Assembly Standing Committee on Appropriations

Please note that any written testimony submitted to the committee is considered public comment and may be read into the record or reprinted. The hearing room is now open for attendance. All are encouraged to watch the hearing from its stream on the Assembly website at Assembly CA gov today's events, we encourage the public to monitor the Committee's website for updates. We will accept public comment on any Bill placed. We'll just have public comment on the bills that will be before us today.

The committee will look forward to the two bills that will be presented. Let me just at least also remind the public, as you came into the hearing room today, the Sergeants directed your attention to the rules for public attendance and participation which were posted outside the door. I encourage Members of the public who are in attendance to be aware of and observe those rules.

Please be aware that violations of these rules or other violations of General courtesy of decorum may subject you to removal or other enforcement processes. With that, let's move to establish a quorum. I do believe we're just one more short, one shy. So let's move as a Subcommittee and take up the first Bill before us. And that's SB 799 by Senator Portantino. That is a do pass recommendation. Senator, floor is yours.

Thank you, Mr. Chair and Members. I'm pleased to be presenting SB Seven Nine Nine, which would restore unemployment benefits to workers who are unemployed due to participation in a trade dispute. And it would kick in after two weeks. Obviously, those of us who drive around California, and particularly in Southern California, we see hotel workers, nurses, fast food workers, writers, delivery workers, actors, city and county workers, all striking. And frankly, it's concerning. There is a point in time right now where there's significant unrest within our workforce.

People are concerned about business models, AI, other concerns about displacing traditional workforce jobs that have been in California for some of them a century. And it's unprecedented. So I know we want to talk about the fiscal impacts of this Bill. So, yes, it would afford those workers unemployment insurance. It's important to know that from 2012 to 2022, California had 56 major strikes. Of those 56, only two lasted more than two weeks. And so that should put this in context.

We're not talking about a significant hit to the Fund, but we are talking about a significant benefit to the worker. And I think that's what's important. If we get people through a labor dispute and back to work, the overall health and welfare of the economy benefits. Obviously, if workers have wages commensurate with their talents and their skills and are paid commensurate with the opportunities in our 2023 economy, they're going to be better consumers, and that will make the economy overall healthier.

So protecting the workers ability to strike, to put food on their table and pay their rent, I think, is in the collective best interests of all of us. And so with that, I have Megan Stubers on behalf of the Writers Guild of America and Sarah Flox on behalf of the California Labor Federation, and it was the federation who brought this Bill to the forefront and respectfully ask for you to hear them out.

Thank you. Welcome. I appreciate your leadership in this area. Floor is yours.

Thank you, Mr. Chair and Members. Meagan Subers on behalf of the Writers Guild of America, West. The Writers Guild represents about 13,000 Members in California. These are writers for TV shows, movies, video programming, news programming, and 13,000 of their Members are here in California. As we know, WGA Members are currently on strike and we think can serve as an example of why this Bill is so important for all working people in our state. We're on about a day 128 for the writers strike. Right now.

They've been relying on strike loans, mutual aid, philanthropy, second and third jobs to pay for food, gas and rent. One studio Executive anonymously commented to a reporter in July that the companies were waiting until fall or winter to make a deal. Their end game, they said, quote, "is to allow things to drag on until union Members start losing their apartments and losing their houses," end quote. Access to unemployment insurance for striking workers is the law in New York and New Jersey.

It's been the law in New York for decades. And workers in California should be able to exercise their right to strike without losing their homes or facing financial ruin. And that is what this Bill is about for all working people in California. We think it's time for California to catch up and meet the demands of the time.

The writers may be the current example of workers who need it, but they are also the voice for the workers going forward who will need this protection if they make the very difficult decision to strike. And so, for those reasons, we ask for your support of this Bill today. Thank you.

Mr. Chair and Members, Sara Flocks, California Labor Federation. And I wanted to focus on the fiscal aspect. Expanding UI to strikers will not change the solvency of the UI Fund. It will have a very minimal impact.

And I want to put this into context. The amount of striking workers in the past and currently pales in comparison to just the average monthly claims of the UI Fund. Now, there is 157,000 workers laid off on average a month in California. In 2022, the UI Fund paid out $5 billion in UI benefits. The prediction from EDD just in May of 2023 is that that's going to increase to over $6 billion paid out by the Fund to unemployed workers who are currently eligible.

In the appropriations analysis that came out, the estimates of the Fund for this Bill was in the millions to the tens of millions at the high end. Tens of millions. The high end estimate of this Bill, without knowing what the impact will be of how many workers on strike, would only come to less than 1% of what's paid out. On the high end it'd be 0.2% of the impact. That is not going to change the fiscal health of the UI Fund.

In addition, the takeup of unemployment is really only 43%. So you could cut the number of striking workers in half who would actually apply for benefits. On the flip side, the economic benefits of expanding UI is huge. When you have a strike, there's a number of workers who are unemployed in one area. We see that with the entertainment strike in Los Angeles and that impacts local businesses when you have UI.

What we saw during the pandemic, economists estimated that every dollar of UI benefits generated $2 in economic activity. That money is going to corner stores, to restaurants, to caterers, to nail salons, to the small businesses that are also struggling along with workers who are on strike. So this Bill makes good fiscal sense and we urge your aye vote. Thank you.

Thank you. We appreciate the detail and completeness of both presentations. Senator's as well. We'll now entertain Members of the public who would like to comment. OK, there is a motion, but before we do that, we have to set a quorum. We'll pause on the public comment for a moment. We'll turn to the Clerk to establish a quorum.

Holden here. Dally, Brian. Calderon, Wendy Carrillo, Dixon, Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Sanchez, Friedman, Weber, Wilson.

We have a quorum. Looks here we'll recognize Mr. Lowenthal as a mover of the Bill. A motion has been made. Is there a second? 2nd by Assemblymember Pellerin. We'll now go to the public comment for or against the Bill.

Good morning, Mr. Chair and Members, Seth Bramble here on behalf of the California Teachers Association. We are in support.

Good morning. Shane. Gusman. On behalf of SAGAFTRA, the Teamsters Amalgamated Transit Union and the Machinists, Unite Here, Utility Workers Union of America, and the Engineers and Scientists of California, all in support.

Good morning, Mr. Chair and Members Tristan Brown with the CFT Union of Educators and Classified Professionals here in support.

Good morning, Mr. Chair, Members Ignacio Hernandez on behalf of the Communication Workers of America, District Nine in support.

Good morning, chair Members Janice O'Malley with AskMe California in strong support.

Good morning, Mr. Chair and Members Louis Costa with the Sheet Metal, Air, Rail and Transportation Workers, Transportation Division, Smart TD in support.

Good morning, chair and Members Jessica Hay with the California School Employees Association in support.

Jassy Grewal UFCW, Western States Council in strong support.

Good morning, chair and Members. Matt Cremins, on behalf of the California Nevada Conference of Operating Engineers. We are in support. Thank you.

Mr. Chair and Members Chris McKaley on behalf of the Los Angeles Area Chamber of Commerce in respectful opposition to the measure. Thank you.

Good morning. Tim Taylor with National Federation of Independent Business in opposition. Thank you.

Good morning, Sabrina Demayo Lockhart with the California Attractions and Parks Association in opposition. Thank you.

Good morning. Katie Davey with the California Restaurant Association in opposition.

Morning, Mr. Chairman, Members. Carlos Gutierrez on behalf of the California Grocers Association and various agriculture commodities in opposition.

Morning. John Moffatt on behalf of the American Council of Engineering Companies in opposition.

Good morning. Matthew Allen with Western Growers also opposed. Thank you.

Good morning, Doug Subers on behalf of the California Professional Firefighters in support. Thank you.

Good morning. Alyssa Yem, on behalf of the California State University Employees Union in strong support. Thank you.

Thank you, Doug. I'm glad you landed on the right place on this particular. We'll bring it back to the committee. Are there any comments or questions? Assembly Member Friedman.

Thank you very much. Normally when I'm asked to sub on a committee, I say no or I don't want to. I say yes, but I do it reluctantly. But this time I was very happy to be asked to sub today. I'm a principal co author of this Bill. I want to thank the Labor Federation and the Senator for bringing it forward. My area right now is very heavily impacted by strikes in Los Angeles.

I represent an area that's home to a lot of film and television workers as well as many people in the medical industry who are currently on strike and some of our strikes involving hospitals and medical care. And let me just tell you what that looks like on the ground. Ayatsi had a food drive a few weeks ago that I attended to hand food out and I expected there to know several dozen people coming.

The line of cars was so long coming from all over Los Angeles to take food and diapers home to people's homes that the police had to set up an entire lane of traffic running through burbank to the highway. Because there were literally hundreds and hundreds of cars coming for working middle class people to get food and diapers that they couldn't bring home.

The idea that people who are on strike are going to just not think much about going on strike because they're going to get Edd in a high rent area like Los Angeles is absolutely ridiculous. The amount of money that Edd pays out every month is probably not enough to cover most families'rent, much less food and other miscellaneous costs of living. And what happens is people panic. They can't put food on the table.

They think about what happens if they can't make that next mortgage Bill and have to leave. And I know this is a fiscal committee, so let me just say that the economic impact of that kind of disruption and that kind of sudden thrust into a dire situation for people who are used to working and people who want to work is absolutely devastating to the entire economy of an area.

So this is a small lifeline to people who are executing their right, their right to withhold work when they feel that the conditions or the pay are not commensurate with the value being offered. It's the only real chance that employees have to stand up for their own rights. This allows them the ability to do that without risking the welfare of their families. It gives them just a little bit of relief. It's minor costs, as you heard, in terms of the scope of Edd.

But for these families, it's going to be profoundly important. So I ask you, for the sake of all of those workers who are hardworking people, people who have built the economy of our state, let's join other states that have already done this and allow for striking workers to have the relief of EDD. Thank you.

Thank you, Senator Dixon.

Thank you, Chair. Is there someone from the Department of Finance? No. No? Okay. I think that no file. I'm sorry? Department of Finance did not have a file. They're not here to present. Okay, well, then I just have a question, because we all have known since COVID with the fraudulent situation with EDD, which the burden of paying down that debt, I guess it is, a 20 or $30 billion debt falls on the backs of business. So I would like to ask that question to the Department of Finance. I've never heard the answer to that. And here we're now with a situation, as unfortunate as it may be, but who pays for this?

And it falls on the backs of business, and especially small business. So I would like to know how that's going to be remedied over time, because we're just compounding that. And then I do have a clarifying question to the author, just to clarify the provisions of the Bill. Are you proposing that unemployment benefits be eligible to the striking workers for a union Member who's not officially participating in the strike or a union that's not striking? Or is this just someone who's participating by not working in sympathy to another union?

So you have to be eligible based on working, and then you have to be eligible based on being part of the strike.

Okay, so it's just those unions who are participating in the work stoppage. Okay. All right. We still don't know how the $20 or $30 billion is going to be remedied other than on the backs of small business.

I do understand over years of following employee labor management negotiations that many unions actually have funds built up over time through Member dues to help Members have some kind of payment to subsidize during the strike activity. Does this union do that? I know. AFLCIO are the United Auto Workers. They all have large funds to cover during strike, and currently you read about that now going on.

UAW is talking about some strikes with the auto industry that there are funds available that are taken from employee paychecks into their dues. Do these unions have those kind of funds available to cover to help assist in the I mean, the dire conditions that my colleague from Glendale has just identified? Is the union participating in covering some of their cost of living expenses?

Thank you, Assembly Member. I think the short answer to your question on behalf of the Writers Guild is yes. The Guild over the years has taken donations from their membership and from philanthropy organizations and other foundations to build up a Fund that is there for workers not only when they are faced with strikes, but whenever they have other sort of financial impacts due to not being able to work. So Members are able to apply to that Fund, but there is eligibility criteria for that Fund as well.

So I would say the membership does try to put forward the ability to support their Members when they need loans for certain things or financial assistance for housing and gas and food and those kinds of things. So that is something that has been going on for years, even prior to the strike. And that is how some Members are getting that financial assistance today. But we still believe that this Bill is necessary to ensure more stability for the worker who is not able to get paid.

Thank you very much. So they are getting some form of sustenance, but the financial sustenance...

If they qualify. But that's not an unlimited resource either, right? They sort of tried to build that up over time, but as things continue on, that's not an unlimited...

Whereas when they qualify, so there are certain qualifications which are meritorious, I suppose. But the state of California doesn't have any criteria in terms of asserting qualifications through the...

To answer your question from the AFL, strike funds depend on the union. Some have them, some don't. After two weeks of being on strike, many strike funds are already exhausted. That's when this Bill would kick in. After two weeks, we don't change this Bill doesn't change at all the eligibility requirements that already exist at EDD. It doesn't change any of the statutory requirements. So a worker who applies, they still have the one week unpaid waiting period.

They have to go through all of the eligibility at EDD, including the two week reporting where they report any income, whether it's earned or otherwise. And so EDD would take that information if there was any income from other sources, they would report that. So there's already a built in process at EDD, and this Bill doesn't change that. That worker who is on strike would have to go through the same qualification, eligibility and reporting as any other unemployed worker.

Okay, thank you for that clarification. I appreciate it. Thank you.

And I think I would also add, too, that this has been a strike that's been on since May of earlier this year. And as the Senator mentioned in his opening statement, that normally these strikes are two weeks, approximately, and so we're already in unchartered land. And so the studios understand, and I think has been widely reported, has said basically that they'll let it go as long as it needs to to force these workers into homeless conditions.

And that seems to be an appropriate place for this Legislature to pay attention because of the very things that you're saying that now that's going to impact on small businesses. It's going to impact on the livelihood of so many of these workers who have families. They're not stars that you see on television. These are people who work behind the scenes, who have a livelihood, a skill, a trade, a craft.

And now they're being denied the opportunity to have pay that it's commensurate with the work and the revenues that are coming in to these studios. And so with the expectation that the mindset is all on the worker to end, this is not fair. It's not real in terms of what they're up against.

They need to have a willing partner sit across the table, bargain fairly, and come up with a deal so that these workers can get back to doing what they're trained to do so that the small businesses can get back to realizing the benefit of how that economic engine has now been energized again.

So there's a lot of responsibility, I think, that we're here today to address conditions that have gone beyond what are normal and have now extended into an abnormal place that many people could find themselves in, a place of being unhoused.

I appreciate your comments, but what I was referring to small business. Small business is currently being assessed by the State of California to pay down that fraudulent cost of EDD during COVID, the 20 or 30 billion, there's never been a clarifying number. I sympathize, certainly with the small businesses that are affected by the current strike, but who's paying down that debt? Small business. All business is paying for that. So I just wanted to clarify that's where I was coming from, right?

And I just wanted to make it clear that we're here even looking at this as a solution, because a protracted negotiation did not have to take us to this place. I think I saw Bryan and then Hart and then Papan.

Thank you, Mr. Chair. And I want to thank my colleague and the author for being here. California is on its way to being the fourth largest economy in the world. Our national economy is rebounding robustly from the Pandemic, and yet it's one of the most hostile times in California's history for workers. I represent Los Angeles, where we have hotel workers who have been on strike for an ungodly amount of time fighting for fair wages.

We have situations where our janitors in the city had to go off for a day, where our classified school employees have had to step off, where our teachers have been fighting for the basic pay that they need. I represent three of the major studios in these conversations where the strikes are happening right now. But even more importantly, I represent all of the workers who don't have the dignity, who don't have the respect, who don't have the pay equity that they need and that they deserve.

We would not be in this situation if there were good faith negotiations taking place. But what is not in good faith is when you have leaders on one side of the negotiation saying, we will literally starve you and put you into homelessness. We will go until they lose their homes. That's an asymmetric negotiation that is pulling the bargaining power away from working people. That is not fair. That is not right. That is not just. And strike funds can't cover all of that.

You can't ask the workers to pay for their own livelihoods at a time when they are being treated as something less than a willing partner or the core base that has built up these enormous revenues and profits that others are reaping in seven figure and eight figure sums annually. That's why we're having this conversation. That's why this Bill is important. And Mr. Chair, if there isn't a motion to move it, I'd be happy to make it.

Well, I think the author very eloquently described the tipping point that we're at right now in regards to labor relations. And my colleagues have also framed the issue really well in regards to the impact on workers and families and the threat to them actively. That's ongoing. Now, here in this role on appropriations, our lens is the fiscal lens. So I want to also highlight the Bill analysis that says that the structural fiscal instability of the unemployment insurance Fund is a significant issue. It's real.

The analysis of the Bill says that the Fund is Fund balance is sufficient to the Fund is unable to self correct and achieve a Fund balance sufficient to withstand an economic downturn, indicating that the scenario of the $18 billion deficit could repeat itself in the future. That's a concerning fact. I think the folks who've testified made note that this is a relatively insignificant cost in relation to the full program. That probably is true, looking backward in historic time.

If the author is correct and we're looking at a different future that may not be quite the same relationship, and that's something we need to consider carefully. I'll be supporting the Bill today, but I think this is something that it would have been better to have this Bill through the Senate and had the votes on the Senate side and the process of going through the full committee review rather than having it come to this body first. But here we are, and we'll proceed ahead as we are.

Thank you. First of all, I want to thank the author. I want to thank the chair for his remarks and leader Bryan for his remarks. I'm going to echo some of the Member Hart's comments. And one of the things that I'm concerned about and I'm going to vote for this today, I just want you to know, but it may not always be that way. I recognize apply to striking workers, no question about it.

My concern is what happens if we have another pandemic and we got people out on a strike? Who stands in line first? So something maybe the author might want to think about is if we have to make that choice in the time of extraordinary circumstances and we have a Fund that might be insolvent, is there some sort of trigger where this it doesn't change the plight of striking workers.

But when we got a pandemic, I represent a district that's got heavy employment due to the San Francisco airport and, you know, like mentioned, I mean, I was standing in food lines giving out food to people that were working the airport, working the hotels, whatever it may been during the pandemic when times were so uncertain.

So my question or my thought or something we might want to think about is when we get into that time when we've got striking workers and we've got a pandemic where people are just lost everything, I'm wondering if there shouldn't be a trigger or something along those lines. It doesn't change the plight of the striking worker, I understand, but one must look at things in the overall context of what might be happening at any point in time. So that's kind of where I stand on it.

But I want to thank everybody for their work. And I watch TV, and I'm not crazy about reruns, I'll admit it, but I also watch with interest as this strike goes on and on and on. And I hear about the hotel workers in LA. Too, so I'm aware of all of it. It's not an easy position to be in, but anyway, I'm looking for that trigger, maybe. Thank you.

Thank you. We'll look to Wilson, Carrillo, Lowenthal.

Thank you, Senator, for your leadership in this area. And I understand the plight of the striking worker and how important it is to be able to have that right to ensure proper wages, safe working conditions, and all the reasons why people feel a need to go on strike. I do have a few follow up questions or technical questions, because I did think the Department of Finance was going to be here. And I noted that the chair said they didn't have a file and I didn't understand what that meant and so I wondered if he could provide clarification on why they're not here and what not having a file means, first?

It just means that they had not done or provided the information that we normally and a lot of bills that come to the committee, there is not a file from the Department of Finance. I know that there is some issues and concerns here, but they did not contact us to say that they had something that they wanted to put forth on the record

Sounds good. I've just been so used to seeing them here, so I was just surprised because I had a follow up question onto that.

But it was noted by one of the witnesses that it doesn't leverage and over leverage the Fund, and particularly in relation to the number of strikes that go beyond the two weeks that the Bill allows for, as well as the number of employees that are striking and greater to the whole. And understand that one of the things I was confused by, and if you can clarify from the author, is typically with unemployment insurance, there is a 26 week cap.

Typically with the pandemic, we expand it beyond this. And the language notes two weeks following the end of the trade dispute. So does that ignore the 26 week cap or does that in terms of cost to the Fund?

That means that if you go back to work after one week, you don't qualify for the unemployment. You have to be on strike for at least two weeks.

No, I'm talking about the amount of time, let's say the strike took a whole year, 52 weeks. Would your eligibility be for 52 weeks or for 26 weeks? What the normal...

It does not change the current law. So it is just 26 weeks.

Okay, sounds good. And then another part of the unemployment insurance, which I believe is still in place is that eligibility to work. And so this would...

Doesn't change any of the eligibility requirements if you have other income...

So they would still have to look for employment while on strike and so they still couldn't receive the benefit. And the cost to the unemployment Fund...

The reality of it is if you're on strike, there is no opportunity to work while you're on strike. So you wouldn't have to go to another state to go find...so that provision, yes.

Okay, so right now a current, absent the law, a current person receiving eligibility insurance would have to seek employment in order to keep their benefit. But someone in a trade dispute would not.

In that trade, correct. But if they got another job, then they would be working, so they would not be eligible for unemployment. So let's say if you were a striking writer and you went and got a job at a restaurant, then you would no longer be eligible for your unemployment because you'd be working at a restaurant. You can't seek work because you're on strike from in that trade. That's a different scenario because the entire industry...

So they would be exempted from that part of the eligibility that says you are seeking work. So they would...

All of the same eligibility for UI applies. So even you still have to have the good cause. There has to be a real and substantial and compelling reason for leaving work, and you do have to be able and available to seek know. My colleague right here just said that some of the writers are now driving for Uber and Lyft, so all of the same requirements apply. And EDD is used to this because our code already allows, if you're subpoenaed to be a witness in a trial or you're in jury duty or there's cases around domestic violence.

So there's already cases where there's kind of not the normal being laid off circumstances where people are eligible for UI, but still need to meet all of the eligibility criteria that apply to other work.

Thank you. And just to know, I agree with Assembly Member Hart's concerns about the fact that our UI is over leveraged the investment that we have to make in terms of the loan that's out. And so we are changing the way it works.

And I think that there's an opportunity maybe in future legislation to continue to look at the best way to do this for other workers, including those that are, quote unquote, "fired." Because we know that there's lots of issues with people who have been fired through no fault of their own, even though there might be some just cause that's noted in their file. And so I do think that we do have to look at this program overall and would have preferred to see it go through policy committees to have those type of discussions, but recognize the urgency that people have with this and look forward to it going through those policy discussions on the other side. Thanks.

Thank you, Senator Carrillo.

Thank you, Mr. Chair. And I want to thank the author I'm a proud co author of this policy and thank the witnesses for their testimony. I just want to share a bit more on the fiscal conversation. The last three years of the Pandemic really showed that California's safety net didn't work for everyone. And what it also showed that despite a state auditor's audit more than ten to twelve years ago that recommended that the EDD system be completely overhauled because it would not be prepared to take on a catastrophe, the state of California actually did nothing.

And so when the Pandemic did hit, the state lost $32 billion in fraud because we were operating under a system that's not up to speed or up to par with where we are technology wise and certainly wasn't prepared to take on the need during the pandemic.

So if we could lose $32 billion to fraud because the state did not take the necessary steps to update very antiquated systems within EDD that we have now completely revamped and are moving forward with new revitalizations on the technology front, we can certainly do more for workers who are on strike, who need that safety net to work for them.

So simply related to the fiscal impact, I would say that if the state can lose $32 billion in fraud, it can certainly use those funds to pay workers and build on our UI Fund to ensure that there's a safety net that works for everyone. Thank goodness we are now moving past that and the EDD system and other systems will be updated. And it's going to cost the state more millions of dollars than it would have cost had it been done 10, 12 years ago. But it's just the state of where we are today. So just sharing some light when it comes to the financial and fiscal impact to the state. Thank you.

Assembly Member Lowenthal.

Yes, I'll just be very brief. I want to commend the author, I want to commend the bill's sponsors and the very thoughtful dialogue up here. You know, I was thinking heavily about the comments made by my colleague next to me from Los Angeles about the underlying reasons why we're here today.

And I encourage the Bill sponsors to, going forward, help us take a holistic look at what the costs are, the drain on all the social safety net services that are taking place right now when we aren't paying a wage, where people can get by and what that does.

And to my colleague from Newport Beach who also made very thoughtful comments about what is the cost to small business and so, you know, challenge you to look at what is the cost that we're paying right now on these social safe net services and on the backside, on the other side of what happens after successful negotiation. On the other side of contract negotiation and receiving an adequate contract, is there less of a drain on social safety net services? And can we look at that?

And not just the cost on the UI Fund itself, but the benefits that we have from paying higher wages and what that does to taxpayers and small businesses? So, very proud to vote for this today and hopefully we can have a more holistic look at the economics of this all. Thank you.

Thank you. Assembly Member Weber. And then Calderon.

Thank you, Chair. I wasn't planning on asking any questions, but the answer to Assembly Member Wilson just made me even more confused. And maybe this is one of the reasons why going through a policy committee to have these in depth discussions and evaluations is a good point. So if someone is striking, do they still have to meet the require of actually looking for a job.

The Bill does not change any of the eligibility requirements. All it does is say that if you are after two weeks of a trade dispute, workers enter the regular process and have to meet the UI eligibility requirements.

So the answer is yes, they still would need to meet that requirement of showing proof that they were actually looking for a job. Thank you. And I will be supporting the Bill here in Approach. But I do want to echo Assemblymember Hart's concerns about the Fund and the solvency. When you made your analogy of it's already, this isn't going to change or significantly make it worse.

I immediately went into my medical mode thinking and just because someone has lung cancer doesn't mean that I want you to continue to smoke. So just because it's already in the negative doesn't mean that we should automatically just continue to pull from it. But again, those were just kind of conversations that probably need to be had and hopefully will continue to be had as this bull moves forward. So thank you very much to the author.

I think all of us up here are very concerned about what is going on with the strikes, why it's taking so long, and very concerned about the impact that it's having on those workers and their families. So thank you for bringing this up so we can have this conversation.

We'll now turn to Assemblymember Calderon who also chairs insurance and this Bill did make its way through that policy committee. So notwithstanding the compactness of all of this, so we'll look forward to your comments. Assembly Member.

Thank you, Mr. Chair. I just want to say that this Bill did come to my Committee and I was happy to hear it. I think we had a really good discussion on both sides and I think it was very transparent and I too am very concerned about striking workers. I live in Southern California and that's top of the fold front page every day. And these are real people who can't put food on their table, can't pay their mortgages, and it really distresses me. And so I just want to thank the author for your courage and leadership in bringing this measure forward and I'll be supporting this today.

Thank you. Assemblymember Dixon.

Thank you, Mr. Chair. I just had some follow-up questions, just to be clear on. I appreciate the Assemblywomen from Los Angeles talking about the structure and others have talked about the structural deficit with the unemployment Fund. It's not the State of California that is paying out these benefits of the fraudulent, the $32 billion fraudulent payments as far as I know, and I wish somebody from Finance were here to clarify that all business has been assessed to pay that $32 billion.

So there are monthly or quarterly payments that business, large and small, pays to the State of California to cover that $32 billion deficit. So it's not the state of California, state of California is charging business to recover those funds. And that is a tremendous burden on business that ironically affects their ability to operate and hire more people and sustain their business.

So this situation, sadly, is a very emotional situation that we're allowing emotions for the hardworking people who are striking and have a right to strike, to dictate law in California that is going to create more structural deficit. I don't understand why a fiscal committee well, we are the fiscal committee. Why we're not doing that kind of analysis.

So it's concerning that we lay on all of us this important discussion relating to real people going through difficult times, and we're proposing to change California law that will go beyond this particular striking situation. So I think that's something that we should pause and really understand what we are really solidifying proposing to solidify in state law. Thank you.

I'll turn to the author if he has additional comments. First, I think we need to understand that this meeting was called very quickly so that we could be in a position to receive the Bill and to give some form of analysis, which we've done. The committee has presented that for the community to review. It's clear that there are pressure points on the fund. It's been stipulated, it's in the report.

We also recognize that if this within what we're dealing with right now, as was presented in testimony, becomes a minuscule impact on the Fund, we talk in the context, rightfully so, of what are potential issues that could come up that we didn't see a pandemic coming, we didn't see other, and we have to respond to those. And how is this Fund prepared to respond?

And we recognize that if something were to be, again added to the impact that we're dealing with, that it would be a problem, heaven forbid. But if we had another pandemic, or even if we didn't have a pandemic, we had some other impact that would force businesses or workers to be in a place where they were not being productive, then we would have a challenge that we would need to deal with that goes beyond where we are today.

Where we are today, based on what the Bill is designed to do, is address needs of workers today, given this protracted negotiations that are going forward, the impact is minuscule. The Department of Finance was not able to be here, as I said, because they found out at the last moment, and they are dealing with the budget and other issues that would put them in a difficult place to bring someone here today. Even if they were here, it's my understanding they don't have a file.

And so as this Bill moves forward, Members may still have questions, Members may still have concerns. There will be opportunity to as the author and others will be able to hopefully have some additional comments or thoughts along those lines. But in terms of being able to have the fullness of additional information than what we presented in the analysis which some of Member Hart and others have called out and we all had a chance to review.

We are at a place where we have a proposal designed to meet a need, a critical need where we have been talking about the increase in number of people who are ending up on homeless conditions. Do we do nothing and just let that happen? Or do we do something that hopefully will help fill the gap to get to a place where there can be reconciliation and understanding and get to an agreement that ends the strikes?

Senator, thank you. Thank you Mr. Chair. And I want to compliment the chair for having a special meeting to have this robust conversation versus doing it last week attached to the appropriations regular schedule. So I think that brought us here today so we could have this robust conversation. I want to compliment the chair of the insurance committee as well because there was a robust conversation at the policy committee on this Bill two weeks ago. And so this Bill has been vetted. It's not a new idea.

We know that in New York and New Jersey they are doing this. We know that in California this Bill has gone through the system before. So this is not something that has caught anybody by surprise. What it is doing is taking this moment in time this moment in time where there is significant unrest within our working labor force where many traditional California industries are undergoing their own change in business model, their own change in how they function from a distribution perspective.

As we see the pandemic over and we see the economy coming back we're seeing many corporations, many businesses seeing robust times. And so it's acceptable, understandable and frankly needed for that labor force to say wait a minute. As we move forward under these new economic situations, what does that mean for me? What does that mean for our family? How are we going to put food on our table and thrive and have a piece of the success going forward? And so that's why this snapshot in time.

This is the perfect time to have this conversation. What this Bill does at its heart is it creates certainty for the workforce during that time of labor unrest. That certainty has an economic advantage for the overall health and welfare of all of us. And so the argument that this person is going to pay and this person is going to get the benefit we see that argument when a school passes a school bond where somebody might say, well, I don't have kids in the school.

Why should I build that new gymnasium or that new library on the high school? Or somebody has a parcel tax to help first responders and somebody says, well, I've never called the police or I've never called and had the firefighters have to come to my house. They've gone across the street. The reason why we pay into the collective benefit is we all collectively benefit from that certainty and that security, to know that if we need help, it will come.

Or if we have someone who comes to our town who's going to get an education, it collectively benefits all of us from having a good school facility. That's why we pay into it. Not because we want the benefit at that moment for ourselves, but we want the benefit for our community and our society and our economy. That's what's at stake here. The numbers are yes, the Fund has its issues, but the numbers are not going to exacerbate that problem.

And frankly, passing this Bill will lead to the follow up conversation of how do we make the safety net, as my colleagues from Los Angeles have brought up, how do we make the safety net be there as a safety net going forward? That's an appropriate conversation to have. And we should look at it from a macro perspective, because this is just one acute need. There are many others.

And we as a Legislature have to continue to look at how we provide for those who need our help to help them provide for their families. And so that's what this Bill does. It creates certainty. It says to that striking worker, we're going to make sure you have the opportunity to fairly negotiate, and you're going to be respected during that negotiation, not disrespected and weighted out. That's what this Bill does. And so, again, I want to thank the chair.

I want to thank the chair of the insurance committee and the robust conversation and all of those folks who drive around California and see firsthand what's happening. And to the small businesses, if we pay our workers adjust fair wage, they're going to be good consumers and they're going to go to those restaurants and they're going to make sure that those restaurants do well and the small businesses do well because they're in the communities as well.

So, to me, this is a good community, good neighbor Bill and good for the state of California. And I respectfully ask for an aye vote.

Thank you. We have no other comments from any of the other Members. We'll take that as your closed. The Bill is out on a broll call. Thank you, Senator. Umberg, SB 35 do pass as amended.

Thank you. Thank you, Mr. Chair and Members, for your patience. SB 35 is simply you want to hear me? There we go. All right, thank you very much, Mr. Chair, Members, thank you for your patience. SB 35 is merely a cleanup of the Care Court legislation that was passed last year. I urge you and aye vote.

We've got a number of motions and seconds, so if you just throw a hand up real quick so I can Calderon moved. And Wilson or Weber. Weber second, we'll take public comment. Anyone who would like to speak in support or opposition?

Good morning Mr. Chair and Members Jolie Onadera with the California State Association of Counties here in support. Thank you.

Thank you. We'll bring it back to the committee. I see no comments from the committee. Would you like to close?

I urge and aye vote

it's out an a roll call. Thank you.

Thank you.

Ok, I think our work is done for today. Oh, we want to make sure that everyone who has need to add on to we're good. Okay. You're talking about the longer day we're adjourned.