Senate Standing Committee on Judiciary

The Senate Committee on Judiciary will come to order. Good morning. The Senate continues to welcome the public in person via teleconference service. For individuals wishing to provide public comment. Today's participant number is 877-226-8216, and the access code is 9979347. We're holding our Committee hearings today in the O Street Building. I ask all Members of the Committee to be present here in the room 2100 so we can establish our quorum and begin our hearing. Before we hear the presentations on today's bills, let's establish a quorum. Madam Secretary, please call the roll.

Umberg, Umberg here. Wilk, Wilk present. Allen, Allen present. Ashby, Ashby here. Caballero. Duraso. Laird, Laird here. Min. Niello, Niello present. Stern. Wiener. You have a quorum.

We have a quorum. Thank you very much. But we still invite other members to present themselves in room 2100. We have 17 items on the consent calendar today. Thank you to staff and thank you to all members. So here's the list of those items that are on a consent count. File number one SR 27, by Senator Cortese. File number three AB 1076 by Assembly member Bauer Kahan with amendments. File number four AB 1376 by Assembly member Juan Carrio. File number six. AB 231 by Assembly member Chen. File number seven AB 1025 by Assembly member Dixon. File number 14, AB 1210 by Assembly member Colorado with amendments. File number 16, AB 1013 by Assembly member Lowenthal. File number 17, AB 1282 by Assembly member Lowenthal. File number 18 AB 1754 by Assembly Judiciary Committee. File number 19, AB, 1756 by Assembly Judiciary Committee with amendments. File number 24 AB 273 by Assembly member Ramos with amendments. File number 25 AB 630, by Assembly Member Ramos. File number 26, AB 325, by Assembly member Reyes. File number 27 AB 334 by Assembly member Blanca Rubio. File number 28 AB 1697 by Assembly member Schiavo with amendments. File number 30 AB 302 by Assembly member Ward. And finally, file number 32 AB 1764 by the Assembly Housing and Community Development Committee.

Mr. Chair, remove the consent agenda. Although I'm so tempted to say I didn't quite catch that. Could you read the list again?

I will. Thank you. Senator Laird. I've got a list right here I'll provide to you in just one moment. All right, let's call the roll on the consent calendar.

Umberg, Umberg aye. Wilk, Wilk aye. Allen, Allen aye. Ashby, Ashby aye. Caballero. Durazo. Laird, Laird aye. Min. Niello, Niello aye. Stern, Stern aye. Weiner. Seven to zero,

7-0. We'll put that on call. All right. The ground rules are as follows. I see a number of frequent flyers here, so you know the ground rules, but I'm going to go ahead and repeat them. The testimony in this Committee is as follows. Each Bill will permit two primary witnesses in support and two primary witnesses in opposition. Each witness will get two minutes to speak in other words. So the proponents will have four minutes divided by two, meaning two minutes per witness. After the main support witness speaks, after the main support witnesses speak, we'll turn to the MeToos in support in the hearing room. In other words, you approach the microphone, you say your name, your affiliation, and your position. We'll do the same thing with the opposition. In other words, the opposition will have two witnesses, two minutes each. After we finish the in person support and opposition, we'll then turn to the phone testimony we'll hear from both support and opposition through the phone line at the same time. In other words, we will not differentiate between support and oppose. There will be a 15 minutes limit on phone testimony for those on the phone line. Please limit your testimony again to your name, your affiliation, your position on the Bill. If you wish to further expound on your position, you can submit a letter to the Committee using one of the methods described on the Judiciary Committee's website. Now let's hear from our first author. File number two, AB 318 Assembly member Addis.

Well, good morning, honorable Chair and members of the committee. I know you have a huge agenda, so I'm going to keep this quick. I'm here to ask for your support on Assembly Bill 318, which extends the deadline for the Mobilehome Residency Law Protection Program, or the MRLPP, by three years. Doing so extends protections for mobile home residents across the state who have encountered violations in their parks. It enables a self-funded program to continue to operate without incurring additional cost pressures for the state.

And it allows a vulnerable and often ignored population of Californians their right to seek justice. This bill extends the deadline for the MRLPP, a program which this committee previously voted on and passed twice. It makes changes to the program based on recommendations from HCD's annual report, thereby strengthening the program and boosting caseload, and extending the sunset, and making these reforms. By doing so, we are following the original intent of the law to fully evaluate the success of this program.

In 2018, the state established the MRLPP, a five-year pilot program, to coordinate the resolution of complaints from homeowners. And this program is funded by residents across the state who pay $10 for this additional protection. However, the program is set to expire in 2024. So despite the act requiring the program to operate for five years, it has really only operated for two years.

Prior to evaluation, the program was not statutorily permitted to accept complaints until July 2020, and HCD did not start referring complaints to the legal services providers until June 2021. There are remaining funds in the program. HCD's most recent report shows revenue collected at over $9 million, with about $3.5 million in total expenditures. So the program is solvent, and we do need to do everything we can to protect and preserve this type of housing for seniors, working families, veterans, and other community members on fixed incomes. And the three-year extension will allow for this. So with that, I would like to turn it over to our witness. Roger Johnson, mobilehome resident.

Thank you, sir. The floor is yours.

Good morning. My name is Roger Johnson with GSMOL, in support of the bill. The Mobilehome Residency Law Protection Program helps seniors, veterans, and immigrant families with modest incomes to resolve violations of state law. These violations include eviction from our homes, park owners, taking residents' electricity to power their equipment, unauthorized fees for water and utilities, elder abuse, housing discrimination, and more. The program was signed into law in 2019.

However, the first complaint could not be filed until July 1 of 2020 in order to give HCD time to set up the program. And it was only until June of 2021 that HCD started referring complaints to nonprofit legal services. AB 318 extends the Mobilehome Residency Law Protection Program by an additional three years, giving mobile home residents the benefit of the full five years of the originally intended five-year pilot program. HCD issued a report a few months ago based upon initial data, which also included recommendations. We are pleased Assemblymember Addis has now included several of HCD's recommendations as a step forward to improving this program. We thank you for your consideration.

Alrighty. Thank you. Next witness. All right, seeing no other witnesses approaching the microphone, let me now turn to those who are in support. Wish to provide me too testimony here in the hearing room. Please approach the microphone. Give us your name, your affiliation, and your position.

Good morning. I'm Michelle Moning. I'm the HOA President at a mobile home park in Roseville and in full support.

Thank you.

Gary, I'm a bunch of homeowner in Citrus Heights, and I support this bill.

Thank you.

Marjorie Murray, Center for California Homeowner Association Law, in support.

Thank you. Anyone else in support of AB 318, please approach the microphone. Seeing no one else approach the microphone, let's now turn to the opposition. If you're opposed to AB 318, please approach the microphone.

Thank you, Mr. Chair and members. Jason Ikert, on behalf of the California Mobilehome Parkowners Alliance, regrettably with an opposed unless amended position on the bill. Want to start by saying that CMPA does not believe that this program should sunset this year. We support an extension of the sunset program. The problem is that this bill, in its current form, extends that sunset longer than needs to be, and incorporates recommendations that are premature in light of the fact that there is a pending audit.

Some of you and your colleagues on JLAC approved an audit in March to examine this program and make recommendations about how it should move forward. We think that any sunset extension should be informed by those recommendations. And so we would support a simple one-year extension of the sunset, which would give plenty of time for this Legislature to consider those audit results.

And in fact, even if this bill passes and is signed into law, those audit results will still be on the table and will still need addressing and legislation next year. So we believe that it would make sense to simply table the rest of this debate and discussion until that point. We think that, again, our client was neutral on the final version of the Stone Bill which created this program. There is a version of it that all parties can live with, but again, that version needs to be informed by the highly respected state auditor's results.

Thank you very much.

Thank you.

All right, thank you. Others in opposition to AB 318.

Good morning, Mr. Chair and members. Chris Wysocki representing WMA. We align ourselves with the CMPA comments. We think a one-year extension makes the most sense on this. The MRLPP has a surplus of over $8 million. Money hasn't been spent, despite the fact that 11 million plus has been collected. We just believe that a one-year extension to allow JLAC and the State Auditor to do its job, come back to the Legislature, recommend ways that we can improve the MRLPP would make the most sense for the reasons we oppose.

All righty, thank you very much. All right. Others opposed to AB 318, please approach the microphone. Give us your name, your affiliation, your position. Seeing no one else approaching the microphone, let's turn to the phone lines. Moderator, please queue up those who are in support and in opposition to AB 318.

Thank you, Mr. Chair. As he indicated, if you're in support or opposition to AB 318, please press one aero at this time. One followed by zero. Let's go to line 22. Please go ahead. Line 22. Your line is open. Line 22. All right, let's give the instructions one more time. If you're in support or opposition to AB 318, please press one zero. 22, you're already open. Now. You took yourself out of queue. Go ahead and hit one zero again, we'll open your line. Line 22. One followed by zero. All right. Sorry about that, Mr. Chair. They took themselves out of queue and there's no other participants queuing up.

All right, let's bring it back to committee. Questions by committee members? I'm seeing no questions by committee members. Is there a motion Senator Laird moves.

We've got to add something. I serve on JLAC. I wasn't there in March because actually, we were meeting here, but it seems to me, so the program got a late start. Obviously, just because of the way things work out, and we're not very far into it. There is a surplus which may ultimately not be there. We don't really know. Why don't we do just a one-year extension and then see what the Auditor comes back with and then adjust accordingly?

Yeah, well, HCD themselves is recommending the three-year extension to get to that five years. They're also recommending and we've taken this amendment that we open the program so it's a little bit more accessible to more residents, not just the most severe cases. And so we do want to be able to allow other folks to come forward. There may have been issues with publicizing the program, given that it was COVID. So there could be residents out there that just have no idea that this process exists. So the three years is really to allow that time. And we can certainly take recommendations as we go.

All righty. Other questions or comments? Seeing none. Senator Laird has moved the bill. All right. Would you like to close?

I respectfully ask for your aye vote.

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

This is file item number two, AB 318. The motion is do pass and appropriations. Umberg. Aye. Umberg, aye. Wilk. No. Wilk, no. Allen. Allen, aye. Ashby. Aye. Ashby, aye. Caballero. Caballero, aye. Durazo. Aye. Durazo, aye. Laird. Aye. Laird, aye. Min. Niello. No. Niello, no. Stern. Stern, aye. Wiener. Aye. Wiener, aye. Eight to two.

Eight to two. We'll put that bill on call. Thank you very much. All right, next. I see Assemblymember Carrillo is here. Thank you.

AB 1317, item number five.

Thank you. Mr. Chair and Senators, I am proud to present Assembly Bill 1317, which will unbundle parking, requiring that parking to be leased as a separate and optional expense for new constructions of 16 units or more. Within 10 counties, property owners often provide free parking as part of a lease. Unfortunately, doing so obscures parking costs and passes amount to tenants regardless of whether they need or want the parking. AB 1317 would require property owners to unbundle parking. Unbundling parking separates housing costs from parking costs, allowing residents to only pay for the number of parking spots they need, if they need them at all. This bill will provide tenants in transit rich areas a powerful incentive to use alternative modes of transportation as they no longer need to pay for parking to rent an apartment and can instead carpool, bike or walk around their community. The vast majority of tenants, especially those in nontransit rich areas, will elect to pay for the parking. For these tenants, there will be no practical difference, except that tenants now have the flexibility to make this choice themselves. Unbundled parking is already a policy in Santa Monica and San Francisco. California has an opportunity to further expand this policy given how the majority of California renters are rent burdened and that California's transportation sector accounts for about 50% of the state's greenhouse gas emission, not to mention the state is investing largely in the future of transportation. This bill is a well tailored and cost effective approach to alleviating the state's dual affordability and climate crisis, all while giving tenants greater flexibility and promoting equity. This bill applies the new construction of 16 units or more in the counties of Alameda, Fresno, Los Angeles, Riverside, Sacramento, San Bernardino, San Joaquin, Santa Clara, Shasta and Ventura counties. We have worked closely with the California Apartment Association and the California Association of Realtors to alleviate their concerns. Both organizations are now neutral. This Bill is co sponsored by Streets for All and Spur. To testify. In support is Mark Vuchvich, co Director of State Policy for Streets for all, and Michael Lane, State Policy Director for Spur.

Thank you very much, sir. The floor is yours.

Thank you, Committee. My name is Mark Vuchovich, representing Streets for All. We're an organization that advocates statewide for safe, sustainable and equitable land use and transportation policy. And we're the proud sponsors. We believe that we have an affordability crisis here in California with our state ranking 47th out of 50 for cost of living. And that's largely driven by the high cost of housing and the increasingly high cost of owning a car. We believe that a person should not have to pay for parking if they are not using it. And this hits close to home for my life, where me and my partner have decided to be a one car household instead of a two car household due to the substantial savings we get from not filling up the car insurance, not car payments, and also not an additional spot at our parking complex that costs money. Streets for All also believes that it is imperative to lower greenhouse gas emissions and VMT vehicle miles traveled. Research shows that bundled parking households drive 3800 more miles. Those are miles that pollute 40% more than bundled households and are miles that add to our worsening traffic congestion. Lastly, we are very concerned with the state of our transit agencies, which are facing falling ridership in the wake of the pandemic. This is a policy outside of the state budget that will slowly bring back consistent transit ridership. A paper on this topic out of UCLA states quote "bundled parking is negatively correlated to transit use. Households with unbundled parking are significantly more likely to be frequent transit users. Policymakers concerned with climate change, as well as following transit ridership must consider the consequences that parking policy has on travel behavior. The company Park Aid estimates that 50% of new housing is already unbundled voluntarily. The cities of San Diego, San Francisco and Santa Monica have already adopted this locally. Let's expand this policy further by passing this statewide. Thank you.

All right. Thank you. Other witnesses in support

Mr. Chair and members, Michael Lane with Spur of public policy think tank in the San Francisco Bay Area. There's a growing recognition that over many decades, arbitrary one-off off-street parking requirements on a building by building basis using static formulas, have led to accumulative excess of costly parking. A 2020 analysis by the City of Berkeley found that nearly 50% of off street parking spots for residential buildings in the jurisdiction sat empty. A recent Santa Clara University study found that the invisible cost of parking adds 17% to the cost of rent. Off street parking is an amenity valued highly by some and not needed by others. Unbundling of parking has become a best practice for new apartments and is the best way to allocate a finite and expensive commodity. These tenants who are car free or car light should not, through the cost of their rent, subsidize the cost to provide two parking spaces for others. Parking is never free, and we must remove the assumption and perception that it is. We respectfully request an I vote. Thank you.

Thank you. All right, others in support, please approach the microphone. Give us your name, your position, and your affiliation.

Pricilla Ketos here on behalf of the City of Santa Monica. In support.

Thank you. Anyone else? Seeing no one else approach the microphone, let's turn to the opposition. I have no opposition on file, but if you're opposed to AB 1317, please approach the microphone. Seeing no one approaches the microphone, let's turn to the phone lines. Phone lines moderator, please open the phone lines for those who are in support in opposition to AB 1317.

Thank you.

Good morning, Chair. Members of the Committee Jordan Panana, Carbajal, on behalf of California YIMBY in support. Thank you.

Thank you, Mr. Chair. As he indicated, if you're in support or opposition to Assembly Bill 1317, please press one followed by zero. 1-0 at this time, Mr. Chair, nobody is queuing up.

All right, thank you. Let's bring it back to Committee questions by Committee Members seeing no questions or comments.

Oh, come on, my flight is not till 7:20. I got all day.

All right. Thank you, Senator Wilk. We appreciate that. Okay, Senator Wilk.

Thank you, Mr. Chair. Good morning. How are you? So I've got actually a number of questions on this. So it sounds like from the list of counties that you gave, you're looking it's like rural, suburban, urban. Right. I didn't see a sunset in this. Is there a sunset? So it's 2025 and it's full. Are the counties that are listed? Because I don't see them as supporters. The counties are listed. Are they supportive of the Bill?

We have not received any opposition from the counties listed on the Bill.

Okay, but we don't know if they support it either. Correct?

Counties are responsible with their lobbyists and whoever wants engaged to engage in any policy.

Okay, very good. Well, those answer my questions. Thank you.

Thank you. Other questions. Senator Niello, then Senator Caballero.

Thank you, Mr. Chair. I'm always troubled when we change rules on entities, people, when a structure or an arrangement or an offering is established, given an existing set of laws and parameters, that's the basis upon which they establish, in this case their business model. And then with legislation or otherwise, in this case legislation, we kind of pull the rug out from under them and change the rules. Apartment houses that were established. And by the way, the thing free parking isn't free. Nothing is free. And I see the phrase used a lot, it's free. It's not free. It's included. In fact, in my private sector industry, the word free is illegal to use in any of our ads because nothing is free. So parking isn't free, but it's included in the rent. And that's their business model. And so now you've upended that and could cause significant financial difficulties for some apartment houses, particularly small ones. What would you do about that?

This policy is only for new structures, 16 apartments and over. It does not change local ordinance in terms of what they're already required to provide in parking. And I would also say that in light of our country running on capitalism, business models change all the time. And so here's an opportunity in which we have an opportunity to ensure that new construction, 16 or over, comply with already existing local ordinances for parking. And we're saying that if there's an opportunity that a tenant does not want parking because they don't drive a car, they shouldn't have to pay for that spot. It does open it up to other tenants to potentially pay for that additional parking spot. Or it opens it up to potential businesses in the area to be able to rent or lease parking associated with a building that has vacant lots. So there's opportunity for everyone involved.

All right, Senator Caballero.

Thank you very much Mr. Chair. Well welcome, Assembly Member. Let me just say that I really appreciate what you're trying to do with this Bill. And if there's one thing that I'm interested is driving down the cost of renting in the State of California, renting and owning. The challenge I have is when we do legislation that applies to counties or to areas irregardless of the different conditions that you find within those areas. I have always supported transit in areas in particular where there's an agreement that along transit corridors there will be more dense construction and we haven't linked it well. And I say that because Los Angeles has a history, a long history of getting transit dollars for the rail extensions and stuff. And then the council members have the right to submarine any increased density along those transit routes so that although we make the grants through our Transportation Department and to their Transportation Department, the commitment that the transit departments make in their applications that there will be increased density is not something they control. It's in the hands of another government entity. I say that because I think this is a great pilot project and I do think it needs a sunset if it's a pilot project for highly densely urbanized areas that have high transit numbers. And there's a phrase that's used I don't sit in the Transportation Committee, so I don't remember what it is. But it's that if there are headwinds at 15 minutes intervals, I can see nobody else sits on transportation either because I have blank looks. But in any case, my point is this if your bill related to those kinds of areas, I'm there because it makes sense for us to try to see if we can reduce the number of cars that we have and the number of vehicle trips. But when you start moving into suburban and more rural areas, my frustration is we haven't put the dollars into transit that we need to be able to extend good transit options. So you have the County of Fresno. Prior to this last election, I had a majority of the County of Fresno very sparsely populated, horrible transportation issues. And to require this kind of experiment makes no sense at all. I now have most of the City of Fresno, but the transportation system is terrible. And if you are in LA, and you want to get up to Fresno in a hurry, the only way is to take a car because if you jump on a train, you have to go up the coast, go across and come back down again and it takes you almost an entire day to do that. And internally, there just isn't the transportation system that will make it easy. And when we look at the vehicle miles, travel obligation to reduce the number of vehicle trips you're taking, it's bike, walk, carpool. Those options are not available in rural California. So anyway, my point of all of this is that I really like your Bill, but I'm not going to be able to support it. It includes one of my counties that I just think it doesn't make a lot of sense and I wish I could support it. But you get rid of Fresno and I'm there. I'm there, at least for myself. But I think there's other like Shasta County is going to have the same issue, I think probably Riverside because talk to Senator Roth and people have no option to get out there other than to have a vehicle and they're moving out there in order to be able to afford housing. So I think there's a couple of counties that may have some issues here, but I just suggest that as a pilot project that it be directly related to highly urbanized areas where that transit corridor is intact enough so that people, if they give up a car, have another option. So thank you

Alrighty. Thank you. Would you like to respond Senator Carrillo?

Sure. I would just echo that I think frustrations around transportation across urban, rural areas are very real. Whether you're from Los Angeles or from Fresno. You can live in a high density area like Echo Park in my community, where we're seeing massive investments in new structures with less and less investment in parking, where some residents are frustrated, others love it. Our metro system can always be better in Los Angeles. I wish there was a faster way to get from LA to Sacramento. There currently isn't. The reason why we - or even to Fresno for that matter, - the reason why we included communities like Fresno or Shasta and did not include a sunset, is because in talking to Committee before we got to the Senate, we know that these are areas that are going to be highly invested in when it comes to housing and transportation. Additionally, we did not include a sunset provision because it takes about five years roughly for a developer to go into first phase of development, getting all the permits necessary to go into construction. And so by the time they get all that process ready to go, any sunset date would have prevented the opportunity to plan. We want to give developers an opportunity to plan for this bill in ensuring that it's going to be beneficial to, one, their investment, two, the investment in community, and that there's community there that's going to be able to take this as an opportunity and as an advantage. So just to share some of the reasons why we did not include a sunset, which was part of our conversations and why we're investing in Stern communities, thank you.

Thank you. All right, other questions? Yes, Senator Ashby?

Yeah, I guess I'm struggling a little bit. Sacramento, my county is on here, and I do see that you have put different kinds of counties, counties with different makeup on there. And I understand it to be a pilot project, but normally a pilot would come back. I mean, you've called it a pilot project a couple of times, but a pilot would then come back with a report so we could decide if it worked well, then we would apply it to the other 48 counties, right? Otherwise we pass this and then these 10 counties have a different set of rules than the other 48 counties into perpetuity, unless somebody comes back and looks at this on their own, initiates it on their own. So how do we initiate the comeback and look at this in the Legislature? That's why I think it needs a sunset, even if the sunset is a ways out, because I know you want to give developers a chance. And I see there are a couple of things that people have mentioned, like it doesn't start until occupancy of 2025. So unlikely that we'd be pulling the rug out from anybody. They would know they were doing this. And I'm going to guess that the reason we don't have any opposition from apartments or building or anybody in here is because they're going to charge people for the parking on top of the residency now. So it may not turn out quite the way we were hoping it would to reduce rent. It might make it harder. When I was a young single mom in Sacramento County, I would have had to pay extra then to park my car and I needed my car to get to school and work. So I'd love to see the result of this. I'm willing to vote for it. But I would really like for you to tell me, how do we see the result 10-15 years from now and know, hey, that really worked. We should apply it to the other counties? Or that didn't quite go the way we wanted it to go. Or It worked in some of the counties, but maybe not some of the others. So how do we measure that success without a sunset or a report back?

Thank you. Senator Carrillo, then we'll turn to Senator Durazo.

Thank you. And thank you for the question. Would you like to respond to that?

Thank you, Senator Ashby, for the question. I'm going to respond to the best of my ability. So I do, I guess, just want to hammer home what Assembly Member Carrillo said about the way that this is going to impact development. And this is in some of the minutiae of the conversations we had with Assembly Judiciary, where if there is a sunset at a certain phase, it's going to cause what I would call regulatory ambiguity for developers who are trying to plan years and years into the future, usually five plus years into the future. And the goal of our bill, I think on I would say like the kind of the tertiary goal of our bill is to make housing development easier at the margins. Because some developers are going to realize that where they otherwise would have planned for 52 units of parking, they're going to plan for 50 because that means they don't have to build an additional $1.0 million floor of a parking garage. Right? And so by not having a sunset, what we're trying to do is not kind of create a regulatory limbo as developers are in that planning phase and that initial planning phase for essentially how much parking that they want to build and the way that they're trying to design their structure in the future.

Okay. I've done a lot of development in the last 10 years. I represent the new growth area, Sacramento, so I'm sure most of you are from here, you know, thousands, tens of thousands of units. That is not the way it works at the local. This bill doesn't change the parking requirements for apartment units inside of it. So you'd still have to go to the city to get a waiver to have fewer units, because what you're talking about is unbundling the cost of the parking from the unit. That doesn't change the way that community development departments inside of the cities implement parking associated with apartments. Like I said, I'm here to support this today, and you even have my county in here, but it needs to come back at some point, and it can be a long ways out. Look, these developers are very used to planning for things, so if they know in advance that it's going to be 25 years out or whatever, which is probably it's fine, but it's not a pilot. If it doesn't come back, if it doesn't come back to us or somebody, some future us, to tell us if it worked or not, then it's just taking 10 counties and giving them a different set of rules than the other 48 counties into perpetuity. So I'm going to vote for it today. But I'd really love you to consider or work with the judicious team or somebody about how we look at the result, but I am hopeful that you're right and that it works, but then we should apply it to the other 48. Okay.

All right, thank you. Would you like to respond that in your close or no?

I will respond in my close.

All right, thank you. Other question, Senator Durazo. Yeah.

I understand that there are many ways in which this connects with lots of issues. There's no doubt about that. I was looking at it in my simple way of as Senator from Sacramento just said, developers are going to build parking or include parking based on the requirements and what makes sense financially. This I took as simply to the tenant to understand what's the cost of parking that they should be charged for. I have an apartment here. There's a hidden cost in my rent because I have access. It gives me access to a certain number of parking spots, but there aren't enough parking spots for all of us. So many of us end up on the street looking for parking. And in order to get it guaranteed, I have to pay on top of that, another $50 a month. So it'd be nice to know, okay, where the different layers of costs that I'm being charged for parking and others who are they're being charged, but they're not getting the parking. So it seems to me more simple than that. As simple as that. So I would support your Bill.

Thank you. Other questions? Comments? Seeing none. Is there a motion was that Senator Durazo, Senator Durazo also moves the bill. All right. Assembly Member Carrillo, close.

Thank you, Mr. Chair and thank you, Senators, for the discussion. Certainly some things to consider in terms of I am of the policy and belief that the Legislature should always have reports and should always have the data necessary to make decisions that ultimately benefit the 40 million people of California. So we will take back that into consideration. I would love some additional thoughts given this discussion on what it actually looks like to plan for cities, because it's a sunset of five years, 10 years may not actually give us the report that we want. But taking that into account, I think ultimately what I've seen in my community in Los Angeles, I'll give you an example. There's a building in Chinatown. It has parking at the top. The tenants there have told me that parking is often empty at the bottom it's split within retail and visitors. And so folks are able to park in the building. They can choose to pay for parking or not. There's other buildings very similar where they've already unbundled parking as their own policy, given how many people just take transit or Uber or the bikes or the scooters around downtown Los Angeles. And so folks are already trying to think about how to be creative when it comes to parking, especially in areas that have tenants that don't need it as much. And we're always looking to find the solutions as to how do we improve upon various different areas. So I appreciate the conversation and with that respectfully request, and aye vote thank you.

All righty, thank you very much. And you've heard Assembly Member Carrillo the concerns expressed. I will, underline Senator Ashby's request, that we have some sort of way to assess the success or what improvements need to be made. All right, Madam Secretary, if you would call the roll.

This is file item number five, AB 1317. The motion due, pass. Umberg, Umberg aye. Wilk, Wilk no. Allen, Allen aye. Ashby, Ashby aye. Caballero. Durazo, Durazo aye. Laird, Laird aye. Nguyen. Niello, Niello no. Stern, Stern aye. Weiner. Okay. Six to two with members missing.

All right, we'll put six, two. We'll put that on call. Thank you very much. Next. Assemblymember Grayson. Item number eight, AB 821.

Good morning, Mr. Chair and members of the committee. AB 821 is a simple bill that would help prevent delays in housing production, guaranteed to help facilitate the much-needed housing that this state needs. This bill seriously does seek to address instances where a local jurisdiction's general plan may be inconsistent with that local jurisdiction's zoning ordinances. Under this bill, if there's a situation where an application is submitted where the general plan and zoning are inconsistent, the local jurisdiction would have two options. They would either have to process the application for development and allow it to move forward, or amend their zoning ordinances for that development to make them consistent with their general plan within 180 days. Local jurisdictions are required by statute to have their general plans and zoning ordinances consistent with each other, but this is not always the case. Inconsistencies between general plan and zoning may happen for several reasons, including general plan amendments or even updates. Currently, if there's an inconsistency, local jurisdictions must amend their zoning ordinances to become consistent with their general plan within a, quote, unquote, reasonable time. While this requirement while this is the requirement, there is no defined timeline for what a reasonable time is, leading to delays of months and even years. The 180-day timeline that this bill would impose for rezoning is reasonable and consistent with the guidelines from the Office of Planning and Research that recommend up to 180 days for minor updates to zoning ordinances. AB 821 will help bring a clearer timeline to what is considered reasonable and will help prevent further delays in housing development. And with me through the chair to testify is Michael Lane, state policy director for SPUR.

Thank you very much. Sir, floor is yours.

Members, Michael Lane with SPUR at public policy think tank in the San Francisco Bay Area. Consistency of the zoning code with the general plan has been required in the statute for nearly 50 years. AB 821 seeks to define the phrase within a reasonable time and provide certainty by creating a process for both the city and a development project applicant. The provisions apply when there is a live project application, and the jurisdiction may choose either conduct the rezone to make it consistent with the general plan or simply accept the application and apply adopted and objective development standards. We respectfully request an aye vote. Thank you.

Thank you. Others in support, AB 821, please approach the microphone. Seeing no one else approach the microphone, let's now turn to... did you wish to testify in support? Okay, fine. Come on.

Thank you, Chair and members of the committee. Jordan Panana Carbajal on behalf of California YIMBY, in support. Thank you.

Jennifer Armenta, on behalf of the California Housing Consortium, in support of this bill. Thank you.

Audrey Ratajczak, on behalf of the California Building Industry Association. In support.

All right, thank you very much. Okay, seeing no else approach the microphone, let's now turn to the opposition. If you're opposed to AB 821, please approach the microphone. Seeing no one approaches the microphone. All right, let's turn to the phone lines. Moderator, please queue up those who are in support in opposition to AB 821 to give us their name, their affiliation and their position. By the way, thank you for recalling Senator Waikowski for all of us.

Absolutely.

And as he stated, please press one, followed by zero. If you're in support or opposition to AB 821. Moment, please. We have one with an operator. Anybody else, please take this opportunity and press one followed by zero to testify in support or opposition to AB 821. Please go ahead, line 20.

Good morning, Mr. Chair and members, Kyra Ross on behalf of the City of San Marcos in opposition to the bill.

Thank you.

Mr. Chair. We had no other participants queue up.

All right, let's bring it back to committee. Questions by committee members? Comments? A motion? Is there a motion? Somebody? Senator Caballero moved the bill. All right. Senator Grayson, would you like to close?

I respectfully ask for an aye vote.

Thank you very much. All right, Madam Secretary, please call the roll.

This is file item number eight, AB 821. The motion is due, pass to the Senate Appropriations Committee. Umberg. Aye. Umberg, aye. Wilk. Aye. Wilk, aye. Allen. Allen, aye. Ashby. Ashby, aye. Caballero. Caballero, aye. Durazo. Durazo, aye. Laird. Laird, aye. Min. Niello. Niello, aye. Stern. Stern, aye. Wiener. Nine to zero.

9 to 0, members missing

9-0. We'll put that on call. All right, thank you very much. Next up we have Assemblymember. Haney. Assembly Member Haney is here. Item number nine, AB 572.

Thank you, Mr. Chair and Members, hello again. I want to first thank you and your staff for your thoughtful work on this bill. And I accept the Committee's proposed amendments. AB 572 caps Annual HOA fee increases for below market home rate homeowners to prohibit exorbitant HOA fee increases that can push Low income homeowners into foreclosing on their homes. With the amendments taken today, the cap will be set at either 5% or the percent change in the cost of living, whichever is greater. Below market rate homeownership programs target first time homebuyers who are low and moderate income. The homebuyers have to go through a rigorous verification process to show they are income eligible, and their mortgage rate can only be a third of their monthly income. These units are usually condos in mixed income buildings with monthly HOA fees. Current law cap's annual HOA fee increases at 20% for all homeowners, regardless if they are in below market rate units or not. This is causing the HOA fees for below market rate owners to increase so rapidly that it is at times becoming more than their monthly mortgage payment. This is clearly a deficiency in our current policy, where we have a maximum of how much the mortgage of a BMR unit can be, but not a maximum on annual fee increases, especially because the benefits of HOA fees aren't enjoyed equally among all homeowners, partly due to the fact that market rate owners can recoup the cost of HOA fees through the eventual sale of their units at a new appreciated price. BMR units don't have the same luxury because their sale prices are limited, so their pricing stays in a lower moderate threshold. This cap is intended to balance affordability and stability. And I should also say it only applies to regular assessments, not special assessments or one time costs. And it is only for future buildings, not those that exist currently. We amended it so that it only impacts government documents signed after January 1. This is timely and necessary, especially as we increase our goals around below market rate homeownership and home ownership for all. And here to testify in support is Mitch Mankin from the San Francisco Housing Development Corporation.

Thank you, Senators, for your time. My name is Mitch Mankin. I work at San Francisco Housing Development Corporation. We're a community based affordable housing developer and a HUD certified counseling agency based in San Francisco and serving the Bay Area, particularly the black community. Over the last several years, our counselors have increasingly been seeing clients who are having trouble up with their HOA fees. BMR owners are being pushed to default into foreclosure or having liens put in their homes because of HOA fees that sometimes eclipse their mortgage payments. In conversations with other organizations, we found this is a problem that extends to the rest of the state as well. The proposed solution 8572 is limiting the increases to regular HOA assessments on BMR homes to 5% per year in increases. This gives BMR owners predictability and stability, and it mitigates the most difficult increases while leaving routine increases untouched. A decrease in fees on affordable homes offset with a smaller increase in fees in the market units. In a typical development, with 10 to 20% of the units below market rate, each market unit would pay an additional amount that's equaled only one quarter to one 9th of the decrease in fees on below market rate homes. We've modeled how AB 572 would play out over 30 years of typical increases and found that the impact on market HOA Members is very small. AB 572 does not change an HOA's ability to levy a special emergency assessment, only a regular assessment. Initially, this Bill had been designed to apply to all HOAs, but after working the opposition, we took an amendment to apply the bill only to newly formed HOAs after January 1 of next year. After this change, the realtors bankers, community managers all dropped their opposition and submitted neutral letters. We're amenable to the Committee amendments offered today, as Senator Haney mentioned, and we're happy to continue working with stakeholders and make sure this is the best bill it can be. And I'm happy to help answer any questions or clarify any provisions. I know affordable homeownership is a big priority for the Legislature, so I'm very hopefully you'll pass this Bill today. Thank you.

Thank you. Floor is yours.

Thank you. All right, others in support of AB 572, please approach the microphone. Seeing no one else approaches the microphone. If you are in opposition to AB 572, please approach the microphone.

Marjorie Murray, Center for California Homeowner Association Law. We find ourselves in a very weird position, since the issue of assessments has been our number one issue for the past 20 years before the Legislature. However, while on the one hand we believe that publicly financed, publicly produced units need to be protected, this is not the way to do it. We never dreamed that the solution to assessments would be to take that duty and levy it on another group of homeowners. Yes, units need to be protected, but the way to do that is to find a solution at the beginning of the production process, not later on down the line. I think the analysis is a very good one. We thank the Committee for laying out what our main concerns are, which are, first of all, that it's going to trigger litigation by the owners, who are going to be required to make up the difference between what the BMR unit owners cannot pay and what they are going to be required to pay. There's going to be a run to the courthouse and several different causes of action. So I think there's going to be litigation. There's also going to be dissension in the community by dividing them into these two groups of people. But I think there's a couple of issues which have not been addressed by the supporters and were not fully addressed in the analysis. One is there is no evidence whatever that the owners of the market rate units have more resources than the BMR owners to make up the difference in the assessments. I mean market rate owners buy homes the way we all buy homes. They liquidate assets, they borrow from their parents, they go to the bank, and they get a loan. They have a long term mortgage which may also have an adjustable rate interest rate, so they may be just as vulnerable as the owners.

Thank you. If you could wrap it up, please.

So I think our issues are laid out in the analysis. We ask for your no vote on this. It's the right issue, the wrong solution.

Thank you. All right. Others opposed to AB 572.

Good morning, Chair and members. Audrey retichek again, on behalf of the California Building Industry Association, we have an opposed, unless amended, position on AB 572. We had been working with the author and with the Committee, but we have requested two proposed amendments. One gets almost there, but not all the way. The first of our two amendments is we propose to move the effective date to January 1, 2025, since it takes a year to get approval of the governing documents by the Department of Real Estate. So we don't want to mess up or delay any projects that have already been submitted to DRE and are in the pipeline. And then the Second Amendment we've asked to limit the number of units in a development where the cap would apply to 15% under the way it's structured. Now, as you've just heard, you could have a situation where the market rate units have to subsidize the below market rate. We understand the new amendments would move the cap to 30%. However, that's still too high for our folks. We've proposed a 15% cap or a requirement that mirrors whatever the local inclusionary zoning requirement is. So if it was higher in some areas, then could be higher there. So thank you.

Thank you. All right. Others in opposition to AB 572. Senator Haney perhaps in your clothes you could address the issue of delaying it for one year. All right, let's turn to the phone lines. For those who are in support in opposition to AB 572

Thank you. If you are in support or opposition to AB 572, please press one followed by zero at this time. One followed by zero. And we have one queuing up. One moment, please. Couple queuing up. Anybody else? Go and hit one followed by zero. I'll be right with this, Mr. Chair. One moment.

Thank you. Let's go to line 26.

Church mac Nonprofit Housing Association of Northern California. Proud sponsor and strong support.

Thank you. Line 21, please go ahead.

Good morning, chair and Members. Dwayne camp with the California alliance for Retired Americans. Unfortunately, in respectful opposition.

Thank you. And no other participants are queuing up at this time. All righty, let's bring it to the Committee. Questions by Committee Members? Yes, Senator Laird.

Thank you very much, Mr. Chair. And I appreciate the engagement that our offices have had because initially I was unclear on the fact, as a common interest development resident, that there are three types of assessment fees because there's emergency assessment, special assessment, and the category your Bill covers, which is regular assessments. And I was very concerned about the roof jobs or other things that are substantial. And I think those would mostly be loaded in the other categories. When I was in the Assembly, I did consumer protection bills on common interest developments.

And there was a real attempt by people to get around every law that was enacted. And so there was a practice that newer residents could carry 100% of the costs of improvements and existing residents weren't. So the Legislature addressed that and made it then common interest development started affording nonprofits so the nonprofits could do what was outlawed in General, and there had to be bills. I did it to keep that equity from there.

I think the thing that I'm struggling with was raised in the testimony, and it is our struggle with affordable housing in California. Somebody has to pay for the affordability, and here it's being transferred to residents that do not live in affordable units. And I appreciate the amendment saying that if inflation is greater or costs are greater, it floats greater than 5%. But, for example, there are places that change the management company.

The management company's rates go to 10%, and it'll create a two tier thing where the affordable units will pay a lower rate and the higher difference will be taken by the market rates. And I know in my condo complex it's a block from here, I'm aware of people that are on fixed incomes that are in market rate units. And so their ability to it is slight.

The contention that they realize their gain when it's sold, but they're living in it for a number of years until it's sold, and they're having to eat the higher fees for people that are capped while that's going on. That seems like a problem to me. And I would just maybe just ask in General, do you have a comment on that? Is there a way you think you can or should or have addressed that in this Bill?

Well, a few ways, and I appreciate that. And certainly our contention here is not that people who live in market rate units are necessarily all wealthy or that they all come from a place where these fees don't matter to them. Certainly they matter to everyone. We've set up a system of housing where we have these below market rate units where we understand that these folks have been income verified, that they can only afford a certain amount in their mortgage.

And then on the other hand, we're setting them up to fail because their HOA fees can go up in a way that really prices them out of that unit. I think that's a clear deficiency in the law. And so we're trying to figure out how to balance these different needs in a way that's as fair as possible. The current situation, I think, is not fair and is actually counterproductive to the goals that we have.

So the way that we address this is this is only in buildings where less than 30% are BMRs. Often it's more like 10 to 15%. So it's a very small number of folks. It's only four.

In my campaign against acronyms, would you tell everybody what a BMR is?

Below market rate.

Thank you very much.

If there's less than 30% are below market rate units, it's only for buildings moving forward. So when you moved into this, this would be in your HOA governing documents so you would know that this was part of the conditions. And I think for me, what also makes it fair is right now there's already a cap of 20% for everyone. This is 5% or the cost of living. And so that difference makes a big difference for those folks who are already income verified and limited.

And the impact on the larger set of folks is pretty minimal. I'll also say, and I do think this is important in the balance of fairness these people who live in the below market rate units, they can't pull equity from their homes in the same way they can't sell at market rate.

So as you know, some of those increases in the HOA fees do increase property values in some ways of which the people who live in the below market rate units cannot gain from that in the same way. And the result of that is in many ways under the current structure because they're paying the same amount. They're subsidizing the property values of their neighbors in many cases. So I would like to see HOA fees not go up for everybody and be limited for everybody.

But the current situation where we've said there's a small set of folks in these buildings who we know are income limited and income verified and so can't pay the same amount as everyone else in their mortgage, it makes sense to have some recognition of that in how much they can pay for.

I think one final comment and maybe it'll lead to a direction. And the final comment is, you see, there is an inequity if it turns out that somebody with a mortgage is making the exact same income that somebody in a below market rate is verified as making and then they are disproportionately treated. And I think the reason I am sort of deciding I will vote for this Bill is that you've narrowed it to the future.

You've done this in a way that it is really actually a small segment of people in the state and they go in at Eyes Open. But I don't necessarily subscribe to the fact that they can take equity out of their house to deal with a higher rate if they have the same income. That's verified for the below market rate people. That is still to me an inequity and not fair to them. But this is so narrow at this point that I won't vote for the Bill.

But I just hope as you get pressures as this goes, you just consider this inequity to see if there's ways to address it. Thank you.

Thank you. Seneca Bayero.

Thank you very much, Mr. Chair. I want to say that I had some concerns and many of which were raised today. But the amendment that you've taken to have it moving forward, I think takes care of the concerns that I had. You really are going in with Eyes Open, number one. And number two is I want you to at least consider the possibility that an income eligible then I was going to figure out what that acronym is. But yet below market rate individual may actually have some positive things happen in their life and no longer be below market or Low income because now they're Low income, right.

My point is that I want to make sure that this really stays with people who need it and that if you rent out your unit that you lose the below market rate protection. Because what we really want to do is keep people in their units. Right? I mean, that's what this is all about. So I want to thank you for taking the amendment and I'll be supporting your Bill today despite the fact that I didn't in the previous Committee. Thank you.

Party. Thank you. Other comments, questions, concerns? All right, is there a motion Senator Stern moves the Bill? Senator Haney, would you care to close? And also I'd ask you to respond to the request to delay it one year.

I'm certainly open to continue to talk about that. I think that for us this still gives plenty of time because we're talking about when you enter into the HOA and have the governing documents apply. If there's a project that's built, it's not going to be built that quickly. So many of these actual when the HOAs are formed and people enter into them, we're talking about a number of years from now already.

So I think that their concern is on buildings that are already in the pipeline to begin being built. And I'm willing to discuss that, but it's not something that I think that the Committee asked for in the analysis. But now that you're raising it, I'm happy to talk about that. I'm certainly very open to that.

All right, thank you very much. Is that your close?

Yes.

All right. Thank you very much. All right, Madam Secretary, if you would call the role.

This is file item number nine, AB 572. The motion is due pass as amended. Umberg.

Aye.

Umberg aye. Wilk.

No.

Wilk no. Allen.

Aye.

Allen aye. Ashby.

Aye.

Ashby aye. Caballero.

Aye.

Caballero aye. Durazo.

Aye.

Durazo aye. Laird.

Aye.

Laird aye. Min.

Aye.

Min aye. Niello.

Niello no. Stern.

No.

Aye.

Stern aye. Wiener.

Eight to 2

8-2. We'll put that on call. Thank you. AB 1485.

Thank you. Mr. Chair Members. AB 1485 would strengthen California's ability to enforce state housing law. It does so by giving the Department of Housing and Community Development, or HCD, and the Attorney General the ability to represent the state's interests and the people's interests in pending legal actions filed by third parties to address violations of state housing laws. Right now, as we all know, Californians are facing a housing crisis of epic proportion. We need to produce almost 2.5 million housing units over the next eight years to keep up with housing demand. But we are only constructing about 80,000 units a year. So we need every tool at our disposal to guarantee that we meet our housing goals and to ensure housing is actually being built and the law is being followed. Existing law empowers the Attorney General to bring suit for a violation of state housing law. It also allows third parties to file lawsuits to enforce state housing laws. But under current law, when a third party files a lawsuit related to enforcement of state housing laws, the Attorney General's Office can only become a party to the lawsuit by petitioning the court to intervene. This procedural hurdle delays housing from being built because the courts can take months to schedule a hearing on this petition. Even once a court hearing is scheduled, the attorney General's ability to intervene in the case is at the court's discretion. The Attorney General should have the ability to enforce housing laws and represent the people's interests in housing cases, regardless of whether the Attorney General or the private party files first. It's important to note that the Attorney General already has the ability to intervene if they go first, but not if somebody else goes before them, which is something that does not reflect the actual importance of the matter at hand. Though they lack the ability to intervene in suits on housing law, they already have this state statutory right to intervene on other issues, like enforcing environmental laws. Housing laws are just as important. And with all of the laws that this body has passed, this is about making sure that those are actually followed and that the state's interests are represented in court. Here to testify in support with me today is Janice Staniford from the Office of the Attorney General and Corey Smith from the Housing Action Coalition, and Alex Fish from the Attorney General's Office is here to answer any technical questions.

Please proceed. Two minutes.

Great. Thank you. Good morning, Mr. Vice Chair and Committee Members. My name is Janice Staniford. I'm a deputy Attorney General and legislative advocate in the Attorney General's Office. On behalf of Attorney General Rob Bonta, I want to first thank Assemblymember Haney for authoring this bill, which the Attorney General is proud to sponsor. California is facing a severe housing shortage and affordability crisis. The Legislature has passed strong laws in recent years to address this crisis, and those laws must be enforced. Violators must be held accountable. Attorney General Rob Bonta has made enforcement of housing laws a top priority and will continue to exercise his authority to hold violators accountable. But under many of the state's housing laws, third parties, like housing advocates and developers, are also empowered to file their own lawsuits challenging local land use planning and permitting decisions. This Bill would address a procedural hurdle that the Attorney General faces when a third party files the enforcement action first. Under existing law, the Attorney General's Office has to formally petition the court for permission to intervene in pending third party housing enforcement cases. This requirement causes unnecessary delay. In one ongoing case, it took seven months and several motions and hearings just to intervene in the case. AB 1485 would remove this procedural hurdle by granting the Attorney General an unconditional statutory right to intervene in pending third party housing cases. The Attorney General already has this right to intervene in other contexts, including in environmental cases, and we routinely use this statutory right to intervene in our environmental justice work. AB 1485 would grant the Attorney General the same right to intervene to enforce state housing laws. California's Attorney General should have the right to represent the state's interests and enforce state housing laws, regardless of which party files the enforcement action first. Thank you for your time and consideration, members. We respectfully ask for your aye vote.

All righty, next witness, please.

Good morning, Senators and Assemblymember Haney. Thank you. Corey Smith, Executive Director of the Housing Action Coalition. We're a Member supported nonprofit that advocates for more homes for everybody in California and proud co sponsor of AB 1485. Don't want to repeat the comments made previously, but do want to emphasize the size of the problem that we have right now, and we want to make sure that the urgency and our solutions match that problem. And as the Assembly Member said, this is another tool in the toolbox in order to build our way out of our affordability and displacement crisis and respectfully request an aye vote. Thank you very much.

All right, others in support, please approach the microphone. Give us your name, your affiliation, and your position.

Michael Ann, with spur in strong support.

Chair and Members of the Committee. Jordan Panana Carbajal on behalf of California YIMBY in support, thank you.

Andrew Dawson. The California Housing Partnership in Support.

Brian Sapp on behalf of Field Settlement Company mid 10 housing, Civic Well, and Council of Info Builders in support. Thank you.

All right, the opposition if anyone is opposed to AB 1485, please approach the microphone. Seeing no one, approach the microphone. All right, let's turn the phone lines. Moderator, please queue up those who are in support and opposition to AB 1485.

Thank you, Mr. Chair. If you are in support or opposition to Assembly Bill 1485, please press one followed by zero. One followed by zero at this time. Let's go to line 20. Please go ahead. Line 20, you are open. Line 20, are you muted? All right, let's go to the next call. Okay, line 29, please go ahead.

Sulok Ting with the Silicon Valley Leadership Group in support.

All right, thank you very much. All right, let's bring it back to Committee. Questions by Committee Members. Seeing no questions, no comments. Senator Durazo moves the Bill. But before we move on, in terms of the last Bill, thank you very much, Senator Laird, for asking for Clarification on BMRs. I am familiar with that acronym, except it was from the military and the M stood for Mother, so I don't know, I think it's different. Any event, so would you like to close?

Thank you.

No other participants. Queued up, Mr. Chair.

Respectfully ask for your aye vote. Thank you.

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

This is file item number 10, AB 1485. The motion is due, pass to the Senate appropriations. Umberg, Umberg aye. Wilk, Wilk no. Allen. Ashby, Ashby aye. Caballero. Durazo, Durazo aye. Laird, Laird aye. Min, Min aye. Niello, Niello no. Stern, Stern aye. Weiner. Six to two.

62. We'll put that on call. Thank you very much. All right. I do not see who am I looking for. Yes. Assemblymember Pacheco. Go ahead. You need to run to the microphone before someone else comes into the hearing room. Right. Thank you. Okay, in that Senator, excuse me. Assembly Member Pacheco was here and present. We're going to take up item number 21, AB 177.

Thank you, Mr. Chair. And thank you, everyone. It is my pleasure here to present Assembly Bill 177, which would ensure that all providers under the Healing Arts License are protected from hostile laws in other states with regard to their licensure and protects providers staff privileging in the hospital setting. Unfortunately, today, abortion providers and those who seek abortion are under attack, as well as those who provide and seek other services, such as gender affirming care.

However, one of the most important things we can do is to ensure that these services are accessible here in California and to ensure that the providers offering this care can continue offering it without fear. With me today to testify in support and to offer any technical questions is Molly Robson, Vice President of Government Affairs at Planned Parenthood Affiliates of California.

Hardy, thank you. Floor is yours.

Thank you. Good morning. Molly Robson with Planned Parenthood Affiliates of California. We represent the seven affiliates in the state who operate over 110 health centers throughout California. We're proud to sponsor AB 17 Seven to protect California's providers from out of state laws attacking comprehensive sexual and reproductive health care. It's been over one year since Roe v. Wade was overturned by the Supreme Court, and since, abortion providers and patients have faced an onslaught of new and unprecedented attacks.

Today, 20 states have enacted total or severe bans on most abortion services. And this number continues to change. As the legal landscape continues to change and bans and laws criminalizing abortion are popping up elsewhere. AB 17 Seven ensures that providers are not punished by being stripped of their medical licensure or their self privileges for providing care to patients in line with their fundamental rights in the state would respectfully urge your support on AB 17 Seven today to protect patients access to care already.

Thank you very much. Others in support of AB 17 Seven, please approach the microphone.

Good morning. Genesis Gonzalez on behalf of Lieutenant Governor Lenny Kunlakis. In support thank you.

Thank you.

On behalf of CNMA and narrow in support.

Thank you. All right, anyone else in support? Seeing no one else approach the microphone, let's turn to opposition. Anyone in opposition to AB 1707? Seeing no one approaching the microphone, let's turn to the phone lines for those who are in support and in opposition of AB 1707.

Thank you. Mr. Chair, if you are in support or opposition to Assembly Bill 1707, please press one followed by 01, followed by zero at this time, and we have no participants queuing up.

Thank you very much. Let's bring it back to Committee. Questions by Committee Members? Yes, Senator Ashby?

No questions, just thank you so much for the Bill. Happy to move it.

Thank you.

All righty. Thank you. Okay, Senator Ashby moves the Bill. Would you like to close?

Yes. This Bill has received bipartisan support and I would respectfully request your vote.

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

Aye.

This is file item number 21, AB 17 Seven. The motion is due passes amended to Senate Appropriations. Umberg.

Umberg aye. Wilk. Allen. Ashby.

Aye.

Ashby aye. Caballero. Durazo.

Aye.

Durazo aye. Laird.

Aye.

Laird aye. Min.

Aye.

Min aye. Niello.

No.

Niello no. Stern.

Aye.

Stern aye. Weiner. Six to one.

Wiener aye. Did you want to?

Wiener aye.

Okay, there we go. Okay. All right. Just helping out. Seven to one. We'll put that on call. Thank you very much.

Thank you very much.

All right. I see Assembly Member Jackson here. Item number 12. AB. 994. And then item number 13, AB 1079.

Thank you very much. Mr. Chair, Members of the Committee, I appreciate being in front of you today to present AB 994, which will require that sheriffs and police departments do not post booking photos or mug shots of individuals when arrested on suspicion for committing a nonviolent crime unless the individual is deemed an imminent risk to others or the public.

A judge orders the release of the individual's image based on an articulated law enforcement interest, or there is an exigent circumstance that necessitates the dissemination on the individual's image due to an urgent and legitimate law enforcement interest. This Bill is an LGBTQ caucus priority because in the event of a booking photo is used, the Police Department or sheriff's offices are to use the name and pronouns provided by the individual arrested.

Additionally, a Police Department or sheriff's office may include other legal names or known aliases of an individual. If using the names or aliases will assist in locating or apprehending the individual and reduces or eliminates an imminent threat to an individual or to public safety. Lastly, AB 994 will now require that booking photos be taken down from social media after 14 days after being initially posted.

Actually, this February, the Utah State Senate voted unanimously to prohibit police from publicly releasing mugshots at all until a person has been convicted of a crime. AB 994 is about providing the right balance, ensuring that everyone is safe and that justice is upheld. I respectfully ask for an I vote. I have no witnesses.

Anyone in support of AB 994 wishes to testify in support. Please approach the microphone. Seeing no one approach the microphone, let's turn to opposition. If you're opposed to AB. 994, please approach the microphone.

Morning, Mr. Chair Members. Thank you. My name is Ryan Sherman. I'm with the Riverside Sheriff's Association in opposition to the Bill, also in opposition on behalf of the police officer associations of Claremont, Corona, Pomona Palace, Verdes, Newport Beach, Upland, Santa Ana, Burbank, Murrieta, Arcadia, Riverside, Nevada, Fullerton, Culver City, California Reserve Peace Officers Association and the deputy sheriff associations of Monterey County and Placer County.

We're all united in our opposition to 994, which would significantly limit the ability of law enforcement to share booking photos with the public, impairing our ability to collect additional information regarding criminal suspects. Specifically, AB 994 requires law enforcement agencies that post booking photos of persons arrested for violent crimes to use only the names of the arrestees that the arrestees provide, regardless of their legal name. AB 994 mandates sworn officers in those instances provide knowingly false information to the public.

This Bill goes further by prohibiting the release of also known as or an aka to be included in the arrestee's name description with the photo, unless that person is a fugitive or intimate threat to public safety. If an arrestee prefers to be called Gavin Newsom or even Mickey Mouse, the law enforcement agency would be mandated under 994 to publish only that name in conjunction with the booking photo.

This author has asserted that AB 994 is needed to prevent law enforcement from dead naming transgender persons via the posting of booking photos on their social media pages. We are sympathetic to this concern and remain willing to work to find a workable solution, but this Bill is not the answer. 994 is extremely overbroad and applies to all persons arrested for violent crime, including robbery, rape, child sexual assault, and murder.

Public safety is best served by ensuring that law enforcement is able to collect as much information as possible about persons accused of violent crimes in order to investigate and determine whether additional victims exist and if other crimes have been committed. For these reasons, we remain respectfully opposed to the Bill and ask for your no vote. Thank you. All right, thank you.

Others who wish to testify in opposition to AB 994, seeing no one approaches the microphone, let's turn to the phone lines for those who are in support in opposition to AB 994. Thank you, Mr. Chair. As you stated, if you're in support or opposition to Assembly Bill 994, please press one followed by zero, one followed by zero, and one. Moment one is just queuing up with an operator. Anybody else, please hit one file by zero.

If you'd like testify in support or opposition to AB 994 and let's go to line number 34, please. Go ahead.

Craig Pulsipher from behalf of Equality California, in support.

Line 28, you are open.

Mr. Chairman, Members Corey Salzillo on behalf of the California State Sheriff's Association and the California Law Enforcement Association of Records Supervisors in opposition.

Thank you, Mr. Chair. No other participants are queued up. All right, thank you. Questions, comments by Committee Members. Senator Stern moves the Bill a couple of questions. First is, what is the penalty for violation?

That is up to the individual to be able to seek remedy if that happens to them. So there's no penalty in terms of the government doing something to a Police Department.

So it's a private right of action.

Correct.

And is there statutory damage?

That does not seek to address that in this Bill particularly. I don't know what the current law is and pertains to how it usually works.

Okay. Lastly, I'd ask you to consider if there is an articulable reason to use the person's dead name, that if the law enforcement entity can articulate a reason, a law enforcement reason or a public safety reason to provide the person's dead name, then I'd ask you to consider that as an amendment to the Bill. So, for example, if someone is a bank robber, for example, and while the robbery is in the past, there may have been other robberies that are still at issue.

So if you would, I'd ask you to consider if law enforcement can articulate a reason why they need to use the dead name that you consider amending the Bill to include that as well.

Sure, I think there's two things that I think the opposition was wrong in. And number one, this Bill does not pertain to violent crimes. So this is only in the case of nonviolent crimes. And there are measures in place that says that even in a nonviolent crime, even when that's in the case, if the individual is deemed an imminent risk to the public, if a judge orders the release of the individual's image and also their name.

And also police and sheriff's offices can also use their dead names if it would help to provide for the individual's arrest. And also if they can articulate other legal names or aliases of an individual, if using the names or aliases will assist in locating or apprehending the individual. So we provide many of those exceptions to making sure that it's not being used as a deceptive tool. But we've taken all those into consideration, and we believe we have a balanced approach.

But if there's additional language, I'm more than happy to take it. However, I haven't even received any language from law enforcement, and this is maybe the Fourth Committee that we've gone through.

Let me give you an example and ask if you'd consider it. The example would be a lawyer who rips off his clients. And so while that lawyer may have been indicted for fraud, there may be other victims that would know that lawyer by that lawyer's dead name, even if that lawyer still is in custody and there's not a threat of continuing harm. But there is an opportunity to address and potentially indict that lawyer for other crimes. So I'd ask you to consider that circumstance.

Oh, absolutely.

All right.

Makes sense. And however, we can be helpful. People can provide me with that language to making sure that is done correctly. I'm more than happy to.

All right, thank you. Yes? Senator Ashby.

Sorry to interrupt. Should I withdraw the motion then?

No, I think Assembly Member Jackson has indicated that his willingness to be able is an amenability to additional exceptions.

Absolutely.

All right. Senator Ashby?

Yeah. I just wanted to say that in the comments, I think that a couple of things. First of all, I appreciate the input from the chair, but also, I think in your own analysis here, it says that the existing law allows a person to bring a private right of action already for $1,000 penalty for each violation.

But the way I read, your rule was for specific performance, meaning an individual could reach out and that would force the entity to take the images down from and it only applies to social media. Right?

It only applies to social media.

So the Megan's law, all that stuff, that would still stay intact. We're not seeking to address any of that. And also doesn't apply to any.

Police departments can still put it on their own websites.

Sure. Just any social media that they would use would have need to come down. And if for some reason they missed one, then this action would be specific performance as I read it. Okay. Thank you.

Yeah. All right. I think perhaps that may apply to a different section of law, but we should discuss. All right, Senator Stern has moved the Bill. Questions? Comments? Seeing no other questions or comments, Senate Member Jackson, you care to close.

Respectfully ask for an aye vote.

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

This is file item number 12, AB 994. The motion is due pass the Senate Appropriations. Umberg.

Aye.

Umberg aye. Wilk.

No.

Wilk no. Allen.

Aye.

Allen aye. Ashby.

Aye.

Ashby aye. Caballero. Durazo.

Aye.

Durazo aye. Laird.

Aye.

Laird aye. Min. Niello.

No.

Niello no. Stern.

Aye.

Stern aye. Weiner.

Aye.

Weiner aye. Seven to two Members missing.

Seven two. All right. We'll put that on call. For housekeeping purposes, I see Assemblymember McKinnor present, and I understand you're going to present Assemblymember Holden's Bill, and then you have a Bill. So what we'll do is we'll have you present Assemblymember Holden's Bill. You can present your own Bill then, and then we'll continue in file order. All right. Assemblymember Jackson, floor is yours for AB 1079.

I appreciate sneaking up in here before the Member. I'm also introducing AB 1079, seeking to create a hate crimes intervention program within the California Department of Public Health to implement research-based community interventions in conjunction with leaders and organizations and communities most impacted by hate crimes. This Bill will also empower the California Civil Rights Department to create and carry out statewide media campaigns to discourage discrimination against individuals or groups based upon immutable characteristics.

Overall, reported hate crimes events in California increased 20.2% from last year's data. As observed by the California Department of Justice, there were 1,763 events in 2021 to 2,120 in 2022. As a matter of fact, in 2022, California saw a horrifying repeated rise in hate crimes, surpassing the historic rise in these numbers seen in the 2021 data. Reported hate crimes targeting black people remained the most prevalent and increased by 27.1 from 513 in 2021 to 652 in 2022.

Antisemitic hate offenses rose 24.3% from 152 in 2021 to 189 in 2022. Hate crims events motivated by sexual orientation bias increased 29% from 303 in 2021 to 391 in 2022. Alongside historic increases in hate violence, white supremacist propaganda distribution incidents and events reached all time highs in the United States in 2022. In fact, California had the 6th most incidents of white supremacist propaganda distribution in the country, nearly doubling to 2021 numbers.

California was second in the country in white supremacist events and third in incidents of white supremacist propaganda distribution on college, University and K through 12 school campuses. While there are serious efforts to combat hate crimes from the California Department of Justice and through other community investments, there has been little efforts through a public health lens on a statewide level. Racism is a public health crisis in California, with 37 declarations by our local governments or governing bodies, which is the highest nationwide.

These declarations, however, do not outpace the harm caused by the nine unpredicted spikes in hate crimes and white supremacist propaganda. To halt the growing tide of bigotry, hate, and dogmatic ideology, California must go on the offense against bigotry with AB 1079. I respectfully ask for an aye vote.

All right, thank you. Those wishing to testify in support of AB 1079, please approach the microphone.

Senator and Members, I'm Greg DeGiere, representing the Arc and United Cerebral Palsy California Collaboration. We support the Bill and thank Dr. Jackson for his leadership. As to the first provision of the Bill, the support for victims, the research backs up the common sense observation that, particularly for mental health issues, that crimes committed because of bias are more traumatic and the trauma lasts longer than identical crimes committed for other reasons. And there's certainly a need for the kinds of support that this Bill proposes.

The second part, I'll just note that the racism certainly is a public health crisis, as Dr. Jackson's pointed out, so is ableism, so are a lot of the other isms, and this gets at the underlying causes that we know that we need better policing of hate crimes laws, but policing can never be enough. We need a change in public opinion and observations, and this Bill aims in that direction. We were supportive amended.

We've been convinced by our conversations with Dr. Jackson and his staff and the Department, and also by your analysis, that we can trust that the Department will use the authority that the amendments that you've given us will allow to look for data to make sure that the disability community is not excluded from the Ads ad campaign. We support the bill.

All right, thank you very much. Others in support of AB 1079, please approach the microphone. Seeing no one approaching the microphone except for one.

Mr. Chairman, very brief, Cliff Berg on behalf of the Jewish Public Affairs Committee, we're in support in the Bill and urge your aye vote. Thank you.

Thank you. All right, anyone else in support of AB 1079, please approach.

Crystal Acidos here on behalf of the California Academy of Child and Adolescent Psychiatry and the California Faculty Association in support.

Thank you. All right, seeing no one else approach, let's turn to the opposition. If you're opposed to AB 1079, please approach the microphone. Seeing no one approaching. Moderator, please turn to the phone lines for those who are in support and in opposition AB 1079, thank you.

Thank you, for your support or opposition of AB 1079, you may press one and then zero. We will go to line 15. Your line is open.

Good afternoon. Rebecca Gonzales with the National Association of Social Workers, California Chapter, in support.

Thank you. Line 37, your line is open.

Yes, my name is Linda Muscle, I'm from Lincoln, California, and I strongly oppose this Bill.

Thank you.

Line 38, your line is open.

Hi, is that me?

That's you.

Yes. I'm just curious why you are not following your.

Thank you very much. All right, moderator, next caller.

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

Okay, thank you. All right, let's turn to the Committee. Questions, comments by Committee Members? Senator Stern.

Yeah, thank you. Thank you so much for the Bill, Assemblymember. Would love to be added on as a co-author if there's an appropriate occasion for that. My mechanics, just my one question, was in terms of implementation. We know this sort of nested in this broader Commission on State of Hate Civil Rights Department. Some of the acts are isolated, but there are sort of broader threats. There are extremist activities that are tracked by the state in some ways.

So, like the State Threat Assessment Center, for instance, tracks the rise of neo-Nazi groups in our backyard, in your backyard. We know that we want CDPH to get out ahead of this and do the sort of preventative work. Is this going to feed back into that broader context, too, if patterns start to emerge or if there's sort of information gathered or ways to bolster any of the organized efforts around this, our efforts to combat the organized efforts?

I wanted to make sure there was some sort of feedback loop, and it looks like it's already authorized under current law, so it may not even need a change. I just didn't know. I don't want it to be so walled off from the broader efforts that DOJ and OES are not privy at least to the work.

That's a very good point and causes me actually to think about ways to making sure that we close the loop and not just assume that they will talk. There's no doubt about that.

Alright, thank you. Senator Min.

I want to thank you for bringing forward this Bill. And I'm sorry I missed the earlier discussion, but I think this is important. We are seeing an alarming rise in hate of all kinds. And I don't think we have the documentation. We don't have the appropriate responses. I think it's safe to say we are facing an epidemic of hate crimes and things that don't rise to the level of crimes. And too many people feel licensed right now.

They've been provoked, encouraged by a lot of national leaders, to act on instincts and beliefs that really should not be acceptable in the social sphere. So I would like to be added as a co-author at the appropriate time and if the Bill has not already been moved, would like to move the Bill.

All right. Thank you. Other comments? Questions? Senator Min has moved the Bill. Would you like to close?

Respectfully ask for an aye vote.

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

This is file item number 13, AB 1079. The motion is due pass to Senate Appropriations. Umberg. Umberg, aye. Wilk. Wilk, aye. Allen. Allen, aye. Ashby. Ashby, aye. Caballero. Durazo. Durazo, aye. Laird. Laird, aye. Min. Min, aye. Niello. Stern. Stern, aye. Weiner. Weiner, aye. Nine to zero, Members missing.

Nine, zero. We'll put that on call. Thank you. Thank you. All right, next. Assemblymember McKinnor Presenting AB 323. We have no opposition on file for AB 323. Assemblymember McKinnor.

Yes. Thank you Chair and Members of the Committee, for the opportunity to present today AB 323, authored by Assemblymember Chris Holden. So many homes in California are expensive for our lowest income families and residents. In an effort to promote home ownership opportunities for Low and moderate income Californians, the state has established pathways through affordable housing policies like the density bonus and local inclusionary zoning programs. However, these pathways can be redirected away from residents that were attended to assist to instead benefit private investors. Currently, developers may petition a local government to change a unit designation from owner occupancy to rental occupancy, even if qualified residents have applied to buy the home. The practical effect being that the state's affordable housing programs end up subsidizing investors instead of providing home ownership opportunities for those that would otherwise be unable to afford it. This exact scenario happened in Southern California. In 2020, two homes in Ensenadas built using density bonus programs were redesignated by the city from owner occupancy to rental occupancy at the request of the developer. The developer then sold the homes to a private investor, even though over 80 very low income facility families had applied to buy the homes. After learning that they were passed over for an investor, these families were just devastated because a home for them means security, a Nest Egg for the future, an opportunity to build generational wealth. So please join me in protecting these homeownership pathways instead of preserving a backdoor for investors to increase their profits. Working with developers to address their concerns, the bill has been amended to include 90 day window for qualifying buyers to submit application to developers to purchase newly constructed homes beginning from the date of final inspection.

Alrighty, thank you very much. All right, those in support? Any witnesses in support of AB 323. If you would line up, that'd be great.

Brian Sapp on behalf of Habitat for Humanity, California, in support. Thank you.

Others in support? Seeing no one else approaches the microphone. Those in opposition to AB 323. Seeing no one approaches the microphone, let's turn to the phone lines. Moderator, please queue up. Those who are in support and opposition to AB 323

Thank you, for your opposition or support of AB 323, you may press one and then zero. We will go to line 40. Your line is open.

Hi, good morning. I'm actually calling about AB 1414.

All right, next caller, please.

Good afternoon. My name is Gerlanda Guadetti. I'm a Staff Attorney at public counsel. We're a nonprofit pro Bono organization in Los Angeles calling to urge your support for AB 1414.

10-0

Okay, we got it. Assembly Member Kalra is here. He's smiling. Great. Okay, next caller, please.

We have no further support or opposition. Thank you.

All right, let's bring it back to Committee. Questions by Committee Members. Who moved the Bill? Senator Min moves the Bill. All right. Would you like to close?

I respectfully ask for an aye vote.

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

This is AB 323 by Assembly Member Holden. The motion is due, passed to Senate Appropriations Committee. Umberg, Umberg aye. Wilk, Wilk aye. Allen, Allen aye. Ashby, Ashby aye. Caballero. Durazo, Durazo aye. Laird, Laird aye. Min, Min aye. Niello, Niello aye. Stern, Stern aye. Wiener, Wiener aye. You have 10 to zero so far with a member missing.

We'll put that on call. All right. Next to your bill, file number 20, AB 1418. I believe that bill has no known opposition as well. All right, go ahead. And then just for housekeeping purposes, I see Assembly Member Kalra right here, so he'll be next. Thank you. Okay.

AB 1418 addresses local ordinance that are touted as a response to rising crime and encourage and oftentimes require landlords to evict tenants based on any criminal activity, even if that offense is minor or do not lead to an arrest. The US. Justice Department has recognized that these policies perpetuate residential segregation. These ordinance are oftentimes placed in low income areas with a large black and Latino population while crime rates have decreased. These ordinances can also be used on people seeking help from the police. A call for help to the police for a domestic dispute can be grounds to evict someone. Often, police are called out to a disturbance, and just the act of the police answering a call is enough to be considered a nuisance, and a landlord can evict on that alone. Black residents are four times more likely to be evicted under these policies, and Latino people were 30% more likely to face eviction, with 80% of these evicted were nonwhite. In California, one quarter of local governments have enacted a crime free ordinance. AB 1418 would prohibit a local government from enforcing or implementing an ordinance that would impose a penalty to a resident or landlord due to contact with a law enforcement agency. I also want to note that this bill does not prohibit a landlord from evicting a tenant due to criminal activity. This bill just clarifies that the landlord cannot be penalized for not evicting that tenant. I have here with me Pastor Sharon Green, who is the Executive Director for the Victor Valley Family Resource Center, and Marcos Segura, who is an attorney with the National Housing Law Project and will be available for technical questions.

All right, thank you very much. If you're in support of AB 1418, please approach the microphone.

Good afternoon, Councilman, Armed Chairman and Senators of the Judiciary Committee. I'm here on behalf of black and brown and underserved renters throughout California, urging your yes vote on AB 1418, which will put an end to the discriminatory housing policies throughout California's municipalities. My name is Pastor Sharon Green, Executive Director of Victor Valley Family Resource Center, and our agency works to empower unhoused and at risk people with skills and strength to survive and be self sufficient. Since 2009, we have opened 15 homes, provided 44,000 shelter nights, over 132 mills, and received over 80,000 calls for assistance with rental and utilities to stay out. On January 14, 2016, the City of Hisparia and San Bernardino County Sheriff's Department began harassing my clients by coming into our homes and having our clients, Lisa, Freddie Go on the ground to take pictures of any identifiable marks on their body, following them around the city while they are doing daily tasks such as buying groceries, using unnecessary traffic stops while they are headed to work, and many times causing them to be late and sometimes lose employment because of lengthening detainment. When I reached out to the city for assistance, they told me that they had the right to harass my clients and they were going to use the city's crime free ordinance to shut my homes down and put our nonprofit agency out of business. The City Council was quoted and are on record for saying, we want you people out of our communities based upon our skin color and calling our clients and me cockroaches. They began fining each one of our homes $1,000 a day with over $60,000 sighted per house.

Thank you, ma'am. Could you wrap it up, please?

Yes, sir. With that being the case, it took over six years with us filing a suit with ACLU to redeem us from this, and we have helped change these laws through several cities.

All right, thank you very much. Okay. Others in support, AB 1418.

Good morning. Kathy McBride with the Michelson Center for Public Policy in support.

Thank you.

Mark Segrego with the National Housing Law Project in support.

Thank you.

Anya Lawler, on behalf of the California Rural Legal Assistance Foundation and the Public Interest Law Project in support.

Thank you.

Andrew Dawson. The California Housing Partnership in support.

Thank you.

Good Morning, Mr. Chair and members. Gregory Kramer, on behalf of Disability Rights California. We're a co sponsor. Thank you.

Thank you. Others in support. Seeing no one else approaching the microphone, let's turn to the opposition. If you're opposed to AB 1418, please approach the microphone. Seeing no one approaches the microphone, let's now turn to the phone lines. Moderator, please queue up. Those in support in opposition to AB 1418

Thank you. In support of opposition of AB 1418, you may press one and then zero. We will go to line 16. Your line is open.

Good morning, Mr. Chair and Members. Nicole Wardelman, on behalf of the Children's Partnership in support.

Thank you.

Line 36, your line is open.

Good morning, chair and Members, Tina Rosales, the Western Center on Law and Poverty, proud co sponsors in support. Thank you.

Thank you.

Thank you. Line 15, your line is open.

Good morning. Rebecca Gonzales for the National Association of Social Workers California chapter in support.

Thank you.

Thank you. Line 41, your line is open.

Good morning. Gail Yen with Root and Rebound, a co sponsor and in proud support of AB 1418.

Thank you.

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

All right, thank you. Bring it back to Committee. Questions by Committee Members? Seeing none, Senator Durazo moves the Bill. Would you like to close?

I respectfully ask for an aye vote.

Thank you, Madam Secretary, please call the roll.

This is file item number 20, AB 1418. The motion is due, passed to Senate Appropriations. Umberg, Umberg aye. Wilk. Allen, Allen aye. Ashby, Ashby aye. Caballero. Durazo, Durazo aye. Laird, Laird aye. Min, Min aye. Niello, Niello aye. Stern, Stern aye. Wiener, Wiener aye. Nine to zero, members missing.

9-0. Put that on call. Thank you very much.

Thank you. All right. Next. Assemblymember Kalra, then Assemblymember Papan, then Assemblymember Petrie-Norris. If Assemblymember Petrie-Norris appears. All right, Senator, caller, the floor is yours. AB 1414, item number 15.

Thank you. Thank you, Mr. Chair. I want to start by thanking the Chair and Committee staff for working with my office, and I'll accept the Committee amendments. AB 1414 would protect consumers against predatory debt collection lawsuits by requiring debt collectors, debt buyers, and original creditors to produce and suit on a contract for consumer debt cases rather than common counts. The COVID-19 pandemics exacerbated financial hardships for Low income families, leading to missed Bill payments and increased chances of exposure to debt collectors and debt buyers.

Debt buyers are collection agencies who purchase past due debts from creditors, sometimes for pennies on the dollar, who oftentimes attempt to collect the debt under outdated causes of action, like open book accounts. These pleadings, also known as common counts, are subject to lesser evidence standards, evidentiary standards, and have helped collectors evade modern consumer protection laws in tens of thousands of cases. According to the Center for Responsible Lending, attorneys represent defendants in only 2% of debt cases, with two-thirds of all cases resulting in default.

Judgments that can garnish wages or seize bank accounts. AB 1414 simply ensures the contract that gave rise to the consumer debt claim is produced and sued on in court if the contract was not entered into. Individuals can sue on an open book account so long as they provide records of all debit and credit transactions that make up the alleged balance.

This Bill will close an exploitative loophole that has only driven people further into poverty and holds debt collectors, debt buyers and original creditors to the same evidentiary standards as every other business. Here to testify. In support is Danny Cando-Kaiser on behalf of the California Low Income Consumer Coalition and Eduardo Lopez, Policy Fellow with the Western Center on Law and Poverty.

All righty, thank you. Floor is yours.

Hello. Danielle Cando-Kaiser on behalf of the California Low Income Consumer Coalition. Co-sponsors of this Bill clique's legal aid members see their low-income clients get sued on common counts every day. These include the mom who lost her car, then her job when her bank account was seized, the grandmother who couldn't pay her grandkids tuition anymore because she was confused and overwhelmed by the court complaint against her for a debt she didn't actually owe. It is not right.

And it is part of a disturbing trend that's afflicting California's courts. Debt collection lawsuits today make up a staggering proportion of all civil cases. In California, a quarter or more of all civil cases are now consumer law debts. Sorry, debt lawsuits. In San Diego, it is at least a third. In 95% of those cases, consumers have no lawyer. And in two thirds of the cases, the court issues a default judgment without ever having heard from the borrower.

That allows the debt collector to seize that person's wage and the money in their bank accounts. Academics and journalists and organizations like the Pew Charitable Trust to the FTC all have observed that courts effectively have been turned into an arm of the debt collection industry. Members of this Committee, you know how overloaded our state courts are. This Bill would help by removing an out motive and obsolete practice that gives special treatment to debt collectors as opposed to everyone else.

The Bill would support low-income individuals who already. Have the odds stacked against them when they're hauled into court. We have discussed with the opposition and Members of this Committee a few places in the Bill where language might be clarified. And we're committed to continuing to work on those chair and Members, this is a good Bill and an overdue Bill. It would help financially vulnerable Californians and would return California courts to the business of adjudicating cases rather than providing special services to the industry. We urge your aye vote.

Thank you. Next.

Good afternoon, Chair and Members. My name is Eduardo Lopez, here on behalf of the Western Center on Law and Poverty. A strong supporter of AB 1414 and everyday low-income Californians face debt collection lawsuits based on their archaic causes of action known as common accounts. Too often, these cases involve original creditors or debt collectors who have or could have attained the original contract. But these debt collectors instead sue on common counts.

That's because as even AB 1414's opponents concede, common counts make debt collection cases easier to win without having to prove the merits of the clan public counsel. One of the co-sponsors of AB 1414 is one of the pro-Bono legal aid providers assisting consumers in California. Here is what Public Council attorney Elizabeth Gonzalez says about the need for this Bill one client I always think of was the survivor of domestic violence.

She was sued by both original creditors and debt collectors on three or four different credit cards, and each lawsuit claimed common counts. Rather than suing on the contract, a contract which was likely agreed to by the abuser in the client's name, this client could only understand Spanish. In one case, a debt collector provided a credit card statement written in English as proof of an account stated.

The collector's position was that since the statement had been mailed to her and she did not dispute it, she impliedly agreed to the account stated. Not only could my client not understand the statement, she had never seen it because her abuser controlled all of the mail. Had we not assisted, her, default judgments would have been entered against her in all of the cases. To be clear, a consumer may still be called, texted, emailed or written to.

The only change that AB 1414 would bring is that if a debt collector decides to sue in a case where there's a written contract, they need to follow the same rules as everybody else. AB 1414 is about removing the special treatment for debt collectors and leveling the playing field. I respectfully urge an aye vote. Thank you.

Thank you very much. All right, others in support of AB 1414, please approach. Seeing no one. Okay, go ahead.

Thank you, Chair, Members, John Chavan, California Nurses Association. In support.

Thank you. Those who are opposed to AB 1414, please approach the microphone.

Thank you. Mr. Chairman, Cliff Berg here on behalf of the California Association of Collectors. I find it interesting that everybody who is in support of this Bill talks about debt collectors. This Bill goes way beyond debt collectors. In fact, this Bill affects hundreds of thousands of California small businesses throughout the state.

What this Bill does is it would abolish a pleading process in California that has existed in California law for nearly 200 years, which are known as common counts. Common counts are the ability to bring an action based upon, as your Committee analysis says, the fact that goods or services were accepted and not paid for. This Bill seems, and the proponents seem to believe, that the world would be better if you could only sue based upon a written contract.

Unfortunately, hundreds of thousands of businesses in California hundreds of thousands of small businesses in California don't have a written contract with their customers. They engage in what, let's say my dentist does, which is they send you a Bill at the end of the month. You get the Bill, you pay the Bill, or you wait until you see what insurance covers, and then you pay the Bill. And then they send you another Bill.

Your pool man, your gardener, your landscaper, your dry cleaners, health professionals all use open book accounts to enter into a relationship with their customer and to get paid. This Bill would cut off the ability of hundreds of thousands of businesses. They are not all represented by collection agencies. They, as small businesses, have the ability to bring a common count today. And this Bill would end that practice. Why? What is this Bill seeking to accomplish?

We are concerned that whatever this Bill is seeking to accomplish, its real goal is just to take away the ability of thousands of California businesses to get paid for goods and services rendered. And if businesses can't get paid for goods and services rendered, the net effect of legislation like this is twofold. It means an increased cost to the consumer for credit, and it means limiting access to credit for consumers.

So the same dentist that you may go to today, who allows, if you wrap it up, please thank you. Send you a Bill at the end of the month will say, payment due at time, services rendered, which means consumers putting the charge on a high interest credit card.

All right, thank you.

You're opposed. Thank you.

Mr. Chair and Members. Cliff Costa, on behalf of the California Creditors Bar Association. Let me first apologize to the Committee. Our coalition letter did not get in in time to make it for the analysis. So apologies. Our organization, which is made up of lawyers who are acting on behalf of creditors, is very concerned about the Bill. We're very concerned about the Bill.

And I won't repeat anything that Mr. Berg just said, but if you read the actual language of the Bill, there are provisions in the Bill that are simply just unclear. Let me give you an example. Are credit cards covered underneath the Bill as a common count, something you can bring as a common count or not? The language in the Bill talks about that.

Whether or not the payment is due on initially on its face of the note or contract, while a credit card statement is not the initial note or contract, you have the terms and agreements that you receive. You may have signed up for an application 20 years ago. What happens, for example, if you have debt that occurred that you never go to a zero balance. And yet it occurred prior to the operation of the Bill starting on January 1, 2024.

And yet you continue to use your credit card and then eventually, in a year from now, stop making payments. Can my lawyers, our clients, bring a common count, or do they have to bring a breach of contract? It's those sort of questions in the Bill that we are pleased to hear that the sponsors of the Bill are open to considering refining in the language. But at this point in time, in addition to Mr. Berg's comments, we respectfully ask for your no vote.

Thank you. All righty, others in opposition to AB 1414, please approach microphone. Seeing no one approaching the microphone, let's turn to the phone lines for those who are in support and in opposition, AB 1414.

Thank you, Mr. Chair. If you are in support or opposition to AB 1414, please press 10 at this time. One filed by zero. And let's go to line 42.

Hi. My name is Shauna Reeves. I'm calling on behalf of Legal Assistance for Seniors. I strongly urge you to vote yes on AB 1414.

Thank you. Please go ahead. Line 37.

Yes, I'm calling from Lincoln, California. I opposed this Bill because of the small businesses can't afford it. Thank you.

Thank you. Give a quick final reminder, one followed by zero. If you're in support or opposition to Assembly Bill 1414, please go ahead line 43.

Mr. Chair and Members, Melanie Cuevas of the California Bankers Association, also in opposition to the Bill, align our comments with those stated before me. Thank you.

Thank you, Mr. Chair. We have no other participants queued up.

All right, let's bring it back to Committee. Questions by Committee Members. Senator Allen, do you have a question?

Well, I'd like know the practice of verbal promises associated with debt and transactions. It's an important part of business. We like everything more formal, I suppose, but all of us have engaged in handshake agreements and have carried through on them.

I guess I do have some of the same concerns that have been raised by some of the folks in opposition. I'd love to get a better I wish I'd reviewed this more carefully. We got so many bills. But I'd love to get a better sense of what exactly the Committee has been doing on this Bill and what the Committee's philosophy has been on ensuring that we're not disrupting an important aspect of the economy with regards to common counts.

I think that was a question of the chair. Sure. All right. Some of them are called let me just ask a few of the questions in terms of the opposition. So they raised the issue of a gardener. So, for example, a gardener who's been performing services for 10 years, the person who has hired that gardener stops payment. How does the gardener collect?

So this is the same question, the same confusion they try to insert in every Committee. Hearing. The answer is quite simple. If there's no written contract, the Bill doesn't apply. They can still use their open books. It's quite simple. If there's a contract, the contract needs to be provided, like with any other business. If there's not a contract, the open books, as is allowed by law, will continue to be allowed to be provided to show debts owed. It's really quite simple.

So is that a predicate, in other words, to pleading open book account? Do you have to plead that there's no written contract?

Yeah, and a lot of transactions, your gardener, whatever it might be, local dentist, you may not actually have a written contract to provide to say you're going to be provided services over a certain term of years and all that. So they just have to open their books. And that's what the current law, that is the current State of the law when it comes to open book accounts.

And so if there's a contract, if there is debt, really what this Bill is about is when debt is passed on to a debt collector and they have a contract with that creditor, they need to provide that contract. They can't just say, zero no, we're just going to sue under this open book accounts, which has a much lower burden for them to be able to get payment. It's treating the debt collectors like every other business. Any of us have a business and we have a contract and we want to sue, we'd have to show that contract.

So back to my question though, is that an element does the jury need to the finder of fact need to find that there is no written contract?

Yeah, because if there is a written contract, then it would have to be provided.

Okay, so the gardener who's trying to collect the debt would have to prove by preponderance of the evidence that there's no written contract.

They would have to yeah, and provide the open books.

That would show that what would be required in terms of open books back to the beginning of the relationship or the last year, or what would be.

The current State of the law, is that an open book is a detailed statement that shows all the debits and credits. That's the current State of law. We're not changing that. That's what an open book account is. And that's what's required if you want to collect debt on an open book account, is to show all the debits and credits

Going back to the beginning of the relationship or going back to the point in time where the creditor is trying to collect that portion of the debt.

It's going back to the beginning of the relationship, but that's the current State of the law, so we're not changing it. So if folks have an issue with that, then we can write another Bill regarding that. But the current State of the law on open book accounts is the initiation.

Of the relationship, and I think I may have misheard this, that currently proving an open book account is a lesser evidentiary standard. Is that right?

That's correct.

It's not a preponderance. What is it for an open book account now, if it's not a preponderance.

Let me get my notes here. So the pleadings, also known as common sense, are subject to lesser evidentiary standards because they don't have to show the contract and any contract. So even if a contract does exist, they just have to show that. They just have to show the open books the common counts, which is designed for small businesses. And so that's a lesser standard of evidence than having to show a contract.

Right, because having to show the contract will then show what exactly the relationship is between the debt collector and the creditor, as opposed to just the open books. The open books common accounts is designed for that small business, not designed for debt collectors.

The open books is designed for the gardener, it's designed for the flower shop, it's designed for the the market down the street that you might have an account which because they're letting you buy stuff and you have to pay them back and they have an open book. That's really where it comes from, kind of back in the day, the idea that you can have to keep a log of what you owe.

And so the lower standard is not having to provide that contract, which is what every other business would have to do. You just have to show an open book that, okay, some debts are owed. That goes to the point of one of our witnesses saying, well, just showed a credit card statement, that's enough. Well, that's not enough. You have to show the contract that actually shows what the relationship is between the creditor and the debtor and the debt collector, and thereby shows what relationship the debt collector has with the person that may allegedly owe the money.

So with respect to collecting a credit card debt, what contract would need be provided in terms of credit card debt?

Well, there's the original contract that the consumer files. And then if there's a contract between the credit card company and the debt collector, that would also have to be provided.

Okay, right.

Because there's obviously a contract. They're not doing that on an open book. Those are all contracted relationships. They would have to provide that contract, not just say, hey, we have a credit card statement here that shows you owe. No, like any other business, they'd have to provide contract just like any of us would have to with businesses that we would owe.

It's having them play by the exact same rules as every other business and still allows for common accounts, for open book to be used by small businesses if that's the only relationship they have.

All right, I'm a bit confused. I'm a bit confused and I don't know what this bill's journey is next, whether it's to appropriate. I'm going to support the Bill nexus to the floor. I think we still need to work because there's still some challenges. There are challenges collecting debts by the consumer, by the small business person. And I understand your point. And your point being that in terms of the large entities, credit card companies that simply need to provide a statement, I think is what you're saying currently, right?

No. A large credit card company has a contract with the consumer, so they have to show the contract.

I think today, under existing law, all they need do is provide a statement.

The debt collector wouldn't have to necessarily show a contract between them and the credit card company.

Okay

And so it kind of cuts off that chain of kind of relationship, the contractual relationship. This would allow small businesses to collect their debt under common counts under the open books. And if a small business signs up with a debt collector to go collect their debts, then that contract will have to be showed.

So also, there was testimony that there's no proof of the merits under current law that a debt collector need not show on the merits of the case that there's a debt owed. Is that existing law?

The debt collector under the open Books would not have to it's a lower standard.

So there's no proof. Okay. I think I'm further illustrating my confusion that there's no proof of the merits. You simply submit something and then there's a judgment.

It's a lower evidentiary standard. So just by showing that a debt exists rather than the further step of.

Having to provide a contract I think Senator Stern had a question.

I don't want to add to the confusion, but is it that there's still a documentation requirement, but even within common counts, it's the pleading standards that's different, not the evidentiary standard. Am I getting that right?

It's an evidentiary standard. In terms of in the pleadings, though, it's about what kind of evidence needs to be provided.

Looks like do you mind? Through the chair. Go ahead, try to get from the opponents. Am I describing that the wrong way here?

I think you're correct. I think first off, just to clarify, this Bill does not just apply to debt collectors. Number two, a debt collector does have to prove their case to the court. The criticism that we've heard is that there are a lot of default judgments, which means the defendant doesn't show up.

But you still have to prove the court that the elements of, in essence, an agreement, the extensions of goods and services, the failure to pay goods and service, all that has to be proven to the court. And this Bill does add a new requirement on book accounts, which is the word all documents, which is not existing law. Just to clarify.

Does that answer your question, Senator Stern? Let's turn to Senator Min. I'll come back to you, Senator Stern all right, Senator Min, thank you.

And I think this is an important Bill in a complicated area. I'll confess. I think, like probably some other people in this Committee, I did not know anything about common counts prior to this Bill coming forward. But obviously we are all aware of the myriad of abusive practices that happen in debt collection and you are trying to address a very real and prevalent problem. On the other hand, I hear the complaints of opposition around how this could affect small businesses.

And I take your point of if you are actually a small business like a gardener, you almost certainly have some nexus, some written documentation to show a relationship between you and the borrower. I'm wondering if you might and I will just say I'll support this Bill, but I do think it needs some work going forward. But I wonder if you might consider taking out original lenders from this and just focusing on those who acquire the debt through the secondary market.

Well, this Bill is focused on debt collectors and debt buyers. But it creates the same, as I mentioned earlier, a small business. If they do hire a debt collector, then that contract would have to be showed. What this prevents is, for example, just providing a credit card statement and not all the transactions that make up the account in order to collect the debt.

And so what this does is actually puts the same kind of burden that's, again, on every other business where we're really just treating debt collectors and debt buyers the same way as every other business provide the contract. This is not affecting small businesses in the way that the opposition suggests.

I appreciate that. I guess I would say I will vote for this today. I Reserve my right on the floor. And I would encourage you to try to I think the problem you're trying to address is abusive practices in the debt collection industry and you're not trying to target the gardeners and small businesses and the dry cleaners that the opposition has targeted. So I guess my point is if you can figure out a way to narrow this so that it doesn't apply to those types of lenders, that would help me vote for this when it comes to assuming it gets out of this Committee.

And we have a Senator made amendments working with this Committee, working with prior committees to make that very clear. And we'll continue to work if there's clarifying language that's necessary, absolutely. But we've taken amendments. We'll continue to do so to make it very clear that this is not about small businesses and in fact allows businesses to continue to use common talents, which is really the key. You still want them to have the ability to get their debt without having to go through a more onerous process.

And there's a reason why we're not hearing from small business. We're hearing from debt buyers and debt collectors today is because what it's doing, it's really affecting them and their ability to go after debt. They should be able to go after debt in the same way as every single other business. And that's really quite simply what this Bill does. It doesn't impact at all the ability for small businesses to go after debt at all.

But it certainly muddies and clump because we all care about small businesses. And that's why this Bill was written and has been amended in a way to make it very clear that it does not impact at all the ability for small businesses to get the debt that they're owed, especially the small businesses, the neighborhood small businesses that really started the whole common know, the common counts legal standard to some extent.

Back to Senator Stern. I'm sorry. Senator Ashby. DId you have a question? All right. Senator Stern.

Thank you. That was my other question about the Bill and your statement just now was helpful. How much are small businesses now utilizing that sort of, I guess direct, I don't know how to characterize it, the direct collection process versus going through a debt collector. Maybe the proponents also know this more, but Bill takes effect, it's in practice, does a new industry have to sort of emerge to serve that small business that's not debt collection.

In other words, if the gardener doesn't really have time to go to civil court or wherever they've got to go to get this resolved, usually they want to have someone else do that for them as cheaply as they can to get that back. Maybe that's more about from the council's opinion. But they're really council with debt collectors. How do you envision it working? I guess small business utilizing the exemption you've already got in the Bill, that would help.

Well, yeah, most small businesses and I don't know the data as to what percentage. I think that typically it's larger entities, healthcare industry, whatever, that go to debt collectors because it costs money to go to a debt collector. And usually you get pennies on the dollar if you're selling your debt and so you're taking a big loss. But oftentimes is the case. I've seen it myself in situations in small businesses, they'll just send an invoice and say these are past due. Oh, here's a list of the three, four months. If it's a gardener, zero, you didn't pay march, April, May and June is owed now and that's enough there to sue on an open books account.

But they have to sue, I guess is my point.

Yeah, eventually, I mean, they can cut off their services and what have you, they can go to small claims. At the end of the day, you're 100% right. That usually it's small businesses that end up holding the bag when it comes to when services or when payments cut off. But this does not take away their ability to more easily go after the debt owed at all.

No, I understand that you've kept them the common counts approaches available to them, if it's just them acting as themselves, not through a collector. I'm always worried because of access to justice issues. A lot of the other things we have. How do we make sure that should this become launches, that it's seamless and that there's not sort of a gap where then they look at that as intimidating and they're like, you know what, I'll eat the three months and I don't want to go down to county.

That's not the way debt collection works. The businesses sell their debt. Once they sell it, they get their money, maybe 30%, 20% of what's owed. They cut their losses and now it's the debt collector. And that's why the debt collectors spend so much time calling and at times harassing folks to get paid, because they just paid for that debt and they want to get their money back and try to get 100% of the debt back and make money off it. So the small business has already made their contractual relationship with the debt buyer or debt collector.

Right? No, I get that by cutting that extra layer out, which this would do, and just sort of free up the small business to look after their own interests and not get sort of wrapped up in this whole other industry, which I agree you should be pushing back on.

I'm going to support the Bill, and I'm glad you're diving in here and educating all of us on this because, again, I don't know this area clearly as well as you or some of the others here, but it's just playing that out to see what the world would look like under this without that extra layer. I get that the case itself would be expedited, but you still have to make some kind of filing, so you need to retain some kind of counsel or you could represent yourself. I don't know.

For most debts, it's small claims court. If you're a small business, right, and so you can't even have a lawyer.

Small claims court process.

Small claims court process is typically where a small business would go or they would sell their debt to a debt collector. And those are basically their options. And what we're saying is, once a debt collector or debt buyer has it, they should provide the contract just like any other business relationship. Now, a contract exists where maybe it didn't exist prior, and by doing that, it puts it on a level playing field in terms of what's required of the business of the debt collector.

Senator Ashby yeah, it's more complicated than it appears on its face. I understand that and I think I'm going to support it today, too. But I can tell you got some more things you're going to work on before it comes to the floor. And I'll look at it again, then and I think one of the sort of questions I have for you is I see that your Bill is targeted towards the debt collectors themselves.

But is there a way to sort of protect the small businesses inside of that process? Because what I'm hearing from my colleagues is our concern that you're taking away an avenue for small businesses. I mean, they don't want to sell that debt because that's at a loss for money. If they could afford or have the wherewithal to take each of those individuals to small claims court, presumably they would do that because they would then get a higher rate of return on the services that they rendered.

So there's a reason that they're selling the debt and it's usually because they don't have another system in place. They don't have in house counsel, they don't have their own in house debt collection. So is there a way to exempt sort of small business relationships inside of this Bill that you have put forward here?

Just something to consider and think about, a way to protect, especially in California where so many of our small businesses are also people who feel intimidated by a court system, people who don't want to deal with lawyers in General or legal forms and we want them to be successful. And I know that's not the goal or aim of this Bill, but maybe there's a way you can carve out small businesses that enter into those contracts with those debt collectors.

Well, I think that that's a very large percentage of ultimately we do protect small businesses by allowing them to continue to use common counts. And so as opposed to the opposition comments that we're getting rid of common counts is false. It's completely not true. And that's the greatest protection for small businesses. It still allows them to use that.

And if the small business has a contract, even better, they can provide the contract and all the proof of debt owed at the point at which they sell to a debt collector. Now they've sold that debt to a debt buyer or debt collector. And that's where we want to make sure that if a consumer is being if debts owed are being sought by a debt collector, that's a very different scenario than when the small business is going after that debt.

And if a small business owner goes to small claims court, they should be compensated 100% for all the debt owed. And this will still allow for that. But you're right, it's a business decision for that small business owner to say, do I have time to go to small claims court? And those are all decisions that any small business has to make when operating in business.

What losses are you willing to take and which ones are you going to fight for and go to small claims court and which ones are you going to file to a debt collector? And those are all part of the. Process and we don't take any of that decision making or power away from small businesses at all.

Chair, I don't know if do you think there's a way that through the chair, if there's a way quickly to exempt small businesses, I think that's what my colleagues are asking for. I don't know if maybe you had a thought.

I just want to clarify just to be clear, Mr. Berg okay, you can clarify. Clarify statement gets any made that debt collectors buy these debts from small businesses. Debt collectors in California are third-party assignees. They represent the actual small business. They don't buy the debt. The original creditor. The small business still owns the debt. The third party assignee is representing the small business and as part of the contract with the small business gets a percentage of the recovery. But they are acting on behalf of as the agent of the small business. They're not a debt buyer. All right, thank you. I'm not sure that that quite resolves the issue.

Yeah, well, it actually kind of proves the point of why I think small businesses should be exempted out.

All right. Other questions or comments seeing Senator Durazo? I'm sorry.

Yeah, I mean, I'm thinking about it also as a consumer, right? Because we want the protections against the debt collectors who are always harassing or some who use very tactics that are harassing the consumer. So they have to have a higher they should have a higher threshold of doing business. Small businesses are just I see as just being put out there as an excuse for debt collectors not having the threshold that they should have when they go out and try to collect the debt.

And so it's pretty clear to me small businesses voluntarily can use the small claims court. They can hire or enter into a contract with debt collectors however they want to do it. It's not taking away their right or their ability to collect anything that's owed to them. This is simply saying if you're a debt collector, you have a higher threshold. You have a higher threshold to be able to prove that when you go out and try to collect that you have an actual contract in place. So I support fully support your Bill.

All right, thank you. Is there a motion, Senator Durazo moves the Bill. Let me go back and address a few points. First of all, Assemblymember Kalra, you have devoted your professional career to giving voice to those who have no voice. And this appears to me to be a continuation of that effort to give voice to those who have no voice. So thank you for that, number one.

Number two is that having served on the board of the Public Law Center representing those who are indigent, I am aware that those service providers, whether they be gardeners or pool service folks or any service provider, sometimes not documented, are wary of the system in General. And so when they avail themselves of, for example, coming to the Public Law Center because someone has stiffed them, knowing that they're undocumented and they may never collect that debt, that's a challenge for them.

By requiring another element of proving that there's no written contract, I am concerned that we're then elevating the burden for the small business person to prove there was no written contract. Because often with those service providers, there is no written contract. They say we will perform certain services for an unlimited period for a certain amount of money. And it is sadly not uncommon that people stiff them.

And so I think I've heard the concern of a number of folks that Visa didn't very often come to the Public Law Center for assistance in collecting debt, but small business people did so before this comes to the floor. If that's the next stop, I'm in the same position as Senator Min. I'm going to support the Bill today, but I'm not committed to support the Bill on the floor unless we have addressed this issue.

So, for example, by providing all the books and records, that's a huge burden on somebody that's had a relationship for 20 years. So we need to fix some of that. And with that, I'll ask, would you care to close?

No, I appreciate that. Look, this is a consumer protection Bill that takes zero rights away from small businesses. It simply says that a contract must be provided. And all they have to do in the pleadings, they can indicate whether instead of showing a contract, if they're a small business, they just show the open books. And then if there's no contract, that's the extent of what they have to do is just show the open books. If there is a contract, then it must be provided.

And I think we have to separate this. Small businesses that are oftentimes paraded around as a way to stop good consumer protection bills. This is not about small businesses. This is about once a small business decides to enter into a small business, just has to show the open books. Once they decide to enter in a contractual agreement with a debt collector or sell their debt to a debt buyer. Now there's a contract like any other business.

That contract needs to be provided if you're going to go after a consumer for the debt owed. And in terms of whether all the documents or all the debt and creditors, again, that is not anything about this Bill. That is the current State of the law that requires it's simply restating the existing requirements for suing on an open book account. I'm not making that up. It's existent.

So if there's a desire to change that, we're a Legislature folks can introduce legislation to change the requirements on open book accounts and that would be a novel issue that we can look at. And so that's not something that can be changed in this particular piece of legislation, because this legislation is just reiterating the current State of the law.

But on every other point, to make it very clear on language, to make it very clear that small businesses still have every opportunity to use the open book account, we've taken many amendments to do that. We're more than happy to continue to take amendments to make it very clear that this is not about small businesses ability to go after debt that's owed to them. It's really about the debt collectors.

And to the point of the opposition, the debt collector, there's a debt buyer that buys the debt outright. That's also a contract. And there's a debt collector that has a contract that says, okay, we get paid a certain percentage that should be provided. The consumer should know what that contract says. And so once a small business is entered into that contract, and now they're letting the debt collector do I'm not going to say they're dirty work for them. That's important work to get their debt back.

But that contract should be provided if you're going to sue under it, as opposed to allowing a debt collector or debt buyer to use a lower standard. If it's just a small business suing under open books, that's not what it's designed for. And I'm just asking that the debt collector and debt buyer be treated like every other single business. If there's a contract, it needs to be provided with that. I respectfully ask for an I vote.

Thank you. And I'm sorry to prolong this, but now you've just raised another question. The contract between the consumer and whomever is providing that service, product, whatever it may be, that's the contract that's at issue, correct?

Well, in some cases, if there is a contract between the debt collector and the business, small or big business, now that's the contract that's being sued.

And why is that relevant?

Because now that shows what the contractual relationship is that allows gives standing to the debt collector or the debt buyer to actually sue the consumer. And so now they need to provide that contract. Just like any other kind of contract that has multiple parties, you need to show the contract that shows the relationship that gives standing to that entity to be able to sue.

All right, I won't prolong this. All right, thank you very much. All right, Madam Secretary, if you call the roll.

This is file item number 15 AB 1414. The motion is due pass as amended. Umberg aye. Wilk no. Allen aye. Ashby aye. Caballero. Durazo aye. Laird aye. Min aye. Niello no. Stern aye. Wiener aye. Eight to two. One member missing.

8-2. We'll put that on call. Thank you. All right, next. Assemblymember Papan. You've been very patient. And next, then, after that will be Assemblymember Petrie-Norris. Assemblymember Papan is going to present item number 22, AB 246, as well as AB 727, if I understand you correctly.

Correct.

Okay. All right, let's go.

Some thoughts on the previous one, but I'll refrain for now. All right, so thank you, Mr. Chair. I just want to start by saying that we will absolutely accept the Committee's amendments and thank you for working with us. AB 246 takes a critical step towards protecting women's health and reducing the amount of PFAS in the environment by eliminating these harmful substances from our intimate products. These compounds have been linked to several health problems, including breast and other cancers, hormone disruption, kidney and liver damage, and immune system disruption.

In light of these findings, California has moved to eliminate PFAS class chemicals from clothing, children's toys, cookware, and food. Even with all our progress towards limiting our everyday PFAS exposure, our most intimate products, menstrual products, remain unregulated. In a recent study, 48% of pad, liners, pads and liners were tested, and they were found to contain PFAS, as were 22% of Tampons. AB 246 has two main components.

First, it would prohibit any person in California from manufacturing, distributing, or selling a menstrual product that contains regulated PFAS. It will also prohibit unintentionally added PFAS above 10 parts per million beginning in 2027. So there's a phase in on the unintentional portion. California's pursuit for gender equity requires us to take action and ensure that feminine hygiene products are safe, clean, and free from forever chemicals. This Bill has enjoyed bipartisan support and is a priority for the women's caucus. With me to testify today is Jessica Gauger with the California Association of Sanitation Agencies who will talk about the environmental benefits.

Alrighty, thank you very much. Floor is yours.

Thank you, Mr. Chair and Members, Jessica Gauger with the California Association of Sanitation Agencies here in strong support of the Bill. This is a women's health issue, but it also is a significant water quality issue as well for public agencies that are being tasked with how to manage these chemicals. Moving forward, we think that we need to limit all nonessential uses of PFAS in consumer products that end up in our waste management stream, including in our wastewater and product bands are the way to do it. This is the most cost-effective way to achieve source reduction. And for these reasons, we support the Bill and would urge your aye vote.

Thank you. Others in support AB 247 to excuse. Strike that. AB. 246

Priscilla Quiroz, here on behalf of the National Stewardship Action Council in support.

Susan Little with the Environmental Working Group in support.

Brian Schaff on behalf of CNMA and NARAL in support.

Thank you. Thank you. All right, seeing no one else approaches microphone in support, let's turn to the opposition. Those who are opposed to AB 246, please approach.

Thank you. Mr. Chair, Members, Dawn Capkey on behalf of the California Manufacturers and Technology Association in an unfortunate opposed, unless amended position. To be clear, our members do not intentionally add PFAS chemicals to these products, full stop.

Unfortunately, our concerns really relate to amendments taken related to unintentionally added, specifically setting a threshold for unintentionally added, which includes trace impurities from the uptake of potentially some PFAS chemicals through soil, water, naturally, much less through aerial deposition as part of dust that may settle onto the manufacturing lines, equipment through distribution, storage, what have you.

And while our members certainly aim to address this and mitigate contamination throughout that supply chain, distribution chain, what have you, inevitably, there are challenges with doing that, given the ubiquity of these chemicals. We appreciate staff's time that they've spent with us, working through the concerns, trying to understand those, figure out a path forward. We certainly respect the author's interest in ensuring the safety, particularly given these products that clearly have very sensitive exposure pathways.

But the workability issues associated with this that then in turn lead to liability challenges for these manufacturers that are, again not intentionally adding these. These are trace impurities contamination. And even the studies cited, those thresholds that are being found in these products where they're not intentionally added is above 10 parts per million. So it begs the question, how far can manufacturers go to try to figure this out? We think it's helpful, the Language Committee provided to focus on SKU.

However, there are still some challenges in terms of how long do those penalties accrue for, given there's not certainty, is it, until a new product is put on the line and completely free of that. But even then, these manufacturers have to put out and put to retailers.

Thank you. If you could wrap it up.

And ultimately, we'd like to work on some of the workability liability issues, but the liability is still there for the fact that these manufacturers do not intentionally add these chemicals. Urge your no vote.

Thank you. Thank you. All right, others in opposition to AB 246. Seeing no one else approaches the microphone, let's turn to the phone lines. Moderator, please queue up those in support in opposition to AB 246.

Thank you. Mr. Chair, if you are in support or opposition to Assembly Bill 246, please press one filed by zero, one filed by zero. And let's go to line 46. You are open. Thank you.

Chair, Members. Max Perry on behalf of the City of Camarillo in support. Line 47, you are open.

Good afternoon. Christina Mahabir with California Spence Waste in support. Thank you.

Please go ahead. Line 45 Philip Vanderclay with the Los Angeles County Sanitation Districts in support.

Thank you. We have no other participants queued up.

All right, let's bring it back to Committee. Questions by Committee Members seeing no questions or comments, is there a motion? No. Oh, Senator Wilk. I'm sorry, Senator Wilk.

I'm supporting the Bill today, so I just want to say that right out front, I've never even heard of PFAS until a couple of years ago. I think the federal government lowered the standard, I believe. And I have a water district that now has to address that issue. Is it 10 parts per million? What's that based on? Do you know?

Well, you mentioned you have a water district.

Right?

Got to contend with it. Water, you can only have 0.2 parts per trillion for drinking water. So I bring that up just to show you that there's a comparison here. 10 parts per million we think is reasonable in clothing. In General, it's 100 parts per million. We feel, with the intimacy of these products, and you can test as Low as 10 parts per million. It's a reasonable standard, especially given the harm that can be caused by these intimate products.

So we really did try to strike a balance and recognizing that upstream could be a little more difficult. We really felt that, hey, let's give a break. Let's make it feasible. So let's get a three year phase in so you really know what's coming in your upstream, where you're ordering materials from, and it'll give you some time to make sure that you don't have it in there.

So we really felt between 100 for your average clothing and 02 per trillion for drinking and ingesting, we really felt that 10 parts per million was reasonable. As I said, you can test for it, too, so it's workable.

I'm almost done. So what you said, which I don't hear a lot of in this building, is you went for a solution that's feasible. So I want to thank you for that.

My pleasure.

Anyway, Senator, happy to support the Bill today.

Thank you, sir.

All right. Thank you. Other questions or comments? Is there a motion, Senator, Durazo moves the Bill? All right, thank you very much. Just a note is that this is Judiciary Committee, and I didn't hear anything with respect to the penalties, which is the area of our jurisdiction. Other Members may be much more informed as to the appropriate levels of PFAS. I don't know.

But I'm going to support the Bill because I think that we've come to a place where we've provided appropriate sanctions to change behavior if needed be changed. All right. With that, Madam Secretary, if you would call the roll.

This is file item number 22 AB 246. The motion is due passes amended to Senate Appropriations. Umberg aye. Umberg, aye Wilk. Aye Wilk. Aye Allen. Aye Ashby. Ashby. Aye Caballero. Durazo Durazo. Aye Laird. Laird. Aye Min. Min. Aye Niello. Stern. Stern. Aye Wiener. Wiener. Aye.

All right.

9-0. Members missing. 9-0.

We'll put that on call. Next AB 727 by assemblymember Weber. And as I understand it, you're going to be presenting so floor is yours.

I'm on a PFAS roll. It's my pleasure to be here. On behalf of Assembly Member Weber, the author will be accepting the Committee's amendments. I'm here to present AB 727, which prohibits the sale, distribution and manufacturing of cleaning products containing PFAS. So the Environmental Working Group found that approximately 50% of industrial grade floor polishes, which are used in public buildings, schools and commercial offices, contain PFAS. And one in six household cleaning products also contain PFAS.

PFAS floor polishes can expose janitorial workers and the public to airborne PFAS. This also enters wastewater when floors are mopped and cleaned. For these reasons, AB 727 prohibits the sale, distribution and manufacture of cleaning products containing PFAS chemicals. The Bill phases in lower thresholds of PFAS in products from 2026 to 2028.

AB 727 also authorizes the Attorney General, City Attorney, a county council, or a District Attorney to bring an action against an entity that violates the provisions and imposes civil penalties not to exceed 5,000 for a first violation and not to exceed 10,000 for each subsequent violation. The Committee amendments specify what constitutes a violation, place a cap on the penalties that can be accrued, and outline when a retailer is liable.

I'm joined here today by the bill's sponsor, Susan Little on behalf of the Environmental Working Group and Jessica Gauger on behalf of the California Association of Sanitation Agencies. First up, Ms. Little.

Thank you very much.

Thank you Senators. Appreciate the opportunity to be here today. I'm Susan Little, I'm with the Environmental Working Group, which is one of the co sponsors of AB 727. As you know, PFAS are called Forever chemicals because they don't break down in our environment and they build up in our blood and organs. They're linked to a range of serious health harms. And at this time, there has been no safe level of PFAS exposure that's been identified. In fact, and unfortunately, yesterday, the US Geological Service has announced that based on their testing, 45% of US tap water contains PFAS. Now.

PFAS are used in a wide range of consumer products, and the Legislature has already acted to remove PFAS from many of them. All of these efforts and this Bill prohibit the entire class of PFAS chemicals, define PFAS as chemicals that contain at least one fully fluorinated carbon atom. And this definition is consistent with the definition of PFAS used by other states and state agencies and states around the nation.

The Environmental Working Group reviewed hundreds of company websites and ingredient lists of floor cleaning products and maintenance products and found that many of them do contain intentionally added PFAS. Not even talking about contamination. Intentionally added PFAS. We even discovered that one popular floor product contains PFOA, again, intentionally added PFOA, a highly toxic PFAS that manufacturers had, at the EPA's request, voluntarily phased out decades ago.