Senate Standing Committee on Budget and Fiscal Review

All right. The Senate Committee on Budget and Fiscal Review will come to order. We have a number of other committees meeting right now, so that is why you don't see as many Members on the dais. But as both houses have very extensive floor sessions today, I don't want to delay the hearing because the impact would have on delaying floor, et cetera.

And I understand at least one of the committees that has a number of our Members is going to expect it to wrap up in the next five minutes or so. And of course, any Members who are on the Budget Committee who are not chairing those committees can of course come to the Budget Committee and return to the Committee that the other Committee you serve on to vote, if you so desire.

So I will let you all know, any Budget Committee Members, Senate, we are in room 1200, and you could come to this room to help us establish a quorum. And of course, if you're on another Committee, you can always return to vote. And I will now give the customary remarks about the Senate's processes and procedures. We continue to welcome the public in person and via the teleconference service. And for individuals who would like to provide public comment, today's participant number is 877-226-8163.

The access code is 736-2832. I will maintain decorum as is customary. Any individual who is disruptive may be removed from the remote meeting service or have their connection muted. And as I already mentioned, we are holding our Committee hearing in room 1200 at 1021 street.

And Senate Members, if you want to come down to the Committee, that would be great to allow public access, we have admitted Members of the public into the hearing room, so those of you who are physically present here, of course, when it comes to public comment, you will be able to give that. And we'll also use the teleconference service, and I already read that number. The public comment will be heard after we have the presentation and discussion on the item that's before us.

And that item is AB 126, and it's a single bill that we have before us. Let's see, I don't have a quorum yet, so in effect, we're going to start as a subcommittee. But now back to the bill we will be hearing. The bill we will hear today is AB 126, relating to vehicle air pollution.

It allows us to extend California's Clean Air Transportation Program, also referred to as the Carl Moyer Program, which I was the author for that extension in AB 8 back when I was in the Assembly. This bill was part of the 2023-24 budget discussions and was heard by this committee on June 26, but it has been since been amended, so that is why it is before us today. However, it is not a formal budget bill. It is a policy bill.

And so before we begin, Vice Chair Niello, do you have any comments?

I'll just say I had completely forgotten how much fun an end of session week is.

And I won't comment to that. I suppose if you have a certain definition of fun. Alright, so, we will begin with our presenters and authors, Assemblymember Eloise Reyes and Senator Lena Gonzalez. If you'd like to come up to--you can both come up to the podium. Go ahead. You may proceed.

Thank you, Madam Chair and Senators. When we're looking at extending a sunset, you say, 'it's easy, reauthorization it's easy.' There's nothing easy about this bill. And what was good about it is that we had the input of so many stakeholders, people who agreed with the language as it was, and people who disagreed.

And it was being able to get together with the Assembly, with the Assembly leadership, with the Senate, with the Senate leadership, and with the Governor's Office and his team, and coming up with language that we all feel is the best language possible. So here, in partnership with Senator Lena Gonzalez, I'm presenting AB 126, which will reauthorize and modernize three clean transportation programs that have been in place since 2007. Senator Gonzalez will touch on these programs momentarily.

This bill secures over two billion dollars in ZEV funding to help transition the transportation sector toward cleaner vehicles. It also includes the infrastructure and mobility options. I want to thank Leadership in both Houses and the Governor's team for facilitating negotiations and for helping finalize this historic deal. It strikes a balance between providing dedicated funding to the hydrogen industry, providing the public with accountability and transparency measures for state-funded infrastructure, and ensuring that funding is prioritized in communities that need it the most.

Recent amendments require that 15 percent of the Clean Transportation Program funds are allocated annually to hydrogen-refueling infrastructure until 2030. It establishes a preference for clean hydrogen that is the least carbon intensive and is consistent with the federal clean hydrogen federal tax credit. And it also includes accountability measures on both hydrogen and EV charging stations that require data to be reported to monitor reliability and accessibility of this infrastructure as well as reporting how clean it is.

This agreement represents the culmination of years of work, and we believe that we are in a place that addresses all the issues by both supporters and opposition. I want to thank Senator Gonzalez for partnering with me to close the deal. And now I'd like to ask her to address the Committee.

Thank you, Madam Chair and Mr. Vice Chair. And, yes, it has been a very eventful end of session week, especially with this bill, and I want to thank you all for your indulgence here. But Assembly Bill 126, as mentioned, will certainly modernize the CTP California Transportation Program. This is a very exciting program, of course. The Air Quality Improvement Program, as well as the Enhanced Fleet Modernization.

And I appreciate my colleague, Assemblymember Reyes, as well as Senator Newman here on the dais, as well as many of you who've added your thoughts and insight here. It's been certainly a labor of love for all of us with so many folks that have had their mark on this incredible bill.

Specifically, AB 126 will support funding for deployment of heavy and medium duty vehicles, fill gaps in light duty vehicle charging infrastructure, prioritize hydrogen vehicle refueling infrastructure through a dedicated funding carve out of at least 15 percent, and require 50 percent of the funds to be spent on projects that directly benefit residents of disadvantaged and low income communities. And it will ensure our state's most impactful and transformative programs do not cease to exist such at a very critical time in the development of these zero-emission markets.

I want to thank everybody who's had again their hand in this, the Governor's Office, as well as Senator Skinner, who I know, who is a huge champion but will continue the fight for clean transportation with us. So with that, I respectfully ask for an aye vote. We do not have any witnesses today, but I'm sure we have folks here for technical assistance if needed.

Great. Appreciate that. Let's establish a quorum. Go ahead, you can call the role.

Senator Skinner?

I'm here.

Oh, look at all of you.

Niello?

Here.

Becker?

Here.

Caballero? Dahle? Durazo? Eggman? Grove? Laird? McGuire? Menjivar? Min? Newman? Ochoa Bogh? Padilla? Roth? Seyarto? Smallwood-Cuevas?

Great, we've established a quorum now and those members who want to comment or questions, I'll start a list. I've got Senator Becker on the list. Senator Newman. Anyway, anybody else will add. Alright, so I want to begin. This was a long time in coming, but I'm very glad it's here before session is over. This is a very, very important, or rather these are very important programs for us to continue. As much as we are very legitimately focused on the climate crisis, which is more and more serious, California still has bad air quality, health-damaging air quality, and it is taking years off our residents' lives and it is affecting our children and it is increasing asthma rates.

And when this program was first, these programs were first developed, they were focused on that and solely on that. And that needs to continue to be a focus. And we know that our most damaging air pollution still comes from stationary--not stationary, apologies--mobile sources from transportation.

Yes, there's other forms of contributors, emissions contributing to air pollution, but it is very seriously from our vehicles and a great deal of those vehicles or a large amount of that most health-damaging pollution is from our heavy duty sector, from use of diesel. So it is very important that these programs continue and continue to allow us to make that transition and support those vehicles in that transition, as well as a variety of other--I won't say industries, but equipment and uses--whether it's at our ports or different places to really help us achieve the air quality goals which we cannot lessen our dedication to even as we fight the climate crisis.

Now, a lot of talk and focus of the negotiations recently has been on hydrogen, which was very important and I think came to a good result, though hydrogen is really a small portion of this bill, but it did take up a lot of our time recently.

But the benefit of hitting that sweet spot in this bill is that it enables us to send the right market signal because there is a role for hydrogen, non-fossil fuel produced hydrogen, for helping us achieve both our air quality and our climate crisis goals. And the benefit of hydrogen is it really is very useful in helping us decarbonize, very difficult to decarbonize sectors. And usually I don't use those kind of terms. I sell it in the kind of vernacular that everybody understands.

Basically those things that are not as easy to electrify right now or that are going to need to continue to depend on a certain kind of fuel, hydrogen has a lot of advantages. So I'm very glad that we got that sweet spot and I'm glad that it allows for all the different class of vehicles.

But I'm also very happy that it did not solely single out only the light duty vehicles because if we had done that, while there's certainly a role for the light duty vehicles, if we had done that to the exclusion of the heavy duty, that would have been a mistake given the air quality issues of diesel. So I appreciate the involvement of everyone, the patience of everyone. Maybe I won't. Maybe patience is--I'll just call it patience.

I respect that and the work that was put in to come to the bill that's before us and the agreement that we have. And I want to thank Senator Gonzalez, Assemblymember Reyes, Senator Newman, and the others involved as the authors have done so. So with that, I'm going to call on Senator Becker and then Senator Newman and then Maria Elena. They provided their testimony. They did not have explicit witnesses in support. We will have public comment after people, after our members asked their questions.

So you had comments. Okay, let me just before, apologies, Senator Becker. Let me just let people know who's on the list and I can add more. It's Becker, Newman Durazo, Niello. Did I miss someone? No. Okay, go ahead.

Sure, first, I know we don't have a lot of time here today, I just want to add my thanks to the Pro Tem staff and colleagues, Assemblywoman Reyes, and particularly our transportation chair, Senator Gonzalez, for many, many hard hours of work on this. This bill is going to protect this critical pool of funding and maintain reliable, frequent charging stations, particularly for the upcoming advanced Clean Fleet compliance charging needs. I'm definitely going to be supporting the bill today.

I just wanted a quick note for the record that I do recognize the need for some potential future cleanup language to make sure that certain elements of this legislation only apply to public chargers, to avoid privacy concerns and make sure the implementation goes smoothly. I look forward to future conversations with the author on that cleanup, but I'm very much in support of the bill today, and I thank you both for all your incredibly hard work.

Thank you.

Thank you, Madam Chair. So glad to support the bill. I want to thank both of my colleagues, Assemblymember Reyes, Assemblymember Gonzalez, and the Chair referred to patience. A lot of that patience had to do with putting up with me, and that's, I guess, fine by me at the end. I think it's really important to note that I and others fought very hard for the inclusion of funds as we extend the CTP to include funding for hydrogen.

And I think if you look at the data, especially the CARB reports, it's very clear that if we're going to meet the state's ambitious goals for decarbonization both around passenger cars and fleets and heavy duty, hydrogen is going to play a meaningful role for that. So to the extension, the inclusion of hydrogen in the extension of CTP is very important. And thank you for putting up with me during that.

As with any compromise, clearly the terms weren't perfect, and I have apologized for any friction I've caused during these conversations. But I do want to thank the Chair, the Pro Tem staff, my colleagues, everybody else who participated, and especially those members of both the BEV and FCEV communities for their participation. This was an exhaustive, and I guess, frankly, an exhausting three-way negotiation with the Governor staff, Assembly, us. But it's really important. We're not only extending a program, we're extending a tax. And it is important.

I actually do have some experience with transportation taxes. They gave me a two year sabbatical, which I enjoyed thoroughly. And as we consider the extension of this tax, it is ultimately very important that the public is properly consulted and that we can convey to our constituents not only what we're doing, but why we're doing it and provide them the assurance that we're going to be fully, transparent accountable in doing that. So happy to support the bill, and again, thank you to my colleagues for your work on this.

Senator Durazo.

Well, I am really thrilled to see my two colleagues here, Senator Gonzalez, and Assemblymember Reyes because I know what you all fight for every day in terms of equity, good jobs, especially in our communities, poor communities, and working class communities. All the protections that other communities have. I just want to point out and either ask or point out maybe to cleanup language is reporting requirements related to job quality.

Senator Gonzalez and I have been through this a lot, but I think we need to do more along those lines is job quality especially having to do with non-construction jobs. We have more experience on construction jobs with prevailing wages and maybe we could do also better reporting requirements even for those construction jobs. And how does the California Energy Commission assess the level of job quality? That's not particularly clear. And again, how does it pertain not only to construction jobs but non-construction sectors?

Those are areas of jobs that we need to look to the future and we need to add them as far as reporting and requirements as much as we do construction and also together with equity. And you've done a really extraordinary job of lifting equity in this bill. So I'm very proud of the work you've done that we need to strengthen the other piece of the quality jobs. Thank you.

Thank you, Senator Durazo. Senator Niello followed by Senator Roth.

Thank you, Madam Chair. I guess I missed the party. I don't quite share the enthusiasm that's been expressed. First of all, this is an eleven plus year extension of a tax. Now I know Republican anti-tax, but I think most people know here I am not categorically nor knee-jerk opposed to taxes. But the problem here is this tax is imposed upon drivers who will not directly benefit from the programs that the tax pays for.

In fact, some lower income drivers are subsidizing higher income people that can afford electric vehicles at this point. And I appreciate Senator Newman's comment about the inclusion of hydrogen. I share his favor toward hydrogen as a mix in our decarbonization efforts, which of course are very important, but this bill actually reduces it. There is an inclusion of hydrogen, but existing law provides for more hydrogen and it's moving toward the Legislature, picking winners and losers.

We seem to have a significant struggle getting broad buy-in in the Legislature toward hydrogen as part of the mix. And I find that very concerning. So I can't support this bill this morning and hope to share enthusiasm with other things as we close out the week.

Thank you, Vice Chair Niello. Senator Roth.

Thank you, Madam Chair. I apologize for missing the earlier discussion. I appreciate the author's work on this very complex issue and I know it's a work in progress and I appreciate your dedication to continuing that work. I want to align my comments with my colleague, Senator Becker with regard to clarification and hopefully some cleanup and the comments of my colleague, Senator Newman, with respect to trying to take a slightly broader view of our approach toward hydrogen, at least at this point in time.

But I appreciate your work. Look forward to supporting this one and the one in the future. Thank you, Madam Chair.

Thank you. Alright, without seeing any other hands up, we will now take public comment. And if people could be brief.

Chair and Members, Reed Addis on behalf of CALSTART, the original sponsors of the measures from the Assemblymember and Senator in strong support today. We knew three and a half years ago it was going to be difficult to get to the compromise, but you got there. It's embodied in this measure. Lots of thanks to you, Chair, Senator Newman, Leadership staff behind us, obviously the authors of the measure.

While we couldn't get all the coalition members who've been supportive here today, I think you're going to see a really good cross section. So thank you again and in strong support.

Good morning, Chair and Members. Michaela Elder on behalf of the Electric Vehicle Charging Association. I want to express strong support for reauthorization and continuing these clean transportation programs that are critical for transforming our transportation sector. Obviously strong thanks to authors Assemblymember Reyes and Senator Gonzalez and Leadership in the Senate and Assembly, Chair Skinner and Senator Newman as well. We know that this deal was not easy. Looking forward to working with the CEC and the Legislature in the future.

Thank you, Senator Becker, as well, for your comments on cleanup language. We look forward to talking about that next year. Thank you so much.

Good morning, Bill Magavern with Coalition for Clean Air in support of continuing these essential clean air programs. And our thanks to the authors, especially for including very strong equity provisions to make sure that this money benefits those in our disadvantaged and low income communities who typically have the worst air quality and the least access to clean mobility. Thank you.

Thank you. Julee Malinowski-Ball on behalf of the California Electric Transportation Coalition, in support. We first want to say thank you to all those involved. This bill helps all Californians throughout the state, regardless of what vehicle zero-emission vehicle choice they make. We support. Thank you.

Hello. Laura Deehan, State Director for Environment California. And I'm also our group's, one of the steering Committee Members of the Charge Ahead California Initiative.

We want to thank the authors so much for their work as well as all of the legislative leadership for your engagement to get to this point, and we stand in strong support of AB 126. Our recent Trouble in the Air report found that more than 90 percent of Californians live today in places where the air is unsafe to breathe some of the year. And the biggest source of that pollution is still from the transportation system.

And the fastest way to accelerate out of that mess of this unsafe air is to build the Clean Transportation System so that we can solve that problem. And this bill does that, especially prioritizing those investments in the parts of the state where we don't have that infrastructure that we need yet. So thank you again. Let's get this done.

Good morning, Melanie Morelos, on behalf of the Greenlining Institute. We'd like to share our appreciation for the Members and the third party agreement amongst the Legislature, the Governor's Office, and all the stakeholders that are in this room. Great compromise takes a lot of work, so just generally appreciate the discussion and all the different ways that we can improve next year. This is 170,000,000 annually. There's a carve out for disadvantaged communities.

This is really wonderful for the people that we serve, which are BIPOC communities, low income communities. So just very grateful, and we look forward to the passage. Thank you.

Madam Chair, Members of the Committee, Mark Oprea on behalf of our client ChargePoint. We want to thank both of the authors and their staff for all their hard work on this. Assemblymember Reyes, thank you for acknowledging the need for cleanup in 2024. And we want to thank Senator Becker and Senator Roth for raising this issue, and we look forward to working with this Committee, with the authors, and with other stakeholders to address those issues. We want to support AB 126.

This is an important measure and we look forward to continuing the work on building out ZEV infrastructure. Thank you.

Good morning, Chair and Members, Eddie Carromero, on behalf of Valley Clean Air Now. Just want to align my comments with everyone in strong support of this measure and continuing these programs and conversations around them. Thank you.

Good morning, Chair and Members, Andrew Kosydar, Southern California Edison, in support. Strong work.

Good morning, Madam Chair and Members, Anthony Sampson, on behalf of the California New Car Dealers Association, in support.

Good morning, Chair and Members. Rachel Mueller with the Weideman Group here on behalf of Electrify America and BYD | Ride. Just want to thank everyone for continuing these wonderful programs and support for clean transportation. And thank you to the authors for working with so many folks to get this done. Appreciate it and hope to work with you guys in the future.

Madam Chair and Members, Dan Cha here for EVBox and FLO EV charging in strong support of AB 126. Extreme appreciation for the authors for their hard work and dedication in getting this deal done. Senator Skinner, Senator Newman, look forward to working with you all on cleanup next year. Thank you.

Good morning, Madam Chair and Members, Erin Niemela, representing General Motors. Also in support and wanted to express our strong appreciation for both authors and their dedication. Senator Newman, Senator Skinner, and Leadership, thank you.

Madam Chair and Members, Andrew Antwih with Shaw Yoder Antwih Schmelzer and Lange here today on behalf of Advanced Energy United, here to express our broad-based support for these provisions and this work product from tough negotiations and compromise. We've been engaged all the way through and we will definitely stay focused on the cleanup conversations that come and the regulatory process that will have to ensue based on the language in the bill. Thank you.

Good morning, Chair and Members. Rebecca Marcus on behalf of the Union of Concerned Scientists and strong support. Thank you.

Good morning, I'm Will Barrett with the American Lung Association expressing our strong support for this ongoing investment in clean air and public health and equity in California. Thank you so much.

Melissa Romero with California Environmental Voters in strong support. And thank you so much to Leadership, all of the legislators who were involved in making this happen, and to the two leading women who never back down from a tough fight because they know what's right. Thank you so much.

Bernice Jimenez Creager with the California Trucking Association. We want to thank the authors for their leadership on this issue and we're in support of this bill. Thank you.

Alright, we'll now go to the phone lines and moderator, if you could queue up our phone lines. And I would appreciate if those calling in, just give your name, affiliation, and if you're either in just support or opposition.

Thank you, Madam Chair. For those of you who wish to speak, please press one then zero at this time. Press one, then zero. Only one time, as pressing one, then zero second time will remove you from the queue. Madam Chair, we do have at least five or six people who signaled that they wish to speak. One moment, please.

Okay.

And Madam Chair, we apologize for the delay. One moment, please. We'll now go to line 18. Line 18, your line is now open.

Good morning. Elise Fondrick from TrattenPrice Consulting on behalf of Enelle, who wants to support the legislation and really appreciates the Legislature and governance leadership on this and would like to work with the Administration and Legislature on any cleanup language during implementation. Thank you.

We'll now go to line 11. Line 11, your line is now open.

Good morning. Ashley Johnson on behalf of Pacific Gas and Electric Company in strong support. Thank you.

And final call for anyone who wishes to speak to this, please press one then zero at this time. Madam Chair, we have no one else who signaled that they wish to speak.

We will now go to line 14. Line 14, your line is now open.

Good morning, Chair and Members. Matt Klopfenstein at California Advisors on behalf of the Center for Sustainable Energy, SMUD, and Audi in support. Thank you.

We will now go to line 13. Line 13, your line is now open.

Thank you. Sarah Olson on behalf of Environmental Defense Fund, in strong support.

We will now go to line 17. Line 17, your line is now open.

Hi, good morning. Williams Lopez on behalf of the Los Angeles Cleantech Incubator, in support of AB 126. Thank you.

We will now go to line 12. Line 12, your line is now open.

Good morning. Greg Sarvas from the Los Angeles Department of Water and Power, in strong support. Thank you.

Thank you. So, Members, we're back to ourselves and no more public comments. So, do we have a motion? Alright. The bill is moved by Senator Min. And my final comment on it before we allow you to close is I think the other real advantage of our getting this done now and the provisions in the bill is that it puts California in a good competitive advantage as we compete for federal funds in this space of which there are lots.

So, Senator Gonzalez and Assemblymember Reyes, would you like to close?

Yes, Madam Chair. Thank you so much. And we appreciate the really robust conversations on the labor front, on clarification for next year for hydrogen, for additional comments. I think this is the bill that's going to affect all of our communities. But for me personally, I'm a Senator that represents one of the largest ports in not just the state, but the country and the world.

And to see so many of my residents that deal with bad air quality every single day, this is a really incredible step in the right direction for them and for so many communities across California who feel the same way regardless if they drive an electric vehicle or not. I also personally want to thank my staff who spent so much time, Cynthia Alvarez and Trevor Taylor, who are hiding behind this pillar here, who are really the nuts and bolts behind this as well.

We thank again so many. The gratitude goes beyond words here, but this is going to be a really impressive bill for all of us to share and for all of us to understand that is all of our accomplishments, really. So with that, I respectfully ask for an aye vote, and I will pass it on to my incredible colleague, Assemblymember Reyes.

Thank you, Madam Chair and Senators. I also want to thank those who participated. Senator Skinner. Yes, you were the author before, and you're joining us as a joint-author here too. This is such important legislation that has to get through. We have to make sure that this does not sunset, that we continue the program so that we can continue to provide the infrastructure.

I, too, live in a community where we have some of the worst air, and it's important to put the infrastructure in those communities that are most disadvantaged--the low income communities that are receiving most of the bad air--give them this infrastructure. I also want to thank some others who have participated in exactly what we're dealing with today: this deal. From the Speaker's office, Chase, who has helped tremendously in making sure that we cross our T's and dot our I's and recheck the language.

From my office, Matt and Brandon, who worked tirelessly long, long hours. And from the Governor's team, Grant, thank you so much for all of your work in making sure that we bring this together. In the Assembly, we had Assemblymember Alvarez, Carrillo, and Irwin, who were also part of these negotiations, and I want to thank them as well.

And to all of you, when you vote aye on this, you'll know that you are helping to reauthorize and to modernize a program that has been working so well in our community, providing the money for this infrastructure to the tune of, as was mentioned earlier, over 180,000,000 dollars annually. Thank you so much, and with that, I respectfully ask for your aye vote.

Thank you, both authors. Good close. So, we have a motion before us by Senator Min, and it is do pass to the floor. Is that correct? That's the way. Okay, let us do roll call.

AB 126. The motion is do pass. Senator Skinner?

Aye.

Skinner, aye. Niello?

No.

Niello, no. Becker?

Aye.

Becker, aye. Caballero? Dahle? No. Dahle, no. Durazo? Aye. Durazo, aye. Eggman? Aye. Eggman, aye. Grove? No. Grove, no. Laird? Laird, aye. McGuire? Menjivar? Aye. Menjivar, aye. Min? Aye. Min, aye. Newman? Aye. Newman, aye. Ochoa Bogh? No. Ochoa Bogh, no. Padilla? Aye. Padilla, aye. Roth? Aye. Roth, aye. Seyarto? Seyarto, no. Smallwood-Cuevas?

Alright, the vote is ten to five, and that bill is out. Thank you all, and with that, the Senate Committee on Budget and Fiscal Review is adjourned. Thank you, Staff.