fears of JPAs, that they're unaccountable bodies, and they're absolutely accountable because they're made up of representatives that are elected from each community. And this is no different.

So I think doing the blanket enabling these regions to do those trusts is probably the right way to go. There's nothing that restricts those JPAs from forming the rules that they need and the opportunities that they need for their regions because each region is different. We've been trying to preach that a lot is one size fits all doesn't. And therefore more local control. This doesn't impede that local control. I think it actually helps it. Is that your kind of... Your effort is kind of geared towards doing that.

Yes. And I want to just share that I spent 13 years in local government as a Council Member, and that's where this idea started in my head. Just the fact that, as a single city, it is so difficult to get projects moving. I always knew that I think we were better together if you band together several cities. So, yes, I very much wanted to make it flexible where we still give local control. We want to make sure that there's flexibility.

We wanted to make sure that it's not a mandate, but certainly it's there for those that want it, and they don't have to take it if they don't want it. But I really think that we have a model here that works. It's proven to be really effective. We continue to build housing, and that's what we're trying to do, meet our housing needs. And so hopefully local municipalities can see this as an option and not a mandate, but really take advantage of it because we're doing some great things in the San Gabriel Valley. Thank you.

Senator Blakespear.

This is our first bill.

Sorry.

I know, I know. I won't speak on every bill.

And there's no opposition. I mean, there's very limited opposition.

I know. I just want to say that one of the great things about this type of JPA is that you can access state money, so it allows for this one to one match that was described, and that right now is currently not available to cities that don't have these JPAs.

But I also just want to be on the record of saying I think there is a policy issue around whether you would allow cities and counties to form a housing JPA that could go get matching money and then would become developers, a developer that build single family sprawl housing development. So policy wise, I think that's a concern that needs to be potentially addressed when you're dealing with this discussion with the Realtors.

Because while we do want to create more supply, we don't want to create more sprawl for climate reasons and all sorts of every other reason, which we talk about extensively up here. I just want to state that, that as you're working it out with the Realtors, it is really important that we're not just allowing carte blanche for that type of development.

If there are no further discussion on this bill, we'll allow you to close.

I respectfully ask for an aye vote. Thank you.

Very good. We do have an opportunity to take the roll call, so why don't we start there, and then we can have a motion on the bill.

[Roll Call] You have a quorum.

Quorum is present, so I'll entertain the motion on this bill. Senator Blakespear moves. The motion is do pass as amended to Housing.

[Roll Call] Five to zero.

The bill is out. We'll put it on call for the remaining Members. I'd like to take up the four items that have been proposed for the Consent. That's item number 3, item number 4. Item number 7, item number 10. Moved by Senator Dahle.

Motion is to adopt the Consent Calendar. [Roll Call] Five to zero.

Those bills are out, and we'll put them on call for the absent Members. We are going to move on to item number 5 on the agenda, which is SB 388 by Senator Archuleta. Welcome.

Thank you and good morning, Madam Chair.

Good morning.

And Committee Members. Today I'm presenting Senate Bill 388 on behalf of the California beer industry. Kind of level the playing field when we think about beer and wine. But this is on behalf of the beer industry. Senate Bill 388 allows beer manufacturer tax information to be made public upon requests to assist the beer industry in planning for future trends. Senate Bill 388 is modeled after Senate Bill 518 by Senator Laird, which passed unanimously out of this Committee last year to help the wine industry.

So Senate Bill 388 is a carbon copy of that bill and extends the same benefits to our state's beer industry. For decades, the Board of Equalization has provided beer manufacturers' return and schedule information to the beer industry. The data released by the Board of Equalization has largely been uncensored, including specific business information. However, beginning in 2019, the Board of Equalization reevaluated the release of this data and determined that they did not have sufficient statutory authority to provide the data unless specific information was anonymous.

This decision was significantly limited the data's usefulness. So Senate Bill 388 directly addresses this issue and equips the beer industry to make a well informed business decision. This bill has no opposition and is supported by the beer industry, including Brewers Guilds and organizations throughout the state. So for these reasons, I respectfully ask for your aye vote.

And with me to date today is Lori Ajax, Executive Director of the California Craft Brewers Association, here in support of the bill, and is prepared to answer any questions, if you have any. Thank you, Madam Chair.

Thank you very much. Welcome.

Good morning, Madam Chair and Committee Members. I'm Lori Ajax, Executive Director for the California Craft Brewers Association, in support of the bill and happy to answer any questions you have.

Thank you very much for being here today. We appreciate it. Is there anyone else in Room 1200 that would like to testify in support of this bill? Anyone in support? Seeing none, we'll move on to lead opposition. Is there anybody that is opposed to SB 388 in Room 1200? Seeing no movement, we'll move on to the teleconference line to see whether we have anybody that would like to testify in support or in opposition of SB 3800. Mr. Moderator, if you could queue up any testimony.

Thank you very much. Again, it's 1-0. At this time, please press 1-0. Giving it a moment here. We have none in queue currently.

Okay, if there's no one that will testify in opposition, then in support, I'll bring it back to the Committee. Any questions or comments you'd like to make at this time? There is a motion to move the bill by Senator Seyarto. Senator Archuleta, would you like to conclude?

I respectfully ask for your aye vote.

Thank you very much. The motion today is do pass to Appropriations. Please call the roll. Oh, okay. Never mind. It's going to GO. We were just confused. Motion is do passed to GO.

[Roll Call] Five to zero.

That Bill is out. Five to zero. We'll leave it on call for the absent Members. Moving on to your second Bill, which is here today, SB 726. Senator Archuleta, the floor is yours.

Thank you, Madam Chair and Members of the Committee. This Bill is exciting for veterans and all those who love our veterans across not only our country, but our state, because it does say a lot about the State of California and our veterans. So once again, thank you, Madam Chair. I would like to begin by accepting the Committee's amendments and thanking the Committee for working with my staff on this Bill.

Senate Bill 726 seeks to provide an additional helping hand to veteran homeowners who have 100% disability rating. And I might add, that is a very difficult rating to obtain by a wounded veteran who has lost his arms, limbs, God knows what he's had. But to receive that 100% rating, it's very rare. But this Bill does seek to have the 100% disability rating in those homeowners. Veterans, like all Californians, are struggling with the high cost of housing. Housing affordability remains significant concern for veterans.

With nearly 35% of veterans paying more than 30% of their income for housing. Nine out of 10 Californians consider housing affordability a problem, and nearly one in three Californians consider leaving the state because of it, according to the 2021 survey by the Public Policy Institute of California. With many veterans throughout the state living on a fixed income and medium priced homes in California exceeding $750,000, California must do more to ensure our veterans can afford to live in this great state while striving to end veterans homelessness.

Senate Bill 726 expands the disability veterans exemption to allow a full property tax exemption for 100% disabled veterans. There are several states that waive property taxes altogether for the 100% disabled veterans, including Florida, Texas, Virginia, and New Mexico and Hawaii. This disabled veterans exemption honors their bravery and commitment to our nation while also assisting our disabled veterans who are struggling each and every day with the high cost of living here in California.

As so many as we look to the future, we must continue to ensure that we utilize every tool and our discretion to help keep our veterans in their homes and here in California. With me today to testify in support of the Bill is retired army veteran Ken Shoemaker. And for these reasons, Madam Chair and Committee, I ask for your vote. An aye vote.

Very good. Like to ask Mr. Shoemaker to please come forward and welcome.

Good morning. As Senator introduced me, my name is Ken Shoemaker. I'm 100% rated service disabled veteran, having served with the third infantry division during the Vietnam era. You won't find many 100% rated veterans that can attend these types of hearings. So I'm here to hopefully speak on their behalf. I want to thank Senator Archuleta's staff and the Members of the California Legislature that previously voted unanimously, I might add, for this important legislation that benefits service disabled veterans living in our great state.

I know something about how our state honors our veterans. I previously served as the President of the Disabled Veteran Business Alliance, our statewide organization that helps empower disabled veteran entrepreneurs. From that unique vantage point, I saw firsthand how the State of California is the gold standard for veteran benefits and sets the bar for the rest of the nation. No other state yet matches us in helping our veteran entrepreneurs. Thank you for your respective role in California's nationwide recognition as the gold standard.

I want to close by discussing how my wife and I will hopefully personally benefit from this legislation. My wife has Parkinson's disease and as a result, we sold our home in the foothills to move her to downtown Sacramento to be closer to medical care and so that we would have access to paratransit and sidewalks where we could actually use her wheelchair and mobility scooter.

However, for several reasons, we were unable to buy another home within three years, so we lost the ability to transfer our lower property tax basis. This legislation will even be a better benefit than that which we lost as we downsize and reenter the housing market. Plus, if I should die, my wife will continue to enjoy this important benefit. Thank you for allowing me to provide my testimony.

Thank you very much, sir, for your testimony here today, and thank you for your service to our country. Appreciate it. We're going to move on to other witnesses in support in room 1200. Is there anyone who would like to speak in support?

Vanessa Chavez with the California Association of Realtors in support. Thank you.

Thank you. Is there anyone else, is there anyone here that would like to speak in opposition in room 1200? If so, I'd like to invite you to please come to the mic. Seeing no movement, we'll move on to witnesses in support or in opposition via the teleconference line. Mr. Moderator, if you could queue up any Members or any individuals that would like to testify, now would be a good time.

Yes. Please press one. The zero at this time. One moment. Yes. We'll go to line number nine, please. Go ahead.

Hello.

Hi. Yes. Line nine.

Yes. Okay. Is it my turn?

Yes. Sir. If you could tell us your name, please, and whether you are in opposition or in support.

Yes. Good morning, Madam Chair, Members of the California State Senate Governance and Finance Committee. My name is Michael Barrett. I'm the Director of Client Services at the Working Wardrobes Career Success Center. I served in the United States Marine Corps for 21 years of active duty, and I'm the recipient of a Purple Heart due to severe injuries as a result of an improvised explosive device.

During my deployment to Iraq, I spent 533 days in recovery and rehabilitation, learned to walk again, and ultimately achieve my goal of continuing service, reenlisting and deploying once again in service to my country with my marines to Iraq. As a 100% disabled veteran, earning and sustaining a livable wage in California has not come with its challenges. You all are well aware and have heard the statistics on the cost of living, as well as the average median for a homeowner here in California.

California is home to the amazing men, women and military families that have served and sacrificed in defense of our nation's freedom. Those seeking to continue a positive and productive life post military service. Approval of SB 726 will ease financial challenges and allow 100% disabled veterans and their families to stay and thrive in California. I enthusiastically support SB 726 and encourage all Members of the Committee to vote unanimously in support the Bill forward. Thank you for your time, your dedication, your dedicated service and support to the veterans and military families that have honorably served and defended our nation's freedom. Thank you.

Thank you for your service, sir. Next, please.

Line number 12, please go ahead.

Yes. Good morning, Madam Chair and Committee Members. My name is Emmanuel Montanez. I am a combat wounded Vietnam veteran with 100% plus service disabled community. As the result of being a tank commander in Vietnam and my tank being hit by three rocket propelled grenades, I did not walk for over a year due to the considerable damage to both legs, vascular damage, et cetera. I wholeheartedly and enthusiastically support SB 726, and thank you for your time.

Thank you, sir. Thank you for your testimony and for your service.

I am Purple Heart and. I'm sorry, I forgot to say that. I am also a Purple Heart recipient and Bronze Star for valor recipient. Thank you very much.

Thank you.

Line 23, your line is open.

Afternoon, Madam Chair and Committee Members. My name is Brody Trout. I'm a former army captain. I have a 100% disability rating based upon injuries I sustain, running combat operations in the mountains of Afghanistan. I support this Bill. Thank you.

Thank you very much for your testimony.

Line 15, your line is open.

Good morning. My name is Drake Newit. I'm 100% service rated disabled vet combat veteran from Vietnam, and I support this Bill 100% supporting it through veteran strong USA.

Thank you very much for your testimony today.

Line 24, your line is open.

Hi, my name is Alison Seller. I really urge you to do everything you can to make all housing more affordable, creating it, streamlining it and everything. Thank you very much.

Thank you very much. Are we finished with testimony on SB 726 moderator?

We actually have one more that just queued up, one moment. Line 26. Your line is open.

Scott Kaufman Howard Jarvis Tax Payers Association in support.

Thank you very much.

There are no more in queue at this time. Please continue.

Thank you very much. I'm going to bring the Bill back to the Committee to see if there are any comments, questions or concerns. There is a motion by Senator Glazer, Senator Archuleta, you may conclude.

Yes. Thank you, Madam Chair, Committee Members, thank you so very much. I know where your hearts are, and I know where your spirit is. It's American. And I will tell you this. Ken Shoemaker, thank you for your testimony. And veterans who called in, thank you so very much. I served with the 82nd airborne. I'm a fellow paratrooper.

And I will tell you this, that when all of us come together and we unite to thank the State of California, I think we should all realize that we all want to stay here. We all want to be the homeowners that we dream to be, and this is a big step forward for so many. And I thank you for your testimony. Madam Chair and Committee, I thank you. I urge an aye vote.

Thank you very much, Senator. The Committee also wants to thank those who testified here today. It's important to recognize their service and to recognize their sacrifices as well. So thank you very much to everyone who testified. The motion today is do pass as amended, to Military and Veterans Affairs. Please call the Roll.

[Roll Call]. Six to zero.

The Bill is out. We'll put it on call for the absent Members.

Thank you. Madam Chair, Committee Members, thank you.

And Committee Members. Thank you.

Thank you. Moving on to Item Number Eight on the agenda, SB 654 by Senator Jones. Welcome.

Good morning, Madam Chair and Members. Thank you very much for the opportunity to present SB 654 this morning. Before I get started, I'd like to let you know I'll be accepting the suggested amendments on page three of the Committee analysis under comment number four. I also want to thank your staff for helping us out with this important issue for the entire state. There is an ambiguity in current law governing airport and hangar leases.

Current law prohibits a local agency from offering a lease at an airport for more than 50 years. This is in order to stay in compliance with FAA guidance. However, the law was intended to prevent lease durations of longer than 50 years at a time, not total.

Some counties interpret a period not to exceed 50 years to mean a lease duration not to exceed 50 years, while other counties, such as San Diego County, interpret the law to mean that they are unable to extend a lease if it would result in a total lease duration of longer than 50 years. These policy discourages leaseholders from making investments into improving their facilities.

Capital investments in these facilities often take decades to amortize, making it impossible to recoup those investments in an aging facility when the remaining lease term is coming to an end. This bill clarifies that the 50-year term restriction applies to the duration of a specific lease rather than the aggregate number of years that the occupant has held the lease. This will encourage investment and improvement in these airport facilities.

I have two witnesses here today this morning, Madam Chair, Darren Miller, one of my constituents who brought the bill idea to me, and Byron Fox with the TDA Investment Group, on behalf of the Construction Laborers Pension Trust of Southern California.

Very good. I want to welcome you and ask you to please stand up to the mic, Mr. Miller or Mr. Fox, whoever wants to go first. Welcome.

Thank you. Hi. My name is Darren Miller. I am Vice President of MITRE Aviation at Gillespie Field in San Diego, California. I am here today speaking on behalf of the leaseholders on San Diego County airports to show our enthusiastic support for SB 654. I am a third-generation leaseholder on Gillespie Field. My family has invested millions of dollars in capital improvements on our leasehold, and we have seen many other leaseholders do the same during our tenure.

All of us leaseholders have made these capital investments with the understanding that we would be able to extend our leases and make additional capital improvements to our leaseholds to modernize the airports. However, due to the ambiguity of California Law 50478 written in 1951, a new policy was written in 2015 by the County of San Diego that limits a leaseholder to a maximum of 50 cumulative years of lease term.

This new policy effectively moved the goalposts for us leaseholders since there was no such policy in effect when we originally signed our leases. All San Diego County Airport leaseholders are in agreement that had we known of this policy when we originally signed our leases, we would have chosen not to sign our leases. Under this new policy, leaseholders are disincentivized to make capital improvements and perform necessary maintenance as they near the end of their lease term.

In fact, there have not been any capital improvements made on San Diego County airports in the last seven years since the implementation of this new policy. Furthermore, as we near the end of our leases, we no longer have the option to sell our leaseholds and improvements since San Diego County will not grant existing leaseholders or the buyers additional term on our leases.

Unless this policy is changed, leaseholds on San Diego County airports will inevitably fall into a state of disrepair as they near the end of their leases, and it is highly unlikely that any new leases will be signed or new developments will be built on San Diego County airports. To be clear, SB 654 does not introduce any new legislation.

Rather, it merely serves to clarify and remove any ambiguity from the existing 1951 law. With the passage of SB 654, leaseholders will be able to add additional term to their leases, thus reopening the door to major new capital improvement projects that will modernize airports in all of California. I am here today to request that you do what is best for general aviation and support SB 654. Thank you very much for your time.

Thank you.

Thank you very much for being here today.

Good morning, Chair Caballero and the Committee Members. My name is Byron Fox, and I'm here for TDA Investment Corp. TDA is a fiduciary for the Construction Laborers Pension Trust for Southern California and strongly supports SB 654. The trust serves 30,850 union members and makes investments to fund the monthly pension funds for those union workers. One of its assets is the Carlsbad Jet Center, which is an FBO at the Palomar McClellan Airport in Carlsbad, California.

The ongoing financial success of this asset directly benefits the union workers within our system. As was mentioned, SB 654 clarifies the government code to ensure that airport leases and subleases can be extended for up to 50 years. This is crucial for the long term sustainability of infrastructure at airports because airports depend on their ability to obtain infrastructure investments through their leases.

For example, when the trust, or since the trust took ownership of this asset in 2019, more than $37 million has been invested to complete leasehold improvements. As also required by the trust, all the work that was done there was provided by union contractors providing scores of local jobs. The infrastructure investment, however, and any other investment required a sufficient length of time to amortize the costs.

Indeed, we would like to invest additional money here, including improvements that would mitigate the facility's environmental impact. However, the likelihood of that investment is very unlikely without the passage of 654. For all these reasons, we strongly support 654, and thanks so much for your time.

Thank you very much for your testimony today. Want to see if there's anybody else that would like to speak in support here in Room 1200? So I'd like to invite you to come to the mic. Seeing none, we'll move on to lead witnesses in opposition in Room 1200. Is there anybody that would like to speak in opposition? Seeing none, will move on to the witnesses via the teleconference line. Is there anybody that would like to testify in support or in opposition to SB 654?

Thank you. Press 1-0 at this time. Yes, one moment. We will go to line 21. Please go ahead, line 21.

Good morning. I'm pleased today to speak in support of SB 654. I'm Karen Huggard, Vice President of Government Affairs at the National Air Transportation Association. Our association represents more than 150 airports and aviation businesses in the state of California. By providing clarity and consistency in the California State Code regarding the extension of airport leases, SB 654 will give airports the necessary discretion they need to negotiate lease terms with aviation businesses.

This legislation also aligns with best practices for aeronautical leases, and it complies with FAA guidance on the matter. NATA's aviation business members are making significant capital improvements on airport properties in California. These investments will provide economic development in local communities. They'll extend access to transportation. They'll increase airport sustainability, reduce aviation's environmental impact, and modernize infrastructure to prepare for the future, such as the next generation of electric aircraft.

With the increasing cost of construction and other capital improvements, airports must be equipped to offer aviation businesses lease terms with a sufficient length of time to amortize such expenditures. SB 654 will help ensure the continued maintenance and modernization of the state's critical aviation infrastructure, and it will deter inconsistent interpretation by local jurisdictions. We encourage the Committee to adopt the bill. Thank you.

Thank you very much. Next, please.

Line 17, please go ahead.

Hi. Good morning, Madam Chair. My name is Jared Yoshiki with the Aircraft Owners and Pilots Association, representing over 30,000 aircraft owners and pilots in the state of California. Would like to thank the author for introducing SB 654 and find that it's an important measure to clear up all of the ambiguities as it relates to long term leases with airport tenants. We wholeheartedly support the bill and ask for your aye vote. Thank you so much.

Thank you very much. Next, please.

Line 27, please go ahead.

Good morning, Madam Chair. My name is Josh Hochberg. I'm President of Sonoma Aviation, with over 100 employees in the state of California. We want to enthusiastically support SB 654 to clarify the existing law and allow amortization of improvements over the course of our lease terms.

Thank you very much. Next, please.

There is no more in queue at this time. Please go ahead.

Thank you very much. We'll bring the discussion back to the Committee. Is there any discussion? There is a motion by Senator Glazer. Senator Blakespear.

Okay, just briefly. I appreciate this bill. I will vote for it, and I appreciate your effort to solve clearly what's a real problem. I represent Carlsbad, and I also come from having been a multiyear member of the San Diego County Airport Authority Board, and I have never heard of this as a problem.

And so I just wanted to ask you, was there an effort to resolve this by reaching out to the attorney at the Airport Authority Board or having a legal letter at the state level saying this is the way the language should be interpreted, like all of the other airports throughout the state?

Yeah, this has been an ongoing, continuous conversation for the last several years, and the County of San Diego finally got to the point where they instructed the lessees in the county to ask for the legislation to be updated so that they could change their interpretation.

Really? Okay. Thank you.

Thank you very much. Anyone else? Seeing none, we'll allow you to conclude.

I have about a 30 minutes close.

I was going to say, I will accept that as your conclusion.

But I think the witnesses did a great job. I ask for your aye vote.

Thank you so much. The motion is do pass as amended to the Senate Floor.

[Roll Call] Six to zero.

That bill is out. We'll put it on call for the absent Members. So I do not see Senator Padilla here. So we'll move on to Senator Wiener, if you're prepared. Oh, that's... My apology. I forgot that Senator Padilla, SB 751 has been pulled for a later date. Number 9. Yes, my apology. I did read that at the beginning. Senator Wiener, the floor is yours.

Thank you, Madam Chair, and first of all, I'm here to present SB 532. And first of all, I want to thank the Chair and the Committee for working with us on this bill, and we're happy to accept the Committee's amendments as outlined in the analysis. Colleagues, this bill has to do with the 75-word ballot question for tiered taxes; in other words, taxes with multiple levels, not simple taxes with one level, and bonds. This bill is a course correction.

In 2015 and 2017, the Legislature passed two bills authored by our former colleague, Assembly Member Obernolte--I was here for the second one, and I voted for it--to increase transparency by requiring financial information about the costs of bonds and taxes in the 75-word ballot question. It's an idea that in some ways makes a lot of sense, but in the implementation of it, there have been significant unintended consequences. And so this bill does not blanket repeal those two laws.

It scales them back to deal with the unintended consequences and the need for course correction. To be clear, the portion of those bills that deal with simple taxes-- when you have a parcel tax where everyone pays 100 dollars or a sales tax, which is all one amount--this bill does not affect those. Those will remain in effect as passed by the Legislature a few years back.

But for tiered taxes and bonds, the bill does scale back what Mr. Obernolte was able to get us to pass a few years ago because those aspects of these laws are not working, and particularly for tiered taxes, under Mr. Obernolte's bills, you have to put information about what people are going to have to pay in the 75-word ballot question. And to be clear, that was unprecedented.

For however many years we've had ballot questions for tax and bond measures, cities and counties and school districts did not have to do that. So that was new. And what we have discovered is that when you have tiered taxes, you sometimes do not even have enough words within the 75 words to both include all the information required about each of the tiers and to say what the money is going to pay for. It can be very difficult or impossible, and also make the 75 words--if you're able to squeeze it in--a very awkward and at times incomprehensible question.

For bonds, putting all that information in the ballot label can be very misleading because we know that when bonds pass, you don't know exactly what people are going to pay because interest rates change and so forth. And so we know that bonds, it can be variable because the markets change, and yet we're requiring them to put in that 75 words something fairly definitive.

And even though under the law you can do an estimate or a range, we know that it can still be incredibly misleading when you're trying to condense it to fit within the 75 words while also saying what the bond is actually going to do. And so what this bill does is it--not for the simple taxes, but for the tiered taxes and the bonds--requires that instead of putting it in the 75-word ballot label, it has to go, all the information has to be in the ballot handbook, and then there will be a parenthetical included with the ballot label.

And we're modifying that, as indicated in the analysis, to state--excuse me--basically see ballot handbook for a statement and an explanation of how this measure could impact local property taxes. So I want to be clear. We're not just trying to come in and repeal everything.

We gave it a try. I voted for the second one. We gave it a try, and it is not working as intended. And so part of it is okay, and we're keeping it intact and part of it needs to be modified, and that's what we're doing with this bill. So I respectfully ask for an aye vote.

And with me today to testify are Rebekah Kalleen from the Coalition for Adequate School of Housing, and Christophe Mayer, representing the American Federation of State, County and Municipal Employees of California.

Welcome.

Good morning, Senator. Rebekah Kalleen, on behalf of the Coalition for Adequate School Housing, representing school districts on school facilities issues. This bill, SB 532, it does create an option. So schools could continue to operate under the AB 195 option or you could take this new path. Local bonds are the primary source of revenue to construct, repair, and upgrade school facilities. Schools are implementing the new transitional kindergarten grade level, which created significant facilities pressures to build and upgrade our classrooms.

We're addressing the need for student and workforce housing, making essential health and safety repairs and seismic upgrades. We're modernizing our facilities to meet the educational needs of today's students. All of this requires funding, most of which comes from local bonds. While state programs like the School Facility Program are an important piece of that puzzle, they help supplement our funding and schools can't make--we cannot meet all of our facilities needs without the partnership of our local communities.

I like to say the bonds are a covenant between our school districts and our communities. Transparency is vital to sustain that ongoing commitment and support. And quite frankly, voters are confused by the new ballot label requirements. They do not make sense for bonds. As Senator Wiener stated, tax rates fluctuate to pay principal and interest. This can be due to changes in the economy, changes in assessed valuation. We saw that under the Great Recession. Project schedules; this year we're doing a high school.

Next year we're doing one TK classroom, et cetera. We need to provide accurate information that voters can understand, and the best place to do that is in the voter information guide, which has the space to explain how a voter may or may not be impacted by a proposed bond. We do not believe that it is transparent to provide information without context that we know confuses voters. Left unfixed, we'll see a widening gap between the haves and the have nots.

Some school districts will continue to pass bonds and improve their facilities, while others, and especially those in low wealth school districts with disadvantaged communities, are not able to do so. And in that case, our students are the ones that will suffer. We very much appreciate, Senator Caballero, your commitment to making this a better bill, to increasing the transparency, and we urge your aye vote. Thank you very much.

Thank you very much.

Good morning, Madam Chair, Committee Members, and staff. My name is Christophe Mayer, and I represent the American Federation of State, County and Municipal Employees. Our members work in hospitals, schools, and transit districts, to name a few, and live throughout the state in communities that are struggling to build affordable housing, that are struggling to keep their hospitals open, and that are struggling to keep their transit districts providing transportation for low-income workers and people who are making climate-conscious decisions.

Since the passage of the bills mentioned by the author, we've seen a chilling effect on bonds and tiered tax rates. And tiered tax rates or marginal rates are a really important tool for achieving equity in our communities. But they are inherently complex and difficult to summarize in 75 words. Senate Bill 532 will not decrease transparency. 86 percent of California voters voted by mail in 2022.

So they voted at home with their voter information guides and with most of them with access to the Internet to do more research if they so chose. So we need to empower our voters with accurate and clear information about what they're voting on, let them make informed decisions about whether to fund local transit districts, build affordable housing, keep hospitals from closing, and bolster their schools. So we appreciate the dialogue that we've had with this Committee Members and staff, and we respectfully ask for your aye vote.

Thank you very much for being here today, for your testimony. Is there anyone else that would like to speak in support in Room 1200? Like to welcome you to the mic. If you could just say your name and who you represent and whether you're in support.

Thank you, Madam Chair. Jean Hurst here today, on behalf of the Urban Counties of California, in support.

Good morning, Madam Chair and Members. Andres Ramirez, here on behalf of the Non-Profit Housing Association of Northern California, proud cosponsor of the bill in very strong support, and also on behalf of Oakland Mayor Sheng Thao, in support. Thank you.

Good morning, Chair and Committee Members. Stephanie Estrada, on behalf of the City of San Jose, in support. Thank you.

Good morning, Committee Members. Michelle Gill, on behalf of California Association of School Business Officials and on behalf of my colleague at Association of California School Administrators, who is in another meeting, in support.

Good morning, Madam Chair and Members. Tristan Brown of CFT--A Union of Educators and Classified Professionals, here in support. Thank you.

Izzy Swindler, on behalf of San Francisco Mayor, in support. Thank you.

Good morning, Madam Chair and Members. Marcus Detwiler, on behalf of the California Special Districts Association and also the Association of California Healthcare Districts, in support. Thank you.

Thank you very much. Is there any individual that would like to speak in opposition as a lead witness in Room 1200? Seeing none, is there anybody that would like to speak in opposition at all in Room 1200?

Vanessa Chavez with the California Association of Realtors, in opposition. We look forward to reviewing the amendments when they are in print. Thank you.

Thank you very much. Moving on to the teleconference line. Is there anybody that would like to speak in opposition or in support in the teleconference line? Again, if you could state your name and who you represent. Just checking in, Mr. Moderator, is there anyone that would like to testify in support or in opposition of SB 532?

Of course. It's one zero, so we can go right away to line number 26.

Scott Kaufman, Howard Jarvis Taxpayers Association, in opposition.

Thank very much.

Line 28 is available. Please go ahead.

Good morning, Madam Chair and Members of the Committee. Patti Herrera representing San Diego Unified School District and the Corona-Norco Unified School District in support. Thank you.

Thank you.

Currently none further in queue.

Thank you very much. We'll bring the discussion back to the Committee for any comments, questions, or concerns. Senator Glazer.

Yeah. Thank you, Chair. I know this bill is double referred, so it's going to come to Elections next. And because of that, I'm going to lay off today and continue the conversations with the author and others. But I will note that I am very troubled by the bill. And I know the intentions of the author and the supporters are pure and good.

And for people who know my own background, they know that I've worked on many of these measures locally and statewide and even across the country to support investments in our infrastructure, our schools, our roads, and the like. And that's really important. And a part of doing that is having trust that we in government are doing our best work. You know, have seen me, many colleagues have seen me work on this trust issue on various measures.

They've also seen my work in terms of honest disclosure and transparency. This Committee passed a bill a few weeks ago, which I appreciate, that tried to have more accurate numbers in terms of how much things cost, and thank you for doing that. But I think that I'm hoping that these conversations can lead to a better path than what's being proposed today. If the issue is the length of the ballot, in terms of 75 words, then that's something I think we should take a look at.

If the issue is that you have to put in, there's too many variables, then maybe we need to find a way to address that with averages that are fair and honest, given that circumstances can't change. But just saying, "go check over here" is something that does worry me. We had a bill last year that did just the opposite. It said people aren't reading the ballot pamphlet, so you need to put more on the ballot.

So you need to take the people that sign arguments for and against these ballot measures, and now you got to put them on the ballot. We got to clutter up the ballot with more stuff. And I opposed that bill. Legislature, in their wisdom, advanced it, and that's now going to happen, the actual opposite of what is being proposed here today. So these are the reasons that I look forward to further conversations with the author about this measure. But for me today, it's not something I can support.

Senator Seyarto.

Thank you for bringing the bill to us to discuss it, and I have some of the same issues as my colleague does. What measure are you using to determine what constitutes whether the bill, the laws that exists, is working or not? Is it the success or failure of ballot measures, or is it an attitude, or a study done with people who vote who look at this?

I know I've said this before, and I'm sorry if I sound like a broken record. This is not about reducing transparency or hiding the ball. I supported that bill a few weeks ago, and I was happy to do it. If we were trying to hide the ball, reduce transparency, we would just try to blanket repeal both Obernolte bills. We're not doing that. We're leaving it intact for many, there are many tax measures that are straight up non-tiered.

Everyone pays $100 in a parcel tax. That will remain exactly the same as today. We're not changing that. If we were trying to reduce transparency, we would be trying to wipe that all away. We're trying to be nuanced here by saying it works for the simple taxes. It doesn't work if you have tiers. There are tier taxes, and there are districts that don't want to do a tier tax, even though that might be the better route.

We want homeowners to pay less than large commercial property owners, for example. You may not be able to do that anymore because there are not enough words to even fit everything in that you need to fit. And so it's just the logistics of how you put together a ballot question that's even doable within 75 words or is so convoluted that voters can't understand it. We have seen, we're happy to get data.

We have this data. The passage rates and the percentages by which these measures us have gone down since these passed. We know that there are districts, particularly school districts, that have decided not to go to the ballot because the new language, the polling is so atrocious. And in fact, they polled both the old pre-Obernolte language and the new. And there's a very significant difference. It's having real impacts. And I think we all agree. I think everyone agrees.

We want our schools to be able to fund their capital needs. We have buildings that are in an absolute dilapidated state. We, as a state, we are not investing nearly enough in addressing sea level rise and wildfires. You look at all the resilience, all the flooding and the fire problems that we have, where cities and counties, we're expecting them to do massive infrastructure work, and we're not giving them enough as a state. And now we're saying, oh, guess what?

We're also going to make it harder and harder for you to raise revenue locally to do it. So that's what this is about. And again, we're being nuanced in terms of keeping it intact for some but not for others because of the sort of demonstrated problems that it's caused for those areas.

Right. And I understand what you're saying, but my concern is, and my question kind of is, well, are these ballot measures failing because now people are looking at the ballot language and determining, hey, wait, this is a tax increase, and they have more information available to them, and that's why it's not passing. Or is it because, as my colleague had mentioned, there's a decrease in the, because I know on a lot of the people I represent, this is what it is.

There's a decrease in seeing when they pass a bond or they pass a tax, the results that they were promised. And I think that's the bigger problem than language. And I think this can be probably solved a little better by doing a summary and then putting at the bottom, especially for tiered rates, this is a complex formula.

You can refer to the ballot language in the pamphlet for a more detailed explanation that will tell you in more detail exactly what's going to happen, including what buildings are going to be built. The problem that they've been having is those things don't happen or they cost so much that they're pulling money out of other areas. And taxpayers have grown weary of that.

And that's the issue I have with this, is it seems like it's going to try to, maybe it's not the intention, but it's going to have the effect of not giving them the information that they've been thinking, basing their voting decision on, because a lot of us know a lot of people don't get past that ballot language. They don't go to the voter guide.

So, Senator, a couple of things. In terms of people having concerns that the money that they're authorizing isn't getting spent as quickly as it won or efficiently, that concern, that's not new. That's not like a new concern that popped up 3, 4, 5 years ago. Right. You and I have both been around this a long time in local office, et cetera.

And the people who have those concerns and the times when government doesn't deliver a project as efficiently, as effectively as possible, that is not a new issue. And again, this is a new thing. Right. This is, this is just a few years old.

And I think that also points to another piece of this, that there's nothing biblical about these bills that passed 16 years ago or five and a half years ago, 7 and a half years ago. For many, many years, these were not part of the law. This is not like we're repealing something that's like so fundamental to California ballot measure law because these were not part of the law for all those years. It's a new thing.

We tried it, I supported it, and it's partially working and partially causing significant problems. And sometimes you can't even fit it in 75 words. And no one from the opposition has ever given a solution to that.

I understand that. But eliminating I don't think would help.

Not eliminating, it's modifying.

Modifying it to just say, go look it up somewhere else. They still need some basic information because that's as far as a lot of people get, and that's what my concern is. I don't have the luxury of waiting for the next meeting on this bill. I have to make up my decision today. So thank you.

Thank you.

Senator Dahle.

I just want to weigh in. It's about transparency, really. At the end of the day, whether they've declined, we don't know all the factors in that because, unless you actually survey the voters and find out why they voted the way they voted, it's hard to tell. For me, it's about, I voted for both of the Obernolte bills. It's trying to get people educated on what they're voting on and not confuse them.

And so I think that I'm going to lay off your bill and see what comes out of the Committee. I don't like the fact that we're confusing the voters, and we want to make sure that we do it. And look, all the people that support it are people who obviously didn't get their bonds passed, and the people who don't who are opposed to it are Howard Jarvis, taxpayers, and realtors. That I saw. Unless they have came off of that, I don't know.

So anyway, I'll be laying off the bill today. I want to learn a little bit more about it. But at the end of the day, I'm for transparency. We need to let the people actually know what they're getting charged. And if it's hard to do that, maybe we should look at trying to figure out how to get it done so that they actually know what they're getting charged.

Because the majority, I've worked on trying to pass local taxes to fund things like ambulances and fire halls, and it's very difficult to get those done until you explain to them what they're paying for and what they're receiving. I think Californians are more than, at least from my hear from my constituents, they don't trust us to spend the money correctly. That is the biggest issue.

It's like billions of dollars going to trains and to things that they don't ever get a return on, and billions of dollars for water systems that don't ever get built, and then we're coming back to them and asking for more money. I think that's a bigger issue that we have to be accountable for. We've lost the trust of a lot of these people who pay those taxes, and that's unfortunate.

Any further comments from the Committee? If not, Senator, I'll allow you to conclude.

Yeah, one thing I just want to note, and I say this, I think like a lot of people here, I was in local elected office, been around this for a while, as have you. Does government sometimes mess things up in terms of things end up being more expensive or delayed? Absolutely. I've been very vocal about times when I think a project hasn't been delivered in a timely way.

I will also say, and I can only speak about my own community, where I've been involved with a lot of bonds. San Francisco, we have rebuilt or rehabilitated our entire park system, every rec center, every park, every pool, every playground, everything, everything. Our entire library system, which I think is the best library system, and I think best park system in the country. We've done that all with bond revenue, and it's been overwhelmingly well spent, at times under budget.

And so government, yes, sometimes messes up, but there are so many times when government actually takes the bond money, takes the tax money and appropriately spends it. And so I don't buy into the narrative, I'm not suggesting you're saying this, but there's somewhere like government can't do anything, right. Can't spend anything. Bond money is always wasted. I think it's not true.

I think there are times, like anyone else, where government screws up, and there are plenty of times when government spends the money well and delivers projects, whether it's schools or parks or anything else, that make fire stations, that make people safer, healthier, and make our lives better. And that's what this is about. I agree transparency is important, which is why I voted for the 2017 bill.

But when we say transparency, it's about how do we do transparency and how do we do it in a way that is actually implementable and that works, and that doesn't distort the system. And right now, the laws on the books are distorting the way that we do bonds and taxes, and so we want to tweak it, and that's what we're doing with this bill. And I respectfully ask for an aye vote.

Thank you very much. Is there a motion? Senator Blakespear moves the bill. It's do pass as amended to Elections and Constitutional Amendments. Please call the roll.

[Roll Call] Five to one.

That bill is out. Five to one.

Thank you very much.

We're going to go back in the agenda to File Item Number Two by Senator Ashby: SB 314. Welcome.

Slightly shorter than Senator Wiener. Let me move that mic. Thank you so much for having me, Madam Chair, and just for the record, that's the first time I've been able to say Madam Chair in my presentations, so I'm grateful to have it come out of my mouth into your ears, Senator Caballero. Today I rise to present SB 314, which would create an independent redistricting commission to draw the district boundaries in Sacramento County.

I'll start by thanking your amazing Committee Consultant, Colin, for his keen attention to detail, and that we'll accept the Committee's minor technical amendments to clarify which county official will administer a drawing to determine the first eight commissioners. In California, existing law allows counties to establish advisory or independent redistricting commissions. In the City of Sacramento, I worked when I was a council member to pass a reform that established the city's Independent Redistricting Commission. But many other jurisdictions have done the same.

Los Angeles, San Diego, Riverside, Fresno, and Kern Counties all have similar programs. Studies of this past cycle do show that independent redistricting commissions were more transparent, promoted more public participation, and that the maps drawn were more reflective of the community than the areas that were not. By contrast, in 2021, the Sacramento County Board of Supervisors drew their own district lines. They did hold hearings and they did take public comment, but ultimately made the final decision themselves as to their own areas of representation.

Many groups felt their voices were silenced or that their communities were split between districts. In particular, the API community and the LGBTQ community were vocal about that process not particularly being fair. SB 314 lays out eligibility requirements and selection processes that are modeled after the bills established by the commissions in Los Angeles, San Diego, and Riverside, as well as the policies that I authored as a member of the City of Sacramento. I respectfully ask for your aye vote. My primary witness is not available today, but is from the organization Organize Sacramento.

Very good.

Thank you.

Is there anyone that would like to testify in support of this bill? Please come forward to the mic and identify yourself. Seeing none, is there anybody who would like to speak in opposition to this bill? Like to invite you to please come forward. Seeing no movement, we'll move on to the teleconference line and see if there's anybody that would like to testify in support or in opposition of SB 314.

And remember, it is one zero at this time. Please press one zero if so. And given a moment here, we have nobody in queue at this time.

Very good. No one in queue. We'll bring it back to the Committee.

I will move Ms. Ashby's bill. Senator Ashby's bill.

Thank you.

Very good. Any other comments or concern? Senator Seyarto.

So I do have a little bit of a problem with the bill. The Independent Commission is--I think that's not a controversial thing as long as it's independent, but your bill actually specifies that it actually has bias built into it by having the membership, instead of just being even or even not defined. It inherently builds in more of one political party than another, which doesn't make it as independent, makes it more biased.

If that weren't there, I'd be fine with this bill, especially because I believe agencies, Sacramento and others, they have the right to do what they want to do with their redistricting processes, but in this particular case, I'm looking at this and thinking, how is that an unbiased independent look at how to redistrict?

I think it's unbiased in the sense that maybe for you it feels biased because it reflects the membership of that county, and in Sacramento County, it is clearly one party over the other. If the county switched to the reverse of which, it would bias itself that direction. It only biases itself in relation to what the makeup of the county is.

Right. I understand that, but it takes the unbiased effort to do redistricting out of it. There's plenty of things that go into it, but this just--and either way, I don't condone it either way.

Sure. I understand what you're saying.

I'm just saying it looks like it's not achieving any more than what people were concerned with. That's the reason they went to these independent redistricting commissions is to get that bias out and to not have gerrymandering based on political party preference and things like that.

Well, if I can answer your question, Senator Seyarto, first of all, as you know, and I know you know this, but I say it so that others can hear, the county and the city are nonpartisan seats, so they're not based on partisan politics, but what we have seen in the past is where a redistricting process doesn't accurately reflect the community, that's when there's bias.

So what this bill seeks to do is accurately place people in positions who reflect that community so that when you draw lines, those lines are then conducive to the representation being more accurate of the body.

So I would actually argue the opposite, that this bill seeks to consider exactly what you're suggesting and doesn't leave that unanswered, if that makes sense to you. If it were silent on that issue, then you could have an entire redistricting commission that doesn't reflect the population inside of that county, which is different in each county, which is why I think, you know, it's important that this is Sacramento only. This doesn't apply to any other county but Sacramento.

Right. The other counties have done it differently.

Some of them have, and some of them done it the same.

They've got the uneven amount. They don't?

This is modeled after LA, San Diego, Riverside, and Sacramento.

Senator Durazo.

Yes. I thank the author. I have a similar bill running right now. The main thing that we were trying to accomplish, which I think you accomplish, is that the bias with regards to incumbent elected officials, that they don't use that power to then come up with boundaries that are going to benefit them and give them an advantage over to be able to win a reelection or two.

So that's a big piece of, I think, what independent means, is keeping your bias out of the equation when the lines are drawn so that you're not given an advantage in that seat. So I think that's another piece of this that's really important to remember, but I support your efforts.

I appreciate that. Thank you. Yes, that's absolutely the balance we're trying to strike.

Senator Glazer.

Just on this point, I mean, I'm reading from the bill the amendments that have been submitted to the Committee, and it says, 'the Commission shall consist of 14 members. The political party preferences of the Commission members, as shown on the member's most recent affidavit of registration, should be as proportional as possible to the total number of votes who are registered with each political party in the County of Sacramento or who decline to state or do not indicate a party preference as determined by registration at the most recent election.' So seems like that's responsive to the concerns that have been raised. Am I reading that accurately?

Yeah, you are, and it's also not a requirement to have the number of Dems there. It's just a goal.

Great. Thank you.

Yeah. Thank you, Senator Glazer.

Any other questions, comments? Senator.

Yeah. I want to thank the author for bringing this forward, and I fully support this bill. I think in the last few years we've had to deal with this with a number of counties, both blue and red, that have refused to do it locally and continue to gerrymander and have the impact of really excluding sizable communities within that county from fair representation. So ideally, counties would just do this locally and do the right thing, and it can be a wide variety of redistricting approaches.

Not every independent redistricting commission has to be exactly the same, but we have counties that are not doing it at all, and it's having problematic results, and so I fully support this.

Thank you, Senator Wiener.

Has a motion--if a motion hasn't been made--

No, it has not.

I move the bill.

Oh, I'm sorry.

Oh, sorry.

We do have a motion then. Any other comments or concerns? You may conclude.

Thanks. I really do appreciate the input of everyone, including you, Senator Seyarto. I think it's good to have that conversation, and we have tried very hard to strike a balance here. I hope you can support the bill. I urge an aye vote.

Very good. The motion is 'do pass as amended to Appropriations.' Please call the roll.

Motion is 'do pass as amended to Elections and Constitutional Amendments Committee.' [Roll Call].

Chair, it's already been heard in elections, so I think we're on to a different location.

Yes. Do pass to Appropriations.

Yay. This one I got right. Do pass to Appropriations.

But I think we're headed to Appropriations next, unless you want us to go back to Elections, which we'll happily do.

No, that's fine.

My apologies. Motion is 'do pass as amended to Appropriations Committee.' [Roll Call].

Six to two. The bill is out.

Thank you.

Thank you very much. Members, we're going to move on to file item number 12, SB 569, by Senator Glazer.

Thank you, Chair Caballero, and to your Committee staff for working with me on this bill. SB 569 would increase the Renters Tax Credit for the first time in 44 years. Since the last increase in 1979, average rents in California have more than tripled. According to the Legislative Analysts Office, renters have been disproportionately affected by the economic consequence of Covid-19. Renters on average earn less than homeowners and were more at risk of losing their jobs because of the stay at home orders.

Currently, the credit is just $60, $120 for joint filers and heads of households. This bill would tie the credit, this very low credit, to inflation. The measure would also make the Renters Tax Credit refundable, meaning all renters who are eligible would receive the full amount of the credit even if it exceeded their tax obligation. That means under this bill, about a million renters now would receive some credit that they'd become eligible based on estimates from the Franchise Tax Board.

We're working to ensure applicable funding is included in the Joint Legislative Budget Proposal. However, it's important to place this new structure in place so renters in need can receive relief regardless of funding. With me today, I have David Knight from the California Community Action Partnership Association to testify. Thank you for your consideration today.

Thank you very much. Like to welcome Mr. Knight to the mic.

Good morning. I think it's still morning. Thank you all for being here. As mentioned, I'm David Knight, the Executive Director for the California Community Action Partnership Association. We are a nonprofit membership organization that is compromised of 60 community action agencies and community service block grant eligible entities throughout all 58 counties in California.

Now, each agency we represent creates locally developed solutions and opportunities, as well as administers critical funding and services to help economically disadvantage Californians and marginalized communities to maintain stability and create the opportunity to achieve self reliance. Now, on behalf of CalCAPA Board of Directors and Agencies, I'm here to testify for support on SB 569, which will provide long overdue changes to the Renters Tax Credit and provide financial relief to 2.4 million low and middle income renters in California.

As mentioned, the Renters Tax Credit was established in 1972, has not been changed since 1979. Now, while the Legislature has made strides in expanding affordable housing, little has been done to provide financial relief to those who need it most, renters. Now, especially now that we're in the middle of the eviction processes, or protections have expired, renters are still struggling. Even if rent prices return to the pre pandemic levels, the financial fallout has expanded opportunity issues, affordability issues for many low and middle income families.

Cost burdened renters who spent more than 30% of their incomes on rent, utilities increased to 46% during the first year of the pandemic. Personally, while this bill is not directed towards me, I've been given a 16% rent increase last year and another 10% this year. Now, CalCAPA members focus heavily on creating the opportunity for all Californians to have the ability to prosper in their own communities.

SB 569 is a major step in the right direction for each family that we serve. It will take years to meet the goals of equitable housing in this state, but renters are struggling today. This tax credit will give opportunities to a family right on the verge of tipping into homelessness and is a real practical solution for today while also ensuring long chances for tomorrow.

I want to thank Senator Glazer for the invitation to advocate on behalf of the passage of SB 569 and for the leadership of this Committee in recognizing the support and the empowerment this bill creates for our families and for allowing me the opportunity to speak today on behalf of CalCAPA's Board of Directors, our membership, and the communities we serve. Thank you.

Thank you very much for your testimony today. Want to invite anybody that would like to testify in support to please come forward. Anyone in room?

Good morning, Madam Chair and Members. Sosan Madanat at W Strategies here on behalf of California YIMBY in support. Thank you.

Thank you.

Good morning. Adam Briones, California Community Builders, in support.

Good morning. Stephanie Estrada on behalf of the City of San Jose in support.

Andres Ramirez on behalf of All Home in support.

Is there anyone else in Room 1200? Seeing none, we'll move on to witnesses in opposition. Is there anyone in Room 1200 that's in opposition? Please come forward. Seeing none, we'll go to witnesses via the teleconference line. Is there anyone who would like to testify in support or in opposition on the teleconference line? Mr. Moderator, if you could queue them up.

Thank you. Again, it's 1-0. At this time, please press 1-0. And we'll go to line 26.

Taxpayers Association in support.

Thank you.

Again, it's 1-0. Currently nobody else in queue.

Very good. Bring the matter back to the Committee. Are there any questions or any comments? There is a motion. The motion is do pass to Appropriations. Senator Glazer, you may conclude.

Thank you. I've worked on this issue for five or six years here in the Senate, but actually worked on the 1979 measure, last time it was ever increased. I'm showing my age a little bit there. But we know that the bill is a step forward, but we know it's not doing enough. I had a bill last year, last session that raised the credit to $500 and $1,000, which is where it really should be, plus tying it to inflation.

We know we have budget issues. I don't always agree with the budget choices that we make, but the choices have been made. And for whatever reason, the Renters Tax Credit increase has fallen on the wayside. The Senate, I praise the Senate leadership for stepping up and fighting for it, but it just hasn't been successful. So we'll keep working. This is a modest step forward and appreciate your support today.

Thank you very much. Good bill. Again, the motion is do pass to Appropriations.

[Roll Call] Seven to zero.

That bill is out. We'll put it on call for the absent Members. I'm going to now turn the gavel over to Vice Chair Seyarto so that I can present my bill.

Senator Caballero is here to introduce her Bill 684, SB 684, whenever you're ready, Senator.

Thank you very much, Mr. Chair. I'm pleased to present SB 684, which creates a streamlined process for communities to build small scale home ownership projects. Since 2010, California's population growth has far exceeded the number of new homes built. The lack of new housing construction has been a key factor in the state's affordability crisis because supply simply has not kept pace with demand. The lack of supply and affordability crisis has also continued to drive down California's home ownership rates and drive up rental costs.

In fact, the affordability crisis has become so extreme that homes now cost more than 8.5 times the average family salary, versus only 2.5 times in the early 1970s. As a result, the American dream of homeownership is now out of reach for many California families, especially families of color. Just like housing, affordability has driven homeownership rates down for communities of color. Local planning rules have created barriers to homeownership.

Many communities throughout the state have enacted policies that restrict denser developments in single family neighborhoods, which prevents the construction of smaller starter homes working families can afford. Under existing law, the framework for dividing land for sale, lease or financing is set forth under the subdivision map out, or the SMA, which has been on the books since the mid 1970s. The SMA creates an extensive permitting and approval process that often delays the permitting and construction phases of new homes.

While the SMA is an important tool for both local agencies and developers, there are opportunities to streamline processes to help allow construction to begin at an earlier stage. SB 684 expands the tools available to local governments and developers to streamline small lot subdivisions for the construction of homeownership projects to create more lower cost homes for sale. Specifically, it will shorten the time frame for development by authorizing local agency to issue building permits once a tentative map has been recorded and provides for ministerial buy right approval.

What's important here is we're not talking about a huge project. We're talking about small projects that would provide that opportunity. SB 684 also includes important guardrails to ensure neighborhood characteristics are preserved, such as requiring developers to abide by existing setbacks and height requirements, and include any affordability provisions required at the local level. Additionally, any proposed development cannot be greater than 10 units on parcels of five acres or less.

So we're talking about small projects and located on parcels either zoned for multifamily residential or vacant parcels zoned for single family residential development. With me today to testify in support of SB 684 is Sosan Madanat on behalf of California YIMBY and Adam Briones on behalf of California Community Builders.

Great. Thank you. Witness when you're ready, go ahead.

Good morning. Chair and Members of the Committee, my name is Adam Briones, and I'm CEO of California Community Builders, a nonprofit working to close the racial wealth gap, focusing on housing and home ownership. As an organization led by and serving people of color, I'm here today as a proud cosponsor of SB 684. This essential legislation will produce more homes that are lower cost and more accessible to first time homebuyers by enabling production of single family homes, or townhomes, on lots that are smaller and less expensive.

California's median lot size is 8300 square feet and research has found that land costs make up more than half the price of homes in places like Los Angeles, San Diego, Salinas, San Jose, and San Francisco. As such, the math driving SB 684 is simple. A home that comes with less land will cost less. Many families want and can afford a large home with a large backyard, and these families have plenty of options in today's market.

But families, and I would argue many more families of color would love to buy a home with less land if that made the American dream of home ownership possible for them. But too many can't buy a home at all because affordable options simply aren't built anymore. SB 684 addresses this head on, making these types of homes much more common and creating increased choice for diverse families.

My organization is deeply invested in this topic because while home ownership is the way in which most Americans build intergenerational wealth, only four in 10 black and Latino Californians own their own homes. That's one of the main reasons why, for every dollar of wealth held by a white family, black and Latino families only have about $0.16.

Home ownership is a broadly shared value in California, and SB 684 represents one concrete step in creating the important, admittedly technical, changes needed to actually produce lower cost, for sale housing and making that shared value a reality. There are no silver bullets when it comes to addressing California's housing and home ownership crisis, but SB 684 creates an important tool for building affordable homes and building wealth for everyday Californians. Thank you for your consideration on this important measure, and I respectfully request your aye vote, thank you.

Thank you for your testimony. Next. Speaker.

Good morning, chair and Members. My name is Sosa Madinet. I'm here today on behalf of California YIMBY as a proud co sponsor of SB 684. California YIMBY is a statewide organization of over 80,000 neighbors dedicated to making our state an affordable place to live, work and raise a family for all Californians. While there's no singular reason for California's housing crisis, the LAO has identified the undersupply of housing as one of the biggest culprits.

This has contributed to California's high housing costs, and we have the third highest median home price and the second lowest homeownership rate in the nation. This was made painfully clear last week when we saw the California Dream for all programs, $288,000,000 in homeownership funding fully extinguished within 11 days. The low ownership numbers are particularly concerning when we consider that homeownership is one of the most important generational wealth building tools for our families, and those hardest hit by the affordability crisis are people of color.

A practical tool to address this problem is by removing barriers to the construction of missing middle housing. Missing middle housing refers to a range of multiunit, clustered housing types compatible with single family neighborhoods such as fourplexes, duplexes, cottage courts, and townhomes. And the creation of this housing can have a positive impact on the availability of more affordable starter homes that allow new buyers to enter the otherwise competitive marketplace.

However, barriers such as the lack of clarity within the subdivision map act prevent small scale developers from developing these housing options. SB 684 encourages the creation of these missing middle housing types by streamlining the subdivision map act, allowing small projects of 10 units or less to move forward sooner in the mapping process, saving critical time in the development timeline.

As my colleague said, while there's no silver bullet to solving the housing crisis, there are important steps that we can take to encourage the production of lower cost ownership opportunities, and SB 684 does just that. It's for these reasons that we respectfully ask for your aye vote today, and thank you for your time.

Thank you very much. And now we'll go to the room to see if anybody would like to come in and add on. Please just state your name and your support for the Bill and your organization.

Hi Members. Graciela Castillo-Krings here on behalf of All Home in strong support. Thank you.

Thank you.

Vanessa Chavez with the California Association of Realtors in support. Thank you.

Stephanie Strada, on behalf of the California Building Industry Association in support.

Brian Sapp on behalf of our clients, SPUR, Habitat for Humanity California and Barrier Council in support.

Nina Weiler-Harwell with ARP California here in support of SB 684.

All right, well, thank you very much everybody. Now we're going to go to the room. Is there anybody who wishes to speak as a primary witness in opposition to SB 684? I don't see anybody scrambling to the mic. So is anybody in the room would like to go to the mic and oppose SB 64? There's none there. So we'll go to the phone lines at this time. Operator, if you can go to the phone lines and see if we have anybody wishes to express their support or opposition to SB 684. And please, if you're calling in your name, your organization, and just simply whether you support or oppose the Bill.

Thank you. At this time, please press 1 then 0. We can go to line 32.

Benny Diaz, representing the California Hispanic Chambers of Commerce, very much in support.

Next, we can go to line 34.

Good morning. John Minet with East Bay for Everyone in support.

Next we have line 35.

Hi, Alison Schallert, a single family homeowner in Los Angeles, calling in support and gratitude for anything you can do to build more housing and make it more affordable. Thank you.

And next, we can go to line 33.

Hi, this is Ryan O'Connell in Napa from How To ADU calling in support. Thank you.

Again it's 1 then 0. Currently none further in queue.

All right, if there's nobody else on the lines to speak, then we will bring it back to the dais. Do we have anybody who wishes to comment? Questions for the author? There being none, we get a motion. Anybody? Motion. Thank you. I think I saw Senator Wiener down there move the. So, Senator Caballero, would you like to close?

Thank you very much, Mr. Vice Chair. And I want to thank all the witnesses that were here. If this was a silver bullet, I'd be really excited. This is just one little piece. And quite frankly, for many of the communities that I represent, most of the developers that come in develop very small projects, and the opportunity to start a project earlier and have it fit in with the neighborhood is incredibly important. And so I respectfully ask for your aye vote.

Thank you very much. Go ahead and call the roll.

Motion is do pass to the Rules Committee. [Roll Call]. Five to zero.

All right, that motion was due past two rules, and it passes 5 to 0. We're going to leave it open for others to add on. All right, that brings us to your next Bill. It's SB 747.

Thank you, Mr. Vice Chair. I'm pleased to present SB 747, which would make important changes to the California Surplus Land Act to provide clarity to its application and allow flexibility for local governments to develop economic opportunities that are critical to the goal of affordable housing production.

First, I would like to extend my sincere gratitude to Committee staff who have been working very closely with me on this issue, and I will be accepting the proposed amendments outlined in comments 6 and 7 on page nine of the Committee analysis. For decades, redevelopment agencies, or RDAs, were equipped with broad community revitalization authority and financing powers.

A core feature of the former RDA tool was that it enabled local agencies to acquire properties and assemble land that could be used to revitalize deteriorated neighborhoods and attract and expand new businesses and jobs to the community. After RDAs were eliminated in 2011, the Legislature recognized that local agencies needed new economic development tools and enacted a variety of laws, including state economic opportunity law, to authorize local agencies to acquire and dispose of property for economic growth.

Since the enactment of the economic opportunity law in 2017, local agencies have utilized this tool to acquire deteriorated buildings, underutilized lots and other property, often in underinvested neighborhoods and downtowns, with the eye to the future sale or lease of these properties to advance private sector investment. All this to revitalize neighborhoods to create economic opportunity by expanding job opportunities, businesses and property and sales tax revenue.

When a local jurisdiction acts to dispose of property excess to its need, property acquired with the goal to pursue economic opportunity, it must undergo review under the Surplus Land Act. The SLA requires a local agency seeking to dispose of real property as surplus to first make it available for affordable housing.

In 2019, AB 1486 imposed requirements under the SLA, which included giving the Department of Housing and Community Development an oversight role and the ability to impose fines when a local government is found to have violated the SLA.

The point of this Bill is that there was this economic opportunity act that was passed and then within a couple short years, the SLA and it created this challenge as to what the surplus land could be used for and how it could be either sold or leased in the future. And when we gave HCD the authority to provide oversight, it created this situation where if you were wrong in your decision, you could be fined.

And for those of you who have served in local government, it created this fear of getting it wrong created a legal paralysis where cities then don't take any action at all because they don't know what they can do with the property in order not to face a fine.

SB 747 makes a number of changes to the SLA to provide greater clarity for local governments when property is deemed surplused first and foremost, it provides much needed clarity that the economic opportunity law remains an independent and alternative process for public agencies to dispose of their property. Second, it makes numerous improvements to the SLA to help local governments advance development while avoiding needless delays and uncertainty.

More specifically, allows local agency to dispose of surface property for mixed use projects, which contain at least 25% of its units affordable to low income households. The Bill also clarifies that land retained by local governments for several purposes, including broadband development, transit oriented development, land for airports or ports, tide lands, and waste all qualify for agency use. Transferring the property over for those kinds of uses won't violate the SLA.

In other words, I had a situation in a number of my cities where there was property available and it sat vacant forever because it was not clear whether they could use the property for economic development, which is how it had been purchased originally, or whether they had to go through an SLA process. Local governments have a responsibility to build housing and support economic development within their communities. Both are critical components to ensure that that happens, both the economic development law and the Surplus Lands Act.

However, the Legislature has a responsibility to ensure the laws pass do not inadvertently punish local governments that are genuinely working to advance development that supports the needs of their communities. With me today to testify in support and facilitate a conversation about the Bill is Aaron Laurel, City Manager of West Sacramento, and Jennifer McLain Hiramoto, Economic Development Director for the City of Ontario.

Thank you. Witnesses if you can come forward.

Thank you. Good morning. Chair and Members of the Committee. Again, my name is Aaron Laurel. I'm the City Manager of West Sacramento, here in my capacity as a Board Member and a former Chair of the California Association for Local Economic Development, or CALED. Our organization represents local economic development professionals throughout the state who are engaged in efforts to improve communities in places like West Sacramento and Ontario.

Speaking of Ontario, I'm joined by Jennifer Hiromoto, the Economic Development Director for that city and also a CALED Board Member. We'll offer some perspective from two cities, one much larger, one a little smaller, but both with the same message that CALED is strongly in support of SB 747 by Senator Capillaro, because it'll do three main things, and the Senator really already articulated these. But first and foremost, it clarifies the ability to use the economic opportunity law.

It also provides important clarifications to what is and isn't covered by the SLA, and third, it includes a transparency and due process process, I'm sorry clause where properties that are subject to the SLA have a way to go through due process. It's that first point that I really want to emphasize, though, the importance of why does it matter for local government to be able to use these new tools, especially in the post redevelopment environment?

That's because local communities are really your most important drivers of outcomes that need to happen in California, things like sustainable development patterns and balanced local economies. You achieve those outcomes in large part by building more dense infill housing, by building affordable housing, but also by repurposing brownfields, doing adaptive reuse projects, and by bringing jobs and amenities to those areas as well. But for those things to happen, cities need to be in the game, as I like to say.

We need to be, and more importantly, be encouraged to directly intervene in the market to take on those tough projects that the private sector just won't touch. For many years, following the loss of redevelopment agencies, local government struggled to rebuild the tools needed to do that to transform places and address economic challenges.

And thankfully, the Legislature created several new tools, and many cities are using those now to reinvest in places like West Sacramento's riverfront, Ontario's downtown, and many other places that we've created literally thousands of new units and capacity for many thousands more, and also centrally located jobs and amenities to support that type of environment.

Our cities and many others are starting to use these new tools, things like EIFDs for tax increment financing, and also the economic opportunity law, which empowers local governments with the authority to acquire and dispose of property, as the Chair described. SB 747 provides greater certainty for our cities and counties to utilize these tools and to lead those revitalization efforts in our communities.

We appreciate the chair's efforts to clarify the application of the SLA, and despite language already in the SLA and I'll read it, it says no provision of this article shall be applied when it conflicts with any other provision of statutory law. It has still become very challenging for local government to understand what's covered by it and what's not. So lastly, I'm always confident to stand up West Sacramento as a statewide model for how to do reinvestment and redevelopment in a strategic and responsible way.

And in my city, I have multiple examples that I could give of how the SLA has caused confusion and delays to some otherwise really great projects that would add more infill housing, more amenities, more investment, affordable housing, high quality jobs, and including an adaptive reuse project of a historic building. But I'll just say this instead. The worst thing about the current ambiguity of the SLA is that it's had a chilling effect. It's that fear of proceeding in these projects.

And so these are transformative projects that really need to move forward. They're hard enough to get going just with the amount of money and time it takes to assemble land, do cleanups, to build infrastructure, and let alone finding the funding to do all that. So the last thing you want to do is discourage local governments from intervening and taking on those projects, and that's what the SLA is doing. Sure.

Thank you.

Now we'll turn to Jennifer for some additional local perspective. Thank you.

Thank you. Next speaker, please.

Great. Good morning. Thank you, Chair, and thank you to the Committee for your time. I'm Jennifer Hiromoto, Executive Director of Economic Development for the City of Ontario, and I also serve on CALED's board, as well as chair its Project Development and Finance Division. I'm here to offer a local perspective and to tell you a story about Ontario and likely a place that you can relate to in the communities in your district. Ontario is a growing city.

Our population is expected to double to 300,000 over the next 20 years. It's also home to the nation's fastest growing airport, which continues to be a major hub of employment. And Ontario continues to seek out new economic development opportunities to create a range of jobs, amenities and homes to match the diversity of the community. Ontario supports affordable housing, and I want to underscore that we support affordable housing. The city remains one of the most affordable communities for middle class families in Southern California.

We are proud to have adopted our recently certified housing element, which allows the building of over 20,000 housing units in the next eight years. And this includes affordable market rate, single family homes and addresses the missing middle, which we've heard about earlier today. But in our effort to create a balanced community and infuse housing, we also have areas in Ontario where neighborhoods are blighted and properties are underutilized.

We need to employ strategies to help renovate these areas and continue to bring back more businesses, jobs and amenities for our businesses and our community. One such area is downtown Ontario, which was the core of the city when it was first founded back in the 1800s. Again, I'm sure you have downtowns in your communities that you can relate to. This historic, walkable, authentic downtown. While charming, it's a ghost town right now.

Absentee landowners, unreinforced masonry and historic properties have made it very cost prohibitive for developers to come in and for us to attract private investment and to create a vibrant downtown. Today, nearly 50% of the properties are vacant and it remains one of the biggest missed economic development opportunities, not just in Ontario, but I'd argue in Southern California. The city has started to take steps to address this, including acquiring property. And with tools like economic opportunity statute, we will have the ability to revitalize downtown Ontario.

Without it, those properties will continue to sit vacant, just as we've discussed. This statute enables communities like Ontario to focus on adaptive reuse of historic buildings, to repurpose public lots for institutions of higher learning, and to create new commercial amenities that leverage investment around transit hubs. Cities and counties, in closing, need to have clarity that we can use the economic development tools the Legislature has adopted, and we appreciate SB 747's effort to provide that. On behalf of CALED, we respectfully request your aye vote on SB 747. Thank you.

Very good. Thank you for both of you speakers coming to give us your perspective on the Bill. Do we have anybody else in the room at this time who would like to come to the mic and express your support for the Bill? Name, organization and support.

Adam Briones, California Community Builders in support.

Thank you.

Stephanie Estrada, on behalf of the California Business Properties Association, in support.

Thank you.

Matt Robinson with the California Transit Association. We don't have an official position yet. But look forward to being in support in a couple of weeks. Thank you.

David Jones, on behalf of San Marcos, in support.

Good morning. Amy Jenkins on behalf of San Bernardino County and the City of Ontario, in strong support.

Good morning. Chair and Members Kirk Blackburn, on behalf of the City of Inglewood, in support.

Good morning. Chair and Members Marcus Detwiler with the California Special Districts Association, also here on behalf of the Association of California Healthcare Districts and the California Association of Sanitation Agencies. We are a support, if amended, position for reasons as outlined in our position letter to the Committee. Thank you.

Thank you very much everybody, for your cooperation. And now, is there anybody who wishes to speak in opposition as a primary witness, come forward to the mic.

Good morning, Mr. Chair Members Andres Ramirez, not as a primary witness, but here on behalf of the Nonprofit Housing Association of Northern California and to express some similar sentiment from the Public Interest Law Project and California Rural Legal Assistance Foundation. The organizations do have a number of concerns with the Bill, but really do appreciate the willingness of the author and her staff to follow up on those conversations after this Committee and just look forward to working with her and her team going forward. Thank you.

Thank you very much. Is there anybody else in the room? If there is not, we will go to the phone lines. Operator, if you can dial up for anybody who wishes to speak in favor or opposed to the Bill. Now is the time to call in for that. Please just state your name, your organization, and your opposition or support for the Bill. Thank you.

Please press 1 then 0 at this time. If so, we'll first go to line number seven. Please go ahead.

Good morning. Pilar Onate-Quintana, on behalf of the Irvine Ranch Water District, in support.

One moment here. Got a couple more in queue. Just give me a moment. Again, it's 1 then 0, of course. And we'll go to line 31.

Good morning. My name is Cammie Martin. On behalf of the City of Tustin. We support SB 747. Thank you.

And next we go to line at 38.

Ethan Nagler on behalf of the Cities of Bakersfield, Corona and Carlsbad, in support.

And at this time, none further in queue.

Great. We'll bring it back to the dias. Anybody wish to speak? We have a motion to move the Bill. Go ahead, Senator Durazo.

Thank you. Thank you. I want to thank the author because I know that when you bring up bills like this, what you're really trying to move forward for our communities that need resources so badly. As you were explaining and the witnesses were explaining what you were looking to accomplish with this Bill, it reminded me of the redevelopment agency that we used to have in all our cities across the state. And frankly, after it was dismantled, I got to appreciate it even more than what I thought.

And part of it, I think the reason, was that it was a combined economic development with housing. For the most part, it was a comprehensive approach to issues of economic development and housing. And I really felt the loss of that approach after it was dismantled. So I see here now sort of a balancing act between economic development, housing, and the other things that we need in our communities. I guess I want to dig into it a whole lot more than what I was able to do.

I'm supporting it because I think I know where you're coming from, but I just want to understand it a little bit better and maybe we'll have some suggestions for it. I think economic development is sometimes a very subjective, depending on who you are. There were projects that were considered economic development, that were a fast food restaurant. That, to me, is not economic development, because jobs at a minimum wage to build on a blighted lot is not something that's going to move that community forward.

So just rambling here with thoughts about it. But if there's anything more you want to tell me, and we could meet in addition to today's hearing, but that's just where I'm coming from, is how do we make sure there is a comprehensive approach and that we're not leaving off the table more of a community benefits approach?

Anybody else? I just have a couple of comments. Number one, thank you very much for recognizing the need for this type of a Bill. People have good intentions when they pass our bills. As they go through for a couple of years or three or four years, we start seeing some of the unintended consequences. And it's important if we want to continue to have public support that we make the adjustments that need to be made so that cities can be successful. So with that, again, thank you. If you have anything you'd like to close with.

Actually, can I.

Thank you. So I'm going to support this today. It's obviously going to be coming to Housing Committee, and I know we'll be working with the author on this. Surplus Lands Act, this has been a work in progress for a number of years. And I know, for example, Phil Ting has a Bill this year. I believe the two of you may have spoken already, and ultimately there's going to have to be coordination among these bills.

Oh, yeah.

This Bill is very broad right now, and I know this is my favorite word today. The Surplus Lands Act is not biblical. We always have to be willing, as with tax policy, we have to be willing to look back and see what's working, what's not working, make adjustments. Housing is incredibly important. Obviously, it's not the only thing. And providing some additional flexibility in targeted circumstances may make sense. So we'll be working together on this Bill.

I think this probably needs to be sculpted, and I know that you know that over the course of the process, it'll probably be an evolution. So I'm going to vote for it today and we'll continue to work together on it.

All right.

That is, my commitment is to continue working on it. There's no question it's a complicated area. Redevelopment. That structure provided the opportunities to do all of this together. And so hopefully we can get there with this Bill as well. And I'm very aware of Assemblymember Ting's concepts are a little bit different than mine. And I'll continue to work with everybody to try to see if we can meet in the middle some more to respectfully ask for your aye vote.

Great. Thank you. Go ahead and call the roll.

Motion is do pass this amended to the Rules Committee. [Roll Call].

All right. That motion passes. It's do pass as amended to Rules. And we'll keep it on call for people to add on. Thank you.

Okay, that concludes our hearing for today. What we're going to do is we'll ask the missing Members to please come down to the room. Room 1200. And we'll go over the bills one last time. What we're going to do right now is do a pass for everybody to be able to add on that were not here when we took the roll call on the particular bills. And then we'll wait to see if we're missing one Member.

We're going to start with file item number 1.

File item number 1, SB 20. Motion is do pass as amended to the Housing Committee. [Roll Call] Seven to zero.

We'll leave that on call. Moving on to file item number 2.

That one is out.

Okay, that one is out. So we'll move on to the Consent Calendar.

Motion is to adopt the Consent Calendar. [Roll Call] Seven to zero.

Again, we'll put that back on call for one last Member. Moving on to file item number 5.

SB 388, motion is do pass to Governmental Organizations Committee. [Roll Call] Seven or zero.

Again, we'll put that back on call. File item number 6.

SB 726, motion is do pass as amended to Military and Veteran Affair Committee. [Roll Call] Eight to zero.

That bill is out. Moving on to file item number 8.

SB 654, motion is do pass as amended to the Senate Floor. [Roll Call] Eight to zero.

That bill is out. File number 12.

SB 569, motion is do pass to the Appropriations Committee. [Roll Call] Eight to zero.

Okay, file item number 13.

SB 684, motion is do pass to Rules Committee. [Roll Call]

We'll put that back on call. And then file item number 14. I think we got everybody here on number 14. We're waiting for Senator Glazer. Otherwise, I think everybody has.

I want to thank everybody who was here to testify today and participate in today's hearing, and particularly those individuals that testified on the teleconference line. Thank you for your patience. If you didn't have an opportunity to testify here today, for whatever reason, you can always submit your comments in writing on the Senate website for today's hearing. So I want to encourage you to do that if you didn't have a chance to testify today.

We're waiting for one Member to come down so that we could finish the voting process. But I think, when we're done with that, then that concludes our hearing. So hold on.

Okay. The Committee on Governance and Finance will finish up our final tally. We'll start with file item number 1.

SB 20, motion is do pass as amended to Housing Committee. [Roll Call] Eight to zero.

That bill is out. Eight to zero. File item number 3.

Motion is adopt the Consent Calendar. [Roll Call] Eight to zero.

That bill is out as well. File item number 5.

SB 388, motion is do pass to Governmental Organizations Committee. [Roll Call] Eight to zero.

And finally, file item number 13.

SB 684, motion is do pass to Rules Committee. [Roll Call] Five to zero.

That bill is out. File item number 14.

SB 747, motion is do pass as amended to Rules Committee. [Roll Call] Eight to zero.

That bill is out as well. That concludes the hearing today for the Senate Governance and Finance Committee. Thank you all for participating. We're adjourned.