Senate Standing Committee on Governmental Organization

Good morning. The Senate Governmental Organizations Committee will come to order. The Senate continues to welcome the public in person, also on the teleconference service. For individuals wishing to provide public comment in today's, participant number is 1 (877) 226-8163 and the access code is 736-2834. We are holding our committees 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. We have 14 bills on today's agenda.

However, file item number four, SB 574 by Senator Wahab has been pulled by the author. Before we hear presentations on the bill, we'd like to establish a quorum, but we do not have one. So we're going to start as a Subcommitee, and I am going to turn this meeting over to Senator Wilk while I go to, I'm going to another Committee to present a bill, Natural Resources. So with that, Vice Chair Wilk, thank you very much.

All right. Thank you, Mr. Chair. Good morning, everybody. Let's get through this effectively and efficiently so we all can make lunch today. Up first is file item number one, SB 225. The author is Caballero, and in her place, presenting today is Senator Menjivar. So with that, I have my consultant here. So I do not know what the Committee recommendation is. Do pass to Appropriations. With that, you may proceed.

Thank you. Good morning, Mr. Vice Chair, committees of the Subcommitee here, I am here to present on behalf of my colleague, Senator Caballero, for SB 225, an important bill to help acquire and preserve much needed affordable housing throughout the state. We're in a housing crisis. We have to think about all the different variables to get to ensure that we have enough housing for Californians. And Senator Caballero's path is a way towards that.

This bill will create the Community Anti-Displacement and Preservation Program, or CAPP, within Department of Housing and Community Development. The program will provide financial resources and technical capacity building to community organizations and local jurisdictions that wish to acquire unsubsidized housing from the speculative market, where residents are at risk of displacement and preserve it as affordable rental housing or home ownership opportunities, meaning there are times where a current affordable housing is on the risk of not being affordable housing anymore.

This program, where they come in to acquire that and ensure it continues as such. A large majority of low income Californians live in unsubsidized affordable housing, housing which is privately owned and somewhat more affordable to low income households. Due to a variety of reasons such as the lack of supply and growing demand, this unsubsidized affordable housing is rapidly disappearing and is likely to continue pushing people out of their homes and communities, again, further putting more people into risk of homelessness.

As this housing stock disappears, there are fewer places for low income Californians to live and new housing production is not keeping pace with the growing demand for affordability. This is as a response to that. Local communities have begun to acquire unsubsidized affordable housing and preserving it as permanent affordable housing. This strategy is known as Acquisition Rehab or Ac Rehab. Ac Rehab has the ability to increase the supply of affordable housing quicker than new construction in a cost effective way.

Under this new program that SB 225 would create, CAPP HCD would administer a program to provide grants and loans for applicants ineligible- Wow. I forgot the word borrowers. Borrowers. There we go. Borrowers. Say that 10 times. Such as nonprofits or local public entities such as housing trust, to help offset the cost to acquire and rehab amidst market rate housing.

So, in summarization, SB 225 creates a technical assistance program to support cap borrowers by providing peer to peer learning and consultation to assist with resident engagement in education, property assessment, affordable housing operations, and a spectrum of ownership and stewardship models to ensure that all borrowers of CAPP program can be successful. This will allow HCD to complete work more quickly and allows the state to be more responsive to the affordable housing needs of California while still upholding transparency, accountability and public participation.

With me today to testify in support of this bill and help address any questions is Justine Marcus with Enterprise Community Partners and Amber-Lee Leslie with Housing California.

All right, each of our primary spokespeople get 2 minutes. Floor is yours.

Thank you, Senator. And thank you, Vice Chair. Good morning, Committee Members. My name is Justine Marcus. I'm the Policy Director for Enterprise Community Partners. We're one of the co-sponsors of the bill. Enterprise is a national nonprofit organization that develops programs, advocates for policies, and delivers the capital to create and preserve affordable homes. Through our work in California and across the country, we've seen firsthand that there's no silver bullet to addressing our housing and homelessness crisis. We need a comprehensive approach.

And preservation, specifically acquisition preservation, which the Senator described, is an important tool in our toolbox to promote affordability and prevent households from losing their homes in communities across the state. Local organizations, community land trusts, cities, housing authorities have been doing this innovative acquisition preservation work for over a decade. And as the Senator described, these organizations are purchasing rental housing from the private market where low income households live today and preserving it as deed restricted affordable for the long term.

We like to say that acquisition preservation is a two bird, one seed approach. The program both prevents displacement and prevents folks from losing their homes while also pulling more affordable homes into our supply of deed restricted homes for decades to come. It is a fast strategy and a cost effective strategy compared to new construction.

That's why we're seeking to create the program and support the APA exemption outlined in the Committee analysis, which builds on the Legislature's success over the last several years to maintain the principles of accountability and public process while also prioritizing flexibility and speed to deploy much needed affordable housing funding and prevent Californians from losing their home. We respectfully urge your aye vote to support and continue moving this bill forward. Thank you.

Thank you. Next speaker.

Good morning. Thank you, Mr. Chairman, Members of the Committee, Senator Caballero is not here, unfortunately. I'm Amber-Lee Leslie. I'm a Legislative Advocate at Housing California, also very proud to co-sponsor SB 225. Housing California is a statewide advocacy organization that brings together a diverse, multisector network to prevent and end homelessness and increase the supply of safe, stable and affordable housing options, as well as reverse the legacy of racial and economic injustice.

The idea for the Community Anti-Displacement and Preservation Program was born from the work of the Stable Homes California Coalition, of which our organizations are a part to create housing policy solutions that responded to the economic strains placed upon vulnerable communities at the height of the pandemic. Since 2020, our coalition of CAPP supporters has grown to include community development corporations, community land trusts, nonprofit affordable housing development communities, and tenant advocacy groups. 139 organizations have registered their support of this proposal.

CAPP utilizes the strategy for growing California's housing stock, popularized by Project Home Key. However, CAPP is unique because it provides critical resources for eligible entities like bona fide housing nonprofits to protect existing housing units without long term affordability covenants from being lost to the speculative housing market.

A report from a coalition member, the California Housing Partnership, published last month estimates that over 120,000 multifamily NOAA properties lost their affordability since we started this work between 2020 and 2022, most of which have been in Southern California, the Bay Area, Fresno, San Diego and here in Sacramento. The Legislature must continue to invest in programs that create more affordable housing. CAPP will keep low income Californians in their homes and increase the supply of deed restricted housing to more swiftly and cost effectively than new production.

Therefore, we respectfully urge your aye vote. Thank you.

Thank you. Are there any other people in support and this is now me- too time, so name, organization, position.

Mr. Chair and Members, Julie Snyder, representing the Metropolitan Transportation Commission and the Association of Bay Area Governments in support. Thank you.

Thank you.

Good morning. Chair and Members, Andrés Ramos with Public Advocates as fellow co-sponsors of SB 225 in strong support. Thank you.

Good morning, Mr. Chair and Members. Graciela Castillo-Krings here on behalf of Silicon Valley at Home Action Fund and all home in strong support. Thank you.

Thank you.

Good morning. Melanie Morales with The Greenlining Institute in support.

Thank you very much. Now we will move to those in opposition. Do we have any primary witnesses in opposition? Seeing none. Anybody in the audience that would like to voice their discontent? Seeing none. Now let's move to the teleconference line, where we will take testimony from those in support and or oppose. So are you with us, Moderator?

I sure am. Thank you. And if so, please press 1-0 at this time. And giving it a moment here. We do have a couple in queue. Give me just a moment. And we'll first go to line 22, please go ahead.

Sylvia Hernandez, National Association of Social Workers. And we support SB 225.

Thank you.

And next we have- Give me a second. Line number 10, please go ahead.

Mr. Chair, Members, can you hear me?

Yes, sir.

My name is Jim Pinnegan. I'm a volunteer for AARP. We represent 3.3 Californians, and we're very much in support of SB 225 because it increases the affordable housing stock. Thank you.

Thank you, sir.

And currently, none further in queue.

Okay, great. With that, we will pull it back to the Committee for any questions, comments and concerns. Senator Alvarado-Gil. Ladies first, I'm sorry, Bob.

I'll move the item when appropriate.

Well, we're still in Subcommitee, but we'll take that into account. Yeah. Senator Archuleta.

Thank you. Please tell the Senator we appreciate what she's bringing forward. It's so important that we look about the housing situation across the State of California, particularly in Los Angeles County, where both you and I reside in, and the number of people that are concerned about losing their housing and their ability to stay and still be able to work with the landlords to keep everybody together.

And I think this is a win win. So I will support this and let's keep it going and let's find even more ways to keep people in their housing and develop housing for the future. Thank you.

Thank you, Senator Archuleta. I'm sorry we don't have a quorum yet, but you may close, and then we will bring it up for a vote later. I think you're probably on pretty solid ground in terms of getting it passed out, but go ahead.

Well, I appreciate you all going easy on me as I step in here for the Senator. Thank you, Members, for your time and consideration of this important measure. I believe this bill is one important step to prevent displacement and ensure families throughout the state can remain in their communities, in homes they can afford. I respectfully ask for your aye vote when appropriate.

Thank you, Senator Menjivar. Good job. Now we'll move on to file item number two, SB 260. And this bill is again, Senator Menjivar, regarding CalWORKS.

I'm here on behalf of me. Good morning again. I'm here to present to you SB 260, my Menstrual Equity Act of 2023. This bill is asking to include an allotment of $20 for CalWORKS recipients to be able to purchase menstrual products. This monthly allotment is administered by the Department of Social Services, and it's a necessary investment in supporting our families participating in CalWORKS. I do commend legislators before my time for doing so much work in this space.

In 2017, a lot of you helped clarify in the state law through AB 480 that diapers were necessary and expanded that within CalWORKS recipients, adding an extra $30 for those to be able to purchase diapers. Despite the progress that we've seen from expansion of menstrual products in our schools, we're still not able to reach every single nook and cranny of Californias who are in low-income and need this necessity.

A study of lines for period supplies in 2021 found that still, one in three low-income menstruating individuals report missing school work or similar commitments due to a lack of access to menstrual products. Yes, while these are afforded to our youth in schools, they're not in schools 24/7. There are breaks, there are summers, there are weekends that isn't allotted to them, and that everyone falls under the school age.

I previously worked in a nonprofit, and in that nonprofit, we provided items for our low-income families within my district. And time and time again, we would have parents come in asking for these products because they were spending their money on rent, on diapers, and they felt that this was the last item that they needed to prioritize. It was a sad story, and I want to make sure that we're able to close that gap.

As mentioned before, we know, and we've said it millions of times, the impacts of the pandemic are going to be long lasting, and it was mentioned right before the pandemic, during the pandemic that they were going to anticipate a strong menstrual product in security, and they were correct. This is what we're still seeing, nonprofits at a local level like the ones I worked at. Still, while we provided resources wasn't enough for every single individual. That's just a tool in our toolbox.

I'm trying to add an additional one to help our communities. As you may know, individuals who do not have these products sometimes opt out to do makeshift products as a replacements, or sometimes utilize the same item for a longer period of time as against recommendations on the box putting them at risk of very serious illnesses.

I have been working with the Department of Social Services on this bill in order to ensure that the language falls in line with the intent of the bill and will continue to work with stakeholders as this legislation moves forward. To that end, I want to welcome two witnesses that I have here today to testify on behalf of SB 260 and the need for it. That's Esther Lau, policy director with Generation Ratify California, one of the co-sponsors, and Christopher Sanchez, a policy advocate for the Western Center on Law and Poverty.

Great. Thank you. Before we start, the rules are two speakers, two minutes. I allowed the earlier group to go over because I'm in a good mood, but we have a lot of bills today, and if I don't eat right at noon, I get hangry. So 2 minutes, two speakers. Go.

Thank you. Good morning, Vice Chair and members. My name is Esther Lau, and I'm a high school senior from the San Francisco Bay Area and also the policy director for Generation Ratify California. I'm here in support of SB 260, which would expand menstrual product access for low-income CalWORKS recipients, most of whom are women of color. As one of the youth at the forefront of this movement, I'm proud to say that this bill has been a vastly youth-led effort.

As a low-income student whose family has heavily benefited from welfare programs, including Medi-Cal, Calfresh, and Section Eight housing, I know what it's like to be forced to prioritize some necessities over others. Unfortunately, CalWORKS recipients face worse struggles and report having to choose between paying their bills and rent and purchasing necessities like menstrual products. Crucially, menstruators who do not have access to products have reported using makeshift products, reusing products, or not using products at all.

As a result, one in three low-income menstruators have had to miss work, school, or other obligations, and that number should be zero. Although free menstrual products are now fortunately provided in most schools at select grade levels, SB 260 addresses a larger range of menstrual product needs for low-income adults, at-home use, and younger menstruators.

Moreover, while nonprofit organizations and shelters generously distribute menstrual products, low-income families are often unable to fully access these resources, as 75% of CalWORKS beneficiaries do not own a car and many reside in rural areas. SB 260 affirms that access to menstrual products is essential health care and is a human right. It would further California's unwavering dedication to pioneering period equity, as we have historically served as a model safe for anti-period poverty policies. Ultimately, SB 260 will set an inspirational precedent for many other states and future menstrual equity efforts. For these reasons, I urge your aye vote on SB 260. Thank you.

Great testimony, and thank you for being involved at such a young age. It's important, and your voice is important as well. Yes, sir.

Good morning, Mr. Chair. Members. Christopher Sanchez, policy advocate at the Western Center on Law and Poverty here in strong support of this measure, SB 260. And to ensure that you're able to make lunch, I'll keep it short. And just say some of these families are actually going to be receiving a steeper cut because they're also recipients of CalFresh.

And that's going to force them to pick and choose what their basic needs they're going to need to meet. And then just really want to highlight the gaps that this really fills in when students who are in untraditional school settings are on winter break and summer break. This is a really important measure to fill in those gaps. For all these reasons, we ask for your aye vote.

And that was excellent testimony. Anybody else in the room in support? Just state your name, organization, and that you strongly support the bill.

Hello, my name is Fiona Lu. On behalf of California high school Democrats and ACLU California Action, I'm in strong support of SB 260.

Thank you.

Good morning, Committee Chair and members. Christoph Mair with the American Federation of State, County, and Municipal Employees, in support of SB 260. Thank you.

Thank you, sir.

Good morning, Mr. Chair and members. Dennis Cuevas-Romero with the California Health Plus Advocates, in strong support of the bill.

Thank you.

Morning, members. Chair, Beth Malinowski, the SEIU of California, in strong support.

Thank you.

Morning. Dawn Koepke, McHugh Koepke Padron, on behalf of the Child Abuse Prevention Center and California Family Resource Association, in support.

Great. Thank you. All right, we'll now move to the opposition. Do we have any primary speakers in opposition seeing none. Anybody in the room that like to come up and share opposition? Seeing none. Let's move to the teleconferencing line. Yeah. Mr. Moderator, do we have anybody queued up?

Certainly, yes. And it is one zero. We can first go to line number 13. Please go ahead.

Good morning. Shannon Swanson, on behalf of the Cal State Student Association, in strong support of this bill. Thank you.

Thank you.

Next, we'll go to line 22. Please go ahead.

Sylvia Hernandez with the National Association of Social Workers, California Chapter, and we are in strong support.

Thank you.

Next, we have line 18. Please go ahead.

Hi, I'm Ashley Steimer-King from the Feminist Majority Foundation and Girls Learn International, in strong support of SB 260.

Thank you.

And currently, none further in queue.

Great. Thank you, Mr. Moderator. We'll pull it back to the committee for any questions, comments, and concerns. And you're willing to take questions on this bill, right?

Absolutely.

Okay. Anything? Seeing none, you may close.

Members, thank you so much. I appreciate it. I close by respectfully ask that you support to ensure that our most vulnerable population receives the additional $20 in their CalWORKS benefits for this necessary item. Respectfully ask for your aye vote. Thank you.

Thank you. Senator Menjivar. If any of our members are up in their offices watching, we are two short of having a quorum. It would be nice to have a quorum. And actually, I'm sure Senator Menjivar would have preferred to leave here with a vote, so please come down with that. We're going to move to item number three, which is SB 544, Senator Laird, regarding the Bagley-Keene Act. With that, sir, the floor is yours.

Thank you, Mr. Chair. Senate Bill 544 codifies the governor's executive order to allow state boards and commissions to continue holding virtual meetings without being required to list the private addresses of each remote member or providing public access to private locations.

The bill also allows a remote quorum to be established so state boards and commissions can take action remotely. In response to the pandemic and widespread shutdown, California allowed state boards and commissions to continue serving the public remotely and safely through virtual meetings.

Although meant to be temporary, we saw significant benefits to these remote meetings. The Little Hoover Commission surveyed state boards and commissions and found that over 90% of cost decreased due to virtual meetings and that roughly half of state bodies had better attendance from their members since appointees no longer had to take full time off to travel.

Since the introduction of this bill, my office has heard of several sitting appointees who have recently faced health challenges that would have prevented them from traveling and physically attending meetings.

Without the current temporary waivers, their only options would have been to miss the meeting or be forced to list their private addresses agendas and provide public access to their location so they could attend remotely. Most importantly, this bill provides equity and diversity in both public participation and board and commission membership.

This bill provides equity and increases representation by codifying the governor's executive order and the recommendations from the Little Hoover Commission report on modernizing government.

Californians that experience challenges attending physical meetings such as people with disabilities, caretakers, seniors, low-income individuals, hourly workers, and those living in rural or different areas of the state, will have an active voice in board and commission meetings.

Remote meetings can potentially help the state fill vacancies on boards and commissions, since potential qualified candidates are empowered to serve when we make it easier and more equitable for them to do so.

Additionally, since the start of remote meetings during COVID some boards and commissions have seen a notable increase in public participation and comments. In a self-evaluation of public attendees at state bar meetings since October 2021, the state bar saw substantial attendance at remote hearings when compared to physical ones and saw double the amount of public comments submitted at remote meetings.

There's no opposition to the bill. With me today are Leza Coleman from the California Aging Commission and Ethan Rarick from the Little Hoover Commission. At the appropriate time, I would request an aye vote.

Again, remind our speakers two speakers, two minutes. Go.

Good morning. My name is Leza Coleman. I'm the Legislative Director with the California Commission on Aging and pleased to be here as the co-organizational sponsor and thank the Senator for this bill.

The Commission on Aging is established in state statute as an independent advisory body and principal advocate before the Governor, the Legislature, state and federal departments on issues impacting older adults.

Our commissioners represent the diversity of our state with many decades of experience both within the world of aging and without. The Bagley-Keene Act, the Commission on Aging complies with the Bagley-Keene act of 1967.

As mentioned in the opening in March of 2020, the Governor issued an executive order authorizing the use of virtual technology, thus ensuring that the state's business would continue during the pandemic. Why are we here today?

Because SB 544 is in response to what started out as a public safety stopgap, but instead revealed that virtual meetings promote meeting attendance by appointed members and increases public participation.

Our commission and the experience of other commissions over the past three years has demonstrated that allowing greater diversity of participation supports the best of our democratic process. The use of video technology seeks to value the rights of residents by affording them the opportunity to participate in state government deliberations at all levels.

Considering the changing demographic of our state, with the significant growth of older adults and adults with disabilities, it's not just important that we promote their opportunities of engagement, it is essential. The disability community has an expression. Nothing without us, nothing about us without us.

Our chair, a former Assemblymember, Cheryl Brown. She puts it another way. If you're not at the table, you're on the menu. So whatever your phrase, the Genie's out of the bottle.

And the use of technology is making how we meet today different. SB 54 allows us to increase transparency and promote public participation in state government by expanding the pool of candidates interested in serving.

Older adults and individuals with disabilities are no longer barred from attending meetings or participating in state government simply because they are limited from attending physically.

Without the passage of SB 544, our commission will lose a very important voice as one of our commissioners since the pandemic can no longer travel comfortably. And while she has changed physically, I assure you her voice and her contribution to our effort is no less strong.

SB 544 is a commitment to the people to value equity and inclusion over the fear of potential bad characters.

As try as we might, we have never been able to successfully legislate bad actors from doing bad things. So instead, let's focus on the fact that we can use modernization and technology, stipulating changes to the Bagley-Keene Act, promoting equity and participation of the public through virtual meetings while safeguarding the private residents of participating members of the state body. I thank you, and I ask for your aye vote.

Thank you. We're not going to tell Cheryl Brown that you did not mention the silver tsunami, because that was her famous line. She used up to 4 minutes. But I'm in a good mood today, so go ahead.

Thank you, Mr. Chairman. I'll be brief. I'm Ethan Rarek. I'm the Executive Director of the Little Hoover Commission. When the pandemic struck, we began meeting remotely under the governor's waiver.

We quickly realized the advantages of this technology and decided to survey other state boards and commissions governed by Bagley-Keene to see about their experiences. Overwhelmingly, they reported more public attendance, more attendance by members of the boards and commission, and saving money due to reduced travel costs and reduced facility rental.

Accordingly, we issued a report recommending that Bagley-Keene be changed to facilitate remote participation by members of the board and commission.

We believe, as has been stated, this bill will make California State government more representative for many people, it's difficult to serve on state boards and commissions because they cannot come to Sacramento. I want to say that our commission cares deeply about public access.

We currently live stream all meetings, including those when we meet in person, even though there's no legal requirement to do so. I care about public access deeply. For the first 15 years of my career, I was a newspaper reporter.

I've been on the other side of this. I've gone head-to-head with government officials about public access. We believe this bill does nothing to restrict public access. People can still watch the meetings. They can hear every word that is said, see every vote that is taken.

They still have full access to the meetings via remote technology. What this bill will do is make California state government look more like California by expanding the number of people who can serve on these important state boards and commissions.

And accordingly, we would ask for your aye vote.

I've heard a rumor that I'm being appointed to the Little Hoover Commission later this week, so if you want another 2 minutes, I will allow.

We would be delighted if you were appointed Senator and that would be wonderful news. So great. If that is true welcome. I have not heard that but welcome.

Well, I heard that, but okay. It's not done till it's done. All right, thank you, sir. Any other people in the room that are in support? Now is appropriate time to come up? Seeing none. Anyone in opposition? Any primary? No. Anybody else here in opposition? No. Now we'll move to the moderator and the phones.

Thank you. And again, it's one, zero. Please press one, zero at this time and we'll go to line 15. Please go ahead.

Isabella Argueda with the Health Officers Association of California in support. Thank you.

Thank you.

And currently none further in queue.

All right, thank you. Bring it back to the committee for any questions, comments, concerns, seeing none. Senator Laird, you may close.

Thank you. I appreciate the testimony. And at the appropriate time, I would request an aye vote.

Thank you, sir. And with that, I'm going to turn the gavel back over to our esteemed chair.

Thank you, Vice Chair Wilk. Appreciate that. So we're going to move now to. Is Senator Limon in the room? Why not? So I'm going to hand it back to our Vice Chair.

Okay, we're moving down to File Item Number Ten: SB 313: Senator Dodd, regarding the Office of Artificial Intelligence. The floor is yours, sir.

Thank you, Mr. Chair and Members. SB 313 established the Office of Artificial Intelligence and requires any AI that's communicating with the public on behalf of a state agency to clearly identify as an artificial intelligence. AI is transforming our society and impacting our lives in countless ways, from enabling personalized health care to enhancing the safety and efficiency of our transportation systems.

But as with any new technology, safeguards must be added as the risks emerge. Think of the auto industry over the years that we've adopted speed limits, seatbelts, and airbags. Now is the time for an AI oversight to catch up. This bill establishes the office of AI and requires state agencies that use a generative AI to communicate directly with a human to clearly and in a conspicuous way to identify as an artificial intelligence.

AI can do a lot, and there are certainly benefits, but it can't be trusted to regulate itself. By staying aware when AI is being used, we can create a future where AI systems are designed, deployed, and governed responsibly, prioritizing the well-being of all the people. Respectfully ask for your aye vote.

Thank you, sir. Do you have any witnesses in support?

No, sir.

Must be nice being chair. All right, anybody here in the room that would like to testify in support? Oh, they do have one. Sure. Please. Take all the time you would like.

I'm back. I'm happy to testify or not. Senator, I'm Ethan Rarick. I'm the Executive Director of the Little Hoover Commission, and we are here in support of this bill. After an 11 month study, we issued a report in 2018 entitled 'Artificial Intelligence: a Roadmap for California.' In that study, we learned that between now and 2030, AI technologies could have an economic impact in California of more than 400 billion dollars and could impact millions of California jobs.

At the time of that study, other states and countries had surged forward with strategic plans to harness the power of AI in ways that were predicted to improve their economies, public health and safety, and other matters. We believe that California at that time was falling behind, and among our recommendations, among the Commission's recommendations were that an AI special advisor be appointed to create a strategic plan to incorporate AI within state government and oversee the safe and transparent deployment of AI.

We emphasized the need for AI policymaking that would protect core values such as autonomy, responsibility, privacy, transparency, and accountability. We believe this bill will advance those goals by creating the Office of Artificial Intelligence and empowering that office to guide the design, deployment, and use of AI. And so we respectfully ask for an aye vote.

Thank you. Anyone else in the room to testify in support? Okay. Seeing none, any in opposition in the room? Seeing none, let's turn to our teleconferencing line. Mr. Moderator.

Thank you. Please press one zero at this time. Giving it a moment here. We've got nobody in queue at this time.

All right, thank you, sir. Pull it back to the Committee for any questions, comments, concerns. I do have one. So last night I submitted this to ChatGPT, right, for a vote recommendation, and it told me to vote no. And then I said, what will happen if I vote yes? It says, 'I will kill you.' So I'm a little concerned about that. So I'm going to vote for this today because I think we need to rein it in now before it can actually do that.

So we're still short on Members. So with that, she's not in the Committee, she's just here to say hi. Everybody's been dropping by today. It's been great.

Everybody wants to be in GO.

Absolutely. So with that, Mr. Chair, you may close.

Respectfully ask for your Aye vote at the appropriate time.

Thank you. Excellent presentation. All right, so now we're going to move to file item number 11, SB 387, Senator Dodd, regarding broadband development.

Thank you, Mr. Chair and Members. I'm presenting SB 387, regarding the Department of General Services Authority to lease state property for broadband expansion across our state. As part of the 2021 state budget, the Legislature authorized a $6 billion investment to expand broadband to unserved and underserved communities in California. Further, Governor Newsom issued the Executive Order in 2020 that directs state agencies to take inventory of state property for broadband deployment.

DGS has the authority to manage all aspects of the real estate portfolio for numerous state agencies, but lacks it for others. State Lands Commission, State Coastal Conservative. The Bill extends the authority to enter into broadband leases for land controlled by the following: State Lands Commission, the State Coastal Conservancy, Caltrans, State Parks, Fish and Wildlife, tax-deeded land, and land that has been distributed to the state by court decree in estates of deceased persons.

Additionally, the Bill authorizes DGS to enter into broadband project leases at below fair market value when determined by DGS and the Department of Technology that doing so is critical to the specific project in question. I would like to thank Senator Ochoa Bogh for agreeing to be a co-author on this Bill. With me today is Matt Bender, Deputy Director of Legislative Affairs for the Department of General Services.

Before we start with testimony, I'd like to establish quorum. So Clerk, please call roll.

[Roll call].

And we have quorum. With that.

Hello there. Matt.

One thing. I do accept the Committee amendments.

Oh, I should be looking at the script. I apologize for that. You are the Committee. So you just agreed with yourself to amend the Bill?

Totally. Totally and 100% agree with myself.

All right, please.

Matt Bender, DGS. No official position, but here to answer any questions you may have. Thank you.

Thank you. Anybody else here in support? Anyone here in opposition? Seeing none. Let's move to the teleconferencing line. Mr. Moderator.

Thank you. Please press one zero at this time. And currently nobody in queue.

Okay, great. Pull it back to the Committee. Questions, comments, concerns? Senator Archuleta.

Yeah. Thank you, Senator, for bringing this forward. Of course, this affects kids, the underserved. And it's a great idea, and it's a step forward. And when appropriate, I'd like to move the Bill.

Great. Anything else? So with that, I'll remind the Committee this is do pass as amended to Appropriations. You may close.

Respectfully ask for your Aye vote.

Thank you. We have the second. Please call the roll.

[Roll call].

We're going to go back now.

[Roll call].

Seven zero, bill is out and we'll leave it. Oh, short one. Excuse me. Thank you for that. And we'll leave it open, and hopefully you'll get a vote or two more. We'll get it out.

Hopefully, yes.

Fingers crossed.

Thank you. We're going to move on now to item number seven. That's SB 721, Senator Becker.

Thank you. Mr. Chair and Members. I'm here to present to SB 721. This Bill creates the California Interagency Artificial Intelligence Working Group to submit a biannual report on the implications and safeguards for AI technology. As you all well know, AI is rapidly developing technology. It's integrated in much of our everyday lives and encompasses everything from chatbots and self-driving cars to Siri and email spam filters. With the development of neural networks in the last decade, AI has increased its personalization abilities and can more easily mimic human-like decision-making.

Existing laws created a framework to analyze the impact of AI technology within state agencies. However, this Bill gives us an opportunity to look at the impact of AI holistically and suggest guardrails to protect against misuse and manipulation for both state agencies and the general public, the Bill creates a working group composed of a series of appointees from various government agencies with cross interests in the field.

Among their goal will be to recommend a definition of AI, study the implications of AI usage, and determine the proactive steps to prevent AI misinformation campaigns and overexposure of the technology to children. Increased transparency in the creation and deployment of AI will ensure ethical use and public trust in the technology.

It's important that we continue to invest in innovation and new technology, but we need to ensure the path forward does not create undue harm, and I have one witness with me here today to testify in support of the Bill.

Good morning. Welcome.

Good morning, Chair and Members Leah Nitake, Deputy Executive Director at TechNet. While we don't have a formal position on SB 721 at this time, we appreciate being asked to highlight and speak to several aspects of the Bill. First, we appreciate the study first approach that this Bill takes to regulating this type of technology.

As noted by the author and the analysis, there are numerous beneficial use cases of AI, including diagnosing health conditions, use in transportation and resource management, and much more. Importantly, this Bill would clearly identify the relevant state agencies to oversee and regulate this technology. As this Committee is aware, there are numerous state agencies and departments that are currently studying, reviewing, or actively regulating this technology, and a more comprehensive, unified approach would be extremely beneficial.

The Bill would also require the study of and recommendations on the potential impacts of artificial intelligence, which is crucial to understanding before creating any sort of sweeping restrictions or regulations. We greatly appreciate the conversations we've had with the author in his office, and we look forward to continuing to working together on this issue. Thank you.

Thank you very much. Anybody else in the room wishing to testify in support of SB 721? Seeing none. We'll now hear from lead witnesses in opposition. Anybody in the room? Anybody in the room in opposition at all? Seeing nobody. So what we're going to do is we're going to move on to witnesses waiting to testify via the teleconference service. Moderator if you please prompt individuals that want to testify and support or opposition to SB 721, please.

Certainly. Thank you. Please press one zero at this time if so. And giving it a minute here. We've got nobody in queue.

Thank you very much. We will now bring the discussion back to Members. Any Members have any comments or questions? Seeing none, do I have a motion?

Motion.

We have a motion by Senator Archuleta. Senator Becker, would you like to close?

I thank you. Respectfully request an Aye vote.

Thank you. The bill's moved by Senator Archuleta. The motion is do pass to Judiciary Committee. Secretary, please call the roll.

[Roll call].

Bill has eight Ayes. One No. We'll put that bill on call. What's that? Thank you. Senator Becker, your work here is done.

Thank you.

You had another Bill on consent. Okay. Senator Limon, good morning. Welcome.

Thank you, Chair and Members. SB 702 requires the Office of the Governor to maintain on its website a list of all state boards and commissions, including the purpose, membership list, and information on when they convene. The Bill also requires an annual report with aggregate demographic information of individuals appointed to the state's boards and commissions. The annual report will serve as the tool to identify gaps in representation, encourage outreach to community, and address barriers to seek an appointment.

I have reintroduced this Bill because it's essential to gather facts to help us institutionalize best practices and the gains made to diversify the state's boards and commissions. California has an express commitment and statute to ensure state boards and commissions are diverse and reflective of the state. However, no formal mechanism exists to evaluate this for gubernatorial boards and commission appointees. Additionally, the report in SB 702 follows precedent and state law that requires a similar report of judicial appointments.

The collection of gubernatorial appointee demographic data is a critical step to achieve and maintain gender, ethnic, and geographic equity on boards and commissions. With us today to testify and support the Bill is Helen Torres on behalf of our sponsors, Hispanas Organized for Political Equality, HOPE.

One second. Please come forward. I do want, for those of you that are following along at home, or perhaps even here, we are now on file item number six, SB 702. Just wanted to make that reminder because we've been moving back and forth in the agenda. So please. Good morning. Welcome.

Good morning. Thank you. Good morning, Chairman Dodd and Committee Members. As stated, my name is Helen Torres, CEO and Executive Director of Hispanas Organized for Political Equality, also known as HOPE. And also, I just as a side want to say, because I think it's important to this Committee, I'm a former Commissioner on the Little Hoover Committee, so if anybody needs any hints on how to get along there, let me know.

HOPE is a non-profit, nonpartisan organization committed to ensuring the political and economic parity of Latinas through leadership, advocacy, and education to benefit all communities and the status of women. HOPE is a proud sponsor of SB 702 for the third year running and is grateful to work with Senator Limon on this critical topic. SB 702 seeks to create transparency in the gubernatorial appointments by requiring an annual report to be released sharing the demographic data of all appointments made the previous year.

This report, which would include self-reported demographic data, including race, gender, ethnicity, ability status, sexual orientation, veteran status, and region. Currently, through the appointment process, race and sexual orientation are not collected. However, we'd like to ensure no exclusions of the process. I would like to share a couple quick status. According to the William Institute of UCLA, roughly 5.3 or a little over 2 million people in California are members of the LGBTQ-plus community.

In addition, the Center of Disease Control and Prevention also predicts that roughly 23% of Californians, our adult population, has a disability. In California. it's also home proudly of 1.8 million veterans. According to the 2020 Census profile of California, Latinos have the largest growth of any population in the state. One in two Californians are women. According to a UCLA Policy Politics Institute Report, Central and Southern California is home to 71.3% of the state population.

This Bill would ensure that California's board and commissions report data hope remains committed to ensuring the California governance is generally representative of the rich diversity of the state. It is important to note that the research shows that diversity in government leads policies that are better reflective of interests of those represented by the country's most populous and diverse state. Similarly, since 2006, California has required its Judicial Council to collect and release aggregated demographic data about ethnicity and gender.

So therefore, we're not alone and we have a precedence to follow. Ultimately, this annual report would be similar to the Judiciary report. If enacted, the data will be a tool to highlight what disparities are in representation exists and what communities and voices are missing from these tables. It's time for California to create a formal mechanism to ensure its governors reflects its communities. For these reasons, I respectfully ask for your Aye vote on SB 702 today. Thank you.

Thank you very much. Now let's hear from any other witnesses in the room in support of SB 702. Excuse me, I don't think there's anybody behind him. So we'll now move to any lead, opposition witnesses. Anybody in the room in opposition? Seeing none. Moderator, we're going to move to the teleconference line to see if there's anybody both in support or in opposition of SB 702.

Thank you. Please press one zero if so. Again, it's one zero. We do have a couple here. Just give me a moment while we gather their line numbers. And we'll go to line number 30. Please go ahead.

Hi, Valerie Johnson with the Campaign for College Opportunity, in support of the Bill.

And next we can go to. Give me a moment. Line 14, your line is open.

Good morning. My name is Cesar Montoya. I'm with the UCLA Latino Policy and Politics Institute, and we're in strong support of SB 702. Thank you very much.

We have one more here. We'll go to line 29. Please go ahead.

Thank you. Julian Canete, California Hispanic Chambers of Commerce in support.

Currently none further in queue.

Thank you very much. We're going to bring this back to our Members. Do any Members have questions or comments. Senator?

Senator Limon, thank you for bringing this back this year. And I just wanted to commend you for taking another swing at this even though the Governor vetoed your Bill last year. I was pretty disappointed when I read his response in terms of vetoing this, being that we as Californians demand transparency in how we use our tax dollars and certainly how we use our power.

And your Bill, for me, really takes us to a place where not only can we be accountable for how we use authority and representation on these appointed boards, but how our Governor uses his power and Executive control. So when I was reading his response, part of it talked about potential costs. And I think about, currently, every child in public school, their parent is required to report on demographics before a school can get even funding for that child. So it is possible.

We've been doing it for decades, and we've been doing it quite well. So I would challenge that number that the Governor's Office has put forward. And the last thing that really shocked me was the comment about inaccuracy of self-reported demographics. And that actually angers me that we are saying that individuals can be inaccurate about how they self-identify their own demographics, and that is actually in print.

So for me, I feel that any candidate that is appointed to boards and commissions by our Governor is a highly intellectual, qualified, educated expert, or at least should be when they're appointed. And they should be given the opportunity to self-identify their demographics without an assumption that they would be inept at doing so. So thank you for bringing this back, and I encourage the governor's office to relook at your Bill, being that the state Legislature in both houses approved it and moved it forward. Thank you.

Thank you.

Senator Archuleta.

Yes, thank you, Senator, for bringing it forward. Obviously, I think the basis of this Bill is equity, and how can we find that equity if we don't have the data? And I think everyone across the State of California knows that the State of California is a diverse, inclusive state, and we try to include everyone.

And I think if we're going to take that leap forward, this is a good way to do it so we can all look every single day and see how diversity is moving forward to include everyone. So I thank you for your Bill, and I will support it and I'll move it when it's ready.

Thank you very much.

Thank you, Senator Wilk.

Thank you, Mr. Chair. I've supported this before. I plan to support it again. Something I wanted to point out, because we're talking about diversity all the time, and it wasn't mentioned by any of the speakers, but one of the other criteria that's in there, which I appreciate, is party registration, because I am definitely a minority in this state, being a registered Republican.

And the reason why I bring that up is I spent most of my career in the Senate on Rules Committee, and we're responsible for vetting gubernatorial appointees. And I think the prior Administration did a much better job in trying to get diversified political views on commissions than the current Administration. So I'm glad that that's in there. I think there's data that everybody should have. We should be transparent in everything that we do. So I support it in the past, plan to support it today, and better luck this year.

Anybody else? Seeing nobody. Was that a motion? Senator Wilk? No. Senator Archuleta. All right, so the Bill has been moved by Senator Archuleta. Senator Limon, would you like to close?

I respectfully ask for An aye vote.

Terrific. The motion is do passed to Judiciary Committee. Secretary, please call the roll.

[Roll call]. Seven.

Thank you.

The consent calendar now. May I have a motion?

So moved.

Motion by Senator Wilk. So could we call the roll, please?

Consent calendar. Item five, SB 591. Item eight, SB 83, Becker. Item 13, SB 436, Dodd. [Roll call].

That also has seven votes, so that'll put that on call. So we're going to move now to file item number nine, SB 240. Senator Ochoa-Bogh. Good morning. Feel free to begin when you're ready.

Thank you. Thank you, Mr. Chair and members, it is no secret that California is in the midst of a housing crisis. Even though the Department of Housing Community Development believes that the state needs at least 70,000 affordable units annually to keep up with the demand.

California produced roughly 19,500 new affordable units last year. The lack of new housing development has continued to increase the cost of housing in California to the point that the vast majority of housing units are no longer affordable to the average person.

According to the Department of Finance, the median price of a single family home peaked in May of 2022 at $898,980. To afford this, a family would need a combined income of $180,000, more than twice the California's medium household income, and almost five times the California poverty measures poverty line of 36,900.

Senator Ochoa-Bogh, could you move that mic up so? People can't hear you, apparently online.

Oh, I apologize.

Is this better? Are we good? Do I need to start?

You're good.

No, you don't need to start.

Just continue where you were. Sorry for the interruption.

Okay.

No worries. Okay. Current surplus property disposal laws provide. The Department of General Services is authorized to sell state surplus property to a local agency or nonprofit affordable housing sponsor for affordable housing projects below market value.

If DGS determines that such a discount is necessary to finance the housing project and that the housing will remain affordable housing for at least 40 years. However, buyers rarely invoke this option.

In fact, according to DGS, none of the surplus properties sold to local governments or nonprofits from 2018 through 2022 were for affordable housing purposes. SB 240 will further incentivize developers to purchase surplus state property for the purpose of building affordable housing by exempting the property from CEQA reviews as by right developments.

SB 240 will also add housing projects intended for formerly incarcerated individuals as a priority in surplus housing disposal laws. Joining me to testify in support, I believe, is Tony Bui with the California Apartment Association.

Thank you again, Tony Bui with the California Apartment Association here in strong support of SB 240. SB 240 would expand current law on surplus property disposal to an often overlooked population, formerly incarcerated individuals.

This bill would be a positive step to address California's homeless crisis by ensuring that affordable housing is developed for individuals who need assistance transitioning outside of the criminal justice system back into our communities. This bill will give the state another tool to continue to chip away at our state's housing crisis. Thank you. And I respectfully ask for your aye vote at the appropriate time.

Thank you, Mr. Bui. Anybody else in the room wishing to testify in support SB 240? Seeing none. Is there any opposition? Also seeing none in the room, so we'll move to the teleconference service. Moderator anybody in support or opposition of SB 240, please?

Thank you. And if so, please press one, zero at this time. Again, it's on, zero and currently nobody in queue.

Okay, thank you. Moderator anybody in the room here, bring it back to the members. Anybody have any questions or comments? Do I have a motion? We have a motion by Senator Jones. Senator Ochoa-Bogh, would you like to close?

Thank you, Mr. Chair. The Legislature has already found that the provision of decent housing for all Californians is a state goal of the highest priority and that the disposal of surplus state real property is a direct and substantial public purpose of statewide concern.

SB 240 will address these concerns by ensuring we do everything we can to incentivize the development of affordable housing on state surplus land. I respectfully ask for an aye vote.

Thank you, Senator. The motion is do passed the housing committee. Secretary, please call the roll.

[Roll Call]

Six? I didn't hear. Is that six? Yeah, six votes. We'll put that bill on call. Senator Wilk, you're on call again.

Which bill, sir?

Right there. Right below there.

All right. Up next, we got File Item Number 12: SB 430: Senator Dodd. Tied-house exceptions.

Thank you, Mr. Chair and Members. SB 430 provides a limited tied-house exemption--exception, excuse me--to the entertainment business under common ownership with an alcohol beverage retail business.

According to the Department of ABC, if a company owns a subsidiary that holds an alcohol retail license, then all other subsidiaries are prohibited by tied-house laws from selling advertising space to an alcohol manufacturer. This broad prohibition is particularly problematic when one of those subsidiaries is an entertainment business that derides revenue from advertising. SB 430 is a narrow proposal, similar to others that this Committee is unanimously approved and includes various provisions that have become standard in tied-house advertising exemptions bills.

We already have taken a number of amendments requested by the opposition and will continue to work with them as this bill moves through the process. I respectfully ask for your aye vote. With me today is Kelly Jo MacArthur, Vice President and Associate General Counsel, Global Media and Entertainment at Amazon. And also we'll have Stephanie Meier, Senior Counsel, Alcohol Policy at Amazon, to answer any technical questions if there are any.

Reminder: each speaker has two minutes.

Rock and roll. Good morning, Chairman Dodd and esteemed Committee Members. My name is Kelly Jo MacArthur. I am the Vice President and General Counsel for Amazon's media and entertainment businesses. I am before you today in support of SB 430, a narrow tied-house exception that will allow alcohol beverage manufacturers to advertise with our entertainment businesses. Our entertainment businesses are proud to have invested significantly in California, which is home to Amazon Studios, Prime Video, and MGM studios.

Amazon is also proud to own and operate Whole Foods Market, which is an alcoholic beverage retailer with 96 locations in the state. Whole Foods Market and our entertainment businesses operate under the same publicly-traded parent company, and because of this connection, the California Department of Alcoholic Beverage Control informed us that tied-house laws prevent our entertainment businesses from displaying alcoholic advertisements. Tied-house laws were written to apply to alcohol retailers, not video and streaming media providers.

Our advertising businesses do not engage in the sale of alcohol and do not have any influence over or control over Amazon's alcohol retail businesses. SB 430 is a narrow proposal similar to others the Legislator and this Committee has approved for alcoholic advertising. The bill contains safeguards to prevent alcohol manufacturers from exerting influence over alcohol retail businesses, and those safeguards are intended and will protect the three-tier system and align with the spirit of the tied-house restrictions.

SB 430 will allow our entertainment businesses to air alcoholic beverage advertisements in a manner consistent with similarly situated entertainment companies. So, for example, Prime Video will be able to display alcohol advertisements during Thursday Night Football. MGM Studios will be able to accept product placements like a branded vodka or gin martini or if you're a real fan, maybe a branded Vesper martini in a James Bond film. For these reasons, we support 430 and respectfully ask for your aye vote. I'm happy to answer any questions you may have. Thank you.

Thank you. Next speaker.

I think next speaker was here for technical questions.

Oh. Technical questions only. Any person in the room here? Just a #MeToo, so your name, organization, and your position.

Thank you for that. Andrew Govenar, Governmental Advocates, on behalf of the San Francisco 49ers, in support.

Well done.

Mr. Vice Chair, Senators, Dean Grafilo, on behalf of the California Retailers Association, in support of the bill.

Thank you, sir.

Hello. Silvio Ferrari, on behalf of the National Football League, in support.

Thank you. All right. Seeing none, do we have any primary witnesses in opposition?

Mr. Chair Members. Dennis Loper, on behalf of the California Beer and Beverage Distributors Association. Regretfully, we appreciate the amendments of 330, but we don't think that they go far enough. We've submitted far more specific guardrails that we believe are important to keep relationships not on a direct but an indirect basis. And I also want to say that I don't agree with the proponent's interpretation of the tidehouse laws. I've been lobbying it for a long time and I've never heard that interpretation before. Thank you.

Thank you, sir. Mr. Flanigan, good morning.

Ryan Flanigan on behalf of the Wine and Spirits Wholesalers of California. We have an oppose unless amended position as well. We share the concerns raised by Mr. Loper. Look forward to continuing to work with the author and the sponsor to hopefully resolve those concerns. Thanks.

Great. Thank you, sir. Are there any me too testimony in the room? Now would be appropriate time. Name, organization, position.

Michael Scippa on behalf of Alcohol Justice, we are opposed to this bill. Thank you.

Thank you, sir. Okay. With that, we will move to the teleconferencing line. Those who want to advocate in support and or opposition may do so at this time. Moderator?

Thank you. Please press 1-0 at this time. And we can go first to line 28, please go ahead.

Good morning, this is Andrea Cao with the California Asian Pacific Chamber of Commerce in support of SB 430. Thank you.

Thank you.

Give me just a moment here. We've got line 31.

Julian Canete, California Hispanic Chambers of Commerce, in support.

Thank you.

And currently none further in queue.

Okay, thank you, Moderator. We will pull it back to the Committee for any questions, comments. Seeing none, I guess I'll have one.

I just want to move the bill.

Thank you for that, Senator Archuleta. Can you address any of the concerns that the opposition laid out this morning?

Yes, I was about ready in my close. I'll just have this be my close. If there's any other questions.

If there's no other questions.

With all due respect to Mr. Loper, this is the interpretation given to us by the ABC Alcohol Beverage Control. So until they recant that and make some different conclusion, that's the conclusion I'm operating on today.

All right. And with that, you ask for an aye vote.

Thank you, Mr. Chairman.

You're welcome. All right. Clerk may read the roll. I mean, call the roll.

SB 430 motion is do pass to Appropriations Committee. [Roll Call]

So that's seven. You need eight to get it out. And again, I should have mentioned this, but it was do pass to Appropriations.

Very good.

With that, I'm assuming we're moving to file item number 14.

Which is SB 495 having to do with alcoholic beverages deliveries?

Yes, sir.

Yes, Mr. Chair. And Members, SB 495 seeks to do two major things. The first is to expand on cocktails to go by adding bars to those provisions, removing the meal requirement, and allowing for the delivery of cocktails directly to a customer's door. With those changes, SB 495 would be identical to my SB 846 from last year, which was unanimously passed by this Committee.

The ability to include alcoholic drinks has been a lifeline to our restaurant industry during Covid-19 this Bill simply seeks to continue on one of the most successful elements of the emergency regulations, pandemic relief. In addition, the Bill requires third party delivery companies who are delivering alcohol on behalf of an alcohol licensee to obtain a permit from the Department of ABC. As the analysis points out, under current law, ABC has no statutory oversight over third party delivery companies that deliver alcohol. I'm going to repeat that.

As the analysis points out, under current law, ABC has no statutory oversight over third party delivery companies that deliver alcohol. The Department has been very clear that it cannot sanction third party delivery companies, and therefore, responsibility to any potential criminal liability is with the driver and the licensee that sold that alcohol. SB 495 solves the problem by shifting some responsibility to third party delivery companies and providing ABC with oversight on those alcohol deliveries.

I want to be very clear that this does not legalize the delivery of alcohol by third party delivery companies by either grocery stores or even restaurants. As the analysis points out, current law already allows all types of alcohol to be delivered by third party delivery companies on behalf of grocery stores and the ability of these companies to deliver wine and beer on behalf of restaurants.

What this Bill does is provide a common sense approach that gives ABC the necessary oversight to ensure that deliveries are being done in a responsible manner that protects against underage drinking and over intoxication. Specifically, this Bill requires delivery drivers who are delivering alcohol to complete a training. It makes it clear that ABC can suspend or revoke a consumer delivery service permit when the circumstances warrant such discipline, and it authorizes ABC to impose fines on the holder of the permit, not on the delivery drivers.

I want to be clear that the Bill does not authorize ABC to find delivery drivers. Page 26, line 18 makes it clear that these fines would be against the holder of the permit. This is similar to how an employee at a restaurant is not the entity responsible for the fine. I would like to end my comments with the following. I understand Labor's concern in opposition to third party delivery companies.

However, the reality is that right now, under current law, alcohol delivery by a third party delivery company is completely legal. With or without this Bill. That will continue to happen. The question for this Committee is not whether to legalize alcohol delivery, but whether third-party delivery companies should take some responsibility. I respectfully ask for your aye vote with me today is Matt Sutton of the California Restaurant Association and Dean Grafilo with the California Retailers Association.

Welcome, Mr. Sutton.

Thank you, Mr. Chair. Senators, good to see you. Fantastic author. Great Bill. Some of you have seen this Bill before. As the Senator mentioned, this Bill restores an ability that was provided through emergency regulation during the pandemic. The cocktail piece has since expired. And so what we're doing here, hoping to do here, is just to have cocktails added to the mix, beer and wine, enjoy this privilege.

Now, the difference with the emergency regulation that allowed this is that Senator Doddsville actually adds public safety guardrails. He mentioned that. He reiterated that as well. So I think that's the important point here, and we are in support of this. Of course, we prefer to have guests in restaurants enjoying restaurants, but we're responding to change consumer demands after the pandemic where guests have come to expect this. They do it for beer and wine, and they question why cocktails can't be offered as well.

So with that, we're very pleased to see the added public safety guardrails in the Bill. Again, that goes beyond the emergency regulations. So we're in strong support. Thank you. Great. Thank you.

Mr. Vice Chair. Senators Dean Grafilo, on behalf of the California Retailers Association, we are in support of SB 495. Senator Dodd, appreciate your continued leadership on this matter. As mentioned, SB 495 addresses a loophole regarding third party delivery of alcohol. Make no mistake, the retailers absolutely appreciate and welcome the continued partnership and collaboration that we have with third party delivery companies, as do our customers. However, third party delivery companies are not currently licensed by the ABC, as mentioned.

So if there is a delivery to a minor, which rarely occurs, the ABC has no recourse on the delivery company. Instead, the retailer gets cited. SB 495 closes this loophole by requiring delivery companies to obtain a permit from the ABC, which will then provide the means to enforce in these rare instances. Thank you. And respectfully ask for aye vote when appropriate.

Thank you, sir. Anybody else here in support? Name, organization, position?

Tim Schmelzer, Wine Institute, in support.

Strong support or just support?

Strong support.

Thank you, sir. Anyone else seeing? None now. We'll move to opposition. Is there any opposition in the room? I'll give you two minutes if you like it.

Thank you, Mr. Chairman and Members. Gavin McHugh. On behalf of the Distilled Spirits Council, we support. We think this provides some important safeguards for this delivery process. Thank you.

Thank you, Mr. Chairman. So gracious this morning. I appreciate it. Senator Dodd, appreciate very much the work in this area. We've worked. I'm Alberto Torrico. On behalf of the United Food and Commercial Workers. We've worked with the Senator, with the author over the last couple of years and very much in good faith appreciate the effort. UFCW shares their concerns about the fact that this is a completely unregulated space now and the deliveries are happening. We do still have concerns and unfortunately remain opposed.

First and foremost, the issue of responsibility. If legislation is enacted under this Bill, basically the liability and responsibility is going to rest on the drivers. We think it's much better suited that these deliveries happen under employer employee relationship. That's how deliveries are handled in cannabis by regulation. We think that should be the same approach here to assure that there is liabilities covered by someone other than the driver. The second thing that we're concerned about is the delivery to minors.

Under current law, a brick and mortar store has a three strikes and you're out provision in law for sales to minors. That's not in the statute in this proposed Bill. We understand that there are some complexities with that approach because of the potential statewide delivery of alcohol by one delivery company. We've tried to reach some kind of resolution with that, but it's proved to be insurmountable at this point. For those reasons, we remain opposed to the Bill. Thank you.

Thank you, sir.

Mr. Chair Members. Got it. Sarah Flocks, California Labor Federation. And we very much share the concern of the author and appreciate his intent to regulate these third party delivery companies. Our concern is that this is a Bill that is legitimizing this model, allowing a permit but not having sufficient guardrails to protect around the abuses that this business model allows and the risk to the public and workers. These are companies like Uber, Grubhub, Doordash, Sipsy, saucy, drizzly, who use misclassified drivers as independent contractors.

They do not have the same control over employee drivers, and they have a history of basically saying those are independent businesses, third parties. We don't have any kind of liability. Amazon has done this, Uber has done this to basically insulate themselves from any kind of liability and push that on to drivers. Even if this does protect against fines, which we appreciate that that's in there. This business model of independent contractors creates an incentive to violate the law by drivers. They're not paid hourly.

They get commissions, they get tips. They have to work fast. They get reviews so they can get repeat business. So there's an incentive not to refuse an alcohol delivery and to cultivate a base of customers. And there's not the same level of control or the relationship between an employer and an employee. We also have concerns that companies like Uber and Lyft have basically violated laws and then work to legitimate their business model in the law.

We didn't have transportation network companies before they were able to get that into the code. And so we have concerns, we share the author's concerns about third party delivery companies for alcohol. But we do think there needs to be much stronger guardrails and an employee employer relationship. Thank you.

Thank you. Any others here in the room in opposition? Name organization position.

Michael Skip, on behalf of Alcohol Justice and the California Alcohol Policy Alliance, in strong opposition.

Thank you. Thank you, sir. With that, we are going to transition over to teleconferencing. We will take those in support and those in opposition. Moderator are you prepared?

Yes, thank you. Please press 1-0 at this time. Again, it's 1-0, and currently nobody in queue.

Thank you, Moderator with that, we will pull it back to the Committee. I do. Senator Archuleta.

Thank you, Senator, for bringing this forward. While I continue to have reservations due to the issues brought up by labor and the distributors on this Bill and prior efforts, I am comfortable, I am comfortable supporting this Bill today and give the author a chance to continue working with labor. And I know you will, so I will move the Bill. Senator Glazer?

Yeah, no, thank you. Welcome. Thank you. And I've been listening to the testimony from my office as we run between committees. But I appreciate the work that the author has in this matter. And the restaurants have had such difficulties. We've talked about, it's come up on other bills, the devastation in that industry. And I'm confident that there's proper protections in this Bill, and I'm happy that it's before us and happy to support it.

Thank you. All right. Seeing no further questions. And we do have a motion. So with that Clerk, please call the roll. Oh, you may close. Yeah, you may want to address some of those.

Yes. And I have really appreciated the opportunity to work with the opposition on this Bill. Clearly, as I repeated twice in my testimony, this is going on right now, whether this Bill passes or not, this area is completely unregulated. And so also, one of the other concerns about the drivers being fined, if you go to page. I don't even know, page 26, line 30, subsection two, the permit holder or licensee shall not pass any of these fines on to delivery drivers.

So I would suggest until this business model is handled in some other way, that this Bill is appropriate to pass so that we can protect underage drinkers in the State of California that get on these delivery platforms. Right now, the ABC has no control over those drivers. This Bill, that section, simply adds these provisions in there so the ABC can regulate this area. So I respectfully ask your aye vote.

And with that Clerk, you may call the roll.

SB 495 motion is do passed to appropriations. [Roll Coll}

That Bill has 10 votes, so it is out again. The recommendation was do passed to appropriations, and we'll leave the roll open for Members to add on.

Thank you very much, Vice Chair. We'll. We'll now begin lifting calls. We'll start with the consent calendar. Secretary, please open the roll on the consent calendar.

Absent Members. [Roll Call]

Consent calendar. [Roll Call]

How much?

That's 13.

It's 13. We're going to put that on call. Yes, we'll now move on to file item number one, SB 225 by Senator Caballero. We need a motion on that. Senator Rubio has the motion on that. Secretary, please call the roll.

Okay, SB 225. Motion is do pass to Appropriations. [Roll Call]

Bill has nine votes. We'll put that on call. We'll now move to file item number two, SB 260 by Senator Menjivar. We do need a motion on that as well. Senator Rubio, thank you. Secretary, please call the roll.

SB 260. Motion is do pass to Appropriations. [Roll Call]

That bill has 10 votes. Is there anybody that's not here? So we still will put that bill on call. We'll now move to file item number three. That's SB 544 by Senator Laird. Secretary, please open the roll.

Motion.

This also needs a motion. We got Senator Glazer. Please call the roll.

SB 544. Motion is do pass to Judiciary Committee. [Roll Call]

Bill has 12 votes, and we're going to put that on call now move to file item number six. That's SB 702 by Senator Limon. Secretary, please open the roll.

SB 702 motion is do passed to Judiciary Committee. Absent Members. [Roll Call]

Thirteen, we're going to have that bill on call. Now move to file item number seven. That's SB 721 by Senator Becker. Secretary, please open the roll.

Motion is do passed to Judiciary Committee. [Roll Call]

Bill's on call. We'll now move to file item number nine, SB 240 by Senator Ochoa Bogh. Secretary, please open the roll.

Motion is do pass to Housing Committee. [Roll Call]

Bill's on call. Now move to file item number 11. File item number 10, SB 313 by Senator Dodd. Secretary, please open the roll.

We need a motion.

Excuse me a second.

We need a motion.

We do need the motion? Senator Ashby, thank you.

SB 313. Motion is do passed to Judiciary Committee. [Roll Call]

That bill is on call. We'll now move to file item number 11, SB 387 by Senator Dodd. Secretary, do we have a motion on that? Secretary, please open the roll.

This is SB 387. Motion is do pass as amended to Appropriations Committee. [Roll Call]

That bill is on call. We'll now move to file item number 12, SB 430 by Senator Dodd. Secretary, please open the roll.

SB 430. Motion is do passed to Appropriations Committee. [Roll Call]

That bill is on call. We're now moved to file item number 14, SB 495 by Senator Dodd. Secretary, please open the roll.

Motion is do passed to Appropriations Committee. [Roll Call]

The bill is on call. Yes.

Can I add a vote onto item six, SB 702, for no to an aye, please? Item six, SB 702 from Nguyen. That's the last one I have.

Okay, let's just open up that.

Thank you, sir.

Right now, that's file item number six, SB 702. Secretary, please call. Open the roll.

[Roll Call]

We'll close the roll on item number six. Okay, can we go to the consent item? Okay, so let's just go to consent right now. Secretary, please open the roll.

Consent calendar. [Roll Call]

What's the number?

15-0.

15-0. Consent items are out. File item number one, SB 225. Please call the roll.

[Roll Call]

I don't think so. So what's the number there? 11-0. That bill is out. Item number two, SB 260, Menjivar.

[Roll Call]

Eleven to one. Okay, that bill is out. Item number three, SB 544, Senator Laird. Please open the roll.

[Roll Call]

13-1. That bill is out. We'll move to item number five, SB. No, that's consent. Excuse me. So we'll move to item number six, SB 702, Limon. That is closed as well. How about 721, Senator Becker? Open the roll.

[Roll Call]

14-1. That bill is out. Move to item number nine, SB 240, Ochoa Bogh.

[Roll Call]

14-0. That bill is out. Item number 10, SB 313, Dodd.

[Roll Call]

That is 11 votes. That's going to keep that open. Item number 11, SB 387. Open the roll, please.

[Roll Call]

14-0. That bill's out. Item number 12, SB 430. Please open the roll.

[Roll Call]

Everyone. All right, great. File item number 13, SB 436. Open the roll, please.

Item 14.

Consent. Sorry about that. Working off a new sheet here. Number 14, SB 495, Dodd. Open the roll.

[Roll Call]

13-0. That bill is out. We're going to move back to item number 10, SB 313. Please open the roll.

[Roll Call]

12-0. That bill is out. That concludes, I believe, the business before the Committee. I'd like to thank all the Committee staff for the great work they've done today, all the people that testified in support or opposition to any of the bills, and, Moderator, thank you for the great work that you did for us today, taking these calls. With that, I'm going to adjourn the meeting of the Governmental Organizations Committee.