Assembly Standing Committee on Local Government

Welcome to Assembly Local Government Committee Hearing I would like to remind the public that for this and future hearings, testimony will be in person, as we no longer use a moderated telephone service. We also accept a written testimony through the position letter portal on the Committee's website and like to go over our ground rules for appropriate conduct.

The Assembly has experienced disruptions in the past, and we want to make sure that we make sure that the conduct that disrupts, disturbs, or otherwise impedes the orderly conduct of the hearing is prohibited. Such conduct may include talking and making loud noises, uttering loud or threatening or abusive language, speaking longer than time allotted, extended discussion of matters not related to the subject of the hearing or Bill, and any other disruptive acts.

To address any disruptive acts, I will take the following steps if an individual disrupts our hearing process, I will direct them to stop and warn them that the continued disruptions may result in removal from the Capitol Building. I will also document on record the individual involved and the nature of the disruptive Conduct. I may temporarily recess the hearing. If the conduct does not stop, I will request the assistance of the Sergeants in escorting the individual from the Capitol Building. Okay.

Today we will have a replacement on the dias for today's hearing. I'd like to welcome Assembly Member Grayson as soon as he gets here, who is stepping in on behalf of Assembly Member Rivas. We have seven items on agenda today. One of these items is proposed for consent. Item number three SB 475 by Senator Min. SB 450 by Senator Atkins, on behalf Senator Caballero will be presenting. Item two, SB 450, by Senator Atkins, on behalf of the Pro Tem.

We will hear all other bills in order shown on our agenda. Unless otherwise noted, we will take up two primary witnesses in support and two primary witnesses in opposition. These witnesses will have three minutes each to provide their testimony. All subsequent witnesses should state their name, their organization, and their position on the Bill. We do not have a quorum yet, so we will operate as a Subcommitee until we establish a quorum. Our first Bill today will be file number one, SB 335. Senator Cortese. Welcome.

Good morning. Thank you, Madam Chair and Members. I do appreciate you allowing me to present SB 335 today. This Bill would grant the County of Santa Clara temporary authority to give voters the option to raise local taxes until December 2028. Existing law allows a local jurisdiction, cities, counties and certain special districts to collectively levy local taxes up to a 2% limit.

SB 703, signed into law in October of 2017, granted the County of Santa Clara authority to propose a new or increased sales tax of up to 0.0%, even if the combined local sales tax would exceed that 2% cap. That Bill sunsetted in 2022 without a proposal being placed on the ballot. SB 335 would simply give the county an extension of that same authority, if you will, until 2028.

During the COVID-19 pandemic, the county invested well over $1 billion into response activities to protect community health, much of which will either not be reimbursed at all or may take many years for reimbursement. Moreover, the impact of inflation and flattening revenue are creating a substantial budget deficit, something we're all familiar with. Unfortunately, forecasts predict an even greater shortfall the following budget. At the same time, community needs are only expected to rise in the coming years, particularly if economic conditions continue to worsen.

Equity is central to the County of Santa Clara's Mission. The core function of the county is to provide safety net services to disadvantaged communities. Dedicated revenue for county services would disproportionately benefit lower income individuals, communities of color, unhoused residents and other vulnerable community Members. If placed on the ballot and approved by the voters, new sales tax revenue would be used to address local priorities such as support of housing services for unhoused residents, behavioral health, trauma and emergency care for the community and public safety services. With me today to testify is David Campos from the County of Santa Clara. And at the appropriate time, I would respectfully ask for your aye vote.

Thank you very much. Welcome.

Thank you, Madam Chair. Good morning, Madam Chair and honorable Members of the Committee. My name is David Campos and I'm here on behalf of the county Executive's office in the County of Santa Clara and I want to thank Senator Cortesi for bringing this item forward. Having been a supervisor in the county, I think Senator Cortesi understands the challenges not only being faced by Santa Clara County, but counties and local governments throughout the state.

We're still coming out of a pandemic, and as we're doing that, we're facing a great deal of economic uncertainty. And even though Santa Clara County is a wealthy county, relatively speaking, there are still many economic challenges that we face. As the Senator noted, we just close a very challenging budget deficit and we expect with declining revenues and the uncertainty of the national economy, that the deficit might in fact be larger next year. We are saying this even though we have a lot to be proud of.

As Senator Cortese noted, we in many respects led the way in the Bay Area COVID response being the first county to issue a shelter in place and spending more than $1.0 billion in that COVID response. We're doing everything we can to get as much of that reimbursed as possible. But as you know, the uncertainty and the challenges of a federal reimbursement, that means that we are facing the very real possibility of having to cut critical services.

The County of Santa Clara is the safety net for the 2 million residents who live in that county. Some of the most vulnerable people are the people that rely on services, whether it's behavioral health, housing for the homeless, basic health care, or even public safety.

And so what this measure does is that it simply gives the Board of Supervisors a tool, the ability to go to the voters and have the voters decide for themselves whether or not to increase to approve a sales tax up to 0.625% for the purpose of protecting those safety net services. Again, it's simply giving the voters a choice, and we respectfully ask that you give us the ability to let the voters in the county decide. Thank you so much.

Thank you very much. Excuse me, are there any other witnesses in support? Seeing none. Are there any witnesses in opposition? Welcome.

Thank you, Madam Chair and Committee Members. Thank you for having me. Tobias Wolken with the California Taxpayers Association in opposition. California already has the highest state imposed sales tax rate in the country. And districts that are going above the cap are among the highest combined sales tax rates in the United States.

It's also important to remember that the state does not offer a local exemption for manufacturing and research and development equipment and these purchases, this limited exemption makes our ability to compete for R&D investment more difficult. We think that the cap plays an important role in keeping the state affordable, especially for those who have the least ability to pay. And efforts to circumvent the cap should be rejected. Thank you.

Thank you very much. Are there any other witnesses in opposition? Me too.

Voleck Taing with the Silicon Valley Leadership Group in respectful opposition. Thank you.

Thank you. Any others that are witnesses in opposition? Okay, are there any questions of the Committee? Do you have any questions? All right, we don't have any questions. We will entertain a motion once we have a quorum. Would you like to close?

Just a thank you to the Committee, to the Chair and the Committee staff. And with that, I'd respectfully ask for your aye vote.

Thank you very much, Mr. Senator, for bringing this Bill forward. We've given this opportunity to other areas as well, so I'll be supporting your Bill when it comes time. But thank you for bringing it forward, and we appreciate the work that you've all put into it, as well as the Committee. Thank you.

If there are any Senators that would like to present, please join us here over in four, four, seven. Thank you. Thank you for your patience, everyone. We should have an author here soon. I think we have one more coming in the door. All right, it looks like we have a quorum. Secretary, please call the roll.

[Roll Call]

Okay, we have a quorum. We've established quorum. Why don't we go ahead? We did do one Bill. Senator Cortese item file number one. Okay, we have a motion by Assembly Member Wilson. We have a second here. A second by Assembly Member Ramos secretary

[Roll Call]

Okay, we have four. One. We'll wait for the missing Members. Let's do the consent calendar. Motion. Motion by Assembly Member Dixon. Second by Assembly Member Boerner.

[Roll Call]

Okay, we currently have a. vote of 60 on the consent calendar. Well.

One of our favorite Senators right there.

Is this good timing?

Perfect. Well, 10 minutes ago would have been better, but we'll take it.

Getting over here from my Committee, so I know. I do apologize. Which Bill? I know which one. I have been asked to present Madam Pro Tem's Bill. So if you don't mind, maybe I'll take that one at first, out of deference to the Pro Tem.

Okay. So this will be file number two, SB 450 Atkins, presented by Senator Caballero. Thank you for doing that for her today.

Absolutely. So thank you, Madam Chair and Members, for the opportunity to present Senate Bill 450 on behalf of Senate Pro Tem Atkins. Many of you will recall a Bill that the Pro Tem previously authored, SB 9, the California Home Act, which was signed into law in 2021. This Bill was a result of a couple of years of angst and working through both the Assembly and the Senate to make sure that the Bill worked.

In real life, SB 9 sought to widen access to housing for California's working families by streamlining a homeowner's ability to build a duplex or split the residential lot, allowing for up to four units. Unfortunately, in the 17 months since it became law, we've seen a number of local jurisdictions take some creative license with it, either by ignoring the new law in its entirety or imposing overly burdensome standards that seek to discourage the housing options provided by SB 9.

This Bill, SB 450, will increase the effectiveness of SB 9 by improving access and certainty for homeowners who wish to use the provisions of that law and increase the enforcement of existing law. I have with me here today two witnesses. Graciela Castillo-Krings on behalf of California YIMBY. And Jennifer Zevec with the California Association of Realtors. This Bill enjoys a broad base of support, and with that, I respectfully request your aye vote.

Thank you very much. I'm looking for your witnesses in support.

Lauren De Valencia, representing the American Planning Association. We're a proud supporter of SB 9, and again, a proud supporter today of SB 450. Many local governments have been working hard to implement the provisions of SB 9, but we have seen some situations where it would not be effectively implemented throughout the state if it's not for some of the changes being made today. So we do appreciate some of these clarifying and minor changes that will help proper implementation, and we urge your support. Thanks.

Thank you very much. Let me see. I think there's a couple running in the door right now. Okay.

Good morning. I'm Brian Leahy. I represent AARP's Capitol Response Team in support.

Thank you. Good morning, Madam Chair and Members. Graciela Castillo-Krings here on behalf of California YIMBY. A strong support, just a little bit more about the support for this Bill. The Pro Tem has worked very, very tirelessly to make sure that she's balancing both the need of providing additional units while also respecting local control. Unfortunately, what we have seen over the last couple of years is that local governments are abusing this discretion.

What the Bill is intending to do is, again, go back to the original agreement with SB 9 and continue to improve this balance so that we can actually lead to additional units. The Bill is modeled after the ADU legislation, which took a couple of tries before we got it right, but it is actually producing thousands of units, and we are hoping that SB 9, through this legislation, will continue to produce additional affordable units. Thank you. T

Madam Chair, Members of the Committee. Jennifer Svec on behalf of the California Association of Realtors, here in support of SB 450 by way of history. We were supportive of SB 9 because it seeks to create an opportunity for generational wealth and for families to be able to split their lots and allow for either a sale to create generational wealth or to be able to sell it to their individual family members in order to create those opportunities.

We're not seeing as much outward migration from the State of California for our families that can no longer afford to purchase housing within California. What's important about SB 50 is it's seeking to close a few loopholes within the application process that is proposed under SB 9 and working within our local communities. And as a technical cleanup Bill, we think that it's an extremely reasonable measure to facilitate the intended results of SB 9. Thank you.

Good morning. Brian Sapp on behalf of Bill Casa in support. Civic well in support. ... Properties in support. Habitat for Humanity of California in support and SPUR also in support. Thank you.

Great. Thank you very much. Are there any witnesses in opposition? Would you like to have a seat?

No, I'm going to keep it very brief. Madam Chair Matt Robinson. On behalf of the San Mateo City County Association of Government, we were opposed to SB 9, continue to have concerns with legislation fundamentally, and we'll work with the author. Thank you.

Thank you very much. Anyone else in opposition seeing? None. Are there any questions from the Committee? Yes, Assembly Member Dixon.

Good morning, and thank you, Chair. I'm putting my government Committee so I speak a lot about local government. I've been through all these bills in my cities. Most of my cities, including my own. Newport Beach has an approved housing element. No fines, no delays. It was done on time. We're doing all the right thing, and many, many cities are.

And I'm aware of why you want to do this, and I respect that, because we want to build more affordable housing, of course. But the cities who are doing the right thing and actually putting on the local books. Over 200 housing laws in the last three years. Sitting on the City Council, I witnessed all this changing to our ordinances constantly, constantly constantly. And some of the speaker just said some of the ADUs were a little problematic, the legislation.

And so cities are working with these things and starting over and working. It's a tremendous burden, cost and human cost burden in terms of the resources to do these laws. And they're just one more example of just eroding local control. I understand the state's objectives. We do need more housing. We need more affordable housing. I particularly believe strongly that we need more owned housing. We're not going to solve generational wealth with rental units. We must have ownership.

Home ownership is really one of my personal goals anyway. I will oppose this because I just feel badly for cities and certainly the cities I represent. In all local cities who have passed their housing elements are working hard, changed all the zoning. And now there's another layer, another layer, another layer. And I remember in SB 9, while I was on the City Council, it was, this was it, this is it. We're going to get housing. And these are the rules.

And now the rules again, the goalposts are continuing to change. So I know you're not the author, and I appreciate your comments. I'm all for it. I just want cities to have a chance to breathe and do the right thing. And I appreciate so I will not be supporting it, but I appreciate your efforts. Thank you very much.

Thank you.

Any other questions from the Committee? Entertain a motion. Assemblymember Ramos moves a Bill seconded by Assembly Member Wilson. Would you like to close?

Thank you very much, Madam Chair. And I appreciate the comments of the Assembly Member. This Bill worked really the Pro Tem worked really hard to balance local control with the need for housing, and in particular, the need for housing that people can own. And That's really what the goal of this legislation is. This is cleanup. This doesn't change the rules. It's just cleanup. And I respectfully ask for your I vote.

Thank you very much for presenting the Bill. And one thing, as hard as we try to do the perfect Bill, there's always going to be something. And I admire her for waiting for a while to see if the Bill actually worked before she did any changes. I appreciate that the Potem's commitment to ensuring SB 9 is implemented properly. I'm happy to support the Bill today. The motion is do passed to the Appropriations Committee Secretary. Please call the roll. .

[Roll Call]

Right now we have 4-1, and we'll wait for the remaining Members of the Committee. Okay, would you like to do your personal Bill then? Yes. Okay. We are now at item number six, SB 747. Welcome.

Thank you, Madam Chair. I'm pleased to present SB 747, which would make important changes to the California surplus land act to provide clarity to its application and allow flexibility for local governments to develop economic opportunities that are critical to the goal of affordable housing production. First, I would like to thank the Chair and the Committee staff for their work on the Bill and accept the amendments outlined on page 12 of the Committee analysis.

For decades, redevelopment agencies, or RDAs, were equipped with broad community revitalization authority and financing powers. A core feature of the former RDA tool was that it enabled local agencies to acquire property and assemble land that could be used to revitalize deteriorated neighborhoods and attract and expand new businesses and jobs to the communities, and in particular in downtown areas that had been abandoned because of a mall that came into town after RDAs were eliminated.

In 2011, the Legislature recognized that local agencies needed new economic development tools and enacted a variety of laws, including the State Economic Opportunity Law, to authorize local agencies to acquire and dispose of property for economic growth. Since the enactment of the Economic Opportunity Law in 2017, local agencies have utilized this tool to acquire deteriorated buildings underutilized lots and other properties, often in underinvested neighborhoods and downtowns, with an eye to the future sale or lease of the property to advance private sector reinvestment and economic opportunity.

When a local jurisdiction acts to dispose of property excess to its need property acquired with the goal to pursue economic opportunity, it must undergo review under the Surplus Land Act, the SLA requires a local agency seeking to dispose of real property as surplus to first make it available for affordable housing. In 2019, AB 1486 imposed requirements under the SLA, which included giving the Department of Housing and Community Development an oversight role and the ability to impose fines on local governments.

Centralizing the Administration of the SLA under HCD with the authority to impose significant penalties for violations, has created confusion for local agencies because they don't understand what their options are to effectively conduct activities and fulfill their mission without experiencing significant delays or lobbying HCD or the Legislature to obtain individual exemptions. This Committee will remember that you saw a whole spate of exemptions to the SLA because it doesn't work.

It's not working, and when you have more exemptions than you have under the law, then it starts to lose its ability to really be effective. SB 747 makes a number of changes to the SLA to provide greater clarity for local governments when property is deemed surplus. First and foremost, it provides much needed clarity that the Economic Opportunity Law remains an independent and alternative process for public agencies to dispose of their property.

Second, it makes numerous improvements to the SLA to help local governments advance development while avoiding needless delays and uncertainty. So long as a local jurisdiction has a compliant housing element and has received a pro housing designation. More specifically, it allows local agencies to dispose of surplus property for mixed use projects which contain at least 25% of its units affordable to Low income housing.

The Bill also clarifies that land retained by local governments for several purposes, including broadband development, transit oriented development, land for airport, airports, tidelands, and waste also qualified for agency use. And you saw one where it was for a freeway and for a University that are proposed in the future, and that would be included as part of this Bill as well.

Property that local government wish to offer for Shorter term leases are less characteristic of a traditional surplus property, so it exempts short term leases of 15 years or less. In addition, this Bill provides due process for local governments by requiring HCD to create an independent appeals process if the Department pursues an adverse action against a local agency in violation of SLA. Right now, there's no appeal process. HCD comes in and says, you violated it. Here's your fine, and That's all there is to it.

Local governments have the responsibility to build housing and to support economic development within their communities. Both the Economic Development Law and the Surplus Land Act are a critical component to ensure that happens. However, the Legislature has a responsibility to ensure that the laws passed don't inadvertently punish local governments that are genuinely working to advance development that supports the needs of their community. So with me here today to testify in support is Gurbax Sahota, Executive Director of the California Association for Local Economic Development.

Welcome.

Thank you. Good morning, madam. Chairs. As the Senator said. My name is Gurbax Sahota. I'm the President and CEO of the California Association for Local Economic Development. We represent hundreds and hundreds of economic developers that are bringing economic opportunity to your communities, many of them city and county staff, that are working hard not only to create economic opportunity, but also increase revenue for local governments so that you can afford the benefits, resources and services that the residents need.

I'm here today to support Senate Bill 747 because the author's efforts bringing much clarity and balance to the Surplus Lands Act, including highlighting the role and the value of economic development, not only for creating jobs, but again, for creating revenue for communities, so that you can provide the services that your residents expect as well as the quality of life. The Surplus Land Act is creating increasing confusion at the local level, as you've seen through the many bills that have come through here that are for exemptions.

Not to mention that it's impacting hundreds and hundreds of projects indiscriminately across the state, regardless of the end use of what that public benefit is from that project. While Senate amendments and those proposed in this Committee continue to narrow the scope of this Bill, khaled continues to support the author's efforts in this policy area, and we look forward to continuing to work with her as the Bill moves forward.

In closing, I would just say that we're grateful to the Senator not only for her leadership in seeing the challenges in the implementation of the act, but for having the courage to put forward a Bill that has real solutions so that we can move all types of projects forward at the local level. We respectfully ask for your yes vote to create efficiency and clarity regarding the implementation of the Surplus Lands Act. Thank you.

Thank you very much. Other witnesses in support.

Thank you, madam. Thank you, Madam Chair Matt Robinson on behalf of the California Transit Association. First, I just want to thank the author, her staff, your staff, all of the Committee staff that have heard from our Members and worked with us to refine the Surplus Lands Act. SB 747 includes a number of really technical changes, mainly around the exemptions that will help us implement the act transit districts. JPAS.

We're not essentially in the mold of cities and counties under the Surplus Lands Act, so we do require a bit more nuance. I'd also like to thank the author for recognizing the importance of additional flexibility when it comes to transit oriented development. Yesterday, you all passed a budget that has $5.1 billion in it to address the transit fiscal operations crisis.

And one of the trailer bills that was passed asks the state transit agencies, local governments, to look at ways, and I quote, the potential of transit oriented development and Value Capture of property around transit stations as a source of sustainable revenue for transit operations. We need flexibility in order to do that and we can't be forced into a certain mold if we're going to get the most value around our station. So appreciate the flexibility that the Bill would provide and also for finally taking a shot at leases. Thank you.

Madam Chair Members, Amy Brown. On behalf of the City of West Sacramento in support.

Morning. Audrey Ratajczak from Cruz Strategies on behalf of the California Business Properties Association and the California Building Industry Association in support. Thank you.

Good morning. Spencer Saks, on behalf of the California Association of Sanitation Agencies and the California Special Districts Association with a support if amended, position. Thank you.

Thank you, Madam Chair Member Sarah Bridge, on behalf of the Association of California Healthcare Districts with a support, if amended, position. Also on behalf of the cities of Bakersfield, Corona, Carlsbad, Merced and Santa Rosa in support. Thank you.

Nicole Wordelman, on behalf of the City of Ontario and San Bernardino County in strong support.

Good morning. Kyra Ross on behalf of the City of San Marcos. Especially appreciative of the language on leases as That's a very important issue for our community. Thank you so much.

Thank you, Madam Chair Jean Hurst here today on behalf of the Urban Counties of California, the California State Association of Counties, and the Rural County Representatives of California. All in support. Thanks very much.

Thank you. Are there any other witnesses in support? Seeing none. Are there any witnesses in opposition? Welcome.

Good morning, Members. Mark Stivers speaking today on behalf of the Nonprofit Housing Association of Northern California, the San Diego Housing Federation, the California Housing Consortium, Western Center Public Interest Law Project, Southern California Association of Nonprofit Housing, East Bay Housing Organizations, and my own organization, the California Housing Partnership, with an opposed unless amended position, we very much appreciate the amendments from the Committee. We are still concerned. Well, the Surplus Land Act has made available thousands of properties that have helped us address our affordable housing crisis.

That is a very important thing. While we appreciate the amendments, we think the Bill still swings the pendulum a little bit too far towards economic development at the expense of affordable housing. But we look forward to working together with the author on this and other Surplus Lands Act bills. We know there are a number of issues to be addressed and we hope we can all work on that together. So thank you very much for accepting my comments.

Thank you. Are there any other witnesses in opposition? Seeing none. Are there any questions of the Committee? Assembly Member Wilson

Senator Caballero. I appreciate the work the Surplus Land Act, especially at the law and focusing in on the necessary needs of local agencies in times of using land for revenue generation purposes, which is extremely necessary as it relates to providing the goods and services for people. So I think this is great and really like it.

One of my concerns, though, and hoping you can address maybe what you're working on to alleviate is in particular, it being used by bad actor cities and counties in terms of who don't want to build housing and don't want to build affordable housing and using the Economic Opportunity Law and the exemptions that are being placed in it to then do some of what the opposition just expressed is prioritizing economic opportunity or economic development over affordable housing because both are needed.

And like I said, as a former local leader, when you think about land, revenue generation is extremely important if you want to provide goods and services. But I know we have a lot of bad actors, which is why some of the laws has been strengthened lately. And so what do you think about the bad actor cities and counties?

So thank you for the question, Assembly Member. It always seems that we have to write laws for the bad actors, right? But let me just say that I have long been an advocate for affordable housing and a long time ago when I was on the City Council, I was among the first that insisted we do an inclusionary housing ordinance. And so every single home built after the 1991 in my city had an inclusionary housing obligation and it made a tremendous difference.

But there's also the need, as you said, to do economic development. The way that we ensure that at least there is the ability to build in a community is to have a housing element certified housing element. But apart from that, to be housing, I always forget what it's called. It's housing friendly. What is that act that it was passed when I wasn't here. So it's one of those things, pro housing, a pro housing designation.

There are only 40 cities in the State of California right now that have a pro housing designation. Others are working towards it. And I'm told that within the end of the year, or by the end of the year, we should have double that, which would be 80. There's 454, 453 cities. They will not be able to utilize this Bill if they don't become a pro-housing city, which means that they have aligned all of their there's expedited processes.

It's interesting to me that there's still opposition from the organizations that I really love and respect, but this is trying to set a balance and to say this is just as important as this. And as long as we'll get to the point at some point, and probably within the next cycle, RHNA cycle, where we start saying, if you're not building at least X percent of your housing, then you're going to lose the ability to do a whole bunch of stuff.

Carrots work much better in my mind, and I've always been a supporter of carrots. So we give them more flexibility, more opportunity to make choices, but then we'll take away those carrots if you're not actually building. But the way it's set up, it's got the pro housing designation, the certified housing element, and I think ultimately we'll get to a point where we say, and you got to at least be building some of these homes that you've planned for.

You know what, thank you for mentioning the pro housing designation. I had forgotten about that in reading the Bill. And so that is an important accountability measure to seek or a stop gap to ensure that the there was balance there and then the bad actors don't use it because they would have already had to designate that. And most of the bad actors are definitely not pro housing. I do remember that there was a first, I wasn't sure if there was a second. If there's not a second, I'd like to make that.

Thank you. Thank you very much. Assembly Member Wilson. Seconds. All right, any other questions? All right, seeing none, would you like to close.

Respectfully ask for your aye vote.

Great. Thank you Senator, for bringing the Bill forward. And yeah, this is the 9th Bill this Committee is hearing on SLA this year, on top of five from last year. But there's always room for improvement and we're headed that direction. I applaud your efforts to reform this important law. Thank you for accepting the Committee amendments. And with that, I will be supporting your Bill. So it's do pass as amended to Housing and Community Development Committee secretary. Please call the roll.

[Roll Call]

Bill is out. 7-0.

Thank you very much for both those bills. Okay, looks like we have Senator Jones here, file number four, SB 654.

Thank you very much.

Okay, we have a second by Dixon. Thank you.

I think I heard a first and a second, so I'll be brief. Madam Chair, based on the prior conversation with the prior author about perfect bills, I want you to know that this is one of those perfect bills.

I won't see you next year, then, right?

I'll be presenting SB 654, Madam Chair. And the reason for the Bill is there's some ambiguity in current law regarding airport leases and their ground leases. I have two witnesses that have traveled today, so I will yield my introduction and time to the two witnesses. First are Brian fox with the TDA investment group on behalf of the construction laborers pension trust for Southern California. And after Mr. Fox will be Jared Yoshiki, representing the Aircraft Owners and Pilots Association. And I think they're both here.

Welcome, gentlemen. Have a seat. You're more than welcome to have a seat here.

The Assembly is much nicer than the Senate.

We don't charge much.

All right. Good morning, Madam Chair and other Committee Members. My name is Byron Fox, not Brian. It's the cross I bear in life. People see Byr and instantly transpose it. Anyway, I am with TDA Investment Group of San Mateo, and TDA is a fiduciary for the Construction Labors Pension Trust for Southern California and is very much in support of 654. The trust serves some 30,850 union workers and makes investments to Fund the monthly pensions of those workers.

One of its assets is the Carlsbad Jet Center, a fixed based operation at the Palomar McClellan Airport in Carlsbad. The ongoing obviously, the ongoing financial success of this asset directly benefits the union workers in our system. So, as mentioned, Senate Bill 654 clarifies the government code to ensure that airport leases and subleases can be extended up to 50 years. This is really crucial for the long term sustainability that airport of infrastructure at airports, because airports depend on their ability to obtain infrastructure investments through their leases.

For example, since the trust acquired this FBO in 2019, more than $37 million has invested in leasehold improvements as also required by the trust. All of that work was done by union contractors and subcontractors providing countless local jobs. The infrastructure investment, however, or any furniture investment, requires a sufficient length of time to amortize the cost. We'd like to indeed invest more in this property, including investments that would mitigate the environmental impact of the facility. However, those additional investments are unlikely, are truly unlikely, unless 654 is passed. Thanks so much.

Thank you.

Thank you. Madam Chair, Members, Jared Yoshiki on behalf of the Aircraft Owners and Pilots Association. We do have a motion a second, so I'll keep this brief. I would just like to echo the. Comments of our previous speaker and thank the author for introducing this Bill. We represent all of the General aviation we are the largest General Aviation Association of representing pilots and aircraft owners in the country. The hangar shortage is a very big deal, and California is one of the largest states with the largest hangar shortage. Believe it or not, it is one of the most critical revenue generators for airports in the State of California.

And the FAA has provided an airport compliance manual for its airports, but that is in no way a solid document. It is meant to apply to all airports throughout the entire country. There is no airport in the country or the state that I'm aware of that is doing or providing caps on leases. And I would argue that it does definitely run afoul of the airport compliance manual.

And to clear up this ambiguity would be a great benefit to my Members, especially trying to obtain hangers and to maintain those hangers to make sure that their aircraft remain airworthy and safe to fly throughout the state. So, with that being said, I would appreciate your I vote on this Bill. Thank you so much.

Thank you very much. Are there any other witnesses in support? Seeing none. Are there any witnesses in opposition? Seeing none. Are there any questions to the Committee? It's a quiet day here on the local government Committee. Entertain a motion. We have a motion by Assembly Member Berner and a second by Assembly Member Dixon. Would you like to close?

Thank you. Madam Chair, Members, I appreciate your support. And ask for an I vote.

Okay. Thank you so much for working on this Bill. Every now and then, we need to change legislation. In 50 years, it took us to help you out. Right? Here you go. Okay. The motions do pass to the floor. Secretary, please call the roll.

[Roll Call]

Thank you, Members, and we'll wait for others. Thank you.

Have a good day. Thanks for hanging out. zero, look who's here. I know. No, I'm not leaving him behind. Never. All right, item number seven Senator Laird, SB 862. Welcome. Okay, we have a motion by Grayson second by Ramos. Feel free to start.

Thank you, Madam Chairman. Given the fact that there's a motion, I will slightly abbreviate my comments. This Bill would allow Santa Cruz voters to decide if the County of Santa Cruz should raise the combined tax limit above 2% for the Santa Cruz Metropolitan Transit District, also known as Santa Cruz Metro, where I once served on the board for nine years. I want to thank the Committee staff for working.

With my office on this measure, and I'll be accepting the Committee amendments that are listed on page four of the analysis. Over the past year, transit systems have had big problems coming out of the pandemic. In the budget we just adopted, we attempted to help transit districts. The Metro is the countywide bus service for Santa Cruz County provides thousands of riders. And as I said, this is simple about what it does with the tax code.

And I want to just say clearly this allows for them to go to the voters. This is not the tax increase itself. And so with me today to testify and support is Michael Tree, the CEO and General manager of Santa Cruz Metro. And at the appropriate time, I would respectfully ask for an aye vote.

Thank you very much, Senator, welcome.

Hi. Thank you. Appreciate being here and do that. There's a first and a second. I'll be also brief with my comments. I appreciate Senator Laird bringing forward the legislation and would respectfully ask for your aye vote.

You are making this simple today. Are there any witnesses in support? Are there any witnesses in opposition? Welcome,

Madam Chair and Committee Members. Tobias Wolken of the California Taxpayers Association. I'll keep it brief since I already made some comments on this earlier. We do not support raising the CAFF. We think that it harms disproportionately, lower income individuals. And we respectfully ask for no vote.

Thank you very much. Are there any other witnesses in opposition? Seeing none. Are there any questions from the Committee? Yes, Assembly Member Wilson,

I'd just like. To make a comment. Thank you, Senator, for bringing this forward. I know it's a district only Bill, but transportation is key. How people move in and out of community is very important to their quality of life. And one of the great, I think, economic equity, what levels the playing field in terms of economic equity truly is public transportation and that ability to not have to have a vehicle or that be able to access public transit.

And so the fact that you're bringing this so that the voters can decide what's best for them and what is truly beneficial to disadvantaged communities and those at the lower rung is really, really good. And so I just wanted to applaud you on that. And I know sometimes we think about disadvantaged communities or we use talking points as it relates to other things for disadvantaged communities, but public transportation and ability to be able to provide that is a really good thing. So I think anything that the community decides to do for itself will definitely outweigh the potential economic harm of a potential tax. Thank you.

Thank you. Are there any other questions from the Committee? Seeing none. We have a motion by Assembly Member Grayson. A second by Assembly Member Ramos. Secretary, please call the role. Before we do that, do pass as amended to Revenue and Taxation Committee. Thank you for accepting the amendments today Senator.

[Roll Call]

Okay, five, two. We'll wait for we have everybody here. Yes. Okay. It fills out your bills out. Thank you.

Thank you very much.

Thank you. All right, we're waiting for one more author. Senator Dahle. I think we'll do some cleanup right now, if you don't mind. Okay. We're going to start with the consent calendar.

[Roll Call]

That's out 8-0 consent calendar. Now we'll do SB 335. Cortese.

[Roll Call]

Bills out, 5- 2. Next is item number two, SB 450. The motions do pass to the Appropriations Committee.

[Roll Call]

Bills out, 5-2. Item number four, SB 654. Do pass to the floor.

[Roll Call]

Bills out 8-0. Item number five, SB , never mind. Item number six, SB 747, Caballero

[Roll Call]

Bills out, 80. And that goes to the do pass, as amended to the Housing and Community Development Committee. Okay. And we have Laird okay, so the only thing we have, we just have one author we're waiting for.

How are you guys?

Good afternoon. Is this the morning? Good morning, Senator Dahle. This is item number five, SB 692. We have a motion by Assembly Member Dixon. A Second by Berner. Yeah, we should stalled them. When we called Atkins Bill, I was like, zero.

Welcome. Thank you so much for the motions, and I will be quick. I know we all have committees today, but this basically expands a water district to be more inclusive, to add more disadvantaged folks to be able to vote. Trust me. Durazo drilled me on this, and we got it out of that Committee. So I just want to let the Members be at rest. That this is good local government. It's a district that is very limited, and they're trying to just get more board Members. Respectfully ask for an aye vote.

Any other witnesses in support? Seeing none, are there any witnesses in opposition? Seeing none, are there any questions of the Committee? That would be no. We have a motion by assemblymember. Dixon second. By Assembly. Member Berner. Would you like to close?

Respectfully ask for an aye vote.

Okay, thank you for bringing the Bill forward, and I will be voting aye. The motions do pass to the floor. Secretary, please call the roll.

[Roll Call]

Bills out 8-0. Thank you. Assembly Member I mean Senator.