Senate Standing Committee on Judiciary

Today's participant number is 877-226-8216, and the access code is 621-7161 we're holding our Committee hearings in the O Street Building. I ask all Members of the Committee to be present so we can establish our quorum. I want to welcome Senator McGuire to our Committee today as temporary replacement for Senator Caballero. Before we hear the presentation on any bill, and I see Senator Bradford is here standing at the podium. We're still lacking a few Members to establish a quorum, so we're going to begin as a Subcommitee.

I have to join one of the other committees for a moment, and then I will return a little while. Meantime, I'm going to turn it over to the Vice Chair, Senator Scott Wilk. Senator Wilk, Thank you.

Thank you, Mr. Chair. Up first, item number 2, AB 700 by Mr. Bradford, having to do with employment discrimination regarding cannabis use. And I don't have a, what's the recommendation? But do pass as amended to Labor, so I'm assuming you're going to take the Committee amendments, but with that, please proceed.

Thank you, Mr. Chair. And, yes, I do take the Committee amendments. And this bill simply strengthens existing law as it protects employees and prospective applicants when seeking employment that they won't be discriminated for past cannabis use. Last year, the Legislature enacted AB 2188 which made it unlawful for an employer to discriminate against a person that they're hiring, termination, or conditions of employment because of a person's off the job cannabis usage.

This law exempted employees, I mean, employers, I should say, who require federal security clearances or whose cannabis usage may otherwise be an issue under federal law or hiring practices. Despite the bill's clear prohibitions on this type of discrimination, certain employers have continued to ask about applicants past cannabis use. Some employers throughout the state employ zero tolerance policies on cannabis use and continue to ask applicants whether they have used cannabis recreationally prior to employment.

This practice not only dissuades otherwise suitable candidates from applying for these positions, but also leads to situations in which individuals respond dishonestly just to get the job, or they are prevented from moving further in the application process simply for using cannabis in a legal and responsible capacity according to the laws of this state. SB 700 just makes it unlawful for employers to request information from the applicant relating to their prior use of cannabis.

This bill preserves the provisions of AB 2188 such as exemptions for employees subject to federal regulations or in the construction industry. It does nothing to change the existing law pertaining to testing of cannabis and cannabis use on the job, ensuring employers can maintain a drug free workplace. I should say, and I respectfully ask for your aye vote.

Thank you, Senator Bradford. Do you have any witnesses in support?

I don't know if we have any primary witnesses in support of this.

Do we have any primary witnesses in support of SB 700? Seeing none. Do we have any that want to testify in a me too fashion? Seeing none, we will go to the opposition. Any primary witnesses in opposition to SB 700? I guess no, he's just moving. Okay, good. Thanks. Your timing was perfect. Any witnesses in opposition? Me too? Seeing none. Let's move to the teleconferencing. I suppose I should read the script. What? Okay, I'm not going to do the script then. Thank you. I appreciate that. So, at this point, we will take testimony, both pro and con, regarding SB 700. Moderator, are you there?

Yes.

Queue up the line, please.

Thank you, Chair, excuse me, Mr. Chair. And if you would like to comment at this time, it is one, followed by zero on your phone. And we'll go to line 80, your line is open. And line number 80, your line is open.

Hi, this is Vanessa Teran, Policy Director with Mixteco/Indigena Community Organizing Project in support of SB 435. Thank you.

And next, we'll go to line 88. Your line is open.

Hi, this is Christopher Grimm testifying on behalf of the Innovative Lending Platform Association. I apologize. I just jumped on, so if I'm on the wrong bill, I apologize, but I'm testifying in support of Senate Bill 33.

We'll get that to that shortly.

Apologies. My bad.

No problem.

And next, we'll go to line number 63.

Hi, this is Cesar Montoya with the UCLA Latino Policy and Politics Institute calling in support of SB 435. Thank you.

Okay, that's three strikes now.

And we have no lines in queue.

That's good. Thank you, Mr. Moderator. We will be back to you shortly. Right now, we'll bring it back to the Committee for any questions, comments, concerns. Oh, we do have a quorum. Yeah. Okay, well, let's... I thought we needed six. We're short one still. Oh, now we have a quorum. Oh, you're an author, but I've never read any of your books. Okay. May you close?

Thank you, Mr. Chair. Members, this is a straightforward measure. We just want to avail individuals who seek employment not to be disqualified for what is now legal in California. There have been employees in this building who have come to me over the last three years in tears because they were medically prescribed cannabis and were fearful that they would lose their job for doing something at home, off hours, for their anxiety and everything else.

We've even had veterans who have stated how important this is for them to be able to have access, but at the same time seek gainful employment. So this is all that this bill does. Just alleviates the employer obligation to ask that question. They can have that conversation, but it shouldn't be a disqualifying factor for future employment. So I respectfully ask for aye vote.

Thank you. Thank you, Senator Bradford. And we have a motion, so we will take the vote when appropriate. Up next as we go and file order, I see that Senator Cortese is here, so he has file item number 3, which is SB 69, and file item number 4, SB 642. So you may proceed whenever you're ready.

All right. Thank you, Mr. Chair and Members. Appreciate you allowing me to present SB 69 to you today. SB 69 adds transparency to the CEQA notification process. Currently, state agencies are required to post notices of determination and notices of exemption to state clearinghouse website. Local public agencies are only required to post these notices on the county clerk's website. When the notice is only posted on the county clerk's website, people tracking the project at the state level or otherwise can miss it.

SB 69 would simply require all public agencies to post these notices to the state clearinghouse website so they can all be found in one place. These notices must be posted within five days of action on a project. Under current law, public agencies are also required to send a notice of determination or notice of exemption by mail, US Post Office mail, to any member of the public who requests one.

Unfortunately, in 2021, the 6th District Court of Appeals in San Jose held that there's no remedy for a violation of this statute when stakeholders aren't notified, even though they requested notification, which they're legally entitled to. This can result in the limitations period, as in statute of limitations ending before a stakeholder has a chance to bring an action.

So the statute of limitations period for a CEQA project currently begins either when a notice of determination or exemption is posted or if there's no formal decision when a project subsequently begins. This bill addresses the court's decision, and it does so by improving the CEQA notification process. Under SB 69, the statute of limitation would either begin when the agency posts the notice to the state clearinghouse website or when they directly send it to anyone who has requested it, whichever happens first.

Additionally, if the notice is amended, corrected, or revised, the statute of limitations resets. Agencies are also authorized, but not required, to send notices by email if a stakeholder requests it in place of physical mail. These changes strike a balance between improving notification, giving members of the public adequate time to challenge projects, and making sure that the limitations period is not extended indefinitely so that projects can still move forward.

My office has been in communication with organizations that have raised concerns about the bill, all on the process here. We're continuing these discussions to find solutions. The bill is sponsored by the California State Council of Laborers, has support from 10 organizations so far, including the California Labor Federation, the District Council of Iron Workers, Center for Biological Diversity, and the Center on Race, Poverty, and the Environment.

With us to testify today are Richard Drury, representing the California State Council of Laborers, and Grecia Orozco, representing the Center on Race, Poverty, and the Environment. Thank you very much, and at the appropriate time, I will respectfully ask for your aye vote.

Under the Committee rules, two primary speakers, 2 minutes each. Thank you.

Thank you, honorable Committee Members. My name is Richard Drury for the California State Council of Laborers, the sponsor of SB 69, and we urge your aye vote. The Laborers participate in CEQA review to ensure that their workers are protected from workplace hazards such as soil contamination, pollution from construction equipment, and other hazards. We make sure that those issues are mitigated and then the project can proceed and go forward. Currently, CEQA requires notice to be provided to anyone who requests it by US mail.

It's a very antiquated process. Unfortunately, a case out of the 6th District held that even if someone properly requests that notice and the agency fails to provide it, there's no consequences. SB 69 requires that that notice be sent, and the 30 day statute of limitations does not begin to run until the notice is sent. However, it also modernizes the notice procedure so that the agency can provide notice simply by posting it on the CEQA clearinghouse or sending it by the electronic mail.

This will actually reduce costs for the agency, but won't have to send possibly hundreds of mailed paper notices and risk the possibility that someone may claim that they never received it in the mail. So it will increase certainty, reduce costs for the agencies. And I want to emphasize, also, that this does nothing to make it more difficult or less difficult to bring CEQA lawsuits. It only allows people to know that a decision has been made. It doesn't change legal standards. We believe it will actually reduce costs and increase certainty for the agencies. Thank you.

Thank you. Go ahead.

Good afternoon. My name is Grecia Orozco with the Center on Race, Poverty, and the Environment, an organization that uplifts environmental justice and underrepresented communities in the San Joaquin Valley. Our communities in Kern County are usually low income communities of color, and many of their communities are targeted to house hazardous land uses, such as expansive warehouses, hazardous waste sites, as well as oil and gas facilities.

And even though our community members are vigilant in keeping track of what is proposed in their neighborhoods, it's not possible to keep track of every single one. And this is partly due to the inadequate notice requirements in CEQA. CEQA is community's first line of defense to combat harmful land uses, but it's often difficult to even try when they don't have the notice to be aware and actually provide that input that's needed.

In the case that was mentioned, Organización De Comida De Aviso versus San Jose, residents were not provided that notice of determination for a proposed warehouse, and even after they timely requested it. And despite having many valid legal claims that they could have raised, the court was unable to issue a remedy due to the fact that the statute of limitations was run. And this is due to this gap in CEQA.

SB 69 would remedy that by providing that the statute of limitations does not begin to run until that notice of determination has been sent. So this doesn't change any legal standards. It just provides that buffer for when a timely request is made on that notice of determination. As such, our organization urges you to vote aye on SB 69 to be able to provide these communities, environmental justice communities, with the opportunity to be aware and to provide input on the decisions that impact their day to day lives. Thank you.

Any other speakers in support? Name, organization, and position.

Mr. Chair and Members, Sara Flocks, California Labor Federation, in support.

Thank you, Mr. Chairman and Members. Matt Cremins, here on behalf of the California-Nevada Conference of Operating Engineers. We are in support. Thank you.

Thank you, Mr. Chair. Keith Dunn on behalf of the District Council of Ironworkers of the State of California, in support.

All right, seeing no further speakers, let's go to opposition. Is there any lead witnesses in opposition?

Chair and Members. Nick Romo on behalf of League of California Cities. Not here in opposition. We do express concerns with the author. We want to thank the author, his staff, and the sponsors for tremendous progress we're making to make true on the promises that we're modernizing this process and we can save cost. So I'd like to thank the author and his staff for the tremendous work. Thank you.

So is this opposed unless amended or what's, or you haven't taken a position yet?

No position until we can try to find the next horizon on where we are with the discussions with the author and his sponsors, should that, hopefully we can get to a point where we're supportive.

Okay, great. Thank you.

John Kennedy with RCRC in much the same position, appreciate conversations with the author and with the sponsors. Trying to perfect how this is going to work in implementation, ensure it doesn't provide other loopholes for people to bring actions. Thank you.

Great. Thank you. Any other witnesses in opposition in the room? Seeing none. Let's transition over to the teleconference line. We will take both in support and in opposition to SB 69. Moderator?

Thank you, Mr. Chair. And once again, if you do have a comment, it is one, then zero on your phone. And, and we'll go to line number 92. Your line is open.

Okay. And they have taken their line out of queue. We have no other lines in queue at this time.

Thank you, Moderator. At this point, we'll bring it back to the Committee. Questions, comments, concerns? Seeing none, the recommendation is do pass to Appropriations. Senator Cortese, you may close.

Thank you again, Mr. Chair, and Members, and to the Committee staff here, and everyone who has worked very closely with us and who continues to, if I can say so, negotiate for perfection here. But we'll keep working with everyone. And in the meantime, I would respectfully ask for your aye vote.

Okay. We have a motion from Senator Durazo. Senator Allen has now decided to join us. So I believe we have enough for quorum. So let's go ahead and take the roll.

[Roll Call] You have a quorum.

Great. We have a quorum. So let's go ahead and finish off the bill. Again, the recommendation is do pass to Appropriations, so let's call the roll. Oh, yes. Senator Allen.

Well, I'm so sorry. I was literally presenting a bill in Transportation. We heard this bill in EQ. I just wanted to know if we had a sense of where things have... I know there was dialogue during EQ with the League of Cities on this bill, and I wanted to get an update from the author. I do apologize, but is there any news on that conversation over this bill?

Yes, Senator. I remember a more spirited discussion on the other bill, which I haven't presented yet...

Yes

642.

That one was with the DAs.

Right. Okay.

Yeah, this is the League.

Yeah. The only concerns that we've heard thus far are, with the exception of one opposition letter that we received from Valley Water Coalition, has been essentially encouraging us to keep working in good faith. And I would dare to say there was some gratitude expressed for the efforts we made so far to work with people.

We're dealing, as you know, from having heard the bill, with perhaps some important nuances in clarifying language at best at this point, in terms of making sure people aren't concerned that we have any kind of an open ended statute of limitations. I think we've addressed that with 180 day maximum. And the bill is getting, as far as I'm concerned, about as close as it's going to get. But we'll keep listening. I listen carefully today, and we'll keep working with people I don't know if that...

But once again, I do apologize. I know you were winding up... The League did speak. Okay.

Met with the sponsors, the author's staff, and we're going to make good on the promise to you to provide you some conceptual language to your Chair and this Chair.

Great. Appreciate it. Thank you, everybody. I appreciate your indulgence.

Thank you.

So, Senator Allen, do you have any questions on file item 1 or file item 2 while you were out? Can you handle that now?

No, sir. I appreciate it.

Okay, good. So with that question, can we call the roll? We good? Well, yeah, I guess you're right. We didn't establish it. So it's Senator Durazo.

So I can ask about 1 and 2 then.

Yeah, well, you were in the room, but we didn't establish that. Okay.

This is file item number 3, SB 69. The motion is do pass to the Senate Committee on Appropriations. [Roll Call] You have seven to zero with Members missing.

7-0?

Thank you. We go to the next?

Sure. Let me do a couple of housekeeping matters here. First of all, thank you, Senator Wilk, for chairing the committee. While I was gone, someone in the hallway mentioned that things seemed to go more smoothly when your chair. Just saying. And I think it was a staff member of mine that said that. But in any. Also, we have the consent calendar. Let me just read the items that are on consent calendar and some of the ground rules for testimony today.

The items on the consent calendar are as follows. File number 13, SB 790 by Senator Padilla. File number 18, SB 462 by Senator Wahab. File number 19, SB 463, by Senator Wahab. File number 20, SB 578, by Senator Ashby, with amendments. File number 23, SB 522 by Senator Niello with amendments. File number 25, SB 446 by Senator Wilk. And finally, file number 27, SB 652 by Senator Umberg, with amendments. Senator Laird moves the consent calendar.

Madam Secretary, if you'd call the roll.

[Roll Call]

On consent 7-0. We'll put that on call. All right. For today and for subsequent xommittee hearings, each bill will be allowed to have two witnesses in support and two witnesses in opposition. Each witness will be accorded and afforded two minutes to speak. After that, the support and opposition witnesses. After the support and opposition witnesses have spoken, and we've heard from all the metoos in the hearing room will turn to phone testimony. We will hear from both support and opposition phone testimony at the same time.

There'll be a 15 minutes limit on phone testimony for those on the phone and those providing metoo testimony here in the committee hearing room. Please provide us your name, your affiliation, and your position. If you wish to add to whatever it is you say here in the committee hearing room, feel free to submit a letter to the committee using one of the methods described on the Judiciary Committee's website.

All right, so, Senator Cortese, we'll hear from you on your next item, which is item number four, SB 642.

Thank you. If I could just say before I start, it's just as a point of privilege, the vice chair isn't as nice to members who are entering the hearing room as the chair usually is. I realize it's a very high bar, but.

Well, thank you for noting that, and.

I can attest to that.

All right. Well, thank you. That sounds like it's a consent item. All right. Senator Cortese.

Mr. Chair and Members, thank you for allowing me to present SB 642 to you today. The bill gives county councils the same authority to prosecute hazardous materials violations as city attorneys, district attorneys, and the attorney general. Authorizing additional public prosecutors to prosecute these violations can help to protect our communities, particularly low-income communities and communities of color near hazardous waste facilities. In 1993, the legislature passed AB 1934 to augment civil enforcement of hazardous waste violations.

The bill at that time amended the hazardous waste control law to authorize county councils to prosecute these violations in order to promote a level playing field for the regulated community. However, the legislature did not make conforming changes to several related statutes. Those statutes include related enforcement provisions as well as other closely related laws, which would include the Hazardous Materials Business Plan program, the Underground Storage Tank program, the Above Ground Petroleum Storage Act program, and the Medical Waste program.

So, this incomplete authority limits the county council's ability to effectively prosecute polluters. For example, the above Ground Petroleum Storage Act program requires certain petroleum storage facilities to develop and implement spill prevention, control, and countermeasures plans. A violation of these requirements could lead to an oil spill, which can cause respiratory damage, liver damage, cancer risk, reproductive damage, among other issues. SB 642 helps communities prosecute violations like these, helping to more completely enforce California's hazardous waste laws.

It gives certified unified program agencies coupas the choice to refer these cases to a wider range of prosecutors. That's why the California Association of Environmental Health Administrators, which represents the CUPAs, and local environmental health departments across the state support the bill, as they note in their support letter, and I quote, because of the high workload of the DAs, many CUPAs refer only the multi-jurisdictional or more serious violations to the DAs, risking no enforcement action on certain violations, end quote.

They state that SB 642 will take some load off the DAs and provide a more expeditious avenue for enforcement of hazardous waste violations, and that, too, is a direct quote. Finally, they note that the authority provided under SB 642 is purely optional. Again, and I quote, neither mandating locals to use their county councils to pursue civil enforcement nor limiting the current DA authority to do so.

So, the bill is sponsored by the County of Santa Clara, Rural County Representatives of California, and the California State Association of Counties. The bill also has the support of environmental organizations that can speak to the consequences of under-enforcement of hazardous materials laws. With us to testify today, we have Sonia Wills with the County of Santa Clara and John Kennedy, who is the Rural County Representative of California Representative today. Thank you.

Thank you. The floor is yours.

Thank you, Mr. Chair, and thank you to the committee and to the staff for your work on this bill. My name is Sonia Wills, and I'm a deputy county counsel with the county of Santa Clara and advise the County of Santa Clara's Department of Environmental Health. Our county is pleased to support SB 642 and are grateful to Senator Cortese and his staff for bringing it forward. I'd like to take a moment to respond to the California District Attorney Association CDAA's unfounded attacks on county councils.

The legislature has vested civil prosecutorial authority in county councils in numerous statutes, including the Unfair Competition law, the False Advertising law, the Public Nuisance Act, the Narcotics Abatement Act, Provisions Governing Unlicensed Cannabis Cultivation, and the Hazardous Waste Control law. The California Supreme Court has stated the rigorous ethical duties imposed on a criminal prosecutor also apply to government lawyers generally when bringing civil enforcement cases. County councils are public prosecutors subject to the same ethical duties imposed on district attorneys.

As the analysis notes, the legislature ended the Environmental Circuit Prosecutors program after CDAA was found to have misappropriated funds and used it for lobbying purposes. The passage, quoted on pages seven to eight, notes that those funds were critical for rural counties where district attorneys lack the resources to take on large corporations with huge legal teams. This bill gives such counties other enforcement options.

CDAA also points out to the fact that county councils have occasionally used outside counsels on a contingency fee basis, but the California Supreme Court has upheld this practice subject to appropriate supervision. The 9th Circuit did the same for the Trinity County District Attorney. But in any event, such practices are relatively rare and far afield of this proposal, which simply seeks to put county councils on the same footing as all 482 city attorneys. Finally, CDAA claims the bill would allow the worst violators to escape criminal punishment.

This is false. Under the current enforcement scheme, the CUPA elects which public prosecutor will work with in a given case. The worst violations, by definition, will be referred to the DA because they are crimes. This bill gives CUPAs another option for cases that do not rise to the level or where the DA does lack the resources. Having added flexibility is why the CUPAs do support this bill. We urge you to do the same. I'm happy to answer any questions. Thank you,

Hardy. Thank you. Other witnesses in support.

Good afternoon. John Kennedy with RCRC. We represent 40 rural counties, populations between 1,100 in Alpine County to about 500,000 in Sonoma County. We're pleased to sponsor this bill because it provides us with some additional flexibility and another tool in our toolbox to address safety-related violations of above-ground storage tanks, underground storage tanks, and hazardous materials business plan laws. These violations could pose very serious problems for first responders.

In particular, we're not seeking to necessarily address any previous problems but just to provide additional capacity going forward. This flexibility is even more important in rural jurisdictions with limited resources. Nineteen of our counties have fewer than 70,000 residents. So if an issue doesn't rise to the level of the AG bringing an action and the DA doesn't have the capacity, this bill merely affords us the opportunity to go out and file a civil action on those claims.

Again, important in rural areas where there may be other criminal or environmental laws that take up the DA's attention, rightfully so. So we urge your support of SB 642 today to improve local flexibility, to provide us another tool, a tool we hope we don't have to use, but one that could be incredibly important if the need arises. Thank you.

Thank you. All right, those here in the committee hearing room, in support: if you'd approach the microphone.

Hello. Ada Waelder with the California State Association of Counties, a proud co-sponsor of this bill.

Thank you.

Good afternoon. Elizabeth Espinosa: here today on behalf of the Urban Counties of California, a coalition of 14 counties with the highest population in the state. Thank you. In support.

All right, anyone else seeing no one else approaching the microphone, let's now turn to the opposition.

Good afternoon. Chair and Members. Kim Stone: Stone Advocacy on behalf of the California District Attorneys Association, the deputy district attorney who was here in the previous committee has a sick child, and so sends his regrets. The California District Attorneys Association has an opposed, unless amended, position on the bill and are requesting amendments to limit enforcement to counties of 750,000, population or greater. And part of the fear is that we haven't been advised that there is insufficient environmental prosecution.

I believe our office has asked for an example or more of failing to go after environmental violators, and we haven't received that. And the other fear is that potential prosecution by the county council might result in sort of a financial or lesser settlement, whereas more aggressive criminal liability might be warranted.

And so if the committee or author is disinclined to take the amendments that we suggest in our letter, at the very least, is like a plan b backup plan, I would request or suggest at least a notice to the DA's office so that they could be aware of it. And if there's an ongoing investigation or something else going on, that might be another option. And for those reasons, we must remain respectfully opposed.

All right. Thank you. Others in opposition, seeing no one else approach the microphone, anyone wishes to provide me to testimony? In opposition, seeing no one approach the microphone, let's now turn to the phone lines. Moderator if you would queue up those who are both in support and in opposition to SB 642.

Yes, Mr. Chair. And if you would like to comment once again, it is one followed by zero. And we'll start with line number 92. Your line is open.

Hello, this is Santiago Rodriguez with California Environmental Voters in support of this bill.

And next we'll go to line number 43.

And next we'll go to line number 60.

Mr. Chair, Members Justin Malan here on behalf of the Association of Environmental Health Administrators. We represent both the CUPAs you heard from the author, and the environmental health departments. We're very much in support with no prejudice against the DA. Thank you.

Thank you.

Yeah, this is Lori Mazzella, Deputy County Counsel for the County of Solano, in support of the bill.

Thank you.

All right, bring it back to Committee. Questions? Comments? Senator Allen?

And we have no other lines in queue.

Well, Senator Cortese had a fun time in EQ last week, and so this bill was also there, and we had a good discussion with the DAs. I guess I'm certainly going to support it in last committee. Certainly happy to support it now because, from my perspective, it's about creating more mechanisms for enforcement of what we know is a very serious set of issues related to hazardous materials and the violations that are out there now.

I will say I was intrigued by the comment that was just made about the fact that the witness on behalf of the DAs talked about how she knew of no incident where certain types of violations were going un...there would've been a request or kind of a demonstrated need for the DAs to go after a violator that wasn't followed up on. I'd love some clarity on that. Obviously, on its face, from my perspective, the more the merrier when it comes to enforcement.

We all know everyone's bandwidth is limited, but I would like to get a better sense of the need for the program and what's happening right now on the DA side that necessitates us stepping in and giving these increased powers to the county council folks, that's my kind of core question, and I don't know if Mr. Campos or someone from the, I don't know if one of your witnesses or you: Senator, would like to answer that question.

All right, Senator Cortese, what would you like?

There's certainly been some documented examples openly in the media, for example, a 2021 San Francisco Chronicle article, and I think that's referenced in the analysis.

I think our motivation for moving forward with this bill was something completely separate and apart from getting into any kind of a competitive sort of food fight, if you don't mind me putting it that way, about how much more capacity is needed or not, or whether somebody's doing their job or not, or whether somebody's leaving a lot of low hanging fruit on the ground. But there's certainly been some of those cases.

I think that article noted that in Madera County, the District Attorney, Sally Moreno, at that time charged a truck filtering company with mishandling hazardous waste but was trying to use outside counsel and did not have funds to replace the outside counsel when they quit. And those are the kinds of situations where, perhaps, if you had the county council available to step in to take over the case, it happens. We just don't have that option right now.

I'm not sure if the whole issue isn't sort of a red herring in the first place. I think what we want from a public policy standpoint is vigorous prosecution of these kinds of claims, or something more nefarious happens. And we have county councils who have the capacity, who, in some cases, like Santa Clara County, have been in their case deemed the number one public legal office in the entire country.

Why have them standing by and not in action if they have the opportunity to do so? I want to be very much in good faith, Mr. Chair, if I can just answer a question that is sort of still pending from the previous hearing, and I know you were interested in seeing us try to resolve that, and want you to know we have in good faith try to resolve this issue.

I think an interesting issue, just even from a lawyer standpoint of is there some sign of maybe concurrent notice that should occur. It seemed like a super simple, elegant solution. If you're just dealing with DA's office, county council's office, notifying the DA, then all of a sudden the issue became, you got 482 city attorneys out there who also have this sort of code jurisdiction. Do we now all of a sudden say that there's a notice requirement there that never existed before? But we're working on it.

We still think that's sort of a practical implementation issue that's probably important just to make sure that you don't get unintended overlap.

Great.

I appreciate that, and I certainly trust you on working that through, Senator. And I think your folks are excited to give us an answer here because I'm interested in hearing.

Sure their answers will be better than mine.

No, it's all very helpful.

Thank you, Chair. And thank you, Senator Cortese. I believe that the example case was already covered by Senator Cortese. But to get to the aspect of potential overlap. As you noted, the city attorneys already have this overlapping jurisdiction, and generally, in my experience, I worked as an attorney for the Department of Toxic Substances Control for over ten years before coming to the county.

There's a lot of internal discussion and coordination when cases are referred to the particular prosecutor that they determine is best situated to handle the case. That would be no different in this situation. The county council's office coordinates regularly with the district attorney's office, especially in public nuisance cases that also end up being criminal cases as well. So this is not new to us to coordinate with our colleagues at the DA's office. I wouldn't think that that would necessarily get in the way of any criminal prosecution.

All DAs would still have the exclusive authority to bring all the criminal cases, while the county councils would be just given the authority to bring civil.

Yeah, absolutely. I guess the issue becomes, is there some sort of preemption? I guess on the civil side because, of course, the DAs can certainly bring civil cases, too.

Thank you, Senator. So first, the issue about preemption. So, as I said, it also applies, this law already applies to equality to 482 city attorneys in the state, and this has never seemed to present a concern. Secondly, the enforcement is not initiated by the public agency itself. It's actually initiated by referral from the Certified Unified Program Agency, the CUPA, or from DTSC. So they're the ones that are in the position to make the referral of the public prosecutor to bring the case.

Third of all, there are often, for certain cases, there are parallel proceedings where there will be a civil action that will sometimes be filed first and that will request temporary injunctive relief or preliminary injunction while the DA is maybe considering and still investigating the matter. Once the DA will make a decision and charge a crime, at that point, it would stay the civil case until the resolution of the criminal case. And those types of cases often happen quite frequently in the hazardous waste context.

Good afternoon. David Campos with the County of Santa Clara. And respectfully, Senator, the way that I would explain it is that in many respects, civil and criminal proceedings are different, and the evidentiary requirements, for one thing, is a perfect example where there is a different threshold that has to be met, which is why because of the higher evidentiary threshold that a criminal prosecution has, oftentimes it's easier, to begin with a civil proceeding.

And again, this is really not about trying to say DAs are not doing their work. They're not doing their job. We know that they are, but they have limited resources, and this simply complements that. It's not about saying that they're not doing what they're supposed to. To the contrary, we believe that we can supplement the good work that they're doing in a proceeding that is different in nature.

They can bring civil cases, too.

That's correct.

So it's not as though obviously there's different evidentiary threshold with the criminal cases. But anyway, look, I'm hearing you on the issue of the city attorneys, the lack of a real record of conflict. I mean, that's certainly very convincing, and I'm happy to support today.

All right, thank you. Senator Allen, Senator Ashby.

Thank you.

So the reason I am chiming up is because my county is specifically listed as opposing Sacramento County District Attorney, but they're not here, and they didn't testify. So, I'm wondering if you've had any conversations specific to Sacramento County and their district attorney.

No, but we can. And I would pledge to you that we'll reach out and see if there's anything that's in addition or beyond what we're hearing from the association itself.

That would be great. And if my office can be of any help in coordinating that communication, I'd be happy to, Senator Cortese.

Well, we'd be appreciative of that.

Okay, I will do that. Just make sure your team that we coordinate after. And then secondly, I just wanted to say, it sounds like a kind of an old-fashioned scope issue to me. At least that's what my ears are hearing, and while I hear what the DAs are saying -

- but I'm sort of uncompelled by the argument that you would make a different standard for 750,000 constituents or less, or population and less, because in a small county, you might have a small county council's office, but in that same county, then you're going to have a small DA's office because the counties are the same and those are both countywide seats. So that's not going to change things.

However, it does make sense, maybe, that if one of them was working on a case in this regard, that they would communicate with the other one. Now, that might increase resources through a coordinated effort and some type of multi-jurisdictional collaboration. And so maybe that's worth thinking about when you move on in the next level. But otherwise, I appreciate what you're trying to do, and I will most certainly help talk to Sacramento County.

Thank you, Senator.

Thank you, Senator Ashby. Senator Wilk.

Thank you, Mr. Chair. I don't want that 750,000 threshold because I have an LA County DA that does not prosecute anybody. And I know our county councils once this I know from my personal experience in my district, we are being devastated by illegal cannabis grows and illegal industrial dumping all over the desert. That's just wreaking havoc, particularly on our water supply. So I think, as you said, there's just another tool for people to use on something that affects everyone.

So I encourage you to continue to work with the opposition, but I think you're going the right direction, and we'll be supporting the bill today.

Thank you, Mr. Vice Chair.

Thank you. Thank you, Senator Cortese. And I know you've taken to heart the comment, with respect, especially to notification. No one here wants to see duplication of effort. Everyone here has seen duplication of effort where two agencies are operating, and unbeknownst to one another, I'll skip my own personal war stories, including the one where two undercover agents spent a year investigating each other unknowingly. But I'm quite mindful of the fact that we want to create a system that is efficient and effective.

And I know you'll continue to work on this with the stakeholders. I see heads nodding in the affirmative. So, with that, I'll ask for a motion. Well, let me ask: would you like to respond to that?

It'd be fun to respond to the issue of the two undercover guys, but I won't do that. Probably quit while I'm ahead on humor, let me just say I respectfully ask for your aye vote.

All right.

Thank you.

Is there a motion? Senator Ashby moves the bill. All right, Madam Secretary, if you would call the roll.

This is file item number four, SB 642. The motion is do pass. [Roll Call] You have 8-0

8-0. I'll put that on call. Thank you. Senator Cortese, I see Senator Eggman here, and I'm going to turn the gavel back over to Senator Wilk, and I'll be back shortly. I hope.

Hope it wasn't something I said Senator.

Don't take it personal.

All right, we're moving on to file item number five, SB 244. Senator Eggman, right to repair act recommendation is do pass as amended to appropriations. Senator Eggman, the floor is yours.

Thank you very much, Mr. Co Chair. And the two bills I'm going to present are going to sound like a redo of my greatest hits, because they're bills you've heard before, but at first you don't succeed that you just keep try trying again. So here we are, back with these still incredibly important and timely right to repair. I want to thank the committee staff for the continued work on this, and I'll be accepting the amendments listed in the analysis.

And when it comes to the right to repair our appliances, I see a lot of you looking at your phones right now. Do you know how many phones Californians throw away every single day? About 46,000 phones. So that's just one example of one line of technology. And I'm sorry, the Senator from Venice area is gone, because I know he's very concerned about waste, as we all are. So this is a bill not only to put information and kind of choice back in a consumer's hand, but it also reduces the amount of unneeded and unwanted waste we have and also continues to build up our middle class economy with repair shops, which, by all reports, and who are regulated under the Bureau of Goods and Services. There's been no problems with them. They are a regulated entity because the opposition will say, well, you can't really trust a repair shop because you can't trust them.

No evidence whatsoever to support that. So the right to repair. And you can say, well, you already can. You can just go on YouTube and Google something and figure out how to fix it. Well, that's what people do, but that's what makes things unsafe, because you're not getting an authorized part, you're not getting an authorized tool, you're not getting an actual handbook. You're getting stuff that people have put together for people to be able to do their repairs on their devices as it is.

So there are four key components that are in this right to repair. Most right to repairs is an authentic part provided by the manufacturer, the appropriate tools needed to make the repair, a manual or service documentation that walks through the appropriate steps, and the software needed to recalibrate the device. This is going to make all of our devices more accessible and provide more options, again, for the consumer.

In California, we already have a law that says the manufacturer should provide, or should, will provide parts for a period of seven to 10 years. But oftentimes they fall behind your warranty to be able to say, well, we can't do that if you've had it fixed somewhere else. And they do that by having their own authorized dealers. So it's part of a business model. We have our own authorized dealers. And personally, I just had my dishwasher go out.

Now I will say I have my 1954 Wedgwood oven that you all may have heard about it from time to time. It is gas, but my dishwasher just went out. I got a new one about four years ago. But somebody coming out, they're like, well, it's broken. You have to get a new one. Or we can repair it, but it's going to cost more than a new one.

Right. So it's just kind of, we used to build things to keep, we've developed a business model. We make things to dispose of and then hook you right back in with the contract for your next purchase. So again, as you know, we've done this a couple of times.

We think this will save as much as $40 billion if we implemented this across the country, reduce the amount of waste, increase the viability of our local repair shops, which are great jobs for, again, growing our middle class, and disrupt a business model that, frankly, keeps us all tied with a tether to the manufacturer of a device that we happen to purchase. So right now, also, as you know, the Biden Administration is also looking at this as a way to make things flow better for the consumer, for small business, and to maintain economic competitiveness in our market. With me here today, and they did a report on it, people sometimes point to the report by the FTC or the Federal Trade Commission, but Dan Salzburg, on behalf of the FTC is here with me today, as well as Jenn Engstrom from CalPIRG, one of the co sponsors of the bill.

Great. Please come forward. And the Committee rules are two speakers, two minutes each. Thank you.

I'm Dan Salzburg. Thank you for the opportunity to present the FTC's testimony. The prepared statement submitted to the Committee presents the official views of the FTC. My oral statements and responses to questions are my own and do not necessarily reflect the views of the FTC or any Commissioner. This testimony is based on the findings in the nixing of the fix report, a report mandated by Congress and issued unanimously by the bipartisan FTC in May 2021.

The report evaluated manufacturer practices that impede independent repair the harms caused by these practices, and manufacturers professed justifications for the restrictions. While the report provides a comprehensive analysis of repair restrictions, I'm going to focus on two professed justifications for repair restrictions that were debunked by the report. First, some manufacturers argue that repair restrictions are vital to protect repair workers and consumers from injuries.

But the commission found that there is scant evidence to support manufacturers justifications for repair restrictions, including claims about the safety of repairs conducted by independent repair shops and owners. Furthermore, manufacturers'safety arguments are difficult to square with the automotive sector, where owners and independent repair shops routinely fix highly complex products that contain gasoline and battery acid and that could cause great harm if improperly repaired.

The automotive sector's experience shows that, with appropriate parts repair information and training, owners and independent repair shops are similarly capable of safely repairing other products. The second claim justification is that repair restrictions protect consumers from cybersecurity risks. The Commission found no empirical evidence to suggest that independent repair shops are more or less likely than authorized repair shops to compromise or misuse customer data. Nor did the commission find any evidence that providing independent repairs with access to diagnostic and firmware patches would introduce cybersecurity risks.

Thank you for the opportunity to provide the Commission's views. The FTC remains committed to promoting competition and consumer choice in repair markets and welcomes the opportunity to work with the California legislators on this critical issue.

Thank you.

Hello. Good afternoon. My name is Jenn Engstrom, and I am the state Director of CalPIRG, the statewide consumer protection group and a proud co sponsor of SB 244. Our state and country has an electronic waste problem. Californian households alone produce an estimated 772,000 tons of e waste each year, which leak toxic chemicals into our environment. This number is so high in part because manufacturers of everything from smartphones to refrigerators restrict access to necessary repair materials.

As a result, consumers are forced to go to the original manufacturer, who can then set prices so high that it just makes sense to buy something new. SB 244 would bring more competition and consumer choice to the repair marketplace. With more options for repair, consumers can more affordably fix their devices, which is expected to save Californian households an estimated $5 billion total per year.

Keeping things in use and out of our landfill will also help to address our e waste crisis and reduce the need for unnecessary mining and production. SB 244 would also provide opportunities to small businesses. Local repair shops across the state are struggling, with 59% of shops surveyed indicating they may have to close their doors if these restrictions to repair materials continue. Given all this, it's no surprise that right to repair is broadly popular across the political spectrum.

Our survey found that 75% of Californians support right to repair, including a majority of Democrats, Republicans, and independents. President Biden has reiterated support for these reforms and states across the country are starting to take action with recent right to repair bills in New York and Colorado passing. This is an idea whose time has come and you have an opportunity to take a huge step forward for consumers and for the environment. And so we urge your aye vote. Thank you.

Thank you. Anyone else in the room to provide testimony at this point? It is name, organization and your position.

Good afternoon. Nick with Californians against waste. We're a proud co sponsor and in strong support. Thank you.

Thank you. My name is Craig Headwaller. I'm the policy coordinator for Surfrider South Bay, and I'm also an independent repair consultant. And I'm finding I'm no longer able to do this. I support this bill. Thank you.

Crystal Acidos. On behalf of the California Product Stewardship Council and Solid Waste Association of North America Legislative Task Force in strong support.

Chao Jun Liu with the Electronic Frontier Foundation in strong support. Thank you.

Hi, my name is Lucy Kaff. I'm with Calpirg at UCLA and I support this bill.

Thanks. Hello, my name is Toby, I'm with Calpirg at UCSD and I strongly support this bill. Thank you.

Hi, my name is Taylor. I'm with Calpirg at UC Davis and I support this bill.

Thank you.

Hi, my name is Sophia Silva. I'm a senior at UC Davis and I support this bill.

Thank you so much. At this point, we'll turn to opposition. Do we have any primary witnesses? In opposition again, two minutes.

Thank you, Mr. Chair and Senators. Dylan Hoffman, on behalf of Technet and we're respectfully opposed to SB 244. The bill's requirements to provide the manuals, tools and keys to digital locks we believe will jeopardize valuable intellectual property and our customers personal information. Consumers have many options to get their devices repaired.

It's the industry standard to provide direct repair options as well as an authorized repair network of local providers so consumers can get their devices repaired near them. The reason these networks are authorized and these shops get access to these tools, parts and information is our manufacturers have a contractual relationship with them. This ensures that they have the training to properly repair the device, but also provides redress if users personal information or our company's ip is improperly accessed.

Many consumer devices, not just phones and laptops, contain personal information. With more connected devices in homes than ever, these present a vector for hackers to access consumers data and information. The proprietary information this bill would require us to turn over to anyone who asked for it would give hackers a significant leg up in accessing our devices and exploiting our customers.

The reason our companies and devices are profitable, the reason they're valuable, is because of the intellectual property that makes these possible, would be counterfeitters across the globe want the information this bill would require us to give away. It will give them a significant advantage and undercut our companies, who employ thousands in the state and across the country. For these reasons, we respectfully oppose SB 244.

Thank you, sir. No other primary witnesses? Anybody else want to add a me, too in opposition? Now's the time. Name, Organization, Position.

Dean Sally with the California Manufacturers and Technology Association, respectfully opposed. Thank you.

Stephanie Morwell with the Consumer Technology Association, opposed.

Thank you, Mr. Chair Members. Steve Carlson for CTIA. We're the wireless Industry Trade Association in opposition.

Tim Lynch, on behalf of the Entertainment Software Association, we're grateful to the author and the Committee for their work with us. And as a result of the amendments being offered today, we're removing our opposition to the bill.

Thank you, sir. All right, so we've had the pros, we have the cons. Let's go to the teleconferencing line. We will take both pro and con advocacy on SB 244. Moderator.

Thank you, Mr. Chair. Yes. And if you would like to comment, it is one, then zero. And we'll go to the first line, which is 115. Your line is open. Line 115, you are open. We'll go to line number 92. Hi, this is Santiago Rodriguez with California environmental voters in support of this Bill.

Hi, this is Santiago Rodriguez with California environmental voters in support of this Bill.

Next we'll go to line number 64.

Jordan Wells, on behalf of the National Stewardship Action Council and strong support. Thank you.

And next we'll go to line number 129.

Once. Next we'll go to line number 57.

Hi, this is Elizabeth Chamberlain. I'm with the repair manual company iFixit, and we are co-sponsors of this Bill and in strong support. Thank you.

And next we'll go to line number 125.

Hello. This is Kathy Schaefer on behalf of the San Fernando Valley and Los Angeles chapters of Climate Reality in support. Thank you.

And next we'll go to line number 128.

Hi, my name is Vita Wells with the Culture of Repair Project. In very strong support. Thank you.

And next we'll go to line number 105.

My name is Tony. I am the owner of iTech iPhone and MacBook Repair in San Diego, and I strongly support SB 244.

And next we'll go to line number 104.

My name is Peter Montesano. I'm the owner of Peter's PC Repair in Los Angeles, and I also strongly support SB 244.

And next we'll go to line number 68.

Yes, this is Dustin Brighton with the Repair Done Right Coalition in strong opposition to Senate Bill 244. Thank you.

And next we'll go to line number 78.

Good afternoon. John Keane, Association of Home Appliance Manufacturers, and we are opposed. Thank you.

And we'll go to line number 99.

Hi, there. Alexandria Choy with environmental nonprofit the Story of Stuff Project, in strong support.

And we'll go to line number 119.

Good afternoon. My name is Robert Gammill. I'm the owner of MacGuyz in Redlands. I'm calling in strong support of SB 244. Thank you.

And we'll go through line number 121.

Hello, this is Matthew Williams, owner of FixMyPC! in Merced, in very strong support.

And we'll go to line number 118.

Is in very strong support. Was in business for over 60 years, retired. This is a great Bill.

Next we'll go to line number 127.

Hi, this is Laurel Lehman with Consumer Reports calling in strong support for SB 244.

And we'll go to line 134.

Ben Golombek with the California Chamber of Commerce in opposition.

And we have no lines in queue. Mr. Chair, please continue.

Thank you, Mr. Moderator, at this point, we have one more me too, I believe.

Yes, that's what I get for stepping out for a minute. Robert Herrell, Executive Director of the Consumer Federation of California, in support of the Bill. Thank you.

And you're the winner of the Senator Ben Allen award. All right. Okay. Pull it back to

Very prestigious.

In a few weeks, we're actually doing a program together about civility and politics. So where can people buy tickets? Do you know?

Oh, it's going to be worth it, trust me. All right, we'll pull back to the Committee. Questions, comments, concerns? Got a motion by Senator Min. Nothing? I will comment very quickly. I have voted against this in the past, but it seems to me, I don't care how much money I spend on a washing machine, it breaks every four years. I do have some concerns about some of the issues that TechNet made, so I'm going to lay off today. I've got to educate myself further.

But I think we all share. A lot of these things are engineered to break so they can sell us another one. And I'm tired of being a cog in the wheel. So with that, let's call the.

That sounds like an aye vote.

Oh, yeah. I guess, I said no. I have to get educated more, but please close.

Well, if TechNet comes to talk to you, ask them to come and talk to me, too, because they haven't been able to do that yet. So I would just say it's time.

And I liked one of the callers that said it was about the culture of repair, right? Isn't that what we should all be working for? Especially as some of us begin to age and we need our parts repaired. That should be able to something we can do. We don't just have to turn the whole thing in and start from scratch. Let's put the driver's wheel back in the hands of the consumer and not the corporation who is keeping us tethered to their products. I respectfully ask for your aye vote.

Thank you. With that Clerk, call the roll.

This is File Item number 5, SB 244. The motion is do pass is amended to the Senate Committee on Appropriations. [Roll Call]. You have 6-0 with members missing.

Six ayes. No, oh, you'd like to go up on this Bill?

Umberg, aye.

So that's seven. So that gets it out.

So that gets it out. We'll leave the roll open for other members to add on. So congratulations. Thank you. And we'll move. I guess we'll wait for the chair. Item number six, sir.

Thank you, Senator Wilk. All right, item number six. Senator Eggman, SB 363.

Thank you very much, and this bill may also sound familiar to those of you who are returning members. We're back at it again this year with an online on time database for acute psychiatric beds, step down beds, substance abuse beds. It makes no sense that we have enough AI that it can tell me what's in my refrigerator and what I can cook with it, but that we can't have an online on time database to know where there are beds that are appropriate for somebody's required level of care. So this would direct the Department to develop a database for everyone to be able to use online on time. Finding beds is harder than it should be. We know people get.

Our emergency rooms get compacted. Our jails get compacted. Because you can't find a bed in the appropriate time makes no sense that we're still using phone numbers and phone books to try to call around and look sometimes all around the state trying to find something that's appropriate. And this will also then allow us the opportunity as we provide this design, this database. And also there's a movement around the country for this, that we'll also be able to see.

We'll be able to do an assessment of capacity. How far are people having to go? Could they find a bed? I know the opposition has some fears that they'll be asked to take a patient that they are not necessarily prepared for. This will provide us that information if that is happening. We don't think it is or would. So we continue to have lots of conversation with stakeholders.

All the work that we've all done in mental health and behavioral health these last few years goes for nothing if we can't streamline things, to be able to have people efficiently and effectively be able to move to the best level of care, to be able to meet their needs in that moment. With me today, I have Dr. Shumate with UC Davis and Moira Topp on behalf of Mayor Todd Gloria and the big city mayors. Thank you, chair and Members.

Thank you, chair and members. I am Moira Topp, speaking in support and co sponsorship on behalf of my client, San Diego Mayor Todd Gloria. I'm also here to represent the Big City Mayors coalition, of which Mayor Gloria is the chair of this year. The BCM is the coalition of the mayors of the 13 largest cities in the state. Mayors see firsthand how our communities have struggled to provide appropriate and timely care to those experiencing severe mental illness and substance use disorders.

Last year, the Governor and Legislature took positive steps towards reforming the antiquated, inefficient, and at times inhumane behavioral health system. To ensure the Care Act and other reforms truly reach their potential and to provide the reforms to the full continuum of care, additional action is necessary. SB 373 is a critical and meaningful step toward reforming California's behavioral health system. The availability of specialty care beds to those who are struggling with mental illness and substance use disorder is of paramount importance to the mayors in our coalition.

SB 363 aims to provide real time information about bed availability in facilities. Such a resource will help local governments and service providers understand bed availability, to expedite referrals to inpatient and step down care. The Big City Mayors know that we have reached a crisis point of seriously mentally ill Californians languishing in our streets. SB 363 will make improvements across the continuum of care and better position California to provide the services and care that Californians expect and desperately seek.

We thank Senator Eggman for her continued leadership on this issue. We respectfully ask for your aye vote, and The Big city Mayors stand ready to implement these measures in partnership with the state and our regional partners. Thank you.

Thank you, Ms. Topp. Others other witnesses in support? You have primary witnesses in support.

Hello. Hi. Good afternoon, everybody. My name is Dr. Collin Shumate. I'm a psychiatrist at UC Davis. Today here speaking on behalf of the Psychiatric Physicians Alliance of California. We're a proud co sponsor of this bill. And again, thank Senator Eggman for working on many issues with regards to mental health. As you all know, this would create an Internet database. And what would the actual outcome of that be? Patients would get care quicker. Our loved ones, our neighbors, our family members would get care quicker. Also, we would get really helpful data about the patients who aren't getting that care.

We could better understand what kind of medical needs, insurance needs and so forth are barriers for our patients to get care. When I was asked to speak on behalf of this bill, I asked a colleague who refers every patient who we put on a 51-50 hold or who we're asking to get inpatient substance use treatment, handles all of those referrals, and he gets hit with a brick wall, almost of barriers, and has to call each and every facility, fax a referral to each and every facility, call them every day to make sure that they still don't have a bed, and then communicate with our team so that we can come up with a backup plan if necessary.

So I think this is an important bill not only to get the data, not only to expedite referrals, but also I think actually the data will probably demonstrate an equity issue, that patients with private insurance get better access to inpatient substance use or mental health care, while patients on public insurance or who are uninsured probably have delayed access to care. Based on my personal experience, and I believe the data will also show that. In the interest of keeping this short, I''ll wrap up and just say that I believe our neighbors ad loved ones deserve better mental health care and substance use care, and I think this is a step in the right direction for getting better outcomes for our patients. I thank you for considering this, and I ask for your aye vote.

Thank you, Doctor.

Good afternoon, Mr. Chair and members. Kiera Ross, on behalf of Mayor Lincoln in the City of Stockton, in support of the bill.

Mr. Chair Members. Tim Madden, representing the California chapter of the American College of Emergency Physicians, in support.

Thank you, Mr. Chair Members. Ross Buckley, on behalf of Sacramento Mayor Darrell Steinberg, in support.

Mr. Chair Members. Paul Yoder, on behalf of San Francisco Mayor London Breed, and also the California State Association of Psychiatrists, co sponsor, urge your aye vote. Thank you.

Mr. Chair and members Corey Hashida with the Steinberg Institute in support.

Good afternoon, Priscilla Ketos on behalf of the California Academy of Child and Adolescent Psychiatry and City of West Hollywood, in strong support.

Thank you. Anyone else in support in the hearing room? Seeing no one approach the microphone, let's turn down to the opposition.

Good afternoon, chair and members Lisa Gardiner with the County Behavioral Health Directors Association. We represent the leaders of the public behavioral health safety net in 58 counties and two cities. We respectfully have an opposed, unless amended, position on this legislation due to the sanctions that have been added in this year's version of the bill. We agree with the author that California would benefit for a more thorough inventory of available inpatient beds, and we appreciate the author's dedication to this. However, we believe those efforts should be guided by partnerships rather than punitive approaches.

This bill empowers the State Department of Healthcare Services with sanctioned authority for compliance criteria that have not yet been developed, exposing our county behavioral health agencies and contracted providers to unknown liability. We urge the author to hold off on punitive enforcement mechanisms that would divert time and resources away from patient care. Ultimately, the most significant barrier to patient care is the availability of beds, we believe, and the willingness of facilities to accept those patients. We appreciate your efforts. Thank you.

All right, others in opposition. Seeing in the hearing room. I see if there's anyone else in opposition, you'd approach the microphone. Seeing no one else in opposition, let's turn the phone lines moderate if you queue up those in support. In opposition to SB 363.

Pardon me, Mr. Chair. If you wish to make a comment, please press one, then zero. We'll first go to line 59. Please go ahead.

Good afternoon, Mr. Chair and Members Sharon Gonsalves, on behalf of Mayor Karen Goh from the City of Bakersfield and the City of Carlsbad in strong support.

We'll now go to line 117. Please go ahead.

Danny Offer with the National alliance on Mental Illness, also known as NAMI California, another co sponsor of the bill and strong support. Thanks.

Line 109, your line is now open.

Hello, chair and members. My name is Waleed Hojeij on behalf of the League of California Cities in support of SB 363. Thank you.

Now go to line 137.

Daniel Savino, Association of Regional Center Agencies, also in support.

Line 124, your line is now open.

Hello, this is Joe Taxpayer. In regards to the first amendment, I'm in opposition because there's too many buzzwords. Big brother.

Mr. Chair. We do have one more person who signaled they wish to speak. Just a moment, please. All right. We'll now go to line 139.

Tricia Jaffo. Hi, this is Tricia Jaffo calling from San Francisco, and I oppose this bill. Thank you.

Thank you. Moderator, anyone else in support or position?

Mr. Chair, there is no one else who signaled that they wish to speak.

All right, let's bring it back to committee. Questions by Committee Members. Yes, Senator Wiener.

Thank you. I want to thank the author for this work and her constellation of work on mental health, and this bill is way overdue. We know that one of the problems in the mental health system is it's so fragmented. I did a mental health and addiction town hall last night with several policymakers and physicians from UCSF and the San Francisco Department of Public Health. And one of the things they talked about was that for someone who needs mental health treatment, even with insurance, you have to just sort of start calling around and randomly seeing who might be available, and it's really disjointed.

And the same is true with mental health beds. We need more mental health beds. We need more placement slots. Absolutely. And I know there could be a bond next year. I know in San Francisco, Mayor Breed has prioritized expanding the number of beds, but the idea that we wouldn't have a centralized catalog to me is just baffling. And so I appreciate the bill, and I'm happy to move it.

All right. Other questions? Comments? Seeing none, Senator Wiener moves the bill. Senator Eggman.

I would just thank you all very much. An idea whose time I think has finally come. And we will continue to work with the opposition. We put the fine in there, but I will point out it could be a fine, a corrective action, or a fine, $100 a day. We don't just want to make this a suggestion. We want people to be compliant with it. But we're glad to keep talking and I respectfully and gratefully ask for your aye vote thank you.

All right, Madam Secretary, please call the roll.

This is file item number six, SB 363. The motion is do pass to the Senate Committee on appropriations. [Roll Call] You have 7-0.

7-0. We'll put that on call. All right, thank you. Next we have Glazer, Glazer. Glazer. We have items 7, 8 and 9 by Senator Glazer.

All right. Let's start, though, with SB 33, item number seven.

Great. Thank you, Chair and Members, first, let me thank the committee staff for their diligent work on this Bill. In 2018, the Legislature passed SB 1235 to require financial providers to give small business truth in lending disclosures, which includes expressing the total cost of financing as an annualized rate.

Recognizing their expertise, the Department of Financial Protection and Innovation was given the authority to decide the exact metric financial providers would use. And boy, did they take their time. In great deal of thoughtfulness and detail, they held three informal hearings, six formal comment periods, and the department chose the time tested APR, the annual percentage rate, as the standard.

You, I'm sure, are familiar with that, with your credit cards, if you have any, in terms of how you assess the cost of money that you are borrowing through your credit card. They released a 48 page guideline document on how the financial providers would comply with the disclosure of note. A study conducted by the Federal Reserve found that consumers like APR because they're familiar with it, and it provides them with crucial information in a digestible manner.

Now, this Bill, SB 33, repeals the sunset incorporated into 1235, allowing for the continued disclosure of total cost of financing to be expressed as an APR. This Bill ensures small business owners who borrow money continue to benefit from the protections the Legislature adopted in 2018.

With me, I have two folks to testify in support, Heidi Pickman, who's the Vice President of Engagement and External Relations for CAMEO, the California Association for Micro Enterprise Opportunity, and Michael Rapaport, who's the CEO and President of Accion Opportunity Fund, to also testify and support.

Thank you. Floor is yours. Thank you.

Thank you, Chairman Umberg, Vice Chairman Wilk and Members of the Committee. My name is Heidi Pickman of CAMEO, and we're the statewide network of entrepreneurial training programs and micro lenders that are mission driven to serve small businesses with loans, credit products and credit assistance. Our members serve over 100,000 very small businesses with these services. We are constantly hearing from our members, our lending members, that they're refinancing or trying to refinance predatory financing that their clients have found online. Not all online lenders are bad. Some are very good. They disclose their prices.

The federal Truth in Lending Act protects consumers, but not small businesses. That's why we were strong supporters of SB 1235, the nation's first truce and lending Bill for small business financing products. And that Bill allowed borrowers to more easily compare their financing options and understand the true cost of the money they're borrowing. And that's why we are strong supporters of SB 33. It would continue the most critical protection, and that's the disclosure of the annual percentage rate, or APR.

An APR that includes all the rates and fees considers the time value of money. There's no other measure that does that, and it lets the borrower know the true cost of the loan. APR is what most small businesses familiar with credit cards, auto loans, mortgages and other consumer products use them, and they all have to disclose an APR. A Federal Reserve Bank study found small business borrowers seeking financing online find APR is a most useful term for understanding the cost of their products.

They also found that when a small business sees a number that looks like an APR, they think it is an APR even when it isn't. If you were to get a credit card that you thought was 40%, but really that you thought might be 18% or 13%, but was actually 40 or 50%, you might think twice against using that credit card. Truth is that most small business owners make financial decisions as a consumer, it's the easiest way to tell if they should take out some kind of financing is look at the APR.

SB 33 would ensure that if small business borrowers have the information--

Thank you very much. If you could wrap it up. Thank you. Go ahead.

Thank you Chairman Umberg, Vice Chairman Wilk, and Members of the Committee, I'm pleased to join you all today in support of SB 33, a Bill that would require providers to disclose the total cost of financing their financing products past January 2024. As mentioned, my name is Michael Rapaport. I'm President and Chief Operating Officer at Accion Opportunity Fund. We are a California-based leading nonprofit community development financial institution. We are a small business lender that provides coaching, technical assistance and capital to entrepreneurs nationwide.

In California alone, we have deployed nearly $580 million in capital to 13,000 entrepreneurs, and 90% of our clients are women, people of color, or people with low to moderate incomes. As a founding member of the Responsible Business Lending Coalition, we initially supported SB 1235 and the transparent disclosure of a commonly used measure of the cost of a loan, the annual percentage rate, which had been used across most consumer lending products for decades.

It's critical that small business owners have that universal measure to evaluate different financing options, especially when our research has shown that some financing options for small business owners, including some sales based financing options, can result in average APRs of 94% and can even result in APRs as high as 358%.

Running a small business is hard work, and it's even harder today as entrepreneurs across California navigate economic uncertainties and the lingering effects of COVID. Yet historically, small business owners have not been given the same protection as individual consumers when it comes to transparency. California blazed the trail for price transparency with SB 1235. Taking away that protection would make it harder for entrepreneurs to navigate the many financing options that are available today, particularly complex ones like sales based financing.

Therefore, we strongly support SB 33 and ask you to support it as well. Thank you.

Thank you. All right, others in the room who are in support of SB 33, please approach the microphone.

Thank you, Mr. Chairman and Members. Robert Herrell, Executive Director, Consumer Federation of California, and recent winner of Scott Wilk's award for the Ben Allen entering the room, in support.

Alright, you got my vote.

Alright, other's in support? Name? Name, affiliation, no mention of Senator Wilk.

My name is Bianca Blomquist, I'm Policy Director for Small Business Majority in strong support of SB 33.

Thank you. Others in the room? Seeing no one else in the room, let's now turn to opposition. Those opposed to SB 33. If you'd approach the microphone. Seeing no one approaching the microphone. All right, let's turn to the phone lines. Moderator if you would queue up those both in support and opposition to SB 33.

Thank you, Mr. Chair. For those who wish to speak in support or opposition of this Bill, please press one, then zero at this time. We'll now go to line 42.

Good afternoon, Mr. Chair and Members of the Judiciary Committee. My name is Dan Laudicina. I am an attorney with a law firm, Hudson Cook, and I represent the Revenue Based Finance Coalition, a nonprofit group of responsible providers of capital to small and medium sized businesses. Thank you for the opportunity to explain why we oppose SB 33. Passage of SB 33 will set in stone a controversial APR closure requirement--

Sir, sir? Your name, your affiliation, and your position on the bill.

My name is Dan Laudesina. I'm with Hudson Cook, representing Revenue Based Finance Coalition, and we oppose SB 33.

All right, thank you very much. Okay.

Line 108, your line is open.

Hello? Yes, my name is Randy Diaz, and I oppose this bill.

Thank you.

Line 88. Line 88, your line is now open.

Hello, this is Christopher Grimm with the Innovative Lending Platform Association, Leading Trade Association, representing small business finance providers and servicers, testifying in support of Senate Bill 33 at the right time.

Thank you.

Line 144.

Hi, my name is Ryan Metcalf. I'm the Director for Public Affairs at Funding Circle. We are in support of SB 33.

Thank you.

Mr. Chair. There is no one else who signaled that they wish to speak.

All right, let's bring it back to--one other person in the hearing room? Your name, your affiliation, your position.

[Inaudible] Morales with the Greenlining Institute in support.

Thank you. All right, questions by Committee Members. Seeing no questions or comments. Is there a motion? Senator Min moves the Bill. Senator Glazer, would you like to close?

Thank you for the consideration of this. I think for all the small businesses that are in the position of having to borrow money, they'll appreciate being able to compare, pricing, make good choices, which this Bill attempts to advance. With that, respectfully ask for an aye vote.

Thank you, Madam Secretary, if you'd call the roll.

This is file item number seven, SB 33. The motion is do pass to the Senate Committee on Appropriations. [Roll Call]. You have seven zero.

Seven zero; put that Bill on call. All right.

Mr. Chairman, this is unusual request, but I'm required to present a bill in another hearing, and they've completed their agenda. And I know your agenda is going to continue beyond the bills that I'm presenting now. I'd like to ask if I can defer these two.

Sure, we'd be happy. We'll defer them till next week. No, I'm kidding. Senator Glazer. I'm kidding. You may come back. That's fine. All right, thank you. All right. Other authors that are in the room. Senator Hurtado, is Senator Hurtado here?

No. And I know Senator Gonzalez is cheering committee. Senator Roth. Senator Min, would you like to present your bill? So, Senator Min , SB 741. That's item number 22. SB 741. Thank you, Senator Min.

Good afternoon, Chair Umberg, members of the committee. SB 741 would amend the Domestic Violence Prevention Act to allow prehearing discovery only if specifically authorized by the courts, by the court.

While domestic violence restraining orders, or DVROs, have proven to be an effective legal remedy for survivors, a lack of clarity in the discovery process has been exploited to their detriment.

I wish we didn't have to bring this bill, but unfortunately, we've seen a litany of abuses where abusive parties are trying to create lengthy discovery processes as a means of intimidating or harassing victims, forcing contact, and causing them to incur legal fees and other expenses, thus extending the window with which that abusive behavior and coercive control occurs.

This bill would require parties and their council to file a written motion that explicitly states the specific types of discovery sought and the specific evidence this discovery is seeking to uncover prior to a DVRO hearing. While the state of Washington and the District of Columbia have already enacted restrictions on discovery tailored for DVRO cases, California does not. SB 741 would reduce the risk of harassment and intimidation of DV survivors and prevent unnecessary delay in adjudicating DVRO requests where time is often of the essence.

I don't have any witnesses here with me today because we were asked to present early, but I am here for any questions.

All right, well, let's take. If there's anyone else here in the hearing room wish to testify in support? Seeing no one approach the microphone. All right, let's turn to opposition. Opposition to SB 741, file number 22. Yes, sir. Floor is yours.

My name is Raul Siegelborn, and I have a comment about the bill.

I guess so, yes.

All right. You're testifying in opposition?

All right, go ahead. You have two minutes.

What's his name? Domestic violence, in general, is a mental health issue, and I believe that this committee should invite and listen to a mental health expert on domestic violence to understand the issue better and make the bill so that, I don't know, to perfect the bill so that it doesn't leave any loopholes. And I actually have a person in mind.

So he's a psychologist that has worked with three universities and with FEMA on issues of abuse and child abuse and domestic violence. And if the committee is interesting, I could provide his contact information.

We'll be happy to receive whatever you'd like to submit. Thank you. Okay. All right. Thank you very much. All right. Anyone else who wishes to testify in the hearing room on SB 741? And I happen to know that Senator Min has an in house expert on domestic violence that he defers to often.

All right. Seeing no one else moderate. If you would queue up those on the phone who wish to testify in support of opposition to SB 741.

My name is Sean Pact. I'm a retail repair shop in Los Angeles, and we need.

If you wish to make a comment, please press one, then zero at this time. And, Mr. Chair, it appears that no one is signal. Pardon me, we do have one late signaler. Just a moment. And we'll now hear from line 146. Please go ahead.

Sir, this is on file item 22, SB 741, concerning domestic violence.

I apologize. I'm sorry.

All right. Thank you. Moderator. Anyone else who wish to testify on SB 741?

Mr. Chair, there is no one else who signaled that they wish to speak.

All right, bring it back to committee. Questions? Comments? Is there a motion? Senator Wiener moves the bill. All right, Senator. Mint care to close.

Thank you again, Mr. Chair. Members, I respectfully ask your aye vote.

Thank you. All right, Madam Secretary, if you call the roll.

This is file item number 22, SB 741. The motion is do pass. [Roll Call] You have seven to zero.

All right, 7-0. The bill is on call. Other authors wishing to present their bill? Senator Wiener, file item number 365. This will -

This is file item number 24, SB 365, by Senator Wiener. Senator Wiener, go ahead.

Thank you very much, Mr. Chair, and I appreciate all the conversations about the bill, which I know will continue after today, so I appreciate the engagement. SB 365 will help level the playing field for consumers, workers, public entities who are increasingly being forced out of the courts through forced arbitration clauses. This bill closes a legal loophole that allows corporations to automatically delay court proceedings, sometimes by years, by filing an appeal after a judge has denied a motion to compel arbitration.

In other words, a court has determined that the case is not subject to arbitration, and the corporation appeals that ruling, and there's an automatic stay that delays justice. Current law allows someone who has made a motion to compel arbitration that's denied to automatically appeal. The consumer does not have that right, but the person or the corporation seeking arbitration has a right automatically to appeal with an automatic stay. There are cases where you have a party that never even signed an arbitration agreement.

Corporation files a motion to compel arbitration based on some weird, bogus argument, frivolous argument, frankly, that arbitration applies to a party that never even signed an arbitration agreement. The court, of course, denies that motion, and the corporation can then file an automatic appeal and automatically stay the trial court proceedings for years until that frivolous appeal has worked its way through the system.

In fact, the attorney general of California just had that happen to him, never signed an arbitration agreement with Lyft and Uber, and yet they appealed the denial of their motion to compel arbitration. This is a badly abused process that SB 365 will help remedy. SB 365 will simply allow a case to proceed even if an appeal has been filed once the trial court has ruled and rejected a motion to compel arbitration. So, we have a court that has rejected the motion to compel arbitration.

We're just saying, let's let the case proceed. They can file their appeal, they can litigate their appeal, but let justice move forward. Corporations enjoy enormous advantages, as I just described when it comes to arbitration. They have the right to appeal because they're overwhelmingly the ones who are seeking arbitration. Consumers are typically not filing motions to compel arbitration. It's large corporations, and they have an automatic right to appeal, and they can currently have that stay. Consumers, again, do not have that same right.

These long appeals have huge impacts. People can die during the course of these multi-year stays. This bill will provide a degree of equity. We're not even asking for full, complete equity. We're just asking for this basic relief, allowing the case to proceed. Nothing in SB 365 changes whether an arbitration clause is enforceable or not; that will remain the same. This is simply a procedural form of equity.

SB 365 is co-sponsored by our attorney general, Rob Banta, as well as the California Employment Lawyers Association and the consumer attorneys of California. It is backed by a massive coalition, including city attorneys and district attorneys, and labor organizations. And I respectfully ask for an aye vote with me today to testify. I want to say Maya Curtis was supposed to be here today, who was a litigant who was impacted by this.

Her flight was delayed by many hours, and so she, unfortunately, is simply physically unable to be here in time. And I apologize to the committee that one of our main witnesses simply couldn't be here. I know she is really unhappy about that, but her attorney, Sarah London, is here, who will testify on her behalf and represent her, so knows her case. We also have Matthew Goldberg, the chief attorney for the Worker Protection Unit, in my Alma mater, the San Francisco City Attorney's Office.

All right, thank you, Senator Wiener, Ms. London.

Thank you, Chairman Umberg, and to the entire committee. My name is Sarah London, and I am from Lieff Cabraser Heimann & Bernstein in San Francisco. And I'm here to substitute in for my client, Maya Curtis, who's very disappointed she couldn't be here today. And we're here to speak in favor of Senate Bill 365 to close this procedural loophole that can and does deny and delay justice.

So over five years ago, on March 11 of 2018, Ms. Curtis and hundreds of other women and families received a horrible email that their eggs and embryos that were stored at a fertility clinic in San Francisco had been damaged or destroyed by a storage tank failure, they report being gripped by panic and despair. And as they had undergone painful and intensive procedures to try to preserve their fertility options and plan their families.

Now, Ms. Curtis was one of the first to step forward to become a litigant in this action because she wanted to bring what happened to light, to seek justice and to help prevent something like this from ever happening to other women and families again. Ms. Curtis was very active in the litigation and worked alongside myself and others at our firm to seek justice in this case. But unfortunately, we ran headlong into this procedural loophole that stopped this case in its tracks in the California state courts.

Now, Ms. Curtis and the other 600 or so victims of this tank failure, none of them signed an arbitration agreement with the tank manufacturer. Nevertheless, the tank manufacturer sought to compel all of these victims out of the state court proceedings and into a private arbitration proceedings. Once Judge Jackson denied that order, they appealed that order, and it totally tied Judge Jackson's hands. She could not proceed with the case at all, and the case had to be stayed for years.

In fact, as I said, March 11, 2018, is when Maya Curtis found out about this. It wasn't until January of this year, five years later, that she was able to go back into state court and just get started in litigation after the Court of Appeals affirmed that ruling. And, of course, the manufacturer never even sought oral argument. Just goes to show how much they stood behind their own position. Now, that court delay had profound impacts beyond just the lack of confidence in our court system.

For victims like Maya, you can pause litigation, but you cannot pause a biological clock. For all of these victims, they continue to suffer a loss and decline of their fertility.

Thank you, Ms. London.

Thank you.

All right, other witnesses in support.

Thank you, Chair Umberg, Members of the Committee for the Opportunity to testify. My name is Matt Goldberg. I'm the chief attorney of the worker protection team at the San Francisco City Attorney's Office. City attorney David Chu sends his regards to all of you. I'm here to express the office's strong support for SB 365. It is a modest but essential bill that will address a growing real-world problem. The issue impacts all litigants here in California, and you've already heard a very compelling example of that.

I want to highlight how this has been playing out in the public sector, where the tactics are particularly absurd and the outcomes particularly damaging. Here in California, as you well know, a wide range of government entities, cities, counties, DAs, state agencies file lawsuits to protect the public, cases combating consumer fraud, wage theft, environmental degradation, etc. While these cases are designed to benefit and protect the public, the government entities do not formally represent any victims.

Government entities, of course, have not signed any arbitration agreements, which is why they are not bound by any such agreements. But corporate defendants nonetheless seek to compel the government into arbitration. They have done so several times in recent years, covering some high profile cases up and down the state, filed by public sector entities, impacting hundreds of thousands of workers. And the process and the outcomes are the same. In every instance, defendants file these baseless motions -

- they lose, they appeal and get a stay, and then eventually they lose their appeals. But by that point, the damage, of course, is already done. The cases have been delayed upwards of a couple of years, and this is particularly egregious in these cases designed to protect the public, often our most vulnerable and at-risk residents.

For example, to deny a low-wage worker their earned wages can often have calamitous impacts on a family in closing a quick response to just some of the opposition to this bill. The bill does not run afoul of federal law or in any way disadvantage valid arbitration agreements. Federal law ensures that arbitration agreements are here to stay, but you, the California Legislature, get to decide the procedural rules that govern lawsuits -

Thank you very much.

- of California courts.

All right, thank you. I'm just pleased to see that the city attorney's office is continuing to function even in the absence of Senator Wiener.

We're doing a lesser job, but we're doing our best.

All right, thank you. All right, those in support, your name, your position and your affiliation.

Mr. Chair, Members Mariko Yoshihara, on behalf of the California Employment Lawyers Association, proud co-sponsor, also was asked to express support for UFCW Western States Council and Smart Justice California. Thank you.

Thank you.

Hello, members of the committee. I'm Samantha Gordon with Tech Equity Collaborative and strongly support the legislation. Thank you.

Good afternoon. Justin Rouse, on behalf of Attorney General Bonta, proud co-sponsor. Thank you.

Mr. Chair, members of the committee, Shane Gusman, on behalf of the Teamsters, Unite Here, the Utility Workers Union of America, and the Machinists, all in support.

Thank you. Others in support, seeing no one else approach the microphone, those in opposition, those wish to testify in opposition. Mr. McKayley, go ahead, the floor is yours.

Mr. Chair Members, Chris McKayley, on behalf of SHRM and the Hollywood Chamber. I want to talk about preemption if I could. To begin with, yes. States are allowed to regulate under their general contract principles, arbitration. However, here's where the issue lies. CCP section 916 is generally applicable. With all due respect, I've heard the term frivolous and loophole used here. I would hope that any litigants utilizing frivolous motions are properly sanctioned. The law clearly allows this, so it's not a loophole.

This bill would add one sentence, a notwithstanding clause, but this is what is happening here. It is not a general contract application because it singles out arbitration specifically and only makes arbitration exempted from CCP section 916. The US Supreme Court has said our focus should be on whether the statute, either on its face or as applied, imposes burdens on arbitration agreements that do not apply to contracts generally.

The court has also repeatedly said, and you know, this bill is another measure long sought, different variations against arbitration that the legislature has pursued, which repeatedly gets struck down by the federal courts, most recently AB 51 by the 9th Circuit as preempted by the FAA. The US Supreme Court, and here's an important point, says the FAA embodies a liberal federal policy favoring arbitration agreements. Here's the key phrase, notwithstanding any state substantive or procedural policies to the contrary.

So even if a state statute is considered to be generally applicable across the board, the FAA still preempts it if it interferes with fundamental attributes of arbitration or has a disproportionate impact on arbitration. This bill singles out arbitration for this different treatment from everything else under section CCP 916, and therefore, we believe it's federally preempted. Thank you, Mr. Chair.

Others in opposition?

Good afternoon, Mr. Chair Members. Ashley Hoffman, on behalf of the California Chamber of Commerce, respectfully in opposition. As Mr. McKayley stated, CCP 916 applies to far more than arbitration, and it stays trial proceedings pending appeal. The intent of this, which is long-standing, is to preserve the appellate court's jurisdiction and ensure that the trial court is not doing anything that would disrupt the appeal, which includes where the very purpose of the appeal is to avoid the need for the proceeding.

Even if Section 916 did not exist, trial court judges have historically had the right to have discretion to stay proceedings and to run their courtroom as they see fit. SB 365 would prohibit a stay under any circumstance.

Even taking away that trial court judge's discretion, which would force the trial court to potentially waste court resources and party time and resources going through a trial that ends up being mooted by the result of the appeal proponents, paints a picture that every appeal of a denial motion to compel is frivolous or for delay, which we strongly dispute.

In fact, a case is pending before the United States Supreme Court right now in which the underlying issue regarding the denial of the motion to compel both judges said this is a very close call, and they would not be surprised if they were reversed on appeal.

One of the amici in that case actually cited over 99 cases in which the court of appeals had overturned a trial court's denial of a motion to compel arbitration, and in that brief, dictates all of the laborious discovery, the Dabbert motions, and other motion practice that they had to go through unnecessarily when ultimately the appellate court reversed.

And then, finally, as Mr. McKayley stated, if there truly is a frivolous appeal, there are three different procedural mechanisms you can bring for motions to get sanctions, fees, and costs. And then finally, the proponents point to the fact that employees and consumers cannot immediately appeal a motion to compel arbitration if it's granted, and that is true.

So my question to you is, why not then propose a mutual right to immediately appeal instead of forcing the courts and parties to proceed to discovery and trial if the appeal could render.

Thank you, Ms. Hoffman.

Thank you.

All right, others in opposition. Name, affiliation and position.

Good afternoon. I'm Gail Delahant with Western Growers Association and we're in opposition.

Chair and Members, Mike Belote for the California Defense Counsel, in opposition.

Good afternoon. Ryan Allain with the California Retailers Association, in opposition. Thank you.

Jamie Huff, with the Civil Justice Association of California, in opposition. Thank you.

Good afternoon. Matt Sutton with the California Restaurant Association in opposition.

Good afternoon. Melanie Cuevas of the California Bankers Association and respectful opposition. Thank you.

All right. Thank you very much. Seeing no one else approaching the microphone here in the hearing room. If we turn the phone lines moderate. If you'd queue up those in support and in opposition to SB 365. And I should note for the record that we've received the written testimony of Maya Curtis. Thank you.

Thank you. If you're in support or opposition, you may press one and then zero again. That is one and then zero for support or opposition. And we will go to line 149. Your line is open.

Good afternoon, Mr.Chair, Members. Jessica Spender, on behalf of Equal Rights Advocates, in support.

Thank you.

Thank you. Next, we'll go to line 132. Your line is open.

Ben Abby, on behalf of the California League of Food Producers, in opposition. Thank you.

Thank you.

Thank you. Next, we'll go to line 48. Your line is open.

Good afternoon, Mr. Chairman and members of the committee. Bryan Little, California Farm Bureau, in opposition. Thank you.

Thank you.

Thank you. Next, we'll go to line 139. Your line is open.

Hi, this is Tricia Jaffo, constituent of San Francisco. I oppose this bill. Thank you.

Thank you.

Thank you. Next, we'll go to line 85. Your line is open. Line 85, your line is open. And we'll move on to line 108. Your line is open. Line 108, your line is open.

Hello?

Yes. Go ahead.

Can you hear me?

Yes, we can. Go ahead.

I oppose this bill. My name is Brandy Diaz.

Thank you.

Thank you. And, Mr. Chair, we have no further opposition or support. In queue.

All right, thank you. Let's bring it back to committee. Questions? Comments? Yes, Senator Ashby.

I think there is certainly a clear value in removing barriers to timely justice, which I believe to be the author's intent of this bill and a noble and worthy goal. I do have some concerns about the broader unintended consequences that we heard about from some of the opposition today. But I also know that you are a very hard worker on your legislation. So I'm going to vote yes today to put it through this committee.

But I'm going to watch for how you are addressing some of those issues before we see it again. And I just want to tell you now.

Thank you. Other questions? Comments seeing Senator Allen?

Yeah, I'd just like to get a better sense from the author. What is your response to some of the issues that have been raised by the opposition witnesses with regards to all of the appeals that have been successful and the extent to which this is going to muck up current process?

I think we need to be clear about their automatic right to appeal the denial of motion; we're not required to do that. That's a creation of the code of civil procedure. We granted them that right to automatic appeal and that we were not required to do so effectively sculpting what that right is is completely within our purview. So we just don't agree that this is somehow preempted by the FAA, by the Federal Arbitration Act.

I know that there will be continuing discussions about this bill, and we look forward to that, but right now, it is so one-sided, right? Consumers do not have a right to an automatic appeal. They have to seek a rid of mandate, which is rarely granted. If arbitration has been compelled and they think it was inaccurate, then they're stuck in an arbitration process, very one-sided to begin with. Only the person seeking arbitration has an automatic right to appeal. They're the only ones.

And all we're saying is that you shouldn't stay the underlying proceedings if a judge has already ruled that there is no arbitration requirement. That's all we're saying. And I understand that the opposition doesn't like that. I get that and we'll continue to have conversations, but I think that's my take on it.

Right.

And ultimately, you're allowing the proceeding to move forward. Obviously, if the appeal is granted, then I guess, well, there's a lot of people have accrued attorneys fees at that point, but did we get data about the number of appeals that are ultimately successful? I didn't see that. I may have missed out on the analysis.

I don't know that we have that data.

Okay.

All right.

Thank you. Senator Allen, just a couple comments. First off, all appeals are not equal. Some appeals are much more meritorious than others. And I appreciate Ms. Hoffman acknowledging the asymmetry here in this situation where a motion to compel which is denied, you get an automatic appeal. I did my own research, which, of course, is dangerous concerning how long it takes to get those issues resolved on appeal. I thought it was between 1 and 3 years.

And now I've just heard actually at least one instance where it's five years. So that is a concern. I mean, there's an expression that justice delayed is justice denied. And I think that for a bunch of reasons, long-term denial works in injustice. And I think this is sort of fundamentally not sort of, it is fundamentally unfair in terms of the asymmetry.

Having said that, I do have a concern about, and Senator Wiener and I have had a number of conversations about this, about actually going to trial, actually going to trial and having the court of appeal ultimately reverse the lower court and finding that that trial was, in essence, for not discovery can be used.

Discovery that's developed in anticipation of an actual trial can be used in arbitration, perhaps not the reverse, but trial testimony and the actual trial, and the judgment then is basically thrown out and is of no benefit. But it costs a tremendous amount to all of us in terms of judicial resources and time and energy and expense on the parties.

So we have talked about some sort of mechanism where, as you approach trial, there's at least an opportunity to delay that trial until you hear from the court of appeals. So it's not all for not delay discovery, allow discovery to go all the way through even expert depositions, all of that, but perhaps not the ultimate trial. So I am going to support it.

I know that Senator Wiener, as Senator Ashby points out, works very hard and is very diligent about coming to a place that is as consensus driven as is possible. So having said that, there's been a motion by Senator Min, do you care to close and respond in closing?

Sure. Thank you, Mr. Chairman. And as we discussed, you have my commitment that we'll continue to have conversations with you and with the committee on this Issue, in particular with the issue that you raised. I can't make any commitments today. This is all because of the Federal Arbitration Act. It requires a lot of analysis to make sure that anything that we're proposing is going to be compliant with federal law, and we want to be very careful about that.

And I understand what you're saying, particularly with some level of discretion for courts as they approach trial. But again, I can't make a commitment today, but we do, other than to commit to working with you on these issues. So, colleagues, thank you for the thoughtful conversation today. I'm not going to suggest that these issues are somehow easy, and whatever one's views are on arbitration. Some people love arbitration. Some people hate arbitration.

I think we can all agree that people should have a right to have if they've been wronged or they are alleging they've been wronged to have that adjudicated.

And if you have a situation potentially where you didn't even sign an arbitration agreement, and a court has heard the motion to compel arbitration and denied it, so a judge has already ruled that there is no right to arbitration, it's not unreasonable to let the case move forward as they exercise whatever appellate rights they have to try to continue to compel arbitration. I think the bill does strike a good balance. We'll continue to have conversations about whether that balance needs to be tweaked here or there.

And I respectfully ask for your aye vote.

All right. Thank you. Madam Secretary, if you call the roll.

This is file item number 24, SB 365, a motion to pass the Senate Committee on Appropriations. [Roll Call] You have six to one.

All right, six to one. We'll put that still on call, just for housekeeping purposes. I see Senator Hurtado is here, and we're doing things in file order, so she would be up next. And then Senator Roth. Senator Roth is also here. Senator Hurtado. Senator Hurtado, SB 224.

Thank you. Okay. Good afternoon, Mr. Chair and members of the committee. First and foremost, I want to thank the Chair and his dedicated staff for working with me on this bill. I will be accepting amendments outlined on page 11 of the committee's analysis. Members, as you know, know the world is facing the greatest threat to mankind yet. Climate change is here, and it is impacting us in ways that we don't see, including impacts to our water availability, insecurity, and our food supply.

Food scarcity can create social disruption that can lead to state failure, migration, crime, and other significant issues. I believe as Californians, we can overcome these climate-related challenges and continue to feed the world. But we need to be in control over our food supply, and sadly, we are not doing enough to protect our own food security. General consensus is that two acres of land are needed to feed a family of four.

And California has the most fertile land in the world, with about 43 million acres that are used for agriculture. But over the past few years, foreign ownership of California's agricultural land has steadily increased. Between 2019 and 2021, California lost over 70,000 acres of ag land to foreign government and related entities. Foreign governments and foreign entities now own and control close to 1.2 million acres of California ag land across the state.

Current disclosure requirements have been made on a self-reporting basis and more than likely to be underreported. This is only one part of the problem. Illicit finance and the use of shell companies to purchase real estate in the US, including ag land, makes it that much more challenging to have a real understanding of the problem at hand.

But as the Corporate Transparency Act goes into place next year and the data is updated, it is my hope that SB 224 will give us a true sense of our food security status and an opportunity to get ahead of the issue. This bill is not unique to the nation. Policymakers in 24 other states have introduced legislation to address this growing concern. This issue is not a Republican or Democrat issue. This is a bipartisan issue that impacts us all.

This is why bipartisan efforts in Congress are also underway. This is an issue about food security for you, for me, for our constituents, and for the millions of people we feed across the world. It is also an issue of water security. Just today, Bloomberg Green released their findings on their investigation of groundwater titled Wall Street is Turning Water into Wealth, Leaving Californians Out to Dry. And I want to share with you four of their findings, and I'm going to say them verbatim.

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

Third, this land grab has given rise to a grab of an even scarcer global commodity, water. In a bid to ensure thriving investment portfolio, some of the world's largest financial entities have amassed control over lakes, rivers, and underground aquifers in places from California to Africa, Australia to South America, giving them outsized roles in managing an endangered resource that the basis of life on Earth.

Fourth, among the most active drillers along the California aqueducts sinking midsection is Canada's Public Sector Pension Investment Board, also known as PSP Investments. The sinking midsection is expected to cost $900 million to fix. So do we let it continue on? Should we continue to give tax breaks? The damage from overpumping that comes from foreign governments and their entities should not be at the cost of California taxpayers.

Last year, Mexico purchased a controlling interest of one of the largest refineries in Texas as they work towards their goal to become energy independent. In California, one of the largest oil producers was purchased by a Canadian government-owned pension fund. The issue at hand is not unique to our nation. The Guardian reported last year that 72% of England's water was owned by shareholders in 17 foreign countries, 10% controlled by companies in the UK, and 18% is unaccounted for.

And last year, Canada implemented a two-year ban on the purchase of property by foreign interest. To be clear, this bill does not seek to target specific countries, but instead provides a neutral approach to a growing issue. This bill is about the direction that we want to take California. Now, I wish my bill could do much more, but I recognize the big hurdle to get a simple bill passed.

And as a daughter of immigrant parents, I recognize the importance and contributions that foreign investment and immigrants make for this nation. And my intention is not to print or block that, but to make informed policy decisions. We need transparency and bold steps to protect our state's interests. This bill does that. This is just the first step toward greater transparency, and this bill helps as the implementation of the Corporate Transparency Act goes into place next year.

Finally, I do want to note that a very similar version of this bill moved through the Legislature with near-unanimous bipartisan support. And presently, my office and I are working to address the governor's concerns expressed in last year's veto message. And with that, I don't have any witnesses in support of this bill, but I respectfully ask for an aye vote.

All right. Those who wish to testify in support in the hearing room, if you'd approach the microphone.

Thank you, Mr. Chair and members. Anthony Helton with the California Land Title Association, in support for the authors accepting of the language addressing issues related to titles of real property. Thank you.

Thank you.

Mr. Chair and members of the committee, Jennifer Svec, on behalf of the California Association of Realtors, pleased to be here in support as proposed to be amended within the analysis. Thank you.

Thank you.

Good afternoon, Chair and members. Naomi Padron, on behalf of the California Credit Union League, also in support with the amendments.

Thank you. Others in support, please approach the microphone. Seeing no one approach the microphone. Those in opposition, go ahead.

Mr. Chair and members of the committee, Louis Brown, today here on behalf of California Citrus Mutual, California Fresh Fruit Association, California Cotton Ginners and Growers Association, Western Agricultural Processors Association. We're here opposed unless amended. We completely share the concerns and the intent of this bill with the author. We do have concerns, though, with it as it goes forward, and just a number of issues that could be created from us in the agricultural industry.

First, want to just completely compliment the committee staff for the very thorough analysis, and we would agree that there's probably information that needs to be gathered on this issue. According to the committee analysis, about 2.7% of the land in California, the agricultural land, may be owned by some foreign interest. So the element of collecting data to better understand if there is a real issue here has some merit.

And we think we'd probably be best suited to move forward with the collection of that data before we do just any type of hard prohibition on the investment in land. California agriculture is a global economy. We partner with countries all over the world and are proud of that because the advancements that have been made due to those partnerships.

There's a concern that if we go forward with a prohibition like this, the chilling effect that would it have on the advancement of technology, our partnerships with global partners across the world. And so we think that right now, especially for our interests, the bill is just too aggressive.

We'd either like to see it narrowed to focus on those countries that are truly a threat to our economy, our global economy, our United States economy, or simply track it back to be something that collects data to identify where the problems are, and then we have a better idea of how we move forward with this. For those reasons, we're opposed unless amended. Thank you.

All right. Thank you, Mr. Brown. Others in opposition.

Dennis Albiani, on behalf of the California Seed Association, I'll just bring forward one example. Eight of the top 10 seed companies in the world have research facilities here in California. So they own property here in California, primarily because of our outstanding research situation as well as the land and our climate. So they're investing this and bringing research forward for the entire industry. Thank you. At this point, we're opposed unless amended. Thank you.

Thank you. All right, others in opposition.

Mr. Chair, Senator, Dean Grafilo, on behalf of the Biotechnology Industry Organization. For the reason stated, we too, have an opposed unless amended position.

Thank you.

Mr. Chair and members, Chris Rose, on behalf of Cal Forest, also opposed unless amended.

Thank you.

Brenda Bass with California Chamber of Commerce. Also opposed unless amended.

Thank you. Others who are opposed. In the hearing room, seeing no one else, approach microphone. Moderator, let's turn to the phone lines for those who are both in support and in opposition to SB 224.

Thank you. If you're in support or opposition, you may press one and then zero. Again, that is one and then zero for support or opposition. We will go to line 156. Your line is open. Line 156, your line is open.

Hi, this is Michael Miiller with the California Association of Winegrape Growers. We will respectfully oppose unless amended. Thank you.

Thank you.

Thank you. We'll go to line 108. Your line is open.

Hello?

Yes, you're on.

Yes, I'm in support with SB 224.

Thank you.

Thank you. Next, we'll go to line 139. Your line is open.

Hi, this is Tricia calling from San Francisco. Thank you, Senator Hurtado, for this very relevant bill and getting it forward, and I fully support it and stopping the land grab of foreign entities. Thank you.

Thank you.

Thank you. And, Mr. Chair, we have no further support or opposition in queue.

All right, let's bring it back to committee. Senator Min.

Thank you, Mr. Chair. I want to thank the author for bringing this forward. We had a long discussion this morning about this bill. I'm going to be opposing it today for reasons that don't really have to do with the testimony here. But I just want to mention that I know that the author's intent here is solid, that she believes she's addressing a real policy problem.

But as Vice Chair of the API Legislative Caucus, as an Asian American, one of a handful in the Legislature, I would be blatantly ignoring my responsibilities to my constituents if I just didn't raise the problem that we're seeing across the country right now in California of anti-Asian hate. We've seen legislatures around the country start to aggressively push legislation designed to ban people from other countries targeted primarily at China, but certainly at other countries from purchasing real estate in this country.

Texas, Florida, Arkansas are seriously considering these types of bills. Virginia, New Jersey, Missouri, North Dakota are among the states right now that are considering bans of this sort on foreign companies or foreign governments purchasing land. And just given the history of exclusions on Asians and the yellow peril of Asians grabbing land in this country, and you hear the rhetoric here with some of the callers, we have an ugly history in this country, whether it was the prohibitions on the Alien Land Act here in California that was overturned in 1952 by the Supreme Court as a violation of the 14th Amendment.

We have a history in the 1980s of efforts in the states and in Congress to try to ban Japanese companies, Japanese government entities from purchasing land and real estate in this country. And I believe that a lot of these types of efforts around the country are going to lead to more anti-Asian hate, and that really has not subsided, even as we've seen media accounts of that subside.

So I think if we pass this bill that we're going to be sending a signal to the country, to the world, that California is jumping in on the xenophobia and anti-China bashing that we've seen. So I realize that your intentions are not there. I want to be clear about that. But I just think that given the timing of what we're seeing, we're in three years of anti-Asian hate, we've seen efforts that are designed specifically to attack China. We've seen a lot of rhetoric around China. And for those reasons, I just am going to be voting no today.

Other comments? Senator Wiener.

Thank you, Mr. Chairman. So as the author knows, I did not support this bill last year. I know it's somewhat modified, but it's along the same lines. I did not support it last year, and I went back and took another look at it, and my views haven't changed on it. I understand what you're trying to do. I'm not saying that there's no form of this bill that I could ever support, but right now it's very broad, and it's either owned by a foreign government or controlled.

And controlled does not even require 51%. It could be a lesser stake, but they effectively control. And when we look at companies that do business in California, not just in agriculture, but across the board, there are plenty of companies that are important companies. I know in my own district, for example, there is some level of control by a foreign government and they're doing very important work in California.

And so you could see an Italian company or a Canadian company that's doing really important agricultural related work and owns 15 or 20, wants to own 15 or 20 acres of land to do that work, whether it's the actual cultivation or something relating to their business or an Israeli company, I could go on and on, and they would just be categorically prohibited from owning that land. So I can't support this today. I will certainly be on the lookout for it when it hits the floor. Like I said, I'm not categorically opposed, but I want to see how it evolves.

All righty. Senator Ashby.

Yeah. This one's hard. I've stewed on it quite a bit and I just feel not prepared to vote yes, but I also don't want to vote no. So I think I'm going to lay off today and try to leave my mind open for when you leave this committee and it comes forward that maybe I can get there with you. I'm not even exactly sure why. It might be sort of the shadow of my predecessor, who I think probably would have strong feelings, or it could be.

I keep coming back to some of the investors who have been doing great things in this city have come from foreign governments, particularly China, actually, helping build a hospital in my district. And so I'm struggling with it a little bit, but I also deeply respect you and what you're trying to do, and you're speaking so passionately about what you're trying to achieve, and I know it affects you greatly, so I'm going to keep my mind open. But today, I think layoff.

All right. Thank you, Senator Ashby. Senator Durazo.

Yeah. Listening to everybody listen to your presentation, it's like, whoa. I don't want to be supportive of any effort that would discriminate against people. As you said, we're either immigrants or we're the kids of immigrants, and so for this to be interpreted in that way, obviously is bothersome. On the other hand, I do believe in transparency. I do believe that it's important to understand what is going on within the world, whether it's a foreign government itself directly or a foreign government-owned company.

I think that's important for us to know. There's too many ways in which, where we don't have that information, we can't make the proper decisions. So there's something about gathering the information, maybe that comes. Somebody might have said earlier, gathering the information is a good thing to do. So you might consider that before jumping into an actual prohibition. So I will support you today. I think, though, there are too many question marks about the potential impact, and I think that you should listen to that and take a step in that direction, but not necessarily end up where you would like to be.

Other comments, 1uestions, concerns? Thank you, Senator Hurtado. You and I have spent a lot of time talking about this bill, and I know you've accepted the amendments that we've been talking about. I still have concerns. I'm going to support the bill. I still have concerns with respect to, for example, the governor's veto. Perhaps you could address that in your close as to what's different this year versus the bill that was vetoed by the governor also in terms of foreign financing.

So, for example, if the Canadian bank, for example, finances the purchase, what happens then? That's a concern, especially what happens if there's a foreclosure. What happens then? I have some concerns about Cal OES being the entity to which the information is reported. Cal OES has a lot going on. Fires, floods, earthquakes, that kind of thing. Keeping track of foreign ownership may not be part of their sort of core competencies. So I have all those concerns and I am hopeful that you can address some of those in close. And if not, then as the bill, if it should move forward. As it moves forward. So is there a motion? I'm sorry. Senator Durazo moves the bill. All right. Senator Durazo moves the bill.

Can I close?

You care to close? Yes.

Well, thank you. First and foremost, I think that many of the questions and concerns raised here today are very much legitimate. And it's a very complex issue, right? Part of it is illicit finance. There's shell companies that exist here in the State of California that, quite frankly, we don't know who owns them. And part of what they're targeting is real estate that includes agricultural land.

And so the reason why we're looking for a ban is just to give us an opportunity for the Corporate Transparency Act, which will disclose who the beneficial owners are. And that's going into the implementation next year to give us an understanding who are the bad actors, how big of a problem this is. But we're talking about our food security here. As I mentioned in my statement, food security, it's going to be heavily impacted. It's already impacted by the floods, by the droughts, by fires.

It's all being impacted. And the less food we have, the more it impacts not just our state and our country, but around the world. That's why we're seeing migration and people migrating from Latin America and other parts of the world to the US, we're seeing conflicts around the world. I mean, if you look at what's going on in Ukraine, that's all tied to water and food at the end of the day.

And we have to think about food security, not just for the state or for the nation, but for the world. We take pride, I take pride in knowing that California feeds the world, and I want to keep it that way. But we have to be in control of the situation. And right now, we don't have control over the situation. The Ag Committee, for example, just has a few bills that come through it, a few hearings here and there.

We don't really have the interest and the involvement that this base needs to be able to have security for the nation, for the state, for the world. I want to keep it that way. I think we can keep it that way, but we need to be bold and courageous in taking bold steps. And it's not about some people have made it about race, about certain countries. It's really about bad actors through investments. I gave several examples, right? And it's about water security, too.

If you think about the aquifers and the water and the storage, and we could be in a shortage of water. What are people going to do? What are we going to do when we have to tell our constituents, well, we're going to have water outages? We know they don't like the power outages. Well, imagine water outages or food shortages. That's the reality of climate change. And we can take bold action now. And I think this bill is part of the solution.

It's in no way intended to try to discriminate or increase hate towards a certain group of people. I think that's absolutely wrong. That's not what the intention of this bill is. But we do have to be realistic and have conversations about what is going on, and we need to be able to address it. I don't really see any other kind of effort of this sort to tackle that kind of issue. So with that, I hope that I answered the majority of your questions and concerns in my closing statement, and I respectfully ask for an aye vote.

All right. Thank you, Senator. Madam Secretary, if you'd call the roll.

[Roll Call]

Five to two will put that bill on call. Thank you. All right, Senator Roth.

Senator Roth, SB 95.

Thank you, Mr. Chair, Members. The bill updates the California Commercial Code to conform with recommendations made by the Uniform Law Commission, focusing primarily on the treatment of digital assets. The Uniform Commercial Code and the California Commercial Code have not been updated recently to keep pace with technological developments, including developments involving digital assets. The Uniform Law Commission and the American Law Institute undertook a project to study, consider, and formulate amendments to the UCC to address these emerging technology developments.

The study and drafting committees and their observers included lawyers and business people familiar with commercial law, the technology industry, and consumer matters. As a result, the UCC amendments address real problems in a practical way and encompass rules relating to sales of and security interests in a wide variety of electronic payment rights, the negotiability of and security interests in virtual currencies, and security interests in electronic money, such as central bank digital currencies.

Given California's leading role in technology based industries, these amendments are important to California businesses as the amendments will greatly improve the predictability of transactions involving these digital assets and allow them to be used more confidently and efficiently by California businesses in commerce. With that at the appropriate time, I respectfully ask for an aye vote. Here with me today to testify in support of the bill are Diane Boyer-Vine and Stephen Weise.

All right, thank you. Just for clarification, Senator, did you accept the amendments proposed?

I do accept the amendments proposed.

Thank you. All right, Ms. Boyer-Vine and I have to turn the gavel over to Senator Laird. All right, thank you.

Please continue. Welcome. And I believe that each of the supportive witnesses has up to two minutes.

Thank you, Senator. Good afternoon. My name is Diane Boyer-Vine, and I'm here today as a Commissioner on the California Commission on Uniform State Laws. The California Commission is the sponsor of Senate Bill 95, and the Commission is part of the Uniform Law Commission. In 2022, the ULC approved the 2022 Uniform Commercial Code amendments. These amendments were the product of a collaborative effort between the ULC and the American Law Institute. Senate Bill 95 would enact these amendments into California law.

Uniform Commercial Code is a set of rules governing a wide variety of commercial transactions. The UCC has been adopted in every jurisdiction in the United States, ensuring that the law governing commercial transactions is substantially the same throughout the country. The UCC was adopted in California through the California Commercial Code. The UCC and the California Commercial Code have not been updated recently to keep pace with technological developments, including digital assets.

The markets using and trading in these emerging assets want definitive commercial law rules for transactions involving digital assets to promote the efficiency and predictability of transactions subject to the California Commercial Code and UCC. The amendments address these concerns through the changes to the law involved, as Senator Roth has described already today. The amendments also address other technological developments. And we urge you to support the advancement of the California Commercial Code through the passage of SB 95. Thank you.

Thank you very much. And it's good to see you back. Next witness.

Thank you for having me here today. My name is Steve Weise. I'm a lawyer in private practice in Los Angeles with the firm of Proskauer Rose, and I'm here on behalf of the Uniform Law Commission. I've been involved in practicing under the Uniform Commercial Code, called the Commercial Code in California, for 48 years. My entire practice, I have been on drafting committees for the UCC for about 25 or 30 years. I testified before this Committee, I shouldn't say testified.

We were on the consent calendar in 1999 when the last time the UCC was significantly updated, and I teach this subject at UCLA Law School. As has been stated by Senator Roth and Ms. Vine, the UCC needs updating. We recognized that three or four years ago and established a study Committee and a drafting Committee to deal with digital assets. We had over 350 observers from a wide range of industries involved in the transaction, excuse me, in the drafting and consideration.

It was vetted and revetted over and over again. The principal changes are to address rights and transfers and contracts with digital assets of one form or another. There's been some discussion about how it applies to cryptocurrencies. They are very carefully and nuanced of provisions in there, not just for cryptocurrencies, but for electronic payment rights, such as accounts receivable. There has also been some discussion about how it might or might not apply to central bank digital currency.

The drafting Committee, even though that doesn't exist yet in the United States, tried to get ahead of the curve and provide some provisions there. The UCC does not regulate any of these things. It simply provides some general rules for them. So thank you very much. I urge approval.

Thank you very much. Now, this would be the opportunity for anybody in the room to testify in support, just with their name, organization, and that that's their position.

Good afternoon, Chair and Members. Naomi Padron, on behalf of the California Credit Union League, in support.

Thank you very much. Anyone else in support? This would be the opportunity. I have no lead witnesses listed for the opposition, but this would be the chance for anybody in opposition to testify here in the room. Seeing no one. Then we will go to the moderator. Moderator we would take, not testimony, we'd take me-toos on either side. Just name, organization and whether they support or oppose. So, Moderator to you.

Thank you. If you're in support or opposition, you may press one and then zero. Again, that is one and then zero for support or opposition. And we will go to line 161. Your line is open. Line 161, your line is open.

Well, we will move on to line 108. Your line is open. Please go ahead.

Hello. Can you hear me?

Yes, we can.

I oppose SB 95.

And do you have a name or organization? Do you have a name or organization?

Yes, my name is Brandy D. I completely oppose this Bill.

Thank you very much. We appreciate your opinion. Moderator, next call.

Thank you. We will go to line 164. Your line is open.

Hi. You don't follow your own process. You need to allow people to speak in opposition. You gave someone opportunity to speak in support, and you need to follow your own process and you need to allow the public to speak. There needs to be equal.

Thank you very much. We will take that as a comment in opposition. Moderator, next caller.

Thank you. We will go to line 107. Your line is open.

Good afternoon. My name is Brian Robert Gilton. I'm a resident of Nevada county. I'm asking the Senators to vote no on SB 95, which brings further infringement of government into the definition of currency. We the people are fed up. Please end the Federal Reserve with financial repression through the monopolization of our currency.

Thank you very much. We appreciate your comments. And we know there are people in the room running for Congress, and they'll take your comments on the Federal Reserve into account. Next caller, Moderator.

Thank you. We'll go line 133. Your line is open.

Hi. My name is Karen Oy and I'm a resident of Santa Clara County. I'm just calling to oppose SB 95. I think he said it with one word and it's all about control. Thank you very much.

Thank you very much. We appreciate your comments. Moderator, next caller.

We'll go to line 158. Your line is open.

Hello?

We can hear you.

You can hear me?

Yes, we can hear you. Please state your name and your organization and your position on the bill.

My name is Carlin Muniz, and I'm a small business owner in Los Angeles, and I feel that this creates a legal framework for the implementation of the CBDC that I am in opposition of SB 95.