Senate Budget and Fiscal Review Subcommittee No. 2 on Resources, Environmental Protection and Energy

Senate Budget Subcommitee Two on Resources, Environmental Protection, Energy will come to order. Good morning. The Senate continues to welcome the public in person and via the Teleconference Service for individuals wishing to provide public comment. Today's participant number is 877-226-8163 Access Code 694-8930 Holding Our Committee hearings here in the O Street Building, I ask all Members of the Subcommitee to be present at Room 2200 so we can establish a quorum. But we will begin with issue 18 while we wait for Members to establish that quorum.

So let's start out with issue number 18. Ask people to come forward. Thank you all for being here this morning, and when ready, we'll start with the LAO.

Thank you. Sarah Cornette with the LAO Our office has been asked to present the Senate Majority cap and Trade Spending plan. This plan does not reflect LAO recommendations, and though it is derived from our revenue estimates from the Cap and trade program, this is not an Lao package and we may not be able to answer Member questions should they come up.

Revenues from the cap and trade program are collected through the sale of allowances that covered entities must purchase for the program, and we estimate for both the current and the budget year that the program will receive 800 million more in discretionary revenues than the Administration estimates. So about 800 million more will be available for discretionary spending. There is still substantial uncertainty about auction revenues. However, the next auction is coming up on May 17, which will provide a better sense of the current year revenue picture.

But we won't know for certain what the budget year revenues will be until those auctions are completed. The Senate is proposing 4.3 billion under its cap and trades Spending plan. This includes 2.7 billion for the continuous appropriations. These are automatic and are required in statute, and 1.7 billion in discretionary spending. Major categories include zero emission vehicles, agriculture, energy and coastal resilience, and the full list of programs is included on page 12 of the agenda. Thank you.

Wait. Thank you. We'll ask Department of Finance to comment.

Yeah. Good morning. Chairman Member Sergio Aglar with Department of Finance. So just a few comments. Just, of course, starting off by noting for the record, the Administration supports the cap and trade Expenditure plan as proposed at the Governor's Budget, which I won't go over today, given that we had a hearing previously on the administration's cap and trade Expenditure Plan. But just kind of looking at the Senate's plan.

One of the bigger differences which my colleague from LAo highlighted is the revenue assumptions, which there are much higher revenue assumptions as part of the sentence plan compared to what the Administration had identified at the Governor's Budget, which enables a larger portion of discretionary programs to be funded. So just kind of reiterating. The administration's cap and trade revenue estimates traditionally take a more conservative approach to look at the current and advanced allowances that sell at the floor price.

And we do not attempt to predict what the auction will ultimately yield, to not send any market signals, and also to maintain the integrity of the cap and trade auction process. However, we do update our cap and trade revenue estimates after the respective quarters. So at the May revision, we will have an updated revenue estimate that reflects the most recent auction, which was not part of our Governor's Budget revenue estimates. And then we will also consider additional potential GDRF expenditures at that point in time.

Also would like to note that Senate cap and trade plan does include many programs that the Administration also supports and are part of our larger climate budget. GGRF is one funding source of our administration's larger climate budget, but we also have multi year funding and multi year availability for many programs, many which are included as part of the Senate's cabin trade plan.

But of course, the Governor's Budget did have to make some tough decisions and some tough reductions to several key climate programs to help address the budget deficit. And we continue to support many of these programs and are actively also looking to pursue some of the available federal funding to help offset some of those reductions we had to make in state funding. And then also, of course, hoping to engage in discussions on a potential bond.

And we have a few colleagues here from several departments to help answer programmatic questions that the Committee may have. I'll just note we don't have Department staff for every GGRF funded program, and so there might be some questions. We'll just need to get back to the Committee in writing. And that concludes my remarks.

Thank you. Let's start by establishing Quorum.

Becker, here. Mcguire. Dahle, Here.

Quorum has been established. Well, thanks. I'd like to start off of some initial comments about the Senate plan, and then I'll have a series of questions and then turn it over to Senator Dahle first, very proud of the Senate plan, the Protect our Progress Plan. Believe it makes smart investments to ensure California continues to be a climate leader and also protects against coastal fights, coastal erosion and other important benefits.

Importantly, I think the plan ensures that we'll be better positioned to win the federal grants around the Ira that are going to be critical for backfilling some programs. As we've discussed and protects and prioritizes investments both in equity and in clean air, and ensuring that the Pluto profits, that the basis of this program go directly to combating the climate crisis. Our plan really goes back to basics to protect from the dangers of climate change, such as sea level rise and flooding.

And our plan maintains funding for the most high impact equitable climate programs. So the climate crisis can't wait. And I think our plan represents the urgency of that part of the reason we're able to invest in important investments to reduce greenhouse gases across all the various sectors, such as transportation, energy. Agriculture is a $10 billion housing infrastructure bond that is part of the Senate Fund.

That's part of the Senate program, and that'll Fund critical investments that are either not funded or delayed under the governor's proposed budget, including many components of the ZEV package, $611,000,000 across programs at Carbon CEC. So I just want to note that the state has borrowed from our cash balances for targeted purposes in the past. All these programs and projects are one time in nature and infrastructure related, and therefore are appropriate to be funded with internal borrowing.

And in fact, the state buildings and other infrastructure projects are commonly funded with borrowed funds. And the Governor has made numerous new proposals to shift cost to bond funds. So I think, again, this is enabled by the decade of responsible budgeting that we've had and allows us to make the critical investments represented in the proposal and by protecting those funds and not borrowing from future greenhouse gas funds.

Of course, that allows us to use the current funds for other purposes that you've seen laid out in the Senate plan. With that, I'll move to several questions. Areas. We'll start with the agriculture related methane reduction. So maybe start out with CARB and see if someone from CARB can discuss how feed additives plays a role or will play a role in our targeting of SB 1383 for the agriculture industry. Do we have someone here address that?

I think we do have a representative from CDFA who can address that question.

Okay.

Good morning. My name is Virginia Jameson. I'm the Deputy Secretary for Climate and Working lands at the Department of Food and Agriculture. And the Department of Food and Agriculture believes that the continued implementation of incentive based, voluntary climate smart solutions will play the strongest role in achieving the 40% methane emissions reductions. So recently we had a summit. Maybe you heard about it. ActUally, Senator Becker, you sent your staff person to the last two days of summit, and we really, really appreciate that.

We had over 300 folks attend from all around the country to talk about this very issue. Interic methane solutions and feed additives. And what we found was that this is a very challenging issue. There are over 10 billion gut bacteria that are making these emissions. In typical cattle rations, there are many different agricultural byproducts that are used, like broccoli stalks and carrot tops and all kinds of things.

And so figuring out how we are going to have feed additives that interact with all of those things and reduce methane on a long term basis is tricky. So we've also been waiting for some action from the Department of. Sorry, you guys are scary, from the FDA. And they're going to be the ones that determine the regulatory pathway for feed additives.

And so we understand that there is a Bill at the federal level in process right now that will set out that pathway at the FDA, and then every product will have to go through their evaluation product process before they can be used in livestock and dairy in California. So, all that said, we think it is really important. It's an important part of reaching our SB 1383 goals.

We know that interic methane is 30% of the methane emissions in California and that there's a lot of work to be done to address those. We do feel hopeful, given the turnout at our summit the last couple of days we had globally and nationally, all the experts in the room, people are very dedicated and focused working on this topic. And we have hope.

And this is the kind of thing that once we do have approved products and we have trials, we're going to be able to get them fed to cattle really fast and the emissions reductions will happen quickly.

Well, thank you. We're not that scared, but maybe Senator Dahle. Senator Dahle

A couple more questions along these lines. I appreciate your response. It's great. And it's wonderful to have some people at the summit and to really have that convening on a national and global basis to have folks here. How is the current application distribution of funding for research and development from last year's $10 million for interic methane research and interference research gone so far? And what are some of the issues you're considering? The distribution of that money.

Okay, so for that $10 million, we are planning to Fund and we have an RGA in process that's going to be released in the next couple of months, and that will be used to Fund demonstration projects for feed additives. And those will be additives that have demonstrated efficacy for reducing methane emissions and research and dietary modifications that are intended to reduce emissions from livestock. Yeah, so, as I said, we're currently working on that RGA.

We're also in coordination with the Food and Drug Administration so that we can identify the highest priority additives for inclusion in our demonstration program. And so that we make sure that the protocols that we're using for that research are properly set up so that they inform the FDA's process. So, separately, we've also issued and closed a competitive solicitation for grants to California based entities.

I believe those were UCs, for research projects that are aligned with California's efforts to implement climate smart AG, focused on nutrient management and methane reduction from dairy and livestock operations. And then we also had $5 million in funding from the Budget Act of 2021 that's going to be dedicated towards three impact areas. This solicitation has already opened and closed.

And we're selecting projects and that will include verification of methane reduction strategies from past project types that we've had, like anaerobic digesters and alternative methane reduction strategies, as well as from our manure, recycling and innovative products development process. What else can I say about this? So CDFA also funded two high priority methane projects. One that's going to evaluate 50 byproducts for their potential to reduce interic methane, and then one that we co funded with CARB to develop a standard protocol for evaluating feed additives.

And then just to explain the byproducts a little bit better. As I said, there's food waste in California that is rerouted to become animal feed. And so we want to evaluate, are there just dietary rations that can be improved that will reduce methane themselves?

Well, thank you for that. I know next year, we're anticipating that three NOP will be approved by the FDA. And so far that's been able to demonstrate at least 30% emission reductions. Is CDFA considering pilot projects to incentivize this and other feed additives in coming years?

Yeah. So I mentioned that CDFA is continuing to discuss pathways for approval of products with the FDA. And if approved by FDA, three NOP and any other additives could be funded as pilot programs or projects to help foster adoption with producers in the state. And that would be kind of dependent on the timeline of their approval and whether or not that's in line with these fundings and the timeline that we have to spend them on.

Okay. Senator Dahle, anything on this? Okay. I don't want to be scary. Well, thank you.

Actually, in EQ, we had a Bill up talking about, Senator Allen has a Bill about methane Digesters and it's coming through. But the question I have is, do we know the cost per ton it costs for us to actually capture Methane? Cost to capture so like a dairy digester?

Yes, we do have that number, and my colleague Arma Cozina, who's our deputy for finance and Administration, has that info.

Thank you.

Hi. Thank you. I'll just join you from here to make it easier. Hi, my name is Arma Cozina. I'm the deputy Secretary for Finance and Administration at the Department of Food Ag. So when it comes to dairy digesters, currently, the collective greenhouse gas emissions reductions from the 131 previously awarded projects is 22.95 million metric tons of CO2 equivalent over 10 years. When you break that down, the approximate cost to achieve one metric ton of CO2 equivalent over 10 years is approximately $28, give or take $0.16.

Thank you.

Thanks.

Yeah. I have questions for CARB on high speed rail and stuff, but I don't know when you're going to do that.

All right, thank you. That's very helpful.

Thank you. And you were not too scary.

OK. All right. Let the word go out. So I'd like to move on to energy, and this will be primarily for the CEC folks if we have folks here today. And I want to start out with energy benchmarking. So last year, the White House created a coalition of state and local governments in coordination with federal agencies to promote what are known as building standards. This was called the National Building Performance Standards Coalition.

Late last year, California joined these efforts, which shares results best practices for delivering cleaner, healthier and more affordable buildings while creating jobs. I believe it was estimated for $20 billion of economic impact in New York City alone from building performance standards, lowering costs, and prioritizing frontline communities. The CEC's Building Energy Benchmarking program currently requires owners of large commercial and multifamily buildings to report energy use and covers buildings with more than 50,000 floor area and, for residential buildings, more than 16 residential units.

That data can then be used to compare the energy intensity and greenhouse gas emissions of buildings to their peers and would be foundational for measuring and improving the performance of large buildings as part of a building performance standard. However, only about 65% of buildings subject to the reporting requirements are currently complying, so that data is incomplete and insufficient right now to support a building format standard.

The Senate GGRF plan does include $15 million for this program to allow the CEC to improve outreach and education about the program and to provide technical assistance to get more buildings capable of reporting their energy usage and improve enforcement so that benchmarking data could be used as the basis for future building performance improvement efforts. So I guess for the CC, why do you believe compliance with the existing energy reporting requirements are Low, and what are you planning to do to improve on these numbers?

Good morning and thanks for having me. Mike Sokal with the California Energy Commission. I'm the Director of our Efficiency Division, which includes the benchmarking program. And for specific numbers of the 2021 data that was reported last year, there's a 68% compliance rate for commercial buildings and 71% for multifamily buildings, which is sort of a continuation of the prior year with a little bit of wiggle room there.

Over this past year, we have at the CEC focused on continued development of pulling together a comprehensive covered buildings list, which is no small feat. That includes all of the California's 58 counties.

And in addition to identifying those covered buildings, also identifying the contact information for the building owners, which is a separate challenge as well, we have been consistently engaging with and are taking efforts to increase engagement with our partner state agencies and local governments that have separate benchmarking programs that have some exemptions from the statewide requirements but require consistent reporting, as well as the utilities that support the data request.

And so we continue to have an increasing accuracy and completeness of the covered building list and take manual efforts to improve our contact information as well. I will say specifically, over the last several years, since this program regulations were adopted in 2018 and the program went into place, there have been some significant issues impacting reporting, one of which is the COVID shutdowns, which occurred over the last several years and are now out of effect as a result of the pandemic.

There were some suspension and delays of local programs and statewide reporting requirements to accommodate the realities of the situation. But with the official end to the pandemic, the CEC does expect that this annual reporting year, which is due June 12023 covering last year's data, there will be an increase in compliance compared to prior years. Now that the local programs are back up and running.

There are other issues as well, including a lack of awareness by building owners of the benchmarking compliance requirements, and that's an active outreach priority that the CEC has taken on, or building owners don't have the resources to comply and so we're looking through a range of support resources as well. I mentioned the Covered building list is incomplete. This has been an ongoing challenge which requires some manual intervention. There are some publicly available resources to pull from, however those, or I should say available for purchase.

However, those cannot be used in publicly disclosed programs. And so we have to sort of do some manual trueing up across a variety of data sources to get there. We have evaluated some data sets for purchase, and there are trade offs. But what we have done in this last fiscal year is bring on board a contractor who provides a range of tools and services to support our enhanced outreach, engagement and data tracking on the benchmarking program named Touchstone IQ.

And with the support of these new tools and resources, we do anticipate the compliance rate to increase both this reporting year and in future reporting years as well. There is, on top of that, just challenges communicating with the building owners where there are questions, technical assistance that's required, and we have staffed up a call center to help assist in that. And we do anticipate, as this year's reporting deadline approaches, an increase in that tech assistance is going to be necessary.

In addition, some of the local programs have faced challenges, particularly lower compliance with some of the state owned buildings, as well as public colleges and universities. And so we do engage with the Department of General Services as well as the chancellor's office from the UC, CSU, and community college systems. But there are ongoing sort of barriers to making sure there's consistent reporting there that we'll continue to engage with, and that leads to Low compliance.

There are some smaller issues that at times have impacted specific cases of reporting data, but those are sort of the bigger issues.

Well, thank you. Well, hopefully this $15 million can help. And you listed a lot of very specific areas where it seems like additional dollars could be helpful and appreciate you stepping at the call center. I think that could help a lot with awareness and with just increasing communication to get that number. And how does EC feel about leveraging that benchmarking data to improve energy efficiency to achieve the state's goals? And do you believe there are good examples from other states?

So that's absolutely something that we believe. And so the foundational data gathering through the benchmarking program is sort of priority one, making sure we have a comprehensive data set to compare similar building types to each other. We do recognize that with these increased tools and with some increased sort of interstate and tech assistance that's now taking shape across the country, that we will be looking at things like building performance standards, which we're tracking closely in other territories, as well as the discussions in California as well.

But a key comprehensive data set on benchmarking is critical to making sure that that's taking shape appropriately. In addition, we do some GHG emissions accounting based on the benchmarking data, and we have used that to inform some of our policy and analysis reports in the past, and we certainly see that as a valuable opportunity in a range of areas as well.

Locally, I will say there are programs that are looking at making more specific actionable efficiency improvements based on benchmarking data, such as the City of Sacramento, which uses the benchmarking data to develop specific policies for existing building electrification efforts and some retrofit requirements. We work with some of the seven jurisdictions that have local exempted benchmarking data, and so they're using that for a range of different auditing and requirements that go beyond the statewide benchmarking requirements.

And San Francisco has used some of the data to improve outreach and evaluate some of the data privacy issues, as well as support renewables and carbon reductions beyond the statewide standards that we're looking at. In addition, through the National Building Performance Standard discussion efforts, we are listening and learning from other states, such as Colorado, New York, and Washington, that are taking a variety of approaches to pursue a building performance standard over.

You know, we're eagerly listening to that discussion to see what may come next here in California as the Legislature may take action in the future.

Okay, well, yeah, that's excellent. I mean, this is a big area as we look at across greenhouse gas emissions across all areas of the economy. As per our last discussion about agriculture and interfermentation, this is about 5% of our emissions, I think 20 million metric tons. So it's significant. So we appreciate you looking at this and engage in learning from these other states.

And so hopefully, if we can get this money in there, it can help us increase that compliance and get to the point where we really can enact one of these standards. So I appreciate that. I'll probably move on to the next area, unless anything on the.

Want to thank the chair, but I want to just preface my first comments with that. This is the Senate plan. This is actually a Democrat Senate plan. This isn't a Republican. We're not engaged in putting any of this together. So I'm kind of at a little bit of a disadvantage because I should actually be asking my questions of the Senate, who's putting this plan. So with that preface, and then we have the governor's plan.

And so I'm trying to figure out where both people are headed so I can comment on it. So I'm at Somewhat of a disadvantage. I want to just put that out to start with. So I do have some questions on a couple of these items in Issue 18, the cap and trade plan. Maybe Department of Finance could help me out here with the Senate plan is $847,000,000 for high speed rail, and the governor's plan is $526,000,000. So how did that come about?

I mean, there's a big gap there. And can we talk about maybe how those numbers came about so we can figure out where we're headed?

This is Sarah Cornette with the LAO. So, as you mentioned, this is the Senate Majority plan. However, our revenue estimates did inform the plan. And as you may remember from our previous hearing, the Administration uses the price floor of allowances to calculate how much revenue we can expect. However, over the past few years, allowances have sold above the price floor, which is why our estimates are higher than the Administration.

So taking the formulas and the statutory requirements into account for the continuous appropriations, high speed rail is allotted 25% of auction revenues. That's where that number is coming from.

Okay, perfect. So I believe that it's a waste of money for the high speed rail. I don't think anybody in this room knows where I stand on this issue. I think per ton cost for high speed rail, even though I know that it's mandatory that 25% of the resources go to high speed rail, I think that's something we need to work on. Which is there anybody that can quantify the amount, the cost per ton that high speed rail is reducing carbon?

Brandon Merritt with the Department of Finance. I was actually looking at the portion of the California Climate Initiatives Report, which is the appendices. We do have a breakdown of the various programs that are funded by that. Unfortunately, that one particular piece is not. I can't find it in the appendix. It is in the report, though. I just don't have that at my fingertips at the moment. So we can. Happy to get back to you on that particular statistic, if you'd like.

Yes, I do would appreciate that. I sat on the Transportation Committee and a few years back we actually had the high speed rail in front of the Committee. And the goalpost has moved quite a bit. In 2008, when they authorized the high speed rail, the estimate cost was $30 billion by 2020. And that was supposed to be complete. And here we are in 2023 and we don't even have 1ft of track laid down.

And in that scenario, they had changed administrators three times and there was talk of it not even being electrified. It may be still operated by a diesel engine. And so I think the public needs to know what the heck's going on because if I can't figure it out, I don't think anybody in the public is going to have a real good grasp on it. So it's a huge chunk of money. I mean, we're looking at over three quarters of a billion.

If the revenues come in higher than the base, and even if they come in at the base level, we're over a half a billion every year for a project that is now expected to cost 105,000,000,000. And we don't even have a date when we're going to complete it, the phases of that. So I think it's something that.

We have to talk about it. Is it worth doing and are we really reducing carbon? Because a lot of the bills that we see come through at all costs, we want to stop carbon. It doesn't matter the cost. Well, it really does matter the cost. And some of the legislators have been picking their parts they don't like, like dairy Digester. Some legislators are trying to say, hey, that's not a good bang for the buck.

Well, if we're going to talk about the dollar per ton, then let's talk about all dollars per ton, which is high speed rail right now is the most expensive. There's no doubt about that. And we don't know how much it's actually going to reduce. So I want to just bring that up. I wanted to find out how we came up with the two different. How the Senate came up with 850, $47 million and then the Governor with 526. So thank you for clarifying that.

I would love to have that before we have our budget hearing because I'm going to bring it up on the floor and shame all these Senators who keep voting for this because we have to do something different. It's a waste of money. So thank you for that. I do have some questions for CARB. I know that that's part of this discussion item and their baseline operations. So is there somebody from CARB that's here or are you guys covering that?

I think we need to hear the question first. Okay.

Well, the California Air Resources Board, in their 2022 scoping plan, estimated that the state will still need 97 million barrels of oil in state production in 2045, meaning that our energy transition will take several decades, even though we are moving at a faster pace on the regulatory side than we are. What their scoping plan says.

The data from the California Resource Board and the US Energy Information Administration tells us that California is shutting down local oil production four times faster than the state agencies estimated for that transition. So what's the rationale behind the next question? The actual question is they just took an action last week to phase out diesel trucks in California. The sell of diesel trucks in California by 2036.

And I want to know how they expect to do that when their own report, scope Hoping report says we're going to use 97 million barrels of oil in California in 2045.

Hi, Senator Dahle. Matt Potill with the California Air Resources.

Good to see you again so I can speak to the Scoping plan again. Matt Potill, I'm the Division Chief of the Industrial Strategies Division. The scoping plan is under my purview and the California Air Resources Board.

I'm not scary.

So what we put in the scoping plan reflects the fact that under regulations like our advanced Clean Cars Regulation, regulations like advanced clean fleets, the one that was adopted just last week, as well as other regulations we have in the transportation space, that these regulations typically include sales mandates, as you mentioned, that also provide for the ongoing operation of legacy vehicles in the fuel pool, in the vehicle pool.

So even with that 2036 deadline, there's still going to be diesel trucks driving around that were purchased prior to that 2036 deadline, for instance. And there's going to be fuel demand for those vehicles. So that's one component of where we get to the number of fuel demand in 2045. The other component is that there will still be some areas in the state where there will be liquid fuel demand in terms of some marine sectors, some aviation sectors, some off road sectors.

And so that demand will persist because those particular sectors may be more challenging to electrify or potentially deploy other zero emission strategies. So the fuel demand that persists in 2045 that we projected in the scoping plan reflects the fact that there would be still some of those legacy combustion engines and some of those harder to decarbonize sectors would still have some fuel demand.

You're reflecting that. But the industry, I'm going to give you an example. So yesterday I had a local waste hauler in my office. I'm the Vice Chair of Energy and the Vice Chair of EQ, which most of that, and I'm on natural resources. So all these issues are going to go through at least one. And I'm on transportation, so I don't miss them. They all come by my office.

So, for example, to electrify a natural gas garbage truck, the duty cycle is one third the time of a natural gas truck, which they were mandated to put in place. So all of our public sector cities, counties, school districts, waste haulers are going to be transitioning. They're going to start transitioning. So you have to have three garbage trucks to do the duty cycle of one natural gas truck.

And the cost of that is going to drive up the cost of what it cost us to dump a garbage can in front of my house, which the rates are going up because we have now organic which is another cost that we added last year. We were just marching forward, setting targets and mandating without a clear plan, even although the scoping plan of CARB is showing us something very different. And there's a lot of really smart people.

I mean, I listen in this Committee about, but I think what we're missing is what is it going to cost? And is that time frame the most efficient way to do it for the reduction of carbon and the cost? Do you take that into consideration that it may cost me $75 a garbage can every couple of weeks to get it dumped because the waste hauler has to have three trucks to make the duty cycle work?

So I'm going to speak in more General sense here, because I will say that my division is not the division that implemented the Advanced Clean Fleets Regulation, but I will talk about kind of consistency between the scoping plan, the regulation that was just adopted by our board, and the General regulatory process. So what we did put forward in the 2022 scoping plan were targets around zero emission vehicle deployment for the light duty, medium, and heavy duty sector. The board adopted that in December.

When the board heard the Advanced Clean Fleets Regulation just last week, they did decide to adopt a target that is slightly more aggressive than what was put into the scoping plan. But there isn't an inconsistency necessarily from the broad signaling that was included both in the scoping plan and what the board ultimately adopted in ACF, which is that transition to zero emission vehicles in the medium and heavy duty sector.

As far as the cost analysis goes, as with any major regulation that the board adopts, we have to do an economic analysis by statute. And so that is part of our regulatory impact assessment and the economic analysis that goes into each of the rules that we adopt. And so that information is put forward as part of the rulemaking process and considered by the Board as part of adoption of any regulation that we have.

Where's that information?

It's public. It's part of the rulemaking that we put forward when we adopt a regulation. Happy to follow up with the links to the documentation, does it take into.

Consideration the cost of services that are supplied by these agencies, and, quite frankly, for private businesses, the cost of the private business?

So, again, I'm going to plead a little bit of ignorance here on the specifics of the regulation, but I will talk in generalities about what we have to look at when we do a rulemaking, and that includes doing a cost assessment on the cost to purchase technology, to fuel that technology relative to other options. And so that is part of a rulemaking assessment. Your specific of a question? We'd have to something I'd have to get back to you on. Check with our rig folks that were responsible for the advanced clean fleece rig.

Well, I appreciate that. I just want to make a comment for the General public that's out there that may be watching and trying to figure out. Exactly. What I'm trying to figure out is there are a lot of legislators and the Governor and people who make targets and do a victory lap saying we're saving the environment, but don't take into consideration the cost.

And I can tell you from the phone calls I get in my office, it isn't about are we saving the environment as air clean. It's about how can I stay in California and afford to have a home, afford to pay the garbage Bill, afford to drive a car or transition to some other type of car when our infrastructure is not in place and somewhere we have to have a better plan. I think targets we're not really abiding by our own plan.

We're aggressively, I mean, in CARB zone scoping plan. We're going four times faster than they originally said we should to transition. And there's a cost to that and there's a cost to the public. And at the same time, we're spending hundreds of millions of dollars on a train that will never, in my mind, be finished using greenhouse gas monies. And we should be using that for other programs that could get us there faster, that actually reduce carbon quicker.

So I just want that to be known because this is definitely not, I know it's the Senate majority's plan, but it is definitely not the Senate minorities plan. So I wanted the record to show that, and I'd love to have that information because I'm going to talk about it when we come to the floor because I think I read somewhere it was like $168,000 per ton. It's way up there.

And I would be happy to take that money and use it for dairy digesters and other things. And at the same time, we don't count carbon from forest fires, which is the biggest emitter of carbon in our state. Thank you.

Well, thank you. I do a few other areas of specific questions before we open it up to a public comment. I will say as a General principle, I do support, over time, orienting our greenhouse gas funds, money on a bang for buck basis, and really trying to figure out how we can leverage it to reduce greenhouse gases. And I do think there's a lot of stuff in here. I do appreciate the General sentiment.

So getting back to some stuff that is in the Senate majority plan, I wanted to turn to equitable building decarbonization, and these are programs aimed at supporting Low energy building upgrades for Low to moderate income families, particularly in underresourced communities. So incentives for Low carbon building technologies for Low global warming potential refrigerants and homes at Carbon CEC and the CC. And our plan contains about $100 million for this program.

This is in addition to the restoration of the General Fund cuts to this program under the governor's proposal. So I guess my first question would be, can you provide us with an update of the program implementation?

Happy to, Senator. Good afternoon. My name is Dina Carrillo, and I'm the Director of the Renewables Reliability and Building Decarbonization Incentives Division here at the CEC. We're developing the equitable Building DCAR program. So I'm happy to share that. We posted an RFI and did some workshops last December and actually posted our proposed guidelines for this program this morning. Our first initial public workshop is scheduled for May 17 this month. The focus of the guidelines and workshop is the foundation of our direct installation program.

Under these efforts, staff will conduct extensive stakeholder outreach, engagement and coordination with local governments, community based organizations, residents, as well as some tribal listening sessions over the next 60 days. Then the guidelines will be finalized and adopted by the Commission over the summer and early fall. Concurrently, we're working on a solicitation for third party implementers to implement the program on a regional basis.

And we're also working with our sister agencies to see if there's some other efforts that we can quick start to focus on building decarbonization for our neediest Californians.

Thank you. You may have mentioned this, but I didn't catch it. How has the public engagement process been going through that RFI process that you mentioned?

Yeah, the process has been going well. We had a robust response to that RFI and to our first workshop. We've concurrently been continuing to work with community based organizations and environmental justice communities to connect on how best to roll out the program and get feedback on these proposed guidelines.

So our regional workshops across the state over the next 60 days is informed by that collaboration, and we'll be hosting them around the state and offering different opportunities for both residents, local governments, implementers, and community based organizations to engage.

Did you say when the guidelines will be released?

They were actually released this morning.

Okay. THEY HAVE iT.

YEAH. GOOD TIMES.

Excellent. Thanks to celebration for the question. Well, I'll look forward to checking that out. Why do you believe this program is important for the transition of building decarbonization?

That is a really good question. Our existing building stock represents 25% of our greenhouse gas emissions, while our existing building code helps to solidify and improve our indoor GHG for new buildings, our existing buildings are really the most challenging. That's about 80% of our building stock was developed before building code. That could be a David statistic. So I'll have to fact check myself on that after this.

I would say one of our big focuses, as we look at the cost of decarbonization, it's been estimated that the need is at about $72 to $150,000,000,000 to retrofit our existing building.

How much, again?

You said 72 billion to 150,000,000,000. That's a statistic from the Building Decarbonization coalition that was established if we were going to focus on Low income and moderate income households from a grant only perspective, for building decarbonization. So while the Governor's Budget was robust in this investment that he proposed last year, it is really just the beginning of the need to decarbonize our existing buildings.

And I think the real risk, if I may, is that without kind of thoughtful and intentional prioritization for our Low income Californians, our state's most vulnerable Californians may be left behind.

Yeah, that's a concern of mine as well. So you mentioned a little bit. But again, could you speak into how the Department is prioritizing Low income households in this development and implementation?

SURE. The statutory language for the equitable building DCARB provides a preference for underresourced communities. Given the finite use of resources and where we are with the budget, we're actually prioritizing all dollars to underresourced communities. That definition is in statute. So if I may, I'll refer to it for a minute. So these dollars will be primarily focused on disadvantaged communities designated by California Environmental Protection Agency, or Calambiro Screen.

Our census tracks with median income households at or below 80% of the statewide median income, or census tracks with median household incomes at or below the threshold designated by HCD for Low income. So all of the funding is going to Low income Californians as we begin our launch.

Excellent. Well, I think you articulated well, I think why we're doing this. And again, I think that's why we made it a priority in the Senate majority plan to put in $100 million for this program on top of restoring cuts. I do think it's. Do you think it's very important. And just as in the case of zero emission vehicle incentives, make sure we're targeted at underresourced communities.

We got to make sure that everybody feels that they are participating in the benefits of this and they can get, say, air conditioning through putting in a heat pump in their house, or they get better indoor air quality benefits and hopefully lower bills as well as we address our electrical rates over time. So thank you for that. Like to move on to two more areas. One is around carbon removal.

And as we know in the legislation that was passed last year and the Governor signed into law, we have a commitment to net zero by 2045. And as was mentioned previously by my colleague Senator Dahle, this is a net zero target.

Right. So there still will be some considerable emissions. So it's 85% direct emissions reductions, and then at least 15% of those emissions are going to need to be removed again, totally separate from carbon capture, which is considered part of the direct emissions reductions. This is carbon removal of 65 million metric tons a year. The scoping plan currently identifies the need for the investment, demonstration, deployment and development of carbon dioxide removal to meet our targets.

Addition, the Biden Administration has provided funding in both the IIJA and Ira to support it. I believe the, the Global IIPC report said that we need to be removing 10 billion tons of CO2 a year from the atmosphere by 2050. I believe that's the number. So my question initially from CARB is, does CARB currently have a statewide roadmap on how to scale and advance carbon dioxide removal that is durable? We touched on this a little bit of previous hearing, but maybe you can comment on that.

Yeah, happy to. Once again, Matt Polit with the California Resources Board Division Chief for the Industrial Strategies Division. So thank you for the opportunity to speak. And as far as a roadmap for carbon dioxide removal and carbon capture, utilization and sequestration, we included in the recently approved scope plan a number of strategies for achieving success in this space. And this flows from the similar comments that you made in terms of the need for CCUs and CDR by 2045 to achieve net zero.

The comments that Senator Dahle made about remaining combustion emissions that we expect will still be here at that time as we make progress towards decarbonization. And so the scoping plan kind of provided this comprehensive picture of what some of those remaining emissions would be, where they would come from, the need for CCUs and CDR, and some strategies to accelerate the deployment of CCUs and CDR.

I think there were about 13 strategies that we included in the scoping plan, some of those that were actually captured in the legislation as part of SB 905. I don't need to go into all of those, but they include things like taking advantage of the federal tax credits and the grant funding from the IHA, as well as looking at and evaluating permitting barriers and addressing concerns around pipeline infrastructure and pipeline safety.

Those are some of the examples that we identified in the scalping plan that the Administration is interested in taking action on.

Any lessons learned from the pilot projects. So.

As far as that'd be more.

For the CEC, I guess the CEC has been the one, I believe, doing those pilot projects.

Yeah. Good morning. So Mike Sokol with the California Energy Commission and the CEC has been in a scoping phase for this pilot project for the anticipated $75 million, including holding a staff workshop on April 19 of this year to discuss the proposed implementation plan for the Carbon removal program, including the proposed budgets for the main components of the program, which are developing a research test center to test and pilot direct air capture technologies for anticipated $37 million Providing a cost share for federal grants at $15 million Providing grants for applied research and demonstration projects for $10 million providing funding for community engagement and outreach at $5.5 million and technical assistance and administrative costs at $7.5 million.

We did receive a range of comments responding to the workshop, which is that attendees supported a research test center that will be designed to address user needs, define research targets, assist in technology development, and provide data transparency while supporting outreach and engagement. Providing cost share to California applicants applying for federal grants is really needed, and the CEC has actually written two support letters of funding intent for establishing direct air capture hubs in California.

If the projects do get funded by DOE, then the CEC will provide funding. As indicated, one project is with the Electric Power Research Institute for $3 million that includes an engineering design study for a direct air capture hub in Kern, county, and a second project is with UC Berkeley for $300,000, which is a feasibility study of a community centered direct air capture hub in the southern part of the San Joaquin Valley, which includes community partnerships as well.

There's also support for funding assistance for applied research and development to encourage California developers to test and demonstrate projects within California rather than going to other states. Information from those projects can help inform other state regulatory agencies, such as those involved in SB 905, and provide education to local communities across the state. Lastly, through community outreach and engagement, information can be disseminated on the technologies demonstrated and tested to identify the potential benefits to the communities.

Great. Well, thank you. Speaking specifically to the carbon removal piece, given that such a large amount is going to be needed, it certainly is important that we send the right market signals to entrepreneurs who are developing this. There's going to be a long term, predictable market for carbon removal, and that we also put the guardrails in place to make sure that communities are protected so it gets back to CARB.

Are there other considerations CARB is accounting for, such as equity cost concerns or other guardrails you're looking at or other things that could either help. There'd be barriers or other things that could actually help implement CDR?

Happy to take that. So I think in terms of what you heard from the CEC and what you're hearing from me is that there are a number of actions that the Administration more broadly, is taking to provide that environment by which CCUs and CDR, particularly the carbon dioxide removal side, will be supported through and deployed here in California and elsewhere.

And work that the CEC is doing on their grant funded program, as well as work that CNRA is doing around pipeline safety, work that CARB has to do to implement SB 905, set up the 905 program. These are some of the critical aspects. There's also areas that are outside our Administration responsibilities around making sure that there is a supportive permitting environment and that the infrastructure is being deployed quickly to support these CCUs and CDR projects that also needs to move forward.

So for CARB, the first step is really kind of establishing this 905 program and to ensure that we have CDR as an eligible project type under our Low carbon fuel standard and under our cap and trade program. So these are activities that will help kind of encourage and incent the deployment of these technologies. But as far as your concerns about other considerations, there are a series of analysis that are called foreign SB 905.

And so in terms of standing up the program and the importance of it, those additional analyses around technology assessments, economic and community exposure, that's work that we need to do as part of the 905 process.

And so to kind of further that work, we're planning to do community meetings later this year to start getting input on what the state is doing to address climate change, the tools required, like CCOs and CDR, and to hear concerns and potential additional issues and barriers to deployment that we can fold into that 905 implementation and work with our sister agencies like CEC, the PUC, CNA, and others that have a kind of joint responsibility on this program.

It's helpful generally. Again, 905 is really CCUs focused. I was really asking more specifically about CDR in terms of any of those kind of guardrails or other things that you think you see.

We think it's important to do more community engagement on this side, and we think it's important to get into the next steps on the technology assessments encouraged about the work that CEC is doing on the deployment of their 75 million, because I think that will also help advance this conversation to get a little bit more specific about the different opportunities for CDR, whether it's things like direct air capture or biomass utilization strategies, for instance, that we can actually start to get into that level of detail on the different technologies and the concerns around the deployment of those.

Okay, great. I think, as you know, a lot of the CDR pathways are other things, looking at oceans and lots of things that are now being entrepreneurs, really looking at ways for durable and equitable CDR. And certainly that's going to be a critical part of our path to net zero. So our hope is that this additional funding will allow CARB to move forward on how to safely, effectively, and equitably roll out a state roadmap for creating this industry and the plan in this state.

So I'll move on to my last area, which is the technical assistance for federal tax credits. So in the Senate majority plan, we put additional dollars in here because we know how this is critical to both technical assistance and outreach to Californians to apply for federal tax credits. And this can include things like the use EV credit, the Residential Clean Energy Credit, energy efficient home improvement credit, clean vehicle credit. So the Senate plan includes $10 million for these purposes.

Certainly, one of my big priorities in the budget has been to ensure that we're leveraging federal dollars that either require matching or require individuals or locals to apply. And I'll note that a lot of these programs are uncapped. So the more people that apply for them, the more benefit we get as Californians. So there'll be various credits that we really need to encourage Californians to use.

So up to 30% for UZV, 30% for new distributed energy resources like solar or battery storage, which can be paired well with existing California incentives, up to $3,200 for energy efficiency upgrades. However, these require Californians to both know about these and make sure that it's simple to apply. So, providing the CEC with additional funding to create technical assistance and to pair this with a direct install program could support the use of these credits.

I know for myself, when I put in an electric heat pump and put in an electric hot water heater, it was still a bit confusing how to access these credits and the people calling back to verify and do audits to then allow you to actually get advantage of the credits. So I'll start out with the CEC. Does the CEC have any update on its efforts to get the Direct Install Program up? And how are you able to integrate federal tax credits in that program?

Good afternoon. Deana Carrillo again with the California Energy Commission. I shared a little earlier about where we were on getting the direct installation program up. And just a remind program is focused on low-income Californians. And so while I appreciate and share the interest in leveraging the tax credits and investments, specifically the energy efficient home improvement credit, it applies to homeowners that have a tax liability. So as we focus on targeting this program to both tenants and low-income Californians, it's not the best fit.

We are still waiting to hear from the IRS on whether this tax credit can be assignable so that we can potentially leverage the dollars or could potentially be cashed out. So if the IRS has not identified any flexibility in that area or provided any specific guidance. I would like to share that as we are out in the communities on the direct installation program for equitable building de-carb, we will be looking to leverage all programs, whether those be local, utility, state, or federal. And that is part of our implementation plan.

So I just want to follow up. Basically, we would be better off to just do a direct grant because they have to file. If they don't file, if they're low-income, they're probably not paying that high. They're not getting much of a rebate is what you're basically saying. Right. So if we gave a direct grant to them, we would probably be able to serve those disadvantaged communities even better.

What I'm pointing out is the specific question of how the income tax credits can be leveraged with a direct installation. That isn't the best match because there's not that tax liability for our low income.

Right. That's what I mean. So if you don't receive anything back, the credit doesn't do any good. But if a direct grant to actually put the heat pump in or the electric water heater would be actually help those low-income people better.

Exactly, Senator. And that is what the direct installation program is. It is a grant program.

What's it funded at that's not federal, that's state.

That is state program that was authorized last year. And I will look at my Department of Finance colleagues on our current numbers on that program with the January May revise. There was a suggested deferment of funds, I believe, into future budget years because this one is a little more administrative, so to speak, in rolling out the program. So we were able to defer some costs that we expected this budget year for future years. And then, as I understand it, the Senate's plan is proposing a deeper investment in that fund.

Department of Finance. We might have to get back to you on that specific number that is included in the budget.

And it would also be nice to know, and I don't know who would answer this, but how many people actually access it, because this is an area where we really can make a difference. In my mind, I think it's a better place to spend money than it is on obviously, things I think are way too high, like the train.

David Evans with the Department of Finance. That number is 835,000,000 for that program.

It's in a direct grant.

It's a direct installation program. So we will be compensating for contractors to come and knock on doors and help people with their indoor and their appliances for both their energy load costs and indoor air quality. Yes.

And that's targeted towards very low, and there's a criteria to meet that?

Perfect. Thank you.

Correct, sir.

Just one thing to add on that, Sarah Cornett with the LAO. The 835 proposed in the governor's budget assumes a delay for the program. So the original proposed amount for that program was 922,000,000.

Okay, thank you. I believe that's restored in the Senate plan, correct?

I believe so, yes.

Okay. Hey, how about that? A couple other questions for Department of Finance. So how's the administration been identifying public private partnerships and or philanthropy to support the individual program applications and any lessons learned there?

Yes, Department of Finance. On public private partnerships, I think we'll have to kind of get back to you on that question. I know there was another question on tax credits, which we could kind of speak to broadly on kind of what the administration has been doing to try to leverage all that on the federal space. But generally, there's the two sets of tax credits, the consumers and then those that go directly to businesses.

And on the consumer side, the governor's office recently launched the climateaction.ca.gov, which helps provide a significant amount of information on both state and federal funding opportunities, including all those federal tax credit that just recently came out, and the administration is doing a kind of big effort to get the word out there and provide all the information necessary to be able to have consumers apply for those tax credits as they're eligible.

Kind of on the energy side, in terms of solar, in terms of kind of like tax incentives, CPUC does play some role in requiring solar providers to distribute, to have customers sign a guidebook. And as part of that guidebook, we're now updating that to include all of the information for the tax credits. So all the consumers that are getting solar will now be able to have all the information to be able to apply to all the tax credits.

And then also the utilities, through their marketing efforts, they also kind of provide information to their customers on all those available dollars. And then, I think to the businesses, which I think kind of gets more into the partnerships. I know GO-Biz is doing a lot of effort in this area, working with a lot of businesses to try to provide them information and engage in partnerships to be able to help have them apply to the different federal tax credits and federal grants.

And businesses do tend to be a lot more knowledgeable on all those opportunities, more than customers, which is why we have made that considered an effort on the customer side. But I think part of GO-Biz's efforts is also to help connect those businesses and create those partnerships to be able to leverage as much of the federal funding as possible.

Helpful on the tax credit side. I get that there's a website and sounds like GO-Biz is doing some specific commercial outreach. And again, the reason this is important is that, again, these are uncapped. So if 10% of Americans apply, Californians apply, that will get 10%. If 50% apply, 50% will get those benefits. So it's really important that we get the information out. Any other specifics on outreach that you can provide?

That's all we can share at this time. Unfortunately, we don't have representatives for GO-Biz or PUC to speak in more detail about what they're doing, but that's what we're aware of their current efforts.

Okay. Well, again, I think for anyone who's tried to electrify, you know that rebates can be complex and can be confusing. And, you know, we're talking a lot more now, rebates and tax incentives for building decarbonization for EVs, for EV infrastructure, for other weatherization projects. And I think that's why it's important that the Senate plan has allocated this additional money to the CEC for that kind of outreach and to let people know also about stacking opportunities with the Direct Install Program.

And again, anything that we can do to make sure that more Californians are aware of these programs and take advantage of these programs because they are time limited and I feel like a commercial. Time limited, apply now. But we really do have to do a lot of education here to make sure we maximize these. So I appreciate that. With that, I don't have any other specific questions.

I did want to note solve representatives from air quality management districts here that as folks know, AB 617 provides funding to local air districts to fund important projects that benefit priority populations and achieve criteria pollutant reductions. Under the Senate plan, we provide 250,000,000 from the general fund and 50 million from GGRF to restore the funding amount to this program at 300 million, which is what was agreed to last year. So I did want to mention that as well.

We include $5 million for the wood stove program to replace older, inefficient, highly polluting wood stoves. So there's a lot of good pieces in here that happy to discuss with our colleagues and make sure that information gets out there. And if people have questions about the Senate plan, obviously my office is happy to take those as well as other budget leaders here. With that, I think we'll move it up to any public comment.

And the public is, we'll start with folks here in the room, ask people to keep your comments for one to two minutes, and after that we will open up the phone lines. So thank you to all the representatives from LAO, Department of Finance, CEC, CDFA, CARB, and everyone was here today to testify. Great. We'll go ahead have a public comment.

Thank you, Mr. Chairman and Members. Bill Magavern with the Coalition for Clean Air. We support the Senate majority overall budget plan because it restores full funding for our climate and air quality and clean transportation programs as promised last year, and it does so in a progressive manner. We also support the Greenhouse Gas Reduction Fund proposal that has been presented today.

As you know, transportation accounts for about half of California's greenhouse gas emissions when you consider upstream emissions, as we should, as well as about 80% of our smog and soot. So it's appropriate to really focus on transportation with these investments. The ZEV incentives that you've proposed for both vehicles and infrastructure will support a number of regulations that are in place. So it's a good idea that you're providing some carrots to go with the sticks.

And the ZEV incentives are appropriately focused on reducing emissions from heavy-duty vehicles which are disproportionately exposing our disadvantaged communities to toxic diesel exhaust and also focused on, when it comes to light duty, on equity in transportation. So I think we've already done enough to help people of means to afford EVs. The market now will sustain that. We need to help people with lesser means to be able to make that transition to zero emission transportation. And that's what these investments that you've proposed would do. So we thank you for that.

Thank you very much for that comment.

Mr. Chair and members, Brendan Twohig on behalf of the California Air Pollution Control Officers Association, representing the executive officers from all 35 local air districts. We're on a mission of gratitude here to thank you for recognizing the cost-effectiveness of air district implemented programs, the AB 617 program for restoring the funding which you just referenced. We appreciate that.

And also the restoration of $150,000,000 to the farmer program, also very cost effective on both the greenhouse gas side and criteria, pollutant reduction side, just like 617, and also appreciate the Senate's leadership once again on funding the Woodsmoke Reduction Program with $5 million. So again, thank you for that. And we hope it all holds firm as we go into the budget season in earnest. Thank you.

Thank you. Thanks for your comment.

Alan Abbs with the Bay Area Air Quality Management District. I can't say any better than my counterpart, so I'll just echo what he has to say. Thank you very much.

Thank you very much.

Good afternoon. Mikayla Elder on behalf of the Electric Vehicle Charging Association or EVCA. We would like to express our appreciation to the Senate for the proposed allocation of $975,000,000 towards zero emission vehicles to restore the proposed cuts in the governor's budget proposal. EVCA especially appreciates the 100 million allocated for ZEV fueling infrastructure grants and the 100 million allocated for equitable at-home charging. Not only are these programs imperative in facilitating ZEV infrastructure needed to achieve our goals, but also draw down federal funding. Additionally, these programs help ensure that we turn our attention towards prioritizing infrastructure gaps in multifamily and low-income communities. So thank you.

Thank you.

Good afternoon. Chair and members Amara Eger, on behalf of the Building Decarbonization Coalition in strong support of the Senate's proposed GGRF plan to fund the Equitable Building Decarbonization Program, Low-Income Home Weatherization Program, technical assistance for federal tax credits, and Building Energy Benchmarking Program. All these allocations will be critical to provide clean energy upgrades, energy bill cost savings, and extreme heat solutions to low-income communities that wouldn't otherwise have access. Thank you so much.

Thank you. This is a fun hearing today. This is a fun comment.

Good afternoon. I think it's afternoon. Yes. 12:06. Orville Thomas from CALSTART representing our support for the Senate budget plan, the majority budget plan. Thank you, Senator Dahle, for specifying that. And the Greenhouse Gas Reduction Fund allocations and priorities. I want to just mention that the heavy-duty vehicles and off-road equipment incentives is definitely important. We see a lot more interest in zero emission ag tractors and yard tractors. And this is a great opportunity for large rural portions of the state to become part of the ZEV transformation and to incorporate that into their farming. Thank you.

Thank you very much.

Good afternoon. Erika Romero on behalf of Valley Clean Air Now. Just want to show strong support for the Senate's proposal which continues to prioritize and maintain Clean Cars for All program funding. And Clean Cars for All has proven to be one of the most successful incentive programs the state is implementing and removing high-polluting vehicles off the road and helping get folks into cleaner vehicles.

And so in the valley, we administer the Clean Cars for All program, and there alone we've replaced over 4500 vehicles and we see firsthand the impact and quality of life benefits that it provides for low-income folks across the state. So we hope that the final budget continues to prioritize investments, especially in the existing air district programs which serve over 85% of the state's population and over 90% of the state's disadvantaged communities. Thank you.

Thank you. Big fan of Clean Cars for All. Thank you. Next up.

Katie Little here with Farm Bureau. Just wanted to also extend my support for the Senate's proposed plan, especially the farmer funding that's been incorporated, as well as the methane reduction programs and the research that's been incorporated as well. Thank you.

Thank you.

Good afternoon. Taylor Roschen on behalf of various agricultural clients. We'd also like to express our appreciation for the farmer program, a critical program to improve air quality and aid farmers in the transition to zero emission and lower emission trucks and tractors. And then finally, we'd like to also express appreciation for all of the methane emission reduction funding. These are critical projects that serve livestock and dairy operations across the state. Thank you.

Thank you.

Mr. Chairman, members, Michael Boccadoro on behalf of Ag Energy. Appreciate the support for the $35 million, in particular for dairy methane reduction programs. As you all know, there's a huge need in this area. I know that this has been a program that Senator McGuire has been longtime supporter of, not just for digesters, but AMP, and especially want to talk briefly about the importance of enteric. We did spend two days. And we appreciate your staff attending.

We know you've got legislation in this area, and we do think by the second half of next year we'll be ready to roll out some sort of an early adopter program with funding hopefully from the state, from the Federal Government, and from private industry that can get dairy farmers in the state to be early adopters of some of the interic feed additives that we have.

Just to put an importance on this, I think it's really important for folks to understand if we cannot achieve the dairy goal of a 40% reduction goal, there is no way the state will achieve the 40% short lived climate pollutant goal. And if they don't achieve the 40% short lived climate pollutant goal, which accounts for fully one third of the scoping plan goal, no way to achieve that either. So this is critically important. They identified $75 million per year that's necessary. 35 million is a good start. We're very appreciative and we also do support the farmer program. Thank you.

Thank you very much. We will now turn to the phone lines. Moderator, can you queue folks up?

Thank you, Mr. Chair. For those of you who wish to comment, please press one, then zero. Press the one, then zero only one time as pressing one, then zero a second time will remove you from the queue. We're going to first go to line 19.

Good afternoon, Senators. My name is Steven King and I'm the clean energy advocate with Environment California. I'm also calling on behalf of Environmental Defense Fund. We support the Senate's proposal for the Cap-and-Trade Spending Plan, which would ensure greater funding for critical zero emission vehicle and clean energy programs. The governor's budget proposal cut billions from these programs intended to clean up our air and cut global warming pollution. California has some of the worst air quality in the country.

Over 90% of people live in a place where the air is unsafe to breathe. We must do more to address this major health issue, and the Senate's proposal is a great step in the right direction. The Senate's proposal would boost this funding, helping California realize the environmental and health benefits of proven clean transportation and clean energy programs. Programs like Clean Cars for All get some of the most polluting cars off the road and make clean cars truly for all. Incentives for residential, solar, and storage are important drivers of clean energy adoption and energy reliability in California. Thank you for supporting programs to protect our air, climate, and our health through the Senate Cap-and-Trade.

Thank you. Next caller.

Now I'm going to go to line 21. Your line is open.

Good afternoon. Julia Levin with the Bioenergy Association of California. We thank the committee for the Senate majority plan, and I would just like to remind the committee that science is very, very clear, that the most urgent thing we can do to address the climate is to reduce short-lived climate pollutants. And our investments in short-lived climate pollutant reductions are also the most cost-effective of all of the state's investments. So for those reasons, we strongly support the inclusion of funding for healthy forests.

As Vice Chair Dahle said, forest fires are one of the largest sources of climate pollution. They're also a very large source of air pollution, and restoring healthy forests reduces pollution of both kinds, as well as protecting our water supply and quality and public safety. We also support the investments or proposed investment in dairy methane reductions. This is, according to the LAO and the Air Board, the single most cost-effective investment the state is making in carbon reductions.

And third and last point is we would urge the committee to include funding, which it currently does not, for diverted organic waste. This is the second most cost-effective of all the state's climate investments and also critical to meet the state's methane reduction goals. So we urge the committee to include funding for diverted organic waste at CalRecycle to meet the state's waste diversion requirements. And this will also help local governments to meet their requirements under SB 1383. Thank you.

Thank you.

Now move on to line 22.

Yes. Good afternoon, senators. This is Chris Chavez with Coalition for Clean Air in the Charge Ahead California and Invest in Clean Air campaigns. We support the Senate majority's proposed state budget as it relates to clean transportation, the zero emissions vehicle package. Once again, the California is home to the dirtiest air in the nation, and one of the largest sources of air pollution in our state is the transportation sector. Almost every California lives in an air basin that fails to meet clean air standards.

Not only does our dirty air threaten the health and lives of almost everyone in state, but it also makes our state vulnerable to future federal sanctions that could threaten the state's economy and local governance. We understand that this is difficulty, that even in this budget scenario, fiscal challenges lie ahead. As such, I want to echo the comments of Bill Magavern and note that we prioritize climate equity programs, medium and heavy-duty programs, and clean mobility programs.

The clean mobility programs in particular have long been underfunded compared to our other climate programs, and some programs are even oversubscribed in one day. We also believe that incentives for medium and heavy-duty vehicles and infrastructure are key in meeting California's new, ambitious clean transportation rules as well as targeted assistance for low-income and disadvantaged communities. Thank you for your time.

Thank you very much. Next caller.

Line 25.

Thank you. This is Olivia Seideman, climate policy coordinator with Leadership Counsel for Justice and Accountability. We appreciate the Senate's proposal to maintain $370,000,000 for Equitable Building De-carb and 100 million from the GGRF, including 100 million from the GGRF. Equitable Building De-carb is a crucial program for California to meet its climate goals and provides access to resources for low-income communities to decarbonize. We also urge against the $87 million in cuts to this program proposed by the governor in January.

We strongly urge against the Senate's proposal of 35 million to CDFA for agriculture-related methane reduction programs and urge the Senate to reject any funding towards the production and deployment of factory farm gas, such as CDFA's Dairy Digester Research and Development Program. The installation and expansion of dairy digesters entrenches polluting practices and increases pollution in already overburdened communities. California should invest in other programs that build resilience in disadvantaged communities and do not exacerbate environmental injustices.

We recommend that the funding be directed to programs that promote sustainable agriculture and away from DDRDP. Climate Action California also echoes our concerns on factory farm gas. Finally, for the $5 million to CDFA for research into DHG reductions for methane emission reduction programs, we strongly urge that any funded research on this matter include research on the full environmental impacts and implications of methane reduction programs, including on air, water, and quality of life pollution for surrounding communities.

We urge the Senate to ensure that if this funding is included in the final budget, there is language that requires CDFA to do so as the implementing. Thank you. Oh, and if we support the increased investment for Salton Sea to accelerate restoration efforts, these investments must improve the well-being of the communities that surround the sea, whose public health and quality of life continue to be impacted. As the state slowly develops management programs and implements projects, half of all funding invested in the Salton Sea must target the development of multi-benefit projects that not only create habitat and suppress deaths but also provide resources for community resiliency and access to recreational spaces. Thank you.

Thank you.

Next caller, line 26.

Good afternoon, Chair and committee members. This is Philip Crabbe of the South Coast AQMD. We are very appreciative that the Senate's budget plan restores AB 617 funding to last year's levels for Air District's program implementation and incentives as mentioned by Chair Becker. The continued prioritization of funding for programs such as AB 617, which the LAO acknowledged is highly cost-effective in addressing air quality, public health, and climate challenges, is critical. Currently, the AB 617 program is severely underfunded.

The number of communities in the program has grown statewide, but there are not enough resources to support them. Further, the South Coast region contains almost two-thirds of environmental justice communities in the state, but we cannot add new AB 617 communities due to a lack of resources. To address this, we respectfully ask that if GGRF revenues surpass current estimates, that you consider additional estimates or investments in this worthy program. This will help cover actual program costs and cost, effectively reduce emissions that help meet federal air quality standards, and protect the health of disadvantaged communities statewide. Thank you so much.

We'll now move on to line 28.

Thank you, Chair, members, and hardworking staff. I'm Daniel Gluesenkamp from the California Institute for Biodiversity. We applaud your Protect Our Progress plan, and we appreciate your commitment to investing in equity and biodiversity while also addressing the climate crisis and sea level rise. The issues are all connected, and your plan wisely recognizes that they can share common solutions as well.

We particularly support you're getting the bang for the buck from GGRF, especially by helping Coastal Conservancy and Ocean Protection Council to protect the coast from climate change advance nature-based solutions such as blue carbon sequestration, while also continuing to welcome millions of Californians who seek health, happiness, and wonder on California's intertidal coast. Thank you very much.

Line 27, your line is now open.

Good afternoon, Mr. Chair and members. This is Victoria Rome with NRDC, Natural Resources Defense Council, and we proudly support the Senate majority's budget proposal. And thank you, Mr. Chair and other Senate leaders for the proposal and your leadership on these issues. In particular, we are grateful for the funding for the ZEV programs, which is essential to tackle the single largest source of climate and air pollution in the state. The incentives are critical to couple with what we now have as 100% ZEV sales requirements for both light and heavy-duty vehicles. We're also watching and grateful for the Senate's proposal to fund clean, equitable transportation programs at previously committed levels and commitment to further stakeholder discussions on public transit's fiscal cliff that they're facing. Finally, we're appreciative of the building de-carb funding. Thank you.

Line 33, your line is now open. Line 33, your line is open.

Great. Thank you so much. Good afternoon. Thanks so much for the opportunity to speak. My name is Rebecca Johnson, and I'm the director of the Center for Biodiversity and Community Science and a marine biologist at the California Academy of Sciences. I'm calling from San Francisco, and I do most of my work along the coast of San Francisco, Marin, and San Mateo counties.

I'm also the co-chair of the San Mateo Marine Protected Area Collaborative and the founder and director of Snapshot Cal Coast, an annual California-wide, coast-wide community science effort in which thousands of people document coastal biodiversity to help understand our changing coast and to inform policy in the face of a rapidly changing climate that's impacting our coast and oceans, especially the inner tidal areas.

And at a time when research and work to protect our coast and coastal communities is desperately needed, I'm calling to strongly support the Senate's proposed funding to protect our incredible and irreplaceable coasts, support the work of the Coastal Conservancy, support the work of the Ocean Protection Council, and build and deliver a DNA barcode library for intertidal biodiversity. Thanks so much for your time.

Thank you.

Line 24, your line is open.

Good afternoon, Chair Becker and members. This is Megan Cleveland with the Nature Conservancy, and I'm calling to register our strong support for the Senate's budget plan, including the Senate's Cap-and-Trade Spending Plan for 2023-24 and this will allocate 110,000,000 of GGRF funding to coastal resilience. Senate's plan will provide critical funding to the State Coastal Conservancy and to the Ocean Protection Council to reduce greenhouse gas emissions by advancing the ability to harness carbon sequestration in coastal ecosystems and also to protect the coast and coastal watersheds from the effects of climate change. Additionally, TNC encourages the Legislature to ensure that GGRF dollars are invested in programs and projects that result in GHG reductions. Thank you so much.

Thank you.

Line 32.

Good afternoon. I'm Mike Dawson, faculty and Chair of Sustainability Advisory Committee at the University of California, Merced. As part of our work, we research coastal marine ecosystems throughout California, including long-term analyses of kelp forests and intertidal ecosystems on the Central Coast, from San Luis Obispo through Santa Cruz and San Mateo counties to Mendocino. I support the Senate's proposed funding to protect coastal ecosystems, support the Ocean Protection Council science, and especially deliver a DNA barcode library for intertidal biodiversity. Understanding the full diversity of species that comprise healthy, resilient coastal ecosystems is essential to understanding how to maintain the many ecosystem services they provide, including carbon sequestration and productive livelihoods. Thank you all for your hard work and dedication to ensuring the health of California's outstanding natural diversity and the many human benefits it brings. Thank you.

Thank you.

Line 30.

Mr. Chair and members, thank you very much for giving us this opportunity to address you on the budget. I'm Dean Pentcheff, and I manage the Diversity Initiative for the Southern California Ocean or the DISCO program in Los Angeles. I fully support the Senate's proposed funding to continue protecting California's coast, the Ocean Protection Council, and particularly to create a DNA barcode library for marine intertidal biodiversity. It's an essential contribution for both research and management of our coastal resources. Environmental DNA gives us the best financial efficiency for an investment in environmental monitoring and conservation. And again, we very much thank you for this proposal and fully support that funding.

Thank you.

Line 35.

Good morning. Chair and members of the committee, this is Paul Mason with Pacific Forest Trust with a couple of quick observations. I mean, there's certainly a lot to like in the Senate's plan, the GGRF plan I'm referring to, but I did want to just make a couple observations.

It feels like in every hearing that I've been in this year where we've talked about wildfire and the enormous challenge in front of us and the scale of the need, there's been broad consensus that we need more resources, more funding than we have dedicated in the past. And so I was a little surprised to see the plan only include the sort of legally required minimum $200 million dedicated towards fire and force resilience sort of activities.

And I'll encourage us to continue to think about how to increase that going forward, especially after this current budget discussion. The other is there's surprisingly little for broader landscape adaptation and conservation. In the past, the Legislature has funded programs at The Wildlife Conservation Board to deal with planning and implementation for adaptation.

So we're actually prepared for climate change conservation and adaptation of our inland natural resources, not just the coast, are going to be really important as we're dealing with water supply and wildlife migration and lots of other issues. So just encourage us to continue to keep those in line going forward. Thank you.

Thank you.

Line 36.

Thank you very much for the opportunity to speak on this. I'm Regina Wetzer. I'm the curator of the Marine Biodiversity Center, the Natural History Museum of Los Angeles County. I support the California Senate's proposed funding to enhance marine science, the Ocean Protection Council, and specifically the development of an environmental DNA barcode library for marine intertidal zones. Thank you.

Thank you. And I think that is. What was that it, Moderator?

Mr. Chair, I believe we may have lost someone. If they can please press one, then zero. And, Mr. Chair, we have one additional person. Just a moment. We're going to go to line 39.

Thank you. I'm Kathy Anne Miller, the curator of algae at UC Berkeley's Herbarium. I study California seaweeds, the foundation species from San Diego to Crescent City. I enthusiastically support the Senate's proposed funding to reduce emissions, sequester blue carbon, and especially to promote detailed knowledge of coastal biodiversity. Heartfelt thanks for your hard work for ocean conservation, climate change. On behalf of all of us, thank you.

Thank you very much. With that, I appreciate that. We'll move now to the vote only calendar. We have a number of items, and I would first take a motion on issues two through seven, number 9, 15, and 17. Senator Dahle motions. Can I call the roll, please?

Becker. Aye. Becker, aye. Dahle. Aye. Dahle, aye. McGuire. Aye. McGuire, aye.

The vote is three to zero. Those items are out. We now ask for a motion on issue eight. McGuire moves. Can you please call the roll?

Becker. Aye. Becker, aye. Dahle. No. Dahle, no. McGuire. McGuire, aye.

Okay, finally, like a motion on issues number 1, 10 through 14, and 16. Assemblymember McGuire moves, and please call the roll.

Becker. Aye. Becker, aye. Dahle. McGuire. McGuire, aye.

Well, thank you. Those items are out as well on a two to zero vote. And this concludes our hearing today. We thank everyone who participated in person and on the phone. If you're not able to testify, please submit your comments or suggestions in writing to the Budget and Fiscal Review Committee or visit our website. Again, thank you, everyone, for your patience and cooperation. We've concluded the agenda for today's hearing. Senate Budget Subcommittee Number 2 is adjourned.

Thank you, Mr. Chair.