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

I ask all members of the committee to be present in Room 2200 so we can establish a quorum and begin our hearing. Honored to chair the subcommitee at such a critical juncture for our state. In the past few years, California has made progress by setting ambitious new goals to fight and prepare for climate change and has provided unprecedented spending to meet these goals. Our greenhouse gas emission targets are ambitious.

We must reduce emissions by 40% below our 1990 levels by 2030 and be carbon neutral by 2045 with at least 85% reductions. The electricity sector is going to do the core of this work. We established interim targets in the last year, so we have to be 90% clean by 2035, 95% by 2040, and 100%, of course, by 2045. So far we've been successful in meeting our targets, but we know that this is just the start.

We've really done a lot of low hanging fruit, and the next stretch is going to be more difficult. In the past few years, we've been averaging about 1-2% reductions in greenhouse gases, and we need to be averaging 4-5% each year to get to our target. So really a three to four x increase in speed of our greenhouse gas reduction is needed. And this doesn't account for the millions of metric tons of carbon that's been released from wildfires in the past few years.

Moreover, grid conditions have shown that we need to build clean, reliable energy faster. As chair of this subcommitee, I'm going to ensure we stay accountable to these numbers, and it'll be critical for our subcommitee to ensure these investments are being spent wisely and cost effectively and that we change course when we're not meeting our targets. We'll also be working to ensure programs are supporting historically disadvantaged communities by prioritizing environmental justice in our climate transition. We all know it's going to be a tough budget year.

All the proposed budget cuts are painful, and my priority, as is our senate priority, is to protect our progress. We need to prioritize our climate investments in a time when we're experiencing flooding from extreme rainfall, sea level rise threatening homes and infrastructure, unprecedented fire levels, extreme heat killing our unhoused population and threatening the health of workers and millions in economic losses from drought and agriculture and other sectors.

The fact that we have ambitious goals requires immediate programmatic action and dedicated funding here, along with my colleagues, to roll up my sleeves and get to work in fighting climate change. With that, I'd like to invite Senator McGuire to say some introductory words.

Thank you so much, Mr. Chairman. First and foremost, I couldn't be more excited that Mr. Becker is chairing this budget subcommitee. He has been a climate champion here in the senate. You have been laser focused on making sure that we're focused on this crisis. And just want to say thank you and so thrilled to be working with you here in the years ahead. And, of course, to your amazing staff led by Ms. Roy.

Really grateful for all of the work that goes in to ensuring real focus on protecting our environment and tackling our climate crisis. And again, couldn't be more thrilled that you're here leading the way. Thank you so much, Mr. Chair. I'll be really quick, I think, just on some concern areas, and I'm sure that we'll hear from Vice Chair Dahle as well.

Number one, Mr. Chair, and I know this is a focus of yours, is on the issue of the reductions for climate resiliency from $500 million over two years to now just about $175 million. And these funds are critical for the protection and restoration of coastal and ocean resources, as well as the impacts of sea level rise and impacts of our climate crisis. Also deeply concerned in regards to the coastal protection adaption programs that was cut by nearly $481 million.

So that's going to be, I know, a focus of yours and wanting to be able to hone in on that. The other area that I hope that we can get into this year is those agencies that are on the front lines of ensuring that we're expediting offshore wind infrastructure, the Coastal Commission, in state lands. Right now, in the Coastal Commission, they have one person--one person that is in charge of permitting for offshore wind infrastructure. One.

And if we want to be able to get this technology deployed and deployed in an efficient and effective way, we need to make sure that we have enough personnel there to be able to move these projects along in an efficient manner. Again, Mr. Chair, just really grateful for your work and look forward to our work together in the months to come.

Thank you. Looking forward to it as well. Like to invite Senator Dahle to say some introductory remarks.

Well, it's good to be on the committee. Thank you again for you that. You know, obviously, there's a lot of concern with natural resources, fire, flood, infrastructure, and also a budget that is something we haven't experienced for a long time, where we're actually going to be looking at prioritizing, I think, a little more close to make sure that we actually provide the things that we need to make California safe and provide the services that we all need. So I will just stop there and I would like to get into it.

And, I mean, obviously, fire is always something I'm concerned with; transmission lines, getting the grid in shape. I have quite a few things on the list here of things that we'll be talking about through the hearings and subsequent hearings as well. So a good--welcome, Chair. Something different in the past, a three person board instead of a four. So it'll be interesting to see how this goes. And welcome. I look forward to working with Senator McGuire and yourself.

Thank you. I look forward as well. I know we're all aligned on some of the issues that you mentioned. I'd like to take a moment to establish the quorum. Consultant, will you call the roll?

Becker. Here. Dahle. Here. McGuire. Here.

We do have a quorum, has been established. Just quick little overview of the hearing and then we'll get right into it. This hearing is going to focus on the oversight of the climate energy packages from the 2021 and 2022 Budget Acts. This historical amount of funding that we'll hear about today spans across many areas, including zero emission vehicles, energy, water drought, wildfire, forest, nature-based solutions, extreme heat, community resilience, many other topics.

We'll first hear from the LAO, then the secretaries of the California Natural Resources Agency, Department of Food and Agriculture, and the California Environmental Protection Agency and finally, Department of Finance, about the status of implementation thus far, as well as the proposed architecture for moving forward. As a reminder, this year is just the beginning of our oversight of these packages. It's intended to be a big picture discussion of all the climate and energy packages in the context of this budget.

We will have the opportunity to dig deeper into various packages at later hearings as well. With that, I'd like to invite our first presenter, Rachel Ehlers, from the Legislative Analyst Office. She will give us an overview of the 2021-22 and the 22-23 climate packages. Ms. Ellers, welcome. Please go ahead when you are ready.

Thank you, Mr. Chair. Good morning, members. This is Rachel Ehlers from the Legislative Analyst Office. I'm going to attempt to share my screen, which after this many years shouldn't be as terrifying as it is every single time, but somehow still is. There we go. Can you see my slides?

Yes, we can.

Fantastic. Okay. Well, so staff have asked me to give an overview of the recent augmentations and then some high level comments from our recent report, which hopefully you all have a copy of, that really dives into a lot of detail on the governor's proposals for the upcoming year. My slides, just for the benefit of the public, are also posted on our LAO website and I believe on the committee website as well.

So to get started with an overview of the recent augmentations, as the chair mentioned, they were very significant. There are a lot of numbers in this chart, so I would draw your attention to a few. First is the total: $40 billion. That's a obviously very significant number over five years. This is nearly all from the general fund, $34 billion or so from the general fund, another $6 billion from special funds, primarily the Greenhouse Gas Reduction Fund.

These are programs in areas that have historically been funded by bonds and special funds. So the fact that there's this level of general fund support is really unprecedented. I think the other thing that I would call your attention to are those first two columns and the totals there. That's money that's already been appropriated by the legislature, $27 billion, across these different programs. So those are funds that are already kind of getting out the door, getting committed to specific projects.

I think you'll hear about this from the secretaries on their implementation status. Then, I think we would kind of draw a line between those first two columns and the subsequent three columns in some ways. Just because the additional funding for 23-24 which has been intended, that $8.7 billion, and then in the out years, that's funding that hasn't gone out the door yet.

So if you're looking at having to find budget solutions, which unfortunately we know you will, we think there's a distinction there in terms of the level of disruption it might cause for local implementers and departments, given that that funding hasn't yet been appropriated by the legislature. There's an intention, but it hasn't gone out the door yet. So you can see that some of the largest categories of funding were for zero emission vehicles and energy and water and drought.

Those are kind of the biggest categories, but again, really large amounts for some of these other categories as well. As I noted, departments are still in the process of implementing these programs. Some funding has been kind of committed and out-the-door for projects, and some are still in process, in part because these are brand new programs in some cases. So departments needed to set up guidelines and RFA or RFP processes. So it's understandable that not all of the dollars have gone out the door yet.

Based on information we got from the administration just this past month, it looks that like out of those first two columns on that chart, that $27 billion, there's about $11 billion that is not yet committed to specific projects and efforts. So again, that's a number you may want to keep in mind, too, as you're thinking about budget solutions and trying to avoid major disruption.

If there's funding that's still kind of sitting at the departments waiting to go out, that could be an area to look at. First, why hasn't it gone out yet? Are there any kind of issues there? But also, would that be a place where you could potentially make reductions or scale a program down without as much disruption? I think the other point we would make here is that while we have some information about the status of the spending, we don't yet have a lot of information about the status of outcomes. And again, that's understandable since this is new funding and in some cases, new programs.

But we think that this is going to be a really important point--and I'll come back to it in a few minutes--of: given this level of investment, what are we as a state getting from these dollars? And what are the most effective approaches and what are some approaches that maybe aren't as effective? So that we know, both in the context of having to make budget changes, which programs should be prioritized or not, but perhaps even more importantly, in the future when there are additional resources, where are the areas and types of efforts that we want to prioritize for additional investments to get the biggest bang for our buck, if we will?

In particular, given the challenges we're facing from climate change, we kind of don't have the luxury of continuing to spend money on ineffective programs and efforts. And we think that this not only is an area that we should be kind of paying attention to, but we may need to take some additional steps to be sure we are collecting the information we need to do those kinds of evaluations. I'll come back to that point.

So as we all know, I think at this point we are facing a multibillion dollar budget problem in the state. As Senator Dahle mentioned, that hasn't been the case for several years, luckily, but it is something we're facing now. This is kind of due to deteriorating revenue forecasts since the budget was passed last June. So there's some technicalities between our office and the Department of Finance in terms of how we define this, but it's kind of roughly a $20 billion gap at this point, we think, between what our intended spending commitments are and what we project that revenues will be.

So in addition to that sort of roughly $20 billion, which is for the kind of current year and upcoming budget year, they are also forecasting--both our office and the governor are forecasting deficits in the out years. Even under the governor's proposed budget, the administration forecasts that there would be multibillion dollar shortfalls in out years as well.

We also think that this could be even an optimistic scenario at this point, the way revenues are trending, we think the budget outlook could be even worse. In fact, a recent report that we put out estimates that we think there's a two-in-three chance that the governor's proposals could be overly optimistic.

So just high level on the governor's proposals. I know the administration will present this in more detail, but he is proposing budget solutions from the climate, resources and environmental protection programs, most of these from reductions: $4.1 billion across that five years, including $3.8 billion in the budget year 23-24; another $1.7 billion in fund shifts, switching from general fund to a different source.

That's primarily the GGRF, Greenhouse Gas Reduction Fund, to backfill--reducing general fund and then backfilling with GGRF. And then also roughly $800 million in funding delays, which is taking money that was intended for either the current year or the budget year and shifting it to a future year. So that would kind of hold the program whole, but give you some budget solution in the near term.

In addition to these spending changes, there's also in the governor's proposal a proposed trigger restoration approach totaling $2.2 billion from these climate and resources programs. And that's basically that approach that is proposed as reductions, but with a list that if the director of the Department of Finance estimates next January, January 2024, that there is sufficient funding to make some restorations as well as fund all of the baseline ongoing commitments that the state has, that those would trigger back on.

A note about that trigger proposal is that it not only includes the $2.2 billion from the climate programs, but also some transportation programs, some housing programs. So the total trigger is $3.8 billion, and it's framed as an all or nothing. Either there's enough funding that the administration decides, "Yes, we could turn that all back on and restore the full $3.8 or none."

There's also a proposal in the governor's approach for a similar type trigger restoration for Greenhouse Gas Reduction Funds, where if in the middle of the year revenues come in higher than anticipated, the proposal would grant the authority to the administration to spend those GGRF dollars in the middle of the year, specifically to backfill general fund reductions to zero emission vehicle programs.

And then finally, I know you'll talk about this in some of your subsequent hearings, there is some new spending proposed from the general fund in the governor's budget. Some of the more notable areas are for some large capital outlay projects for CalFIRE and for some flood management projects as well as some others. So I know that those will be on your agenda, but just want to flag that for you. It's not all reductions. There is some proposed new spending as well.

So this is a graphic that shows what I just talked about, but in graphical form. I think some of the things I would highlight for you here is the dark black or blue bars. That's all of the general funding that is proposed to be retained under the governor's proposal. So you can see that's most of it, that's the majority of the funding. The light green are shifts to other fund sources, again primarily to the Greenhouse Gas Reduction Fund and then the kind of dotted gray bar, those are the reductions.

So a few things that I would highlight for you here. First, you can see, again the majority is retained. I think the second point I would highlight for you here is you can see there is a different approach somewhat proposed across these different thematic areas. So for example, you can see for zero emission vehicles, that's the category where there's the largest fund shifts proposed. You could see for wildfire and forest resilience, barely any budget solutions proposed there.

And then for coastal resilience down there at the bottom, you can see it's a disproportionately different approach in terms of the level of reduction compared to the level retained as compared to some of these other bars. So our overarching assessment of the governor's proposal--first is that these programs remain very important for the state.

These are key efforts to not only kind of mitigate the magnitude of climate change, but also prepare for the impacts, to protect our state's biodiversity, to work on our energy reliability, especially as we're making transitions to the sources of energy we're drawing upon. So these are really important efforts we think are really important to continue to focus on and sustain. That said, we also think that identifying budget solutions in these areas is going to be important and necessary for the legislature.

These climate environment resources programs were the largest areas of one time spending from the recent budget surplus. And it follows, therefore, that if you don't want to make reductions to kind of base ongoing programs, you're going to have to look at this one time spending to make some of the reductions that you need to get your budget back in line. We also think that you can continue to achieve a lot of the state's goals within these programs, even at a reduced level of spending.

But choosing where you're going to prioritize that spending is going to matter a lot. If you want to kind of keep your eye and keep working on those goals, where you make those reductions is going to matter. I think this second bullet--if you take one thing away from what I'm saying today, this is the point that I would want you to take--we think the governor's overall approach is reasonable. If you read our big report, you'll see that word pop up a lot.

There are a few of the specific proposals we raised some concerns with, but overall they make sense. But this is the point I want you to take home. These specific choices reflect the governor's priorities and the administration's priorities. You as a legislature have a lot of different options. You could build a similarly reasonable package in a completely different way.

If you remember those bars that we saw in the earlier chart, there was a lot of different ways you could slice those different colors and achieve your goals and prioritize your program. So that's what our report was intended to help you do, and that's what we will be working with you over the next few months to do as well. A few more points we wanted to highlight for you.

We think this idea of shifting funds, reducing general fund, and finding other opportunities, whether it's from the GGRF or federal funds--there's quite a bit of federal funding available--we think that makes a lot of sense, but we just want to be sure you're aware that's not without trade offs. If you're spending GGRF to backfill funding for zero emission vehicle programs, you don't have those revenues available for other types of activities which the legislature has frequently prioritized GGRF revenues for.

Similar trade offs--if you're looking at federal funds, we have a great opportunity to maximize the use of federal funds from some of the recent legislation out of Washington, D.C. But those programs often are a little bit different from the state programs. They may have similar goals or similar activities, but different eligibility criteria or different way that they're structured. So it's not going to be a dollar for dollar match in most cases.

If you make a general fund reduction, there's not going to be an equal, exact amount of federal funds to plug the exact same hole. So we just think that's an important thing to keep in mind. We have concerns about both of the trigger proposals the governor has, both for the general fund restoration as well as the mid-year GGRF trigger. We think that both really minimize the legislature's authority to respond to mid-year changes and whatever evolving priorities might be.

Ceding that authority to the administration raises some concerns for us. We also just want to highlight that in the context with a budget problem, every dollar of new spending you're doing from the general fund on a new activity necessarily means you need to find another dollar of solutions. And so we think there's a pretty high bar for thinking about new spending now, as we'll get into in the subsequent weeks.

We do think some of the governor's proposals actually do meet that bar, potentially because--for example, public safety associated with flood management, but some don't, at least in our assessment. So we think--you really want to think about that new spending in a kind of a different context now, because every dollar you spend on something new, you need to find a dollar to cut somewhere else. And then finally, just to reiterate this point, that we think the budget problem really could get worse.

So preparing for that eventuality and finding additional solutions now, spending the next few months doing that, we think would be really wise before you get to May and June and have to kind of bump up against your constitutional deadline for a budget and may have to find some additional solutions. So that leads straight into our overarching recommendations. The first is this point that I really am highlighting for you, which is you can do it differently.

And that's what we would recommend, that you adopt a package that reflects your priorities and legislative prioritization criteria. Some of the criteria we would suggest you might want to use are, again, focusing on what your goals and priorities are, thinking about funding that might be needed urgently to address really pressing needs as compared to kind of maybe longer term objectives or goals, trying to avoid disruption where you can. And that would be one of the points I raised earlier about thinking about money that's already kind of been committed for a specific project that might be something you don't want to start with.

You might want to start with money that hasn't been committed to specific projects at this point because that would be less disruptive for local agencies that maybe have already lined up their matching funds, have already started putting contracts in place with dollars that they've been promised from the state. And then finally thinking about other available resources like federal funds or other special funds so you have a holistic picture of how you might be able to meet your goals, not just with general fund, but other sources.

Our final, here, overarching recommendations. We think, as I noted, the governor has some proposals to delay funding rather than reducing. And in some cases that may make sense, but in other cases, we think you might just want to go ahead. If the funding is not needed immediately now, maybe you want to go ahead and make that a reduction, and then just revisit it in a future year rather than making that commitment to delay it.

And then given the out-your-budget situation, which is not looking very rosy, having to then go through this process all over again. If there are cases where funding isn't needed now, maybe in many of those cases you just go ahead and make a reduction, and then as resources may be available in the future, you can revisit it then, rather than pushing the problem forward. We recommend you reject both the general fund and GGRF trigger proposals from the governor.

We think--you have mid-year spending authority already as a legislature. If there's additional funding that comes in, you can pass a mid-year spending bill on your highest priorities at that point, which, we're not sure what they will be necessarily in the middle of next year. So we think preserving that legislative authority and flexibility is really important.

As I noted, we strongly recommend you use this spring budget process not only to build a package that matches the total that the governor had for budget solutions, but identifying some additional amounts so that you are prepared in May and June when we have a better sense of what revenues are to make deeper solutions if you need it, rather than getting kind of squeezed at that time frame.

As I noted, we think you should use a pretty high bar thinking about new spending because it does necessarily come at the expense of some of your existing commitments. There is, as I noted, a lot of federal funding from both the Inflation Reduction Act and the bipartisan infrastructure bill, the IIJA. We know the administration has been spending a lot of time gathering information about that so we don't duplicate efforts.

And so we take advantage of the expertise of the specific programmatic departments that have been looking at that funding. We think requesting that information and working with the administration to try and get a full picture of what the funding availability, as well as kind of what those different eligibility criteria are as you make your decisions so that you know that you can try and achieve some of your same goals, even if there are some of these differences in programs.

And then finally, coming back to this point about oversight--which you are doing here today with this hearing, so a good start--not only of the spending, but also that point about the outcomes. What are we getting for our dollars? Are our investments in forest resilience actually helping to prevent catastrophic wildfires? Are our investments in energy reliability actually building resilience on the grid? Are our investments in helping fish and wildlife actually helping sustain the species?

Some of these are really hard to measure, but they are the key important points. And so we think, as you're thinking about making program adjustments, you could also think about some statutory changes to focus those programs more narrowly on the highest priority goals. And you also could think about setting aside a small portion of funding for some of these activities, for some of these types of evaluations to make sure that we don't get five years from now and say, "Well, what are the most effective programs?

We've got a general fund surplus again, and we don't know." Some of those types of data collection efforts do take money. They are not free. And they may be worth doing, especially for some of these new pilot programs you've been funding for the first time. Those might be particularly worth making sure that we have the data collection, even if it's just by the department that they're collecting some outcome data. In some cases, you may also want to kind of set aside some money to contract with outside researchers to really make sure you're getting what you want. And with that, Mr. Chair, I'm happy to answer any questions.

Thank you very much for that overview. We're going to go ahead and hear from the secretaries, and we'll do questions.

For everybody at the end. So, I'd now like to invite Secretary Crowfoot to present status of implementation and architecture for moving forward for the wildfire, water, drought and energy packages. Welcome, Secretary Crowfoot.

Thank you, Chair and Senators, it is a pleasure and an honor to be with you. First of all, thank you. Thank you, Senator McGuire, Senator Dahle, for your leadership, your partnership over so many years, establishing the investments that we'll talk about here today. Much of the progress that we're really excited to report on comes from leadership you exhibited and funding that you provided.

And, Senator Becker, I think I speak for everyone in the Administration when I tell you how excited we are to have you as chair, applying your decades of advocacy and leadership and climate change, helping this budget be the best budget it can be. Your mantra is our mantra, Chair Becker, which is protect our progress. California has led and is leading the world, combating climate change, adjusting to its impacts, protecting our people and nature, and we need to continue that despite the current budget challenges.

Also, Senator McGuire, note your focus on the concerns around coastal resilience and funding for coastal resilience and adequate capacity to bring on offshore wind as quickly as we need to. And then, Senator Dahle, you know your leadership and concern around the ongoing catastrophic wildfire risk and, of course, impacts and opportunities for rural California. I want to thank you for inviting three secretaries within the Administration, myself, and of course, Secretary Ross and Secretary Garcia to set the frame for our discussion today.

This dialogue really starts what is not multi-week, but multi-month consideration of the budget. And I know that a lot of you in the room today, certainly the Senators as well as others, may be experts on many of the details already in our proposal. But we do want to take a little time to step back and at a high level, explain the approach that Governor Newsom used to set the proposal and then some of the highlights that we're particularly proud of.

We appreciate your patience as we lay this groundwork, recognizing that there are several hundred, if not thousands, of people watching this discussion here today. And we want to make sure this budget conversation is as accessible as it needs to be for everyone, including members of the public. So, I'm going to start highlighting a handful of our areas, and then I'll turn it to my colleagues in the other two agencies. So little context.

Our resources agency, as you know, is a large, broad agency, over 25,000 men and women doing the work across the state to protect our natural resources as well as our cultural and historic resources. We're spread out over 26 departments from our largest, which is CAL FIRE that surges to over 10,000 personnel during the height of fire season to our smallest, which is the San Joaquin River Conservancy, with just a handful of employees, all aligned towards again, achieving our mission.

Now, look, we know that California is on the front lines of the climate crisis and Californians are impacted by these changes every day. Simply put, extreme events are getting more extreme. So, year in and year out, our goal, our commitment, is to protect California from these impacts, helping adjust California to these changes, dramatically cutting carbon pollution and of course, continuing to equitably grow our economy, and I am really proud of our progress.

With investments that you've provided, the governor's provided, we've moved further and faster to implement improvements that are going to change people's lives. And we need to, given the threats and the challenges. This includes getting funding out the door and into communities more quickly than ever. We heard you over the last couple of years that that is important and we're proud to report on that progress here over today.

I should mention that we have over three dozen experts from across our agencies here and ready to answer specific questions. And I should have also said at the top, we're very thankful to the Legislative Analyst Office and Ms. Ehlers. The working relationship we have is always professional and collaborative and we think will result in the best budget that we can provide California. So huge thanks there. So as I said, our mantra is your mantra, which is protect our progress.

I talk about it as sustaining key investments while closing our budget gap. So at the highest level, the Governor and Legislature agreed last year to advance a climate budget of $54 billion. And despite these challenging fiscal conditions and the need to cut our General Fund budget by over $20 billion, we're proposing to retain 48 of that $54 billion to tackle climate change. Key principles that guide the proposal you're going to dissect and discuss in coming weeks.

First, maintain progress across all of the priorities that both the Governor and the Legislature have. Make directed what I'll call surgical cuts that retain the lion's share of new funding that you've provided over the last couple of years. To maintain that progress, continue to prioritize investments in underserved communities who are most vulnerable to both pollution and climate impacts. As Ms. Ehlers pointed out, anticipate where we can supplant cuts with federal funding. We propose a trigger mechanism to restore cuts if fiscal conditions approve.

And we want to hold ourselves accountable. So much of what you'll hear about today is based on very specific action plans that we've developed with measurable outcomes, and we're glad to talk more about those in coming weeks and months. You also know from the governor's proposal in January that the administration looks forward to engaging with the Legislature to explore the potential of a general obligation bond to help fund these priorities if challenging fiscal conditions remain.

And we're committed to working with the Legislature to fully reauthorize our clean energy transportation funding, known as AB 8. So myself and the two secretaries will highlight investments integrated across what everyone knows as funding packages. And while there are sort of buckets of funding, we work to integrate those into an all of government approach, an all hands on deck approach. And six priorities drive all of the funding that we advance on climate resilience.

And those six priorities are articulated in the state's climate adaptation strategy, which we needed to update last year. Our state law, based on a law that the Legislature passed, requires us to update our adaptation plan every three years. And we're really proud that the most recent iteration is not a plan that sits on a bookshelf somewhere, but is really meant to connect the dots and align all the investments we're making.

So the six priorities for all the funding that you'll hear about today, I call them our north stars. First, strengthen protections for climate vulnerable communities. Second, bolster public health and safety efforts to protect against climate risks. Third, build a climate resilient economy. Fourth, accelerate nature based solutions. Help nature, help us. Five, make all of these decisions based on the best available climate science. And six, partner and collaborate both with other levels of government and those outside of government to leverage resources.

So, jumping into the more specific overview, I'm going to focus my remarks on water, wildfire, energy, nature based solutions, and extreme heat, and then I'll turn it to my colleagues to address additional priorities. So, on water it's obviously been a remarkable period in California's history. 8 of the last 10 years have been extreme drought years, ending in October was the driest three year period in over a century. And then in January, we received the wettest three week period in our state's history.

Just last night, the Governor declared an emergency and mobilized the National Guard to support residents across 13 counties whose safety is in peril as a result of these record breaking storms. It's clear weather extremes are getting more extreme, and I think we want to take a moment to recognize the destruction, but also the loss of life stemming from the storms in January. So, climate change means more variability, more of these extremes, but it also means hotter temperatures over time.

And in the area of water, that means that by 2040. In the next 20 years, scientists tell us we'll have on average, about 10% less water supply than we had historically, because again, on average, more of that water will evaporate into warmer air and absorb into thirstier soils and plants. And so with the leadership and partnership with the Legislature, we're investing to adapt to that new reality.

Governor Newsom has directed us to focus a strategy that we call preparing for the water supply strategy for a hotter, drier future. So we have an action plan with specific, measurable outcomes to diversify and expand our water supply. Given these changes, and you all over the last couple of years and the Governor have allocated or appropriated, committed to 8, I should say committed to $8.7 billion of funding for improved water resilience.

This proposed budget proposes to retain 8.6 of that 8.7 or 98% of that previously committed funding. And we're moving quickly to turn the funding that you've all committed and allocated into action on the ground. A few examples. First, with Cal EPA or within Cal EPA, our State Water Board provided a historic $3.3 billion in financial assistance during the past fiscal year to help communities expanding access to safe drinking water, responding to specific drought emergencies and projects that bolster water supply.

That funding is double the amount that was provided moving forward. Put out the door, I should say, that it's double the amount that was put out the door the previous year and more than four times provided the amount provided just two years ago. For example, the Water Board over the last year has funded $50 million in the delivery of emergency water tanks and bottled water supply. And we have to report that despite all these storms, there are still communities that require that emergency support.

In our resources agency, $900 million of the drought relief that's provided over the last two budget years is actually in communities helping. I should say 900 million was provided to us, and we've got 580,000,000 out the door. Specifically for small communities and urban water agencies funding 288 projects.

Good examples across the state, including helping schools in Monterey County shift from portable water to recycled water in their irrigation systems, replacing inefficient appliances and toilets in buildings in Sacramento County, I traveled last week to Fresno County, where DWR funding is helping Bakersfield and several small communities recharge groundwater basins with storm flows. Funding has also made itself meaningful through DWR in better understanding these atmospheric, rivers and hydrologic conditions that we face in January.

This funding that you all allocated, $51 million that was leveraged with federal funding, has significantly improved our ability to anticipate where these atmospheric rivers will hit and what are the most vulnerable places in California. And so in January, when we experienced that unprecedented in nine atmospheric rivers in a row, that funding that atmospheric river research, those diagnostic tools, allowed Cal OES, the National Guard and CHP to pre position equipment and personnel to keep people safe.

And that funding is also helping us improve modernize our management of reservoirs to more nimbly manage those reservoirs for both water supply and flood safety. So that's a good segue into the water budget and funding for other aspects of flood protection. This budget proposes $738,000,000 over multiple years that Department of Water Resources can invest in flood management projects and the first ever state grant program to help dam owners make safety repairs.

This funding will benefit a range of infrastructure, including large scale multi benefit projects like this 3,000 acre Little Egbert track in The Delta that protects the town of Rio Vista from flooding and creates important habitat for fish and wildlife. These multi-benefit projects are so important.

This budget also, we should say the last two budgets have also invested nearly $400 million to protect sustainability of groundwater, which is so important given that depending on the year, between 30 and 60% of our water supply is represented by groundwater. Over the last two years, DWR has gotten $176,000,000 out to local communities and groundwater management agencies, including $68 million for 42 recharge projects. Really important given the amount of snow that's currently sitting in the mountains.

That 68 million to 42 recharge projects got it out the door to provide nearly 117,000 acre feet of potential recharge capacity. So we're really proud of the funding that we've moved that's been allocated by the Legislature and the Governor, and looking forward to continuing to get that funding out the door and making a difference. So, now I'm going to shift to energy. Our agencies, and particularly within our agency, the California Energy Commission has worked hard to implement your policy direction and your unprecedented investments.

And I want to highlight a few areas. Buildings are responsible for almost 40% of the state's emissions. So this equitable building decarbonization is a key pillar to achieving our climate goals. The current year budget provides about $62 million to the Energy Commission as a down payment for this effort. And so the Energy Commission is establishing a statewide direct install program to replace conventional or legacy appliances with clean energy appliances like electric heat pumps. It's also providing an incentive program for the purchase of these appliances.

That direct install program should be available to California's most underserved communities this year. We also know that energy storage is critical to our clean energy future, and particularly what we know is long duration energy storage, allowing for energy that can be delivered for durations of over 8 hours. And that's really important not only to balance renewable energy resources, some of which are intermittent, but to help when we have grid outages or public safety power shut offs.

This current year budget provides $140,000,000 to the Energy Commission to implement the program. And the Energy Commission is quickly allocating funds, providing grants to firms and technologies that have demonstrated success in the past, including what could be one of the largest tribal grants or tribal funding in the state's history. $31 million to the Viejas tribe of Kumeyaay Indians in Southern California to establish a micro grid, or I should say energy storage, that supports not only the tribe, but that region.

You all have also allocated over the last two annual budgets funding for the strategic Electricity Reliability Reserve, recognizing that these unprecedented heat waves, including the longest, hottest heat wave in the state's history just last September, are stressing our grid like never anticipated. And so $2.2 billion over the last couple of years have gone to DWR to procure resources. Last summer, DWR was able to procure 1800 megawatts estimated cost of about $654,000,000.

That was important to get us through that last heat wave, and they're actively pursuing additional opportunities that will come online this summer and next. Also important to reliability is demand side grid support, meaning helping to reduce electricity usage during heat waves to help us keep the lights on. And this program incentivizes energy consumers to use less electricity during these periods.

Last year's budget provided $200 million, and the Energy Commission was able to quickly implement this program, enrolling about 300 demand side energy conservation to support grid reliability during last year's extreme event. And they're now focused on expanding the program for this summer and beyond.

And then lastly, in energy, the Energy Commission is in the process of developing the distributed electricity backup assets program, basically meaning bringing cleaner and more efficient distributed energy, small scale energy like batteries online that can serve as on call emergency electricity supplies when needed. The 2021-22 budget provided $550,000,000 for this program, and the Energy Commission plans to issue a solicitation this year in order to bring on new distributed energy storage resources by next summer 2024.

So let me shift to wildfire and landscape resilience, obviously critical to everything we do in California. Some good news here, last year's fire season demonstrated the positive impact of your investments, our investments into improved tactical response by CAL FIRE responding to wildfires and upfront wildfire resilience before wildfire ever strikes. Now, important factor that I've spent a lot of time explaining to people. Last year's wildfire season, 2022, had more fires than the previous fire season and similar drought and extreme heat, but significantly less devastation.

So last year, about 362,000 acres burned, about 770 structures. Compare that to the previous year 2021, 2.5 million acres burned with 3500 structures, and then the year before that in 2020, of course, the fire siege, 4 million acres burned, 11,000 structures destroyed. Now, we obviously got a help from Mother Nature last year with some early summer rains and some favorable conditions, but we feel confident that investments being made in both response and resilience are paying off and resulted in less destruction.

California, you all have surged funding in wildfire resilience. A few years ago, it averaged about $200 million a year, and now it's upward up over $2 billion every year. This year in this budget, we're proposing another $664,000,000, which would bring the three year total up to $2.7 billion. These investments have resulted in over 1000 projects. Fuel reduction projects, fuel breaks around communities, defensible space, home hardening. That's made a difference. Protecting communities.

Consider that several fires last summer that were predicted to grow into these mega fires actually stayed manageable, including the electrifier in Amador county and the Oak Fire in Placer County, where wildfires actually encountered these fuel breaks or these vegetation management and were able to be controlled. Likewise, CAL FIRE did an excellent job flooding the zone of these wildfires with increased assets, thanks to your investments, including 10 new helitankers.

Chief Tyler explained to me that in some cases, some of these fires last year had upwards of five to seven helicopters attacking, initially attacking a fire at one time, and that made a difference.

All of the funding that we've worked to get out the door, as well as what we're proposing, is being spent according to our wildfire and Forest Resilience Action Plan, which has almost 100 specific actions with clear metrics, including our commitment to, by 2025, managing over 500,000 acres on the state side of vegetation management projects, with another 500 by the Federal Government, up a million acres of forest management projects every year.

Now, given the fiscal conditions, we are proposing to either postpone or shift $91 million of those investments in wildfire. But that maintains over 2.6 of initially $2.7 billion of wildfire investments, or 98%. So I'm going to move to the climate resilience package, which captures a lot of our priorities. In one package, our proposed budget protects $1.9 billion of this bucket of funding, or 73% of funding, which includes funding for extreme heat, sea level rise and coastal resilience, and broader community resilience.

Lot of good examples of where we've worked to get funding out the door as quickly as possible, including our partners at the Department of Fish and Wildlife, expending almost all of the $15 million that you allocated for protecting Fish and Wildlife from climate change impacts, purchasing water to benefit birds and waterfowl, compensating farmers to flood their fields after harvest to benefit bird habitat. Likewise, DWR has gotten out the door 100% of the $125,000,000 allocated for habitat restoration, which is great.

We talk a lot about water supply, but we're equally focused on balancing and protecting our fish and wildlife and, of course, our aquatic environment. The Department of Community Services and Development has committed 100% of the $25 million to reduce both emissions and household energy costs through our Low income weatherization program.

And then our colleagues at the governor's Office of Planning and Research, or OPR, are spearheading the effort to get the California's fifth climate change assessment moving and actually helping us secure world class scientific research that will directly inform the climate actions we take. And in the case of extreme heat, obviously a growing threat. $649,000,000 committed in the last couple of years.

Our proposed budget maintains 44 million, or 68% of that funding critical programs, including $150,000,000 for the Green Schoolyards Program, the Community Resilience Centers Program, which the Strategic Growth Council is seeking public input on its draft guidelines. So really working to drive as much of that extreme heat funding as possible, and then, of course, on nature based solutions, which is so critical to protecting the environment, getting more people outdoors, and achieving our 30 by 30 goal to conserve 30% of California's lands and coastal waters by 2030.

We're maintaining $762,000,000 of the funding, or 68% of that funding. We've already invested almost $100 million in 55 projects that are doing a lot of things, conserving our environment, absorbing carbon, protecting vulnerable communities, including funding for our local Conservation Corps, getting the world's largest wildlife crossing off the ground, and in construction, the Annenberg Wildlife crossing in Los Angeles.

At our Wildlife Conservation Board and Department of Fish and Wildlife, there are over 100 nature based solution projects in review where we're going to be working to get funding out the door and then, of course, we're really excited about our tribal nature based solutions program, $70 million funded this current year and another $30 million of maintained funding for $100 million of funding to tribes, an unprecedented amount to really improve our partnerships with tribal governments and communities, learn from their traditional stewardship of our environment.

So that's a lot. Thank you so much for your patience in letting me work through that. We do think it's really helpful to set the framework of our discussion here today. And with that, I'll turn it over to my colleague Yana Garcia, who is, of course, the governor's new secretary for the California Environmental Protection Agency. Secretary Garcia,

Hi there, I just want to take a moment to see whether Secretary Ross was actually next in the order

We were going to. Yeah, we were going to have Secretary Ross, if that works. I want to thank Secretary Crowfoot, grateful to you and your team, not to say that we won't have tough questions for you coming up in a moment. But, yes, Secretary Ross, if you're ready, why don't you go ahead?

Thank you, Senator. And thank you, Members for giving me some time here this morning. And I promise to be as brief as possible. Secretary Crowfoot has done such an excellent job of setting up this bigger frame. And so I'm going to focus in on the role that CDFA has in implementing parts of this package.

First, by underscoring what we all know and that is here in California, this ability to grow healthy, sustainable, grown food and making that accessible to all Californians is just foundational to not only our quality of life, but also our health and wellness, but it also allows people and communities to thrive.

And we know that climate change, especially for the kinds of nutrient dense specialty crops that we grow, is a very strong threat to and could eliminate much of our ability to sustainably grow that food for future generations. But it's also the methods by which we grow this sustainable food that have environmental benefits can reduce pollution, air pollution, water quality impacts, and ensure that those landscapes are available for future generations to have food security.

So I'm going to talk a little bit in numbers, but not a lot. But I want to say from the beginning, with every one of our programs that we have established for climate smart agriculture and for healthy, resilient, equitable food systems, we always build in feedback loops or in depth evaluations, and so we want to have those outcomes.

We want to be able to tell you about the peoples and the communities that have benefited from this programs in the way that they have, starting with our climate Smart Ag Programs, we collect the stories, we do feedback, we go out to the field with the farmers and we hear from them directly what they are doing, that is the intent of these programs, and that is, with a small amount of grant money, can we start to transition the practices towards our pathway of carbon neutrality?

And can agriculture become a part of a solution? Not only reducing the greenhouse gas emissions from farming, but helping to be part of that drawdown of carbon? And we hear that from farmers like Amy on her farm, who got a healthy soils grant for composting and hedgerows on a small amount of acreage of their farm. And through that first and second year of that program, it increased their confidence to be able to expand those practices beyond what the terms of the grant were.

And that's what we're seeking. We want permanent change. We want it to go from a few acres and a few farmers to every farmer and every acre, regardless of where they grow. And we want to make sure that we're making impact that goes beyond these incentive grants that in the early stages can help de-risk this change for farmers and make these the standard practices, not just the best practices. In total, between 21-22 and 22-23 the Department of Food and Agriculture received 700 and

$42 million for all of our vision about healthy, equitable and climate smart food and agricultural systems. Of this amount, $288,000,000 has been committed to projects and $143,000,000 has been identified as solutions for the General Fund. This leaves $311,000,000 that are uncommitted. But our spending plans and our action plans make me confident to be able to say to you today that all of this funding will be committed by the end of 2023 and $112,000,000, slightly more than that, will be committed in the first half of 2023.

Let me start with healthy, resilient, and equitable food systems. We have $128,000,000 that has been committed to these programs to make sure that we are part of the solution to addressing food insecurity, that we're providing healthy, nutritious food to our schools, and that we're providing coordination and communication to really expand the local procurement of food. That we're really targeting and prioritizing. Supporting historically underserved small farms and 89% of the farms in the State of California are less than 500 acres.

To be able to really circulate those dollars in a local, sustainable economic community. These programs include our farm-to-school program, a farm-to-community hubs grant program, our refrigeration program, and a California nutrition incentive program. Let me just touch on the school program and the nutrition incentive program in particular. The farm-to-school program is about supporting small farmers, which I just mentioned, about keeping those local dollars local and really expanding more seasonal, culturally appropriate purchases from these farms within these communities.

It's about improving the nutrition and the nutrition education for students so that we're really helping to set lifelong, healthy lifestyles from the earliest age possible. And it's about experiential learning, not only learning about nutrition, but learning what does it take to grow food, understanding what climate change is all about, getting out and enjoying nature or gardening, regardless of where those schools are.

We've already committed $30 million for this year, and the other $30 million that we've received for this year will be expended by the end of 2023. In that process, we have been able to reach, with California-grown food, one and a half million students. It is an oversubscribed program. It has been oversubscribed by 56% and we're anxious to get out our next round of grant proposals as soon as possible so that we can finish out this program this year. I love our California nutrition incentive program.

This is a program that empowers our low-income shoppers to increase their purchases of fresh fruits and vegetables, dried nuts and other specialty crops that they can acquire at their farmers market, where it's truly fresh and they connect with the farmer as well as our small businesses and corner stores. This program has received $10 million in 21/22 and $10 million in 22/23.

And what's really terrific about this program is that it's leveraged $12.8 million of federal funds so that we can reach more people to be able to ensure that they have the healthy benefits of California-grown fruits and vegetables.

Our other program I wanted to touch on our healthy refrigeration program, which is part of the infrastructure, improving energy efficiency, but equipping more places to have the refrigeration capacity to offer these healthy fruits and vegetables was delayed in getting started because we didn't have enough funding for the administrative costs and the valuations that we're doing on this to show impact so that we can hopefully continue to draw down those federal dollars.

But we will have all of our funds committed by the end of 2023 with regard to climate-smart agriculture for sustainability and resiliency. These are new programs for us. We patterned them off of the USDA climate-smart building blocks and they align very nicely with the natural resource conservation incentive programs. But we're really doing these specifically to demonstrate how we can lower greenhouse gas emissions with these practices and at the same time store carbon, improve our soils and the long-term productivity of our soils.

We've been appropriated $348,000,000 for climate-smart agriculture, which includes our healthy soils program, our livestock methane reduction program, pollinator habitat program, and research in greenhouse gas reductions and especially methane reduction programs. To date, $152,000,000 of this is uncommitted, but we are on track to have all of these funds committed by the end of 2023. These are helping us achieve some of our most important climate goals that have been established by the Administration and our partners in the legislature. So thank you for that.

Our healthy soils program is an example of one that started with a modest investment three years ago and has grown to be a wildly successful program that's been oversubscribed with every round of funding. These practices not only improve our soil health, they improve air quality, water holding capacity, and over time can even enhance pest resistance. Our program was oversubscribed by 114% this year. We've been able to fund 1500 grants that result in a reduction of 1.1 million metric tons of CO2 equivalents over the lifetime of these projects.

The program received $160,000,000 between 21 to 23 and $15 million has been identified as a General Fund solution. We have $78 million uncommitted at this point in time, but all of those funds will be out the door and at work on farms and ranches in California by the end of 2023. I also want to note that there has been a $10 million proposed in the 2324 budget for the healthy soils program under economic recovery and high-road job growth.

This is really specifically about how do we help recover from the pandemic interruptions that happened on our farms, the droughts that have happened on our farms, and really provide support to our underserved populations in the farming community. Many of these are the smallest of the small farms who just can't withstand the shocks to the system that we've experienced in farming over the last three years. $57 million was set aside for technical assistance for underserved farmers.

We are in the process of doing an impact assessment and alignment of regulatory reporting requirements for agriculture to assist in reducing paperwork burdens where it makes sense without impacting the environmental goals and public health and safety outcomes that we're seeking. And I want to touch specifically on the $30 million of this $57 million that was seed money for the Future of Food Innovation Initiative.

That's a partnership with UC, Mercedes, CSU, Fresno, University of California AG and Natural Resources, and local communities to really focus on automation and the jobs of the future, workforce development to equip all workers to be able to transition to those jobs, agroecology, and food entrepreneurship really adding value in the heart of the Central Valley where we grow so much of the food and then send it off someplace else for processing.

That $30 million of funding from the State of California was leveraged to be the country's largest economic and development Administration Grant of over $65 million that was announced in September of 2022. Great things happening in that regard. And finally, I want to touch on drought relief and conservation and agriculture. One of our longest-term programs is our on-farm water use efficiency program.

It's a SWEEP program that has really equipped all of our farmers with a focus on historically underserved and small scale farms to be able to adopt the most modern and efficient irrigation practices, to conserve water, to conserve energy, and to reduce greenhouse gas emissions. Of these programs, we've been able to fund 1100 water conservation programs that not only reduce our CO2 equivalent reduction has been 900,000 metric tons, but also water savings of 1.4 million acre-feet over the lifetime of these projects.

SWEEP was appropriated $160,000,000 between 2021 to 2023. Of this amount, $50 million has been committed, $40 million has been scored as a General Fund solution. We have $70 million, which is an historic amount this year, that will be out and work on the farms by the end of 2023.

With that, I just want to close with just wanting to share with you that we have numerous stories of how people are being impacted by this access to healthy food, locally grown food that's available in a monthly newsletter in our farm-to-fork office. And we collect stories and feature them on Water Wednesdays, as well as ongoing videos to help everyone in California see what farmers are doing with your investment and the partnership of local technical assistance to make these programs successful.

So thank you for this opportunity to meet with you today. And with that, Secretary Garcia, I'll turn it over to you. Thank you.

Thank you, Secretary Ross. A lot of cutting edge programs there. Really appreciate that. Now we're very excited to have Secretary Garcia come and present on zero emission vehicles and the circular economy packages. Thank you.

Great. Thank you, Chair, Vice Chair and members of the committee. And thank you to Secretary Ross, echoing Secretary Crowfit's appreciation for your leadership and the leadership of your colleagues for your partnership in taking on some of the challenges we're facing given the fiscal outlook over the next few years. And I just want to note that we appreciate the LAO's analysis and the committee's stated priority on protecting investments benefiting low-income and environmental justice communities.

I am certainly looking forward to being back before you later this month to discuss some more details about the proposed gen 10 budget and approach. But today I'll briefly cover how CalEPA, our board's departments and offices are currently implementing the legislature's groundbreaking investments in recent budget cycles to build the nation's first clean transportation and circular use economy. I'll also be touching a bit on some of the Energy Commission's implementation of funds. And welcome continued discussion on tracking progress across the implementation of our various programs.

So over the past two budget cycles, the legislature has appropriated $6.5 billion to increase access to the benefits of clean transportation for underserved communities and to accelerate the transition away from combustion vehicles and nearly $850,000,000 for more reuse, recycling, and instate manufacturing. I want to start with our investments in zero-emission vehicles and related infrastructure. As you know, the transportation sector accounts for approximately 50% of California's greenhouse gas emissions. It is also responsible for air pollution in our neighborhoods and negative health impacts in our communities.

Now, I'm pleased to report that all of the funding from the past two years of the Air Resources Board's zero-emission vehicle package investments have been fully dedicated to specific projects. As outlined in the board-approved funding plans for both years.

For fiscal year 21/22, CARB has encumbered over 90% of the $1.7 billion included in the zero-emission vehicle package appropriation and has spent almost a quarter of those funds through the end of last year through investment programs like the Clean Vehicle Rebate Project, clean cars for all, and the hybrid and zero-emission truck and bus voucher incentive project.

For fiscal year 22/23, the final budget bill was signed into law, as we know, in September, and CARB's board approved its funding plan for the zero mission vehicle package investments in November, dedicating the full $2.4 billion to the same high-impact projects. CARB will begin encumbering those funds this quarter. The Air Resources Board has also collaborated closely with the Energy Commission to ensure that our vehicle incentives and the Energy Commission's infrastructure incentives are coordinated and that state funding is spent to maximize our impact.

Now to highlight a bit of the Energy Commission's work for a moment, the Energy Commission has encumbered approximately 90% of the $785,000,000 in fiscal year 21/22 and about $117,000,000 of 22/23 funding from the 210 emission vehicle package. This includes adding funding to block grants to accelerate zero-emission vehicle infrastructure deployment for passenger vehicles, trucks, and buses and targeted investments where the private market may not otherwise act, including in rural communities and in apartments.

The Energy Commission anticipates allocating the remaining funding balance to existing block grants and direct solicitations, and all funds are expected to be encumbered by the encumbrance deadline. For the 22 zero-emission vehicle package, a total of $874,000,000 was appropriated to support zero-emission vehicle infrastructure, including for medium-duty, heavy-duty, and off-duty vehicles, and emerging opportunities to support electric and hydrogen fuel cell vehicles.

Specifically, $375,000,000 were appropriated to support zero mission school bus charging or fueling infrastructure between fiscal years 22/24 and 27/28 and final allocations will be determined this year. The CEC expects all funds to be encumbered as well by its deadline. Now let me briefly turn to our investments into building a circular economy.

In budget year 21/22 the legislature appropriated $205,000,000 for Cal Recycle to make major investments in the circular economy, with the primary goals being to expand instate recycling infrastructure and to attract recycling businesses. The following year, the legislature partnered with the Administration to make history when we committed to $639,000,000 for investments in California's circular economy over the next three years. Importantly, these investments have prioritized equity and underserved populations on the front lines of the climate crisis, facing a disproportionate level of harm from pollution.

And already we've begun to put these state dollars to use rolling out food and yard waste recycling programs across the state, with $191,000,000 invested in food and yard waste diversion and recycling, and $237,000,000 being rolled out this year for local organics recycling, food rescue programs and infrastructure projects to cut methane pollution from landfills.

Since 2016, we have also sent 147,000,000 meals worth of still fresh, unsold food to Californians in need, thanks to investments of $52.4 million in more than 100 edible food recovery and food waste prevention-related projects. This helps feed some of the one in five Californians who do not have enough to eat. Included in this package is another $391,000,000 over three years, with $233,000,000 appropriated for this fiscal year to enhance the circular economy for beverage containers and to maximize climate, environmental, and consumer benefits.

All in all, these investments in the projects they have already supported have had profound impact and yielded a vast range of economic, social, nutritional, and environmental co-benefits for all Californians. These investments have begun to lay a solid foundation upon which the state can continue to build a robust, expansive, and sustainable circular economy. Thanks again for inviting me and my colleagues here today. We have several staff here on the line who are available and happy to answer any follow-up questions you may have.

I'll turn it over to the next speaker.

Thank you very much. With that, we'd like to move on to Sergio Aguilar from the Department of Finance to provide us an overview of the Governor's proposed solutions to addressing the deficit. Mr. Aguilar, please go ahead.

Good morning Chair and members, Sergio Aguilar with Department of Finance. so I'm going to provide an overview of the overall framework that the Administration used when determining general clean solutions in the climate and natural resource area. Just first start off by noting that the budget does reflect the Administration's continued commitment to the state's ambitious climate goals.

The 21 and 2022 budget acts allocated approximately 54 billion over five years to advance the state's climate agenda, and this budget maintains approximately 48 billion, or 89% of those recently enacted climate investments and also continues to prioritize equity and investments in priority populations that face disproportionate harm to pollution. So even with these budget reductions, this still does reflect a historic level of investment.

The climate and natural resources budget reductions were developed on an overall framework to pursue mechanisms to offset the reductions, including shifting some of the reductions to other special funds, which include the greenhouse gas reduction fund trigger.

Looking at a General Fund trigger to the extent that the additional General Fund revenue materialize, it would trigger back on some of these reductions, looking at maximizing federal fund opportunities, and then also engaging the legislature and conversations to explore bond. Now, the Administration's general framework on the climate and resources General Fund solutions included many different considerations. So I'm going to walk through a few of the key considerations that we looked at when determining the programs to include as part of solutions.

I think one looking to protect the majority of funding for most programs, and as a whole we're protecting close to 90% of the kind of budget. But even in the cases where we are making reductions to programs, we're trying to, in the majority cases, protect the majority of funding for those specific programs. And so it's just a partial reduction in most cases. So it still continues to implement those programs. Again, looking to prioritize equity and investment in priority populations.

Looking to protect funding for the most immediate climate risks, such as water and wildfire, which are 98 and 97% protected, respectively.

Looking to minimize the disruption for programs that are already underway, including consideration for the status of those previously appropriated programs and where they are at in the awarding process, which the secretaries in many cases highlighted in their presentations, where they're at in the processes, looking to the availability of shifting to other funds, the availability of shifting to federal funds and also looking at trying to provide equitable reductions across categories if possible, when considering the many other factors, and then also looking at the availability of the program funding by fiscal year.

Given the multi-year nature of the recent climate investments that were approved over the last two years and the need to address the budget gap within the specific budget window through 23/24 the programmed fiscal year allocations is definitely a key consideration. And just acknowledge the Administration did have to make tough decisions to address the $22.5 billion budget deficit to meet our constitutional mandate for a balanced budget.

However, the Administration does still support these climate programs that have been reduced, which is why they are largely included in the General Fund trigger. And in terms of the General Fund trigger itself, we note the LAO highlighted some concerns. And just to elaborate a little bit more, one of the overall framework considerations I just alluded to was trying to minimize disruption for these critical programs at the departments.

And really, the trigger mechanism allows for an automatic restoration of specific reductions upon determination that there are revenues available, rather than requiring the departments to wait for future legislative action to restore the funding, which would likely delay the program implementation for several months. And these program administrations would align with the amounts and the parameters of the programs that were previously adopted over the last two budget agreements.

So it wouldn't necessarily make any changes to what has already been agreed to with the legislature and Administration over the past two years. And with that, we're here and happy to take any questions.

Thank you very much to the schedule. Some of my colleagues. I'm going to start out with questions from both my colleagues and we'll start out with Senator Dahle.

Thank you, Mr. Chair. Thank you to all the speakers. I took notes of just a few things. It's kind of like 30,000ft. I know this is our first hearing, but I wanted to have some comments for Secretary Crowfoot first. And I listened to your six priorities and one of the ones I really focused in on was the natural-based solutions. And as you're well aware, we've had these mega fires and we see the climate changing. We have these events where atmospheric rivers, fire and the likes.

And so I wanted to touch a little bit on the natural-based solutions. Which is the biggest carbon sink that we have is actually the forest in California. We don't count wildfires in our emissions. And that's a bill I actually ran a couple of years ago, which wasn't passed to actually count that into our emission standards. We focus a lot on ZEVs and other forms of pollution, but we don't talk about the forest.

And so I wanted to ask the secretary, the direct question is that we've done a lot in the area that we actually control, which is private lands in California. I've ran many bills in trying to streamline the process so that we can actually do fuel reductions on those lands. And we've been very successful at actually allowing foresters to go in and actually do the work that we need to do.

And we've also spent a huge amount of resources on those private lands doing conservation easements, working with the conservancies to get the job done. But the question is, what is our relationship with the Federal Government, who has over 60% of the land base in California that is burning? We had the Dixie fire in my district. Well, my staff just showed me we had 4.2 million acres burn.

And if we don't address our partners at the federal level to get a handle on the natural-based solution that we have, which is the forest out there. I think we're shooting ourselves in the foot to not push them, to actually do the kind of work we're doing on the private land in California, on the federal land in California. So could you address that relationship and what you see for the future of that partnership with the Federal Government?

Thank you, Senator.

Absolutely Senator, I would first acknowledge one of your early points, which is the damage of these catastrophic wildfires. Not only the communities, but the emissions are hugely impactful to public health. A lot of our kids have grown up with masks in the summer as almost something to be expected, but also carbon emissions. At the end of the day, these catastrophic wildfires emit remarkable amounts of carbon emissions.

So getting the catastrophic wildfire crisis into control is a matter of public safety, it's a matter of public health, but it's also a matter of climate action. So we need to expand forest management and landscape management, period, full stop. And we need to do that in state-responsibility area on private lands, and as you point out, on those lands that are owned and managed by the Federal Government.

And we've been pushing in recent years, and I think it's been a good partnership between yourself and legislators and the governor's office for more federal leadership. First of all, more federal funding. There hasn't been enough funding into California, into the US Forest Service to manage those lands, and there hasn't been historically an aggressive approach toward that end. I'm glad to report that the focus is stronger than I've ever seen it by the Federal Government.

You know that Randy Moore, who was our regional forester in California, is now head of the US Forest Service, and he's driving hundreds of millions of dollars into the West and into California. So we're seeing the same sort of quantum leap of increased investment on the federal side as we've achieved on the state side. We're also working to make it easier to get these projects done.

Simply put, the approval and the permitting environment has been too complicated and moving too slow to get these projects on the ground. So we have a remarkable partner in the current regional forester, Jennifer Eberlein. We talk with her weekly, if not in some cases daily, during fire season, and we're aligned on this wildfire task force. Here's my last point, is that action plan and that task force.

There are two chairs of that task force, myself and the regional forester, Jennifer Eberlein, because we need to have the forest service and the state working hand in glove. So I'm with you on the need for the Federal Government to step up. I think that they are. And we're going to all need to continue to step up more to address the crisis.

Thank you for that answer. I look forward to the Administration pushing hard and also I know there's an infrastructure issue as well. We'll save that for another day. I have just two quick questions. Just a comment to Secretary Ross. The budget is proposed to reduce the SWEEPs program, which is hugely effective and very great program by $40 million. I will be pushing that. We don't do that. I think that we need to fund that program. It's working.

The returns are great and I think that we should completely fully fund that. So I just wanted to put that out as something that I'll be talking about for sure in your department. And then I wanted to go to Secretary Garcia, which I have not met yet. Nice to meet you through video conference, wanted to just again come back to the amount of resources we are focused on, ZEVs. And if you look at the budget proposal, it is across the board.

It's getting reduced some, but that's where our biggest focus is. And at the end of the day, I sit on the Energy Committee, Vice Chair of the Energy Committee. I'm on EQ and I'm on Natural Resources. And we've been having the secretaries come in from CARB and CPUC. And at the end of the day, our infrastructure is not in place to be able to even power up the grid. And we're talking about moving away from natural gas and actually electrifying.

What would your comments be on how we build the power plants or get the amount of energy that we need to produce electric energy in California and get the transmission to get these ZEVs powered in the near term?

Secretary Garcia, would you like to respond to that?

Is Secretary Garcia still on the line?

I was going to say if Secretary Garcia might be having technical difficulties, I'm glad to contribute in on this.

Great. Go ahead, Secretary Crowfoot.

So, Senator, we agree that we need to move further and faster than we have in the past to build out the energy infrastructure that we need for the future, for a couple of reasons. One is because we continue to grow and we need that infrastructure for the future, and we're working to move to a clean energy grid. And so that means more transmission. That means bringing on projects across the state.

I'm really excited with the economic benefit that those will have across the state, but we need to move faster. And so the governor's been very clear with us and across the energy agencies, of which the California Energy Commission is part of our agency, that we have to accelerate the approval process, the prioritization of transmission of renewable energy generation. He is very focused on maintaining energy reliability and affordability as we make this transition.

And so he's getting regular updates, and I know you all, through statute, are getting regular updates from our agencies around what we're doing to ensure that as these heat waves intensify during the summer, we're able to keep the lights on while we transition. So just know that that's a key priority of ours and something we look forward to talking to you more about, which is specific actions that we're going to take to accelerate the deployment of that infrastructure.

Just a quick follow-up. I know the Governor was at Diablo yesterday, and I know there was a press release that came out from the Sac Bee just a couple of hours ago about the continuation of Diablo till I think it's 2030, which is positive for California because we need that energy right now. But the permitting process to build a transmission line, something I worked on as a county supervisor, which was never fruitful, takes years.

I mean, not maybe just years, but in several circumstances, decades, along with building these wind generations in the ocean. To get that done, we're talking about a long time frame, but we have set goals by 2035 and 2045. So I would suggest that the CEC, the CPUC, the EPA all get together and come up with something that you could give back to the legislators on the plan, like how we're actually going to do this.

Because at the end of the day, you can have all the ZEVs in the world you want. If you can't charge them and you can't get access to charging, or you have the energy available to do it, we're not going to get where we want to go very quick. That's been something I think that we brought up at every level to try to figure out what is the actual policy and what does it look like and where is it needed geographically, throughout the state.

So I would ask that you bring that back to us, because we can set goals, but without a plan, we get nowhere. And the last thing I wanted to touch on is there was a proposal for pump storage at Orville, and I know that's been taken out. That creates megawatts. It's good for the environment, and I will be pushing for that funding to be allocated back into the budget, too. So thank you.

Senator Dahle. I appreciate those comments. We'll leave those as comments. We want to make sure we get Senator McGuire and we'll follow up. I'll have some follow-up questions also on permitting and transmission. I do believe that pump storage is in there still, so we'll circle back with you on that.

But the LAO suggested to take it out, so I just want to make sure.

Yeah, I think the LAO more suggested more of a phased approach, but. Good. I'll follow up with you on that. Senator McGuire.

Thank you so much, Mr. Chair. I'm very grateful and appreciate your accommodation and know that everyone is incredibly busy today. And thank you for this wonderful hearing, sir. First and foremost, I won't repeat my comments in regards to the Coastal Resiliency and Protection Funds in the beginning in the deep concern that I have in regards to those reductions. And I know that's something that we'll confront here as we move forward.

I do want to take a moment to make a few comments on Secretary Crowfoot's presentation, and one just on Secretary Crowfoot himself. What I greatly appreciate about the Secretary is that he is in touch, engaged, and involved on issues big and small in every damn corner of the state. And he also follows through and really grateful for that and just want to take a moment to be able to acknowledge, because it has served, I know, the North Coast well. I think, on the issue of wildfire.

I'll be quick. It's appreciate that 97% of the original budget that was proposed is remaining in the Wildfire Budget. That said, I want to make sure that our eye is on that 72 to 66-hour work week for CAL FIRE. So if you live in almost any city in this state, your average firefighter has a 56-hour work week. CAL FIRE currently has a 72-hour work week. 72-hour work week.

And under the new contract that was negotiated and successfully executed with the state, it's going down to 66 hours a week. And we need to ensure that those funds you got to bring that contract from 72 to 66 remains. That will also mean additional approximately 400 full-time firefighters would be hired. And I just want to focus in on that, as that is contingent on the budget. And our current situation is tenuous at best.

The other piece is, as we move forward in wildfire mitigation funding, especially on public lands, whether it's federal or state-local, the vast majority is federal, is how we can strategically invest in our federal and state lands, especially within our key watersheds that are within the California aqueduct system. And we are going to face devastating consequences as we continue to see those key watersheds above our reservoirs continue to burn. And I think that's something that we should be taking a look at as we move forward.

A little bit of a separate issue than today. It is about strategy and how we deploy funds. But I think also, for example, in our neck of the woods on the North Coast, we have two massive Army Corps reservoirs that would also benefit from some type of strategic approach when it comes to state funding. As we move forward with a potential conversation on a bond, I think that should also be looked at.

And then on Secretary Ross' issue, and this is something that the Secretary has made herself so damn available on. And I appreciate Secretary Ross. And that's the issue of organic dairies in this state. I get it. There is not consensus. If dairies are good, they're not good. I'll give you my opinion, especially organic family-run dairies. They're good for this state.

And we saw a record number of organic family-run dairies go out of business on the North Coast last year because of the drought, increased feed prices, and fuel prices, a dozen. That's 300 head of cattle or less. And the more we produce in this state, the better when it comes to high-quality agricultural products. And I know that Secretary Ross is under some constraints.

I'm not speaking for her, by the way, but I'm just giving my own editorial before she throws her shoe at the screen. She's under some fiscal constraints. But I really do believe that we need to look at some funding. I think that there's some unallocated funding available in some other areas that we could potentially look at to be able to assist these organic dairies, keeping them in business, in supplementing some of those high costs that we've seen.

Because again, I think there's a difference between a dairy that has 10,000 head of cow versus 300, because especially on the North Coast, those are main economic drivers. And it also meets the consumer's demand for organic milk. Those are the items we'll finish with, and I don't know if the secretaries have any comment on that. Mr. Chair.

Secretaries, any comments on Senator McGuire's comments and questions?

I would just say, duly noted on all those pieces that touch us both on wildfire and CAL FIRE and coastal resilience. So I appreciate that and look forward to unpacking all of those issues in coming weeks.

And if I could respond to Senator McGuire, because I spent many quality hours talking with him about this topic, his voice was a very important one that resulted in additional disaster relief by the United States Department of Agriculture. It sounds like a lot because it's several 100 million, but that's for all dairy farms across the country, and they're all suffering in that regard.

But I also want to point out that now is the time to weigh in on those types of programs because of the Farm Bill reauthorization and the California Position Letter on the 2023 Farm Bill was just posted to our site and made available to all Members of the Legislature and all Members of our congressional delegation in the middle of this week. So I do think we have another opportunity, Senator McGuire, to focus on what we can do at the state level.

But remember, we have a big voice on federal farm and ag policy as well. Thanks.

Senator Mcguire. Anything else you'd like to cover? Senator Dahle? Do you want to? Okay. Well, the good news is I have a lot of questions, so we will move to those. And I know both my colleagues here have some other commitments, so they'll join us for as long as they can. I want to start out with where we really began, a conversation around metrics.

And the LAO also kind of laid this out as we think about metrics, especially if there are going to be potential requirements for additional reductions in the course of this year or subsequent years. So I know you each have so many different areas that you oversee, and again, grateful to all of you for all your comments and for being here, and some of you covered some metrics as you went along.

But I'd ask each of the secretaries, especially as we're thinking about climate change and the billions of dollars we're being invested here, they said, you can talk about what factors are being considered to measure success either in greenhouse gas reductions, specifically from certain areas, or in the case of wildfire, areas of land being treated, or ways to measure coastal resilience or other things. Maybe you could walk us through some of the metrics success that you are thinking about in your areas. Whoever wants to go first.

I'll jump in here. This is Secretary Garcia. Hi. Members of the Committee, apologies for missing a couple of your questions, Mr. Dahle. Happy to come back to those as well. But quickly, on the issue of metrics, I just want to point out that the Greenhouse Gas Reduction Fund has a number of metrics that are built into how we spend our dollars, most notably tracking the greenhouse gas emission reductions that are associated with dollars spent.

I think one of the things that we've been thinking about quite a bit as we've shifted some of our funds, some of our climate programs, from the GGRF into General Fund is how we can be learning lessons from the General Fund tracking process and applying those to our General Fund funded programs. At this time, we are in the process of adopting some of those best practices, currently. We will be in touch about that in the months to come.

But through the GGRF, we are certainly focused on driving down greenhouse gas emissions with each dollar spent and leveraging co-benefits. That means job creation, that means local economic resilience, housing, transportation connectivity, transit connectivity, et cetera. So there are many ways in which we're looking at those metrics on the ground and over time, and definitely looking forward to hearing your feedback on how that is going, what we can do better, and open to that as I'm in this new role as well.

Great. Thank you. Go ahead, Secretary Ross.

Yeah, thank you. Obviously, we work very closely with the Air Board on the metrics that we've developed so that we can quantify greenhouse gas emission reductions. The challenging part for all of us is the science and the quantification of how do we measure carbon sequestration and the longevity of that, especially on working lands, forests, as well as agricultural lands. But there's a lot of work that's happening with $3 billion investment at USDA that's been out for grants.

It's called Climate Smart Commodity Partnerships, where it's really about measuring and getting people onto the same measuring stick so that we don't get a lot of variables with more and more companies that are looking at scope three emissions and how did they account for what's coming from their products that they're sourcing on a farm as an example. That's going to be very important. But I'm going to come back to the people equation of this.

We don't want to undercount how people have been impacted positively with farming practices that they've been able to adopt and expand the total number of acres that actually start to have evidence of using these practices, whether it's composting or no-till or on-farm best water use efficiency programs. And those are the kinds of things that I think are critically important because that then comes back to the health and economic vibrancy and resiliency of local communities.

And our rural communities are over dependent on the agricultural economy as a driver. And so we have to think holistically. That's why being also able to connect what we're growing, how we grow it, and getting it to everyone in the State of California, regardless of their socioeconomic circumstances, measuring the number of children in school that not only are served healthy, nutritious California food, but it's tasty. And they're starting to develop those lifelong habits.

That's what some of our evaluation work will be doing on our Farm to School Program. So that we're really thinking holistically about connecting the practices on the farm as part of local economy, serving and connecting people with good food, and reducing those chronic disease health outcomes that happen when we don't pay attention to establishing those lifelong habits. Not an easy one to set metrics for, but I think it's an important aspect of the work that we're doing here as a whole system.

Thanks for letting me comment on that.

Thank you, Senator Crowfoot.

Yeah, I would just round it up by saying we work for a Governor who is really focused on outcomes. And it's been very clear with us that getting funding out the door is not success. It's an important step in success, but success is actually the outcome. So we have been focused in recent years on truly management by measurement, and that's manifested in some really specific numeric targets that we have.

So in the case of water, I mentioned that hotter dryer strategy, where we're focused on actually generating supplies from recycling and groundwater recharge and storage underground and surface. So we want to be held accountable to that. In the area of wildfire, same thing. That action plan has numeric targets. A million acres a year in managed landscapes, a 500,000 acre a year goal for prescribed fire, even sub-targets for the amount of work that CAL FIRE and others are doing. And then on energy, same thing.

We know we need to bring several gigawatts of energy online every year, and we need to accelerate that pace, and we need to prioritize and accelerate transmission. And that's all really highly numerically measured. So we look forward to sharing our targets, numeric targets. And again, we certainly expect to be held accountable to those targets by the Governor and the Legislature.

Well, thank you for that. And we have the ultimate measurement, which is we know we have about 425,000,000 metric tons of greenhouse gases every year, and we have to get that to zero by 2045. So we have the ultimate target there. But it's great to hear each of you talk about things that you're measuring in your areas. So you mentioned water, and I know we have some folks on the line, too, from Department of Water Resources.

In terms of metrics, in terms of water reuse and recycling, I understand we're probably around 10% maybe of our water that we recycle. Some countries, Israel is around 90%. Obviously, they're the kind of global leader in that world in that way. But what do you see as a reasonable target by 2030 for water reuse and recycling? I hear from some of the industries people say 20%, maybe more, is possible. What's a really target we can set out there for water reuse and recycling?

Secretary Crowfoot, would you take that? Or any of you on your team?

Yeah. And I'm actually looking up the number because I believe we have a specific target within the hotter dryer strategy. And I'm really proud of the progress that our partners at the Water Board have made to get federal revolving loan funding and actually General Fund out to significantly expand recycling. So I don't have that number committed in my mind, but I can certainly get that to you. And I don't know if Secretary Garcia wants to add anything.

I don't have a number in front of me, but I am joined by Joe Karkoski. I don't know if he has a number from the State Water Board. Happy to kick it over to him for the precise answer to your question. Chair.

Yeah. Hi. Good morning, everybody. Good afternoon, I should say. Yeah. The water supply strategy has targets of 800,000 acre feet by 2030 and 1.8, million acre feet by 2040. And as Secretary Crowfoot pointed out, last fiscal year, we funded about $1.2 billion worth of water recycling projects throughout the state.

Thank you. Very helpful. And where are we right now? You mentioned 800k by 2030. Where are we now, would you say per year?

What we've funded totals about 728,000 acre feet so far. So the 800,000 by 2030 is in addition to what we've already currently funded. So last year, I think the projects we funded were around, would produce another 80,000 or so acre feet per year.

Okay, so that's 800,000 additional you're looking for by 2030. Okay, great. Just to go back to a couple general questions until we move into some more specifics around success messages. I don't know if each of you care to comment. Which packages are you seeing as the most successful, would you say, in terms of greenhouse gas reductions? And why don't we just start there. Are there a few you want to call it, you think are being particularly successful along those lines? And whoever wants to start?

So I'll start. I know that there are folks from the Air Resources Board on who can probably give you a summary of the precise numbers that we're seeing.

But I will say that across the transportation sector, I think the zero-emission vehicle investments across our light, medium, and heavy-duty sectors are likely yielding the best well-rounded benefits, not just from an emission reduction standpoint, but also from a direct air pollution reduction standpoint, greenhouse gases and toxic and criteria air pollutants that are affecting health and environmental outcomes for disadvantaged communities.

I would say just to add a little bit more context and color, if you will, to some of the drinking water package, the criteria that is used across the Water Board's funding programs is also really important to note here, focusing on communities most in need of our drinking water investments, providing for long-term drought and climate resiliency to the point on a volume of wastewater recycled. Also increasing that restoration of water service to communities with water outages.

And this, surprisingly to some, also has an emission reduction benefit in the sense that we are getting communities off of interim water supply, off of trucked and hauled water. So these are also very important ways in which we're driving down greenhouse gas emissions and criterion air pollutant emissions. I will see if any of my colleagues from the Air Resources Board have a number for our greenhouse gas reductions across the transportation sector associated with our investments in the zero-emission vehicle space.

I will also note that much of this is summarized in our climate investment report to the Legislature. Sydney, do you have any numbers to add?

We'll be happy to provide those. As you mentioned, the CCI reports that we put out annually in partnership with DOF will have that. We can get that over as soon as possible.

Great. Thank you. Secretary Crowfoot or Secretary Ross, anything you want to add in terms of programs, other programs that you're really feel you're seeing the most success from?

Yeah, I would have to call out our Livestock Methane Reduction Program.

I'm looking for the piece of paper that has the actual reductions on it, but it has shown remarkable progress, and it's especially important because of the impact of short-lived climate pollutants and so being able to find successful strategies that are now being duplicated by USDA with alternative manure management practices in addition to dairy digesters to generate renewable energy has really shown remarkable progress, and I think that's one that should be held up as another example.

This is one of the few places on earth that actually has a mandate for methane reduction from livestock and are making significant investments and significant progress in making those reductions real.

Excellent. Thank you for that. And I'll have a Bill further this year on that issue. But you're right, it's about seven to 8% of our carbon emissions are from agriculture, so very substantial. So thank you for that. Secretary Crowfoot.

I would just compliment the work of the California Energy Commission and the Energy Partners building out our renewable energy grid. Chair Hochschild updates me from time to time in terms of the amount of electrons or energy consumed in a day that were produced by renewable energy. And we know that's having a demonstrable impact on emissions and we know that's not only meeting the climate goals, but the energy goals. So I think we're making good progress there.

I think we all recognize we need to even accelerate our infrastructure and transmission deployment. But I'll also bring into the discussion natural and working lands. As my colleagues have talked about for the first time, the scoping plan actually brings in natural and working lands. That is, the potential for our lands and our vegetation to be of sink for carbon emissions or a source of carbon emissions.

And I think one point of progress is certainly last wildfire season where we saw much less pollution and emissions as a result of really the absence of very large mega fires. I'm not going to suggest that we won't continue to experience mega fires because climate change conditions. But the more that we can get these catastrophic fires under control and return a more regular natural environmental wildfire cycle onto our land, that's obviously going to benefit our natural and working land's contribution to carbon neutrality.

So that's something we're really focused on. I'd lastly mentioned we're partnering with the Air Resources Board and within our agency to develop an expert panel to help us understand how do we achieve our lands becoming a sink and not a source or minimizing the source of emissions. I'm really grateful to work with both Secretary Ross and Secretary Garcia and CARB on that. I think it's a really promising area of climate action.

Good. Well, I agree. I'm very excited about that. I think it's one of the areas, among others, that we're really cutting edge for the country here and is very important I also mentioned other opportunities that we'll need to be looking at, I think starting this year around carbon removal, like direct air capture and other opportunities that we have here in California.

As you know, to reach our climate goals as projected, we're going to need 65 million metric tons of carbon removal separate from anything from carbon capture and sequestration, which is included as direct emissions reductions. We're going to need 65 million metric tons of carbon removal. And certainly natural working lands, I think, can be a significant contributor to that, along with other areas that we need to start looking at. So that's very helpful. Had a question on trigger cuts. Maybe this is for the Department of Finance.

Unless any of you want to comment, we just want to make sure we're all on the same page in terms of the architecture that's been laid out for these budget solutions, does the architecture assume that trigger will be pulled, so the funding will be put back into these programs? Or does the architecture assume that no trigger will be pulled and that those funds don't come back? Mr. Aguilar, any comment on that?

Yeah. So in terms of the overall General Fund architecture and looking how the dollars were scored within the budget and the multi-year, the budget assumes these programs are reduced, and so you'll see the decrease of those dollars within the respective budgets and the multi-year framework.

However, just acknowledging these are key important priority climate programs and there are fluctuations within the General Fund revenue, we wanted to make sure that to the extent the revenues do increase and are projected to be higher than what we are projecting at Governor's Budget by next January, that if the revenues do come up, then these programs would get triggered back on. But in looking at kind of how all of it was scored, we're not assuming at this point those expenditures would occur. So they are reductions.

Great to start to, I guess following on the subject of cuts, and I'm sure this is difficult to answer because there are difficult decisions, but for the secretaries, what can you tell us about the thought process for deciding which programs to cut and which ones to spare? What were some of the factors considered and whoever wants to go first to address that.

I might take a crack at that. I mean, first of all, it's really difficult to make cuts given we stood behind and championed all of the funding in last year's budget. That being said, as my colleague Sergio from Department of Finance noted, as it relates to climate resilience or protecting Californians, there's major focus on those climate impacts with a clear and present danger right now across California.

So that's wildfire, given we've lost 7% of our entire state to wildfire over the last three years, including communities that have been absolutely flattened, and then on water, both drought and flood. Recognizing that before we started our efforts over the last few years, well over a million people lacked access to dependable, safe drinking water, we're making progress. But drought and wildfire and flood, and we saw the manifestation of that in January. So those have been huge priorities.

And on coastal resilience, I spend a lot of my time leading the Ocean Protection Council and championing the work of remarkable agencies, including the Coastal Commission, the Coastal Conservancy, and state lands. So we're not de-emphasizing those as pre-key priorities, but those know, frankly, provided less direct threat to a broad set of Californians compared to those other threats. So that's at least one filter we've been running potential cuts through.

Thank you. Makes a lot of sense. Secretary Ross.

Yeah, I just wanted to add, we were also looking in the context of one of our longest programs has been the SWEEP Program, the water use efficiency program. And one of the things we were looking at and evaluating this whole picture is how many farmers have come into this program. We've proven the practices, and there's a whole new tranche of funding from the Federal Government.

We've also used our investments in technical assistance to help these farmers understand how they can access federal programs and provide them the support to access federal programs. So that's one thing we were trying to take into mind. With the resources we have, what have we proven out as models that we know should be self-sustaining because we have these new federal funds coming into it?

And where could we pare back on some of our programs and still create that proof of concept model with some of our new beginning farmer programs and urban farming programs? With the SWEEP one I wanted to call out, it was our most significant cut. It was not an easy conversation to have, but we had what we felt was another viable funding stream to be able to point people to.

Got it. Secretary Garcia.

Thank you. I would just add that in the vehicle space and from an air pollution standpoint, in addition to a climate pollution standpoint, we really focused on those programs for which there were not GGRF options or federal funding options, but that bring us a benefit around disproportionately burdened communities.

And so we're looking really at programs that work to electrify our ports, to electrify our heavy-duty sector, to protect communities around freight transport corridors, and ensuring that those programs remained intact and were not pushed out or had their funding clawed back. I would also say from the standpoint of investing in our circular economy, we also prioritized some of the programs that lead to direct methane reductions.

As you know well, many of these programs give us also multiple benefits, an emission reduction benefit, but also reductions in our landfills and at best can actually give us some options for feeding Californians. So we also worked to protect these investments as well as investments that continue to invest in our circular economy moving forward.

Well, thank you. I think those are also some really nation leading programs, so I appreciate that. And electrifying ports. I know my colleague from Long Beach would agree those are some of the worst air pollution areas in the state. So appreciate that focus. Actually, that led perfectly, Secretary Ross, to my next question around federal funding. We know that there is a lot of money out there now with the IRA and the infrastructure package, but it's going to be complicated.

I've heard that there's as many as 8,000 programs out there. Obviously, not all of them have been put out guidance yet, but I'm wondering if you could each tell us what areas and programs, Secretary Ross, you already mentioned this, but what area programs in the climate energy packages that the Governor envisions federal funds as a way to help offset General Fund reductions. And what are you doing to make your agency competitive for the federal funds that we're going to be applying for?

Part of that is, you know, there's a lot of labor standards in some of these legislation. So I'll put that as part of the question of what are you doing to make yourself competitive for the federal funds. So we'd love if you could each address that question. Secretary Ross, do you want to start?

Sure. Yeah, sure, since I'm the one that brought up federal funds. Many of the funds that will be available that are specific to agricultural practices are actually available to individual farmers, but there will be significant increases in programs like the Environmental Quality Incentive program, which could fund these upgrades in irrigation, for example. They can also fund a number of healthy soils practices. There are funds that are also being made available for Conservation Stewardship Program.

This is really being able to partner with growers to do a whole suite of practices to reduce greenhouse gas emissions, improve opportunities for wildlife habitat, pollinator habitat. It's a whole suite of programs. Again, these are all individual farmer programs as opposed to programs that the Department could apply for.

But we have signed in the last three months, we signed a memorandum of agreement with USDA's Natural Resource Conservation Service, University of California Cooperative Extension Services, as well as the California Association of Resource Conservation Districts, so that we're all seamlessly being trained to be able to advocate to farmers how to apply for each one of these programs. And we think that's going to be a helpful way of bringing in as many federal dollars as possible.

I also want to say the interest of farms in establishing their own microgrids on farm as they look at electrifying more of their farm equipment and doing engine replacement. There's a number of programs available for USDA rural development in particular, and the On-Farm Renewable Energy Assistance Program that could really help at the farm level, each one of those farmers being able to draw down federal dollars in that way. The last one I want to call out are examples like the Economic Development Assistance program.

I think the investment that the Legislature and the Governor agreed to last year for community economic resilience funds to really bring together communities on a regional basis to envision their future of carbon neutrality. They've all got planning grants, and I think those are going to equip regions to draw in federal dollars as well. Thank you.

Thank you. It was very helpful. Secretary Crowfoot or Secretary Garcia?

Yeah, it's a great point. And there is a generational opportunity to draw down federal funding, some of which is formula-based. So it's going to come to us based on our population and size and different attributes, but then some of which is competitive. So we need to be competitive, we need to be aggressive. And we know that other states, particularly those smaller, less capital-intensive states with their own budgets, are really aggressive.

So the Governor has brought us together, through the leadership of Mayor Villaraigosa into this infrastructure working group where we're coordinating our efforts to go after that federal funding. So, one, there's a sort of administration-wide effort to identify the opportunities and then aggressively pursue. And then each of our departments and entities within our agencies are also using their relationships and their insight of these federal funding programs.

One example that comes to mind is our Coastal Conservancy that's been working with the Army Corps of Engineers to secure funding for an important flood protection project in the South Bay, within the Bay Area. And I think we'll be expecting some really significant good news based on that recent federal funding for that project, thanks to the coastal conservancy. So we're working both on a departmental level and then an agency and a broader Administration level to secure funding.

And I know Department of Finance is tracking how much federal funding we're bringing in, and I believe it's upwards of over $50 billion at this point.

Yeah, that's significant. And I know you recently brought up Sarah Amanzada, who also worked on that federal interaction as well, which is.

Really excited about that.

Yeah, that's excellent. Secretary Garcia.

Oh, hi.

Sorry about that. There's a delay on my side. Thank you. I actually do want to kick it over to our colleagues at Department of Finance. As Secretary Crowfoot noted, there has been a very coordinated, Administration-wide effort to draw down federal dollars, not only for some of our climate programs, but in the drinking water programs within that, and for large-scale infrastructure opportunities across the board. I will just note before kicking it over to Sergio, we are actively looking at applying the Justice 40 Framework.

So to the points on some of the equity and environmental justice priorities that you laid out Chair, which we agree with, we are looking at the US EPA and CEQ's Justice 40 Prioritization in environmental justice communities, disproportionately burdened, but also historically marginalized communities, tribal communities, et cetera, in how we're drawing down those infrastructure dollars. And I think that's just important to note as we're moving forward.

And I'll kick it over to Sergio to give a little bit more flavor on what opportunities we're looking at across the federal infrastructure sources.

Yes, Department of Finance. So as the Secretary Crowfoot noted, Administration is coordinating definitely on trying to make know we're one aware of all the various federal funding opportunities and also doing what we can to apply ourselves, but then also make sure that the communities across the state also apply, because in many cases there are programs where it's not necessarily a state government entity that would apply, but a local jurisdiction or a nonprofit entity or an agriculture case, farmers.

And so just kind of to elaborate and give a few examples. So far, I think what we're tracking is we've been able to receive as a state as a whole, not just state government, but state local entities and others, a little bit over $48 billion across various types of funding in water infrastructure, in roads, environmental justice, energy efficiency, public transit. And that's really mostly the Infrastructure Investments and Jobs Act, which was the first federal funding package that was approved.

Most recently, I believe it was last September, the Federal Government approved the Inflation Reduction Act, the IRA, and that includes over $100 billion worth of funding across climate programs to help reduce pollution, more funding for clean energy, clean transportation, disaster response, agriculture, drought mitigation. So we are definitely actively working to track that, just to give a couple of examples and how they kind of meet with our overall approach on looking at specific federal funding opportunities and how that relates to General Fund solutions.

In the coastal resilience side, the Inflation Reduction Act, which was the most recent federal funding that was approved, provides $2.6 billion for the conservation, restoration, and protection of coastal and marine habitats. And then the Infrastructure Investments and Jobs Act provides $1.5 billion to help coastal communities invest in natural infrastructure projects. And these specific funds, which is about $4 billion, is going to be administered through NOAA, the National Oceanic and Atmospheric Administration.

And they're going to provide funding in forms of grants, in cooperative agreements, technical assistance, and various other mechanisms. We're still waiting to hear from the Federal Government on all the specifics on how that funding is going to be rolled out. And this is over multiple years. So we anticipate they're going to do like multiple solicitations, but we're actively monitoring to kind of make sure we're aware of when that funding opportunity comes out.

Another example on the Inflation Reduction Act, there was about $3 billion that was put together for Environmental and Climate Justice Block Grant, which basically the Federal Government modeled their program after TCC, the Transformative Climate Communities Program. So it's $3 billion that there were some reductions that we have under TCC in the state funding. Acknowledging there's this $3 billion available in federal funding where they model this funding.

After our program, we believe the state could leverage some of those funds, and the local communities that would have applied to our dollars would be able to apply directly to federal dollars. And we're also making sure that the state could provide, in some cases, support to these local entities to apply to some of these programs.

When it comes to ZEV, which I think is one of the biggest examples that we have in looking at both the Infrastructure Investment, the Jobs Act, and the Inflation Reduction Act, there's close to $28 billion directly related to ZEV programs.

And we know our overall strategy on the federal ZEV funding is to leverage the formula funding, where possible, directly apply or support our partners who are applying to these competitive opportunities, and also create opportunities to use smart finance to stretch the public dollars as much as we can. And even kind of on ZEV, there does appear to be less formula funding than we would have anticipated because these federal programs don't appear to be using a per capita basis for that funding.

But we note that there is a tremendous amount of interest for these competitive solicitations. There is ultimately no 100% assurance that we're going to be getting the funds, but we think California, as a leader in ZEV, as an Administration, we're going to be very competitive for these dollars. So those are a few examples we could point to, but there's definitely a lot of others.

And just acknowledging, too, because especially this last federal funding package, the Inflation Reduction act, it's still very new, and there's still a lot of information that has not been released by the Federal Government in terms of how that money is going to be rolled out. And so there's still some additional information to come from the Federal Government which will help us determine how we could best leverage these dollars.

Well, thank you. Those are great examples of exactly what I was getting at here. And you mentioned, because I know, and Senator McGuire mentioned this, a number of us have been upset about cuts to coastal resilience in our budget. But if there are funds available that we can get from a federal perspective, you mentioned 4 billion potential funds, that is significant for us to obviously go after and understand how that will, could possibly compensate for some of these other cuts. I'm glad you mentioned TCC.

I had a meeting yesterday on that. And as you know, as you mentioned, that really our program was the model for this 27 billion in the IRA for disadvantaged communities. And certainly getting our 3 billion-plus will be a priority. And many of these programs I've heard are also uncapped. So they may have modeled them out, assuming, say, only 20% of people uptake some of these programs, but they're essentially uncapped. So the more Californians that we can get to apply, the more we'll ultimately benefit.

So certainly I'm committed to working with Administration. I want to make sure that California gets every dollar that we can out of these programs and look forward to working with all of you. Those were powerful examples. I do want to mention kind of a less positive story, at least so far, where we've received very little of the IRA funding for clean energy projects, say, battery manufacturing projects that have gone out.

So I'd love if maybe someone from the CEC, I know there's very folks online, could comment about that and is there anything that we can do to make California more competitive, for example, to build out manufacturing, say, in the Central Valley or in the Inland Empire areas, that we could, we could certainly use those jobs and I think are really ripe for that investment. We've not been successful in gathering any of that so far.

So any comments on what we can do to make California more competitive there?

Yeah, I'd turn to Drew Bowen, who is the Executive Director at the California Energy Commission.

Great. May take--

And if he's having trouble getting on, I can respond too. Senator, duly noted. We've been disappointed. There he comes.

Drew, go ahead.

I apologize. Thank you, Chair Becker and Secretary Crowfoot. Would you mind repeating the question? You literally said the CEC and then I just cut off.

Yeah, just, I guess, in brief, you know, we have not been successful yet in getting any of the grants for, say, large manufacturing, the battery manufacturing plants, for example, that have been given out around the IRA. And so the question is, really is, what are your comments on that, and is there anything we can do to make California more competitive? I think certainly Central Valley, Inland Empire, others, are really right for building out manufacturing in those areas, and what can we do to make ourselves more competitive?

Thank you. Thanks for that question. Yes, we were very disappointed about that when we learned that, but as has been noted by several on the call, there is a substantial amount of funding that is still available, and we are actively pursuing as much of it as we can possibly get to come to California. We are investing in manufacturing on our own with California dollars and have--I believe it's $250,000,000 invested in that regard and look to do more.

But we are working on a number of different programs. I think the Energy Commission is anticipating we will get on the order of about two billion dollars of federal money if we're successful everywhere we're expecting to be, both in formula grants that we are confident we'll get, and then for the competitive ones as well. And that's just for the Energy Commission. So on manufacturing, yes--big disappointment, but there's still plenty of time.

There are additional rounds, and indeed, we're having folks come out from the federal government visit with us, take tours of some places, Central Valley, also Lithium Valley down in Imperial County, and are confident that we will be able to demonstrate that we are the hub here in California for those sorts of investments.

Well, thank you, and we look forward to partnering with you; anything that we can do, obviously, in the Legislature along those lines. I'll move on to the general obligation bond. I was wondering maybe, Secretary Crowfoot, could you tell us a little bit more about what the Administration has in mind with a potential general obligation bond?

Thanks, Senator, for that question. So Governor Newsom, when he introduced this proposed budget in January, did reference that he is open-minded and interested in discussing a potential general obligation bond with the Legislature. We at this point are waiting to see how revenues develop by the May Revision before we would initiate any discussion.

The Governor's comment during his budget introduction was important and significant, but really just an intent to explore this possibility with legislators, many of whom I know are very interested in a bond, but at this point, as I know my colleague Sergio would echo, we're waiting to see how revenues shape up here in May before further discussion.

Okay, good. My colleagues and I are working on a bond, SB 867. So we look forward to working with your staff to receive technical assistance to best meet the needs of Californians as that conversation goes forward. I know you have another commitment coming up. I wanted to maybe see if there's a few other things I had specifically for you, I guess, to pick up one piece that Senator Dahle asked.

As Administrations begun to plan and implement various programs, we have still seen a lot of delays in permitting. AB 205 created an expedited permitting process for Clean Energy Project, the CC, and there's one onshore project that is used in application. Is there anything else we can do to encourage more use of that permitting option and opportunities to expand that program to, say, transmission lines?

Yeah, great question. I'm going to turn to Drew Bohan from the CEC in a second because he's tracking this on a daily basis. But the short of it is the Governor agrees with you. We need to move quicker to get climate infrastructure in the ground. We need to accelerate processes. I'm quite impressed that the CEC has stood up this permitting pathway that was called for in the trailer bill language that was approved last September.

And as you know, Senator, there are already applications in through that process. I think that could be a model for other sectors, and our water strategy actually notes that something like that could be done in water. But we're assessing that, and I know the Governor's Office is eager to bring forward proposals to further streamline permitting processes while still enabling significant environmental review and engagement from community members and tribes and others, but with that said, Drew, do you want to just explain in a few sentences where your permit pathway is?

Certainly. I would just say Secretary Crowfoot reminds us all the time about execution is really critical to our success. So, yeah, we're looking at this across the board. We got authority last year from the Legislature. Thank you for what we're calling the so-called opt-in permitting process. It shortens the timeframe that we're obliged to get permits finalized. We've already got one permit in the door through that process. We're working on that actively now.

We're expecting several more based on the conversations we're having with developers in the very near future, as early as this month. So that's one piece on our permitting. With regard to offshore wind, there are many different state and federal agencies that have a permitting role. One of our obligations based on AB 525 is to come up with an overall plan, and we have a series of reports coming your way, Senator, to the Legislature that will look at that.

And permit streamlining is a significant piece of it. Finally, I would just say we are also looking through what we're calling the CERIP activities, the California Energy Reliability Investment Plan that we just sent over yesterday to the Legislature based on the statutory requirement that includes funding in the first year that is targeted just at permit streamlining and with an emphasis on transmission because we realize we've got a lot of projects, a lot of need, and we've got to get those moving quickly.

Thank you. Yes. Large need, and appreciate those comments. Secretary Crowfoot, maybe I'll ask you one last question then, if you want to say anything to wrap up for your next engagement, and we have your team on for some specific questions. When it comes to building decarb, that's another area where there's, again, federal money coming in, but also a lot of different state incentives.

I wonder if you can comment how the CEC, Air B, CPUC are working to ensure these program incentives are complementary and easier to access, and are there opportunities to sort of stack applications for these programs or with other existing energy programs?

It's a great question from my view, and one of those areas where there is shared responsibility across agencies. So the CEC has funding. ARB, CPUC plays a role regulating investor-owned utilities, as you know. So I'll say that I'm confident that the CEC has developed its Direct Install Program, the Low-Income Weatherization work, as well as the incentive to plug in with ARB and CPUC. But again, why don't I turn to Drew Bohan to elaborate on that?

Thank you again, Secretary Crowfoot. Yes, this is a major area of focus for us. We have in the Governor's Budget $835,000,000 just for the Energy Commission for equitable building decarb. We judged this to be a significant down payment, but the need is great. So we're doing a couple of things. As Secretary Crowfoot noted, we are looking at focusing first on the Direct Install Program.

What we had pitched is that two-thirds of the money or so would go to direct install and the balance would go to rebates. We're focusing laser-focus just on the Direct Install Program for now, and we are also getting federal money coming in that is very similar. It has slightly different requirements, and so we're making sure we're coordinated with that federal government money. But we're also looking at-- Secretary Crowfoot testified earlier that we're hoping to get some funds out this year. Indeed, that's true.

We're working with the CSD Program, the Weatherization Program, and might be looking at opportunities to shift some modest amount of funds their way because they can get that money into homes, into improvements very, very quickly. Similarly, there's a program that's out of the Public Utilities Commission known as the Tech Program, and that is also doing installations for largely space conditioning, so HVAC systems in homes and businesses and water heating. And those are very, very high GHG reduction yielding programs.

They don't do as well, the Tech Program as well with the target audience, the lower income folks. So that's what we're designing our Direct Install Program around, and we've made a lot of progress. We've had a number of workshops, but this is a topic that is very engaging. Many, many Californians are very interested in the way this program gets designed.

So we are taking this input as we speak, and we are hoping to hire a contractor to help us move those funds out a little bit later this year. The funds themselves will move later than that, but getting that community input is critical.

Yeah. And I know for the Tech Program that you mentioned, the market rate incentives went much faster than anyone sort of expected, and I view that as a positive. Do you see in the next generation of tech, will there be market rate incentives as well replenished there?

If you're asking me, Senator, I think that's probably a question best answered by the Public Utilities Commission or perhaps Finance.

Sure. I see you have Rachel Peterson.

Yes. Good afternoon, Chair. Thank you so much. Nice to see you again. Rachel Peterson, Executive Director of the California Public Utilities Commission, and I'm actually going to turn to Deputy Executive Director Leuwam to testify because she's closer to the program and the potential rollout of future incentives. Just safe to say that, as Director Bohan said, working within buildings and reducing the emissions footprint of buildings is, of course, a key part of California's overall emissions reduction strategy.

So we're very excited about these programs that work within existing infrastructure, existing buildings, to form part of the overall strategy. And with that, I'll turn to Deputy Tesfai, please.

Thank you, Director Peterson, and thank you, Chair Becker and Committee Members, for allowing us to share a little bit more detail and updates on the Tech Program. And so, what I wanted to share was that actually in February of this year, so just last month, the California Public Utilities Commission actually issued another decision augmenting the budget of the tech initiative. So, as you know, that was originally from SB 1477, but thanks to authorization from AB 179, we were able to augment that funding by 50 million just last month.

Excellent. Great. Thank you for that. Secretary Crowfoot, any wrap up remarks from you before--I know you have to head out.

I would say at the highest level, I'll say what I said before, which is we look forward to working with you to make sure that this budget is the best it can be, and you bring a ton of expertise and experience in these areas and look forward to your questions and both answering these through public testimony. And then as you need more follow-up information, we're 100 percent committed to getting it to you as quickly as possible.

Great. Thank you. We'll continue on then. I understand that we don't break for lunch here, as maybe it's an incentive to have us wrap up sooner, but if you would like to, the secretaries, don't feel like you need to be on camera at all time if you were grabbing a bite there. So let's just see, to go back for a moment. I don't know if the other secretaries can comment on this. In terms of the future commitments, this gets to something LAO talked about as well.

Considering that we may be facing deficits in the outyears, would the funds proposed for delay now be protected in those outyears or would they be back on the table for potential cutting if/when that time came to balance the budget? In other words, for those future years, what level of certainty do stakeholders have that the money tagged now for delay will actually be there in future years? Anyone who would like to take that on.

Mr. Chair, I believe that'd be a really good question for the Department of Finance.

Yeah, so, Sergio Aguilar from Department of Finance. I could take that question. So I think just generally, looking at the budget picture, I think it's important to note that the budget picture as proposed in the Governor's Budget, even though there are revenue declines, we do not project a recession. And so we are continuing to monitor the General Fund picture, and we'll have a better understanding in the May Revision of the overall General Fund picture.

And depending on what it looks like, to the extent there are additional declines in the revenue, then we'll have to make decisions whether to look at potentially tapping into the reserves or making additional reductions. But then conversely, if there's revenues that improve and increase, then we would be looking at potentially doing kind of more and more restorations of the cuts that we proposed.

But ultimately, just depending on the General Fund revenue and the ultimate kind of budget forecast, there's going to be decisions that will need to be made. Acknowledging, as the LAO notes, the outyears currently are not balanced, and so I think it's just important to note there'll be additional decisions that will need to be made across the state budget, not only looking at what's in climate, but looking at what is being funded across the state.

Got it. So I'll take that to mean that those programs are not protected really in the outyears and they would be subject to conditions in that timeframe. But thank you. That's a helpful clarification. Okay, good. We're going to move on now to energy reliability programs, and I know we still have a lot of folks in the CEC on board here.

So I guess I'd ask to start out, what potential amendments to the Demand Side Grid Support is the Administration considering and how does the Administration plan to modify and implement the program for summer of 2023? We're going to have someone from the CEC, Drew or others, respond.

Certainly. Happy to jump in. I was just giving Secretary Crowfoot a moment if he wanted to, but yes, Senator, we're quite proud of that program. You gave us the authority last year, and we moved, we think, very quickly. I have some very strange staff to prove it. But that program stood up in record time and we were able to enroll over 300 megawatts in a really short period of time, which was helpful because the Labor Day Weekend was, as we all know, very, very hot.

We estimate that approximately $14,000,000 will come in to us in terms of incentives that we need to pay out. The invoices are coming in as we speak, and we had to pivot very quickly. We originally intended that the program would be largely run by each individual utility, and the utilities in turn would go identify generators that they could either get reductions from or actual generation itself, often in the form of diesel generation that could come online and support us.

So it was a very good program and it was a complement to the PUC's program in PUC territory, which is similar, and that's called the Emergency Load Reduction Program. We learned a few things, and one of them was that going through the utilities directly, it may make more sense for us to go directly to the individual load entities themselves that actually are consuming electricity in California.

It's what we did when we pivoted last year, and it looks like we're going to want to do that again this year. We also learned that we've got other tweaks we can make to the program to make it easier for participants to play, and we're actively both reaching out to folks and learning. We're also working with aggregators.

So in addition to just a factory or a large energy consumer that might be able to reduce or might be able to fire up a generator, we're looking at aggregators that pull together a whole number of these different players and then collectively, basically offer up resources to the grid operators. So those are some of the things we're looking at.

Great. Thank you for that. I know that one of the things the Legislature worked on last year was to ensure that the program expands eligibility for customers in all IOU territories, and I just want to reiterate the intent of the Legislature along those lines since I heard there were some questions. So is that your expectation for this upcoming summer?

Yes. We're working with our colleagues from the PUC. I think it was AB 209 that changed the AB 205 rule that said that those entities in IOU territories could--the amendment said that if they were not in another program, they could participate in the DSGS Program, and so depending on your situation as a significant operator of load, you might find one program more appealing than the other.

But we've been working closely with--you heard from Director Peterson and from Leuwam Tesfai, and we are coordinating with them to figure out what exactly is the best balance between the two programs. And we don't want to confuse the consumers out there and force them to pick between programs that are somewhat similar. So we're looking at for this next summer to make sure it's crystal clear to everybody, what are the differences? What are the best opportunities for you.

Great. Thank you. We'll look forward to digging in maybe a little bit more on that in a subsequent hearing because it certainly played a key role in our reliability strategy last summer, and I think it's very important to get the demand management side of it right. So thank you for those comments. I guess a couple of questions for DWR. I understand that about 440,000,000 has been committed from the Strategic Reserve, which is much less than 2.3 billion appropriated in the budgets.

Yet the Governor's Budget does not include any reductions in the reserve. So does Administration anticipate needing the full amount in the near future? And what are the projected costs for Summer 2023?

Good morning, Chair. This is Delphine Hou, Deputy Director of the Statewide Water and Energy Program, overseeing the Electricity Supply Strategic Reliability Reserve Fund. So happy to answer that question. First of all, thank you for having me here. I do want to make a slight correction. As Secretary Crowfoot had said at the beginning of this, we had already committed 654,000,000 for last summer's activities. So those were funds to support the 1800 megawatts that he had mentioned earlier today.

Moving forward, we've already then committed an additional amount of money for a total of $800,000,000 to support activities for the Summer 2023 and going forward. In our projections, we also feel that there's other capacity that we are currently under discussion and negotiation with. So we do foresee that we will be using the maximum of 2.3 billion overall that has been allocated to the fund.

Okay, thank you. I guess the question is, as a follow-up, what actions has DWR taken to use the Strategic Reliability Reserve Program to develop new low and zero-emission generating resources? None are described really in the progress report, except for whichever you can, which is obviously not new. So we're a little concerned about those dollars not being used for low and zero-emission generating projects. So, could you talk about actions you're taking to develop new low and zero-emission resources?

Absolutely. Appreciate the question, Chair Becker. First and foremost, DWR is committed to looking at low and zero-emission generating resources. One thing we do have to be fairly mindful of is maybe the sort of prevailing technology available today. For example, batteries maybe paired with renewable resources like solar or wind. Those are also resources that are very much of interest for load-serving entities, both in the IOU footprint as well as public entities.

So we want to be very mindful that there is an increased amount of demand for those specific resources, but on the same side, there's also constraints on the supply. We've been hearing over and over again about supply chain issues and other delays in bringing those resources to fruition so that those entities can meet, for example, their resource adequacy requirements.

We also want to be very mindful, DWR prior statute, that we are not out there competing with load-serving entities, as they are also trying to get those requirements fulfilled. So again, the Strategic Reserve, we want to make sure that our fund is being used to help support the grid for those extreme events above and beyond what load-serving entities and others are doing for their traditional planning activities.

Now, having said that, we have also been looking at newer technologies that are more competitive on the emission side and bring it down lower. They're not non-emitting resources, but they are lower emitting resources, and we feel that those are improvements from where we have been in Summer 2022. We have 143 megawatts of that coming online for this Summer 2023, and we certainly will be looking into more opportunities moving forward.

Great. Well, thank you. I look forward to diving into that in subsequent hearings as well. I understand that Secretary Garcia and Secretary Ross need to leave shortly. I'll ask a couple quick follow-up questions, and if you have time for those, great. Otherwise, we'll have--appreciate your team is still here.

For Secretary Garcia, first, in terms of our incentives for electric vehicles, wondering what has CARB done to streamline the Clean Cars 4 All and Clean Vehicle Rebate programs to ensure it's easier for consumers to access--and for consumers that qualify for both--to leverage both programs together? And I'd also say, I guess, how can we best work with air quality management districts on administrating the Clean Cars 4 All Program and enabling more disadvantaged communities to get the most effective outcomes?

Appreciate the question, Chair. Thank you. And I'm actually going to kick it to Sydney Vergis, who's on the line to give a little bit more detail on both these questions, but with the air quality management districts, we've had some successful conversations with them recently. I do welcome partnership and engaging them to ensure that the way that they're getting the money out the door is consistent. As you know, likely know well, we have a few very well-resourced air quality management districts and others with less resources.

And so I think from a staff capacity, some of them are a little bit more challenged than others in getting some of the funding out the door and developing consistent policies through which to do that. Fully committed to having several conversations with them to understand how we can better provide them with the support that they need to support our programs, and we'll kick it over to Sydney to give a little bit more context to some of your questions. Thanks.

Great. Thank you so much. And thank you, Senator. My name is Sydney Vergis, and I'm a Division Chief at the California Air Resources Board and oversee a number of our incentive programs. So, like you, we've been hearing in the past couple of years that folks want to be able to easily access our programs for which they're eligible and be able to apply for those programs easier.

And we definitely want to make sure that our programs are reaching the priority populations in the communities that these funds are intended to benefit and help. One of the areas of action that I really want to lift up and make sure you're aware of is in recent years, CARB has developed and implemented a web platform. It's called Access Clean California. This is formally known as our One-Stop-Shop.

This is a centralized application tool that works in tandem with a supported outreach partner network to help really get at this issue and increase low-income consumer access to what we call our EV Dashboard. Within the web tool is something that we refer to as our Benefits Finder, and this connects users to and kickstarts the application process for a number of incentives, including both Clean Cars 4 All, CBRP, as well as other incentive programs like our Financing Assistance Program and programs outside the agency like CPUC's low-income solar programs and then several local utility EV incentive programs.

One of the nice things about Benefits Finder is that it includes a streamlined income verification process upfront. For us, doing that on the back end has proven to be very challenging in terms of being able to get folks the incentives that they're eligible for. So having it upfront through this application has been really useful in terms of streamlining.

One nice thing about Access isn't just the online interface, but also this personal touch and network of outreach providers that we have put in place and have been working with. So we have over 20 formal outreach partners that have many sub-organizations. So we work with tribal governments, community-based organizations, labor unions, and also affiliates throughout small communities in the state who then go to in-person events like farmers markets or car shows. They also hold online workshops and focus groups.

We've also taken steps to align requirements across our programs, which has helped streamline, and so we're always looking for ideas about how to increase our reach and make sure our programs are really getting out to where they need to go, and so always open to hearing more ideas. Thank you.

Thank you. And I know that SB 1230 did also kind of get at this hub notion, so I'll look forward to checking this out. Sounds exciting. And are people preapproved now for the program? You mentioned streamlined approval, but my understanding was SB 1230 kind of asked CARB to figure out a way to pre-approve folks as well. Is that happening?

Right. So the nice thing about this is that many of these programs do have income verification requirements because we want to make sure that these programs are really targeted where they're needed the most, and so that verification and approval is done upfront through our Access tool.

Okay, good. Look forward to checking that out. That sounds exciting. Secretary Ross, if you have a moment before you leave, there's research in GHG reduction and the Governor's proposal have the fundings, I understand it, for this proposal. And how would you think about this change and the scope of the research that can still be done and how this impact the number of projects that can be funded?

That's a great question. Thank you, Senator. One of the things that we looked at in this situation is we've had for the last year and a half a really great group of volunteers and professionals coming together to reevaluate what are the opportunities for reducing, reusing, repurposing the waste stream that comes from a dairy cow, extracting the nutrient value as potential, as an example, organic fertilizer as a replacement for synthetic fertilizers, but other ways of really reducing emissions, reducing this waste stream, and moving this high nitrate product off of some of the lands where they are.

And so we intend to and have put out a request for proposals to really focus on what this group of experts has recommended as places where we could close the gap on things we need to know, and so that's how we're using the funds that we have. It is unfortunate that because of a shortage of staff, we weren't able to use some of the funds that had been put there the year before.

But we feel confident we can get some really good research done in this space, especially given with the interest of USDA and the entire pledging countries of the methane reduction pledge to really amp up research in this regard. So we feel that we can fill some gaps, we can do some things that are very specific to the dairy sector as we have it here in California, as well as leverage that with where other funding streams are for research in this space. I hope that answers your question.

Yeah, that's good. And again, look forward to following up in some of these other areas we touched on around methane reduction, healthy soils. All very interesting, and look forward to diving into those in subsequent hearings. Thank you. I know that you and Secretary Garcia have to run. Do you have any final comments before you sign off?

No. Just really appreciate your knowledge in all of this space and I look forward to working with you, Senator. Thank you.

Look forward to working with you.

Agreed. Before hopping off, appreciate your interest in all of this, Senator, and very much look forward to working with you and being back before you shortly.

Excellent. Good. Look forward to it as well. A few more questions specifically for--we can address to some of the agency heads and others on the line. I again appreciate everyone being available for these questions and being around. So just one more question, follow-up with CARB on the question of zero-emission vehicles. We know that about ten percent of drivers account for a third of all gasoline consumption.

So these folks are now, I think people are calling release super users and on an average have three times the vehicle miles traveled than an average driver. So obviously it's much more significant to our goals to have them getting into zero-emission vehicles than, say, some others. Are CARB's outreach efforts doing anything to target those super users?

Great. Thank you so much for the question, Senator. Sydney Vergis from CARB. So just to provide a little bit of context before responding more directly, when our light-duty incentive programs were first getting off the ground something like 13 years ago, they were really targeted at the question of how do we accelerate getting this new technology to market? How do we accelerate getting early adopters to make the right decision of getting into a zero-emission vehicle?

Over time, our Clean Vehicle Rebate Project or CVRP Program has evolved thanks to our partnership with the Legislature, where the program has become more and more focused on equity over time. As the market has continued to grow and evolve, there's been increasing focus on helping to ensure that those most in need aren't being left behind in this transition to electrification. So what you see in CVRP now is a higher focus on equity and outreach and getting low-income consumers into zero-emission vehicles.

So I think my ledge office has alerted me that this question of should the program become more focused around supercommuters is going to be a really active one during this legislative session. So I'm looking forward to having continued conversations there.

Great.

Senator Becker?

Sure. Go ahead, Drew.

Yeah. If I may add, thank you. I just wanted to note it's not precisely responsive to your question, but one of the areas we're targeting funding specifically, and this is where the Energy Commission is directly putting out solicitations and seeking applications, is for so-called TNCs, transportation network companies that we know as Uber and Lyft. And there are others, and they are among the power users.

They may not be in the same group you described, but some of the companies are targeting electric vehicles, providing a little greater incentive to their drivers if they rent or lease those, and so we're wanting to target them because they put on so many more miles than the average player.

Thank you. Very important. Appreciate that as well, and look forward to following up on this topic. Let's see, I had a follow-up question. I think we touched on this a little bit about the ZEV fueling infrastructure. Obviously, that's a huge priority, as I've mentioned, to build that out, especially in lower income communities. And we talked about federal funding. I don't know if we discussed specifically the National Electric Vehicle Infrastructure Formula Program and how that's complemented state funding.

I know that Department of Finance referred to significant amount of funding that is available, but any comment on how we're leveraging that around fueling infrastructure? Because I know that's so important.

Absolutely. Yeah. This is a very welcome addition to our portfolio, obviously. The amount of money earmarked for California is $384,000,000. That money goes directly to Caltrans and the other transit agencies or transportation agencies throughout the country. We are working very closely--the Energy Commission is--with Caltrans because we will end up managing that money directly. Our goal is to deploy 800 high-powered fast chargers along interstates and highways. It's a narrow spectrum, but it's a critical one.

And NEVI's vision is to have a cross-country network. So if we can build our network along those major corridors and they go into Oregon and Arizona and Nevada, we'll be contributing our part. But we're excited about that funding. In addition, Senator, there's about 2.5 billion dollars in competitive funding. We are also seeking, again, to get as much of that as we possibly can for California. That particular program, unlike the NEVI Formula funding is both competitive, and the DOE has not yet released the competitive applications. So we're eagerly awaiting that, but we're poised to apply as soon as possible.

Excellent. Thank you. Good. Well, we'll move on. Again, just more evidence of this importance of this taking measures of this federal funding, but I appreciate you hitting that. Couple questions for CARB and LAO and Positor and Finance on GGRF. First, let's see. I think historically, we probably underestimated cap-and-trade revenues, and given the recent auction, I was wondering, does the Administration have an updated estimate of cap-and-trade revenues available for discretionary spending? And does LAO have a different estimate for discretionary spending given recent auctions? I see a couple of folks on the line. Christian, do you want to start?

Yeah. Thank you, Mr. Chair, for that question. And so generally, the way that the Administration will update the estimates for the current year is that we generally release that with our May Revision. And so totally acknowledge the fact that historically, at least recently, that the total revenues that come in from tap-and-trade have been a little bit higher than what the Administration has estimated in the past. But we definitely are working on a new estimate and we'll be releasing that as part of the May Revision.

Great. Ms. Ehlers, any additional follow-up?

Yes. Thank you, Mr. Chair. Actually, just today, in 44 minutes, we will be posting an update on GGRF on our estimates, but I can give you a sneak peek, heads up that our estimates are several hundred million dollars more than the Administration net across both. We think there'll be additional funding both in the current year based on the auction that happened last week, as well as our projections for the budget year. So we do think that the Administration is underestimating based on historical trends.

Okay. Well, I think, I guess that's positive news, but we'll look forward to seeing that report. One thing that I think this Committee will come back to certainly is GGRF funds are generally--there's a couple of specific carve-outs--but it's aimed at reducing emissions. And I'm wondering if CARB, LAO can comment on, you know, the top five programs per dollar that are proving most effective of reducing emissions and which programs are proving least effective per dollar at reducing emissions. So I'd love CARB or LAO to comment on that. Sure. Sydney, do you want to go first?

Well, I was just, I want to make sure to give the opportunity to Department of Finance, but I'm happy to help if called upon.

I think that we were hoping that CARB could address that question.

Sure. Happy to. Thank you, Senator. So generally speaking, across all programs, not just CARB, the portfolio of California Climate Investments generally facilitates greenhouse gas emissions. I think one important thing to flag as part of this conversation is that the overlays on the various CCI programs across agencies include, but are not limited to the metric of greenhouse gas emissions per dollar spent. So there are also multiple goals, including things like advancing equity, improving air quality, supporting workforce development, including resilience to climate impacts, and enhancing mobility.

So cost-effectiveness is certainly one metric for these programs, but it's not all-inclusive. Just speaking, looking at the most recent California Climate Investment Report put out by DOF, the top five most cost-effective programs are CDFA's Dairy Digester Research and Development Program, the Strategic Growth Council, Department of Conservation's Sustainable Agricultural Lands Conservation Program, CalRecycle's Organics and Recycling Manufacturer Loans Program, CAL FIRE's Forest Health Program, and CARB's Fluorinated Gases Emission Reduction Incentive programs. In terms of lease cost-effective, there's a couple in that category.

Those include equity programs like CARB's Clean Mobility Options Program, Sustainable Transportation Equity Project, the Advanced Technology Freight Demonstration Project, and CalRecycle's Reuse Grant programs. And as I mentioned, a lot of these may not be the most cost-effective.

They're certainly helping to advance other goals like equity and delivering mobility options to those who may not have access to say things like transit and are not able to get from point a to point b. A lot of these programs are meant to deliver electrification options to those communities.

Great. Thank you for that. Ms. Ehlers.

The only thing that I would add is just to underscore this point that a lot of these programs do have multiple goals. And so if your goals are helping serve vulnerable communities or helping reduce air pollution, then just focusing exclusively on GHG emission reductions probably isn't the best metric.

But that said, if the program is really exclusively, primarily focused on reducing greenhouse gas emissions and it doesn't score well on these kind of comparisons, we think that that's a pretty important consideration, especially in the context of reduced budget resources and kind of when you're prioritizing. So just really underscoring that point that think about what your primary goals are.

Don't limit your metrics to just one if you have multiple goals, but if the GHG emissions are the primary goal, then we think that that metric should be a pretty important input into your decisions.

Great. Thank you for that. Good, and I think we'll have a chance to talk more about that in the future. Last question along these lines, maybe for Department of Finance, what's the rationale for using the GGRF trigger restoration approach instead of allocating additional funds in a subsequent year? And how's Administration plan to prioritize across the different activities listed in the budget bill control section?

Yeah. Thank you, Mr. Chair, for that question. Again, Christian Beltran with the Department of Finance, and really, the rationale for using the GGRF trigger was really to just acknowledge the continued commitment by the Administration to support the implementation of the 2021 and 2022 ZEV package investments that were agreed upon with the Legislature over the past couple of years.

The budget proposes to use the GGRF to backfill those programs that were impacted by the General Fund solutions and ultimately the Administration's plans to prioritize programs that receive General Fund reductions and no GGRF backfill by first assessing where departments are at and encumbering those dollars from 21 and 22, as well as analyzing program demands, available federal funds, and program impacts, among other considerations.

And overall, the Administration is committed to backfilling the reductions to the levels that they were previously agreed upon with the Legislature if the additional GGRF revenues materialize, of course.

Well, I do appreciate those comments. I think, as per the comments of Ms. Ehlers from LAO at the beginning of the hearing today, I think we want to be careful about tying our hands in the future. And if the GGRF funds really are going to be sort of our primary mechanism for reducing greenhouse gases, tying them up with decisions today rather than looking at what's going to be most effective in the future is certainly a concern. So we'll look forward to revisiting that.

Have just a few more questions, and we'll skip a few areas, but in water, the secretary did touch on a few areas, but I'm wondering if maybe CNRA or DWR could comment that in what areas of the water package have you seen the most progress in addressing drought issues?

Mr. Chair, Members of the Committee, this is Chris Tjernell with the Department of Water Resources. I'm a Deputy Director for Integrated Watershed Management. It's a great question and really appreciate this focus. I would say that some of our biggest successes with moving the drought response funding to communities has been for those in historically underrepresented communities. There are different metrics of that, those that, based on metrics such as relative annual income, social metrics.

There's also physical metrics, those communities that are maybe reliant on shallow domestic groundwater wells for their drinking water, that have felt broader impacts from prolonged drought over the last number of years. The programs that we administer that really go right to the heart of those particular challenges. We've been able to move hundreds of millions of dollars through each one of those grants, benefiting communities, both large and small, depending on the program that was administering the dollars.

So I would say that in particular, the focus that the Legislature put on the funds and then carried through by the Administration, in this case by the Department of Water Resources, that really focused those funds on communities most in need, those most vulnerable amongst us have been amongst the most successful.

And was I correct in hearing the secretary say that there was 1 million people without safe drinking water or something? Did he say at the beginning of this sort of process of addressing this?

I believe he did, but if representatives from the State Water Board or CalEPA are on the line, they might be most appropriate for that question.

Sure. Mr. Karkoski?

Yeah. Good afternoon. Joe Karkoski with the State Water Resources Control Board. Head of our Division of Financial Assistance. So, yeah, over the last few years, we've seen a reduction of about 40% in terms of the populations that still have water that is not compliant with drinking water standards. So we're aggressively working on that.

We partner with Department of Water Resources using both of the funds we've been appropriated by the Legislature as well as the Federal Government to systematically address a lot of the most significant drinking water issues, especially in small, disadvantaged communities. To add to what Chris mentioned, we have a very robust technical assistance program. We partner with a number of NGOs who help those small communities do the necessary planning, identification of what type of projects do they need that will provide for long term resiliency and are affordable as well.

Okay. Well, that's significant, a 40% reduction, but obviously a long way to go there. And, but I do appreciate that. I guess. Any other lessons learned so far from the infusion of spending in these packages in the drought and water packages?

Happy to take a shot at that. I think one of the pieces that we have, one of the lessons learned, and it's not necessarily that we didn't know this already, but it was certainly confirmed by the Administration of several of these key drought related grant programs that the Legislature authorized us to administer. And that is that there's a lot of demand out there. So, for example, there's an urban communities drought relief program that has been funded to the tune of $500 million over the last two budget cycles.

We just put a solicitation for this next round of grants out the door a couple of months ago. It's for a total of around $300 million worth of available funds, and we received $1.9 billion worth of applications. Definitely a positive in that it means there's a lot of good projects out there that we get to prioritize among and really move funds towards the areas of greatest need, those most vulnerable amongst us.

But the other side of that, of course, is just the exposure of, again, what we've already known, but it's a confirmation of that, which is the need is great. And so just a confirmation to wrap this up, but a confirmation that these types of programs are in high demand. Droughts come, droughts can go, floods can come and floods can go. But between them, there is consistent demand for climate resilient water systems. And that's really what we're seeing.

And if I could maybe add a few points to what Kris mentioned. So I'd say the partnerships with the local NGOs who are really connected with the small communities is very important and critical. And we've had those partnerships for quite a while, and we're able to build on them with the additional investments we've received, also using well established programs, so we're able to hit the ground running. So I think that's been a key to success.

The other thing that we haven't touched on yet is the importance of providing match funds for the federal infrastructure money. So the Legislature and Governor worked to do that last year, which puts us well positioned to leverage those federal funds. So for every $1 state match, we're getting $5 or more of federal funding. And then the last, just reemphasizing that technical assistance. A lot of these small communities just don't have the capacity to do the technical work or project management to make these projects happen. So that's been extremely helpful.

Well, thank you. I like that math of one to five. So we should make sure that that gets recognized. And I appreciate that and that you and other folks have commented today, really engaging stakeholders locally in the communities, especially in terms of raising awareness of these programs, what's available, helping people apply for these programs in the water area, but in the agriculture area and other areas as well.

Since you mentioned infrastructure, just if anyone has a comment, I know that Antonio Villaraigosa has been working on infrastructure report and sort of doing a listening tour of folks. Any comments on that? Anything come of that that anyone can comment on, or is there a timeline for that in terms of helping us on this theme of making sure that we get infrastructure dollars from the Federal Government in these natural resources areas, but other areas as well? Anyone who can comment on that?

Yeah, again, sir, ... , Department of Finance. I don't have a specific timeline on when something may be released, but I could take that question back and see if there's any information that could be provided.

Sure. Okay. That'd be great. Again, it's from my standpoint, all positive, and appreciate the focus from the Governor and the team, and again, making sure we get those dollars. Good. I'm going to leave aside the wildfire. We talked on a lot. We'll dive in, probably in a subsequent area.

I'll maybe just close it out with a couple questions around extreme heat for OPR folks who might be on the line and CNRA, of the various programs addressing extreme heat, which ones give us the biggest bang for the buck in terms of reduction of greenhouse gases or other metrics? Bryan, do you want to go first on that?

Sure. This is Bryan Cash from the Natural Resources Agency. Not sure if anyone from OPR is on. If they are, they can follow. But one thing we've noticed is really with extreme heat, it's important to take a full portfolio approach to it because extreme heat, as you know, hits a lot of elements of California, a lot of things that are important, our economy, health of individuals, all of our natural systems, energy uses, et cetera. So we really try to take a full portfolio approach to that when addressing extreme heat. And I'll turn the time over to OPR.

Samuel Assefa, OPR Director. We actually don't have metrics in terms of which programs from the extreme heat would reduce GHG. Our focus is primarily on what do we need to put in place for adaptation and resiliency and education around extreme heat. So we don't have that data and the program doesn't actually look at the reduction, at least at this point.

Yeah, good. Understood. If there's other metrics you're measuring, I think one couple of just quick comments, because I know, I think we've committed about $749,000,000 over four years to this. And as you say, it's really a holistic approach. I think 15 million of that did come from GGRF for the farm worker low income weatherization program and probably another $115,000,000 for weatherized housing. I do want to mention here that now when people do put all electric heat pumps in, they also get air conditioning as well. And so we're finding in my area, for example, where many houses never needed air conditioning, now many houses do need that.

And so I'm going to make sure that people recognize that despite the name of heat pumps, that heat pumps also provide air conditioning as well. And that as we look to be doing this weatherizing, and particularly in communities with many more lower income folks that may not have had air conditioning or may not have needed air conditioning in the past, but will certainly do so in the future that we recognize by putting in all electric heat pumps, we can get them air conditioning as well. I see that LAO, you have your hands up as well.

Thank you. Mr. Chair. Just a quick point here. Yeah. The GHG emissions aren't usually the core goal of these.

Understood.

That can be a secondary goal. It's a good point. I think the other point to make here is this is really, in this most recent budget, the first time the state has made dedicated investments in addressing extreme heat. There have been some programs like urban graining or weatherization that maybe had other goals like energy efficiency or planting trees kind of for the sake of it, but not dedicated to extreme heat.

So this is an area where we really still don't know what are the most effective strategies. Is it creating resilience centers for people to go to when it's too hot? Is it installing heat pumps? Is it planting trees? We kind of don't know yet. The research is really nascent and the investments are really kind of first time investments.

So this might be an area, as I mentioned, my opening comments, where you might want to think about what data are we collecting and do we need to require more data to be collected or even kind of potentially pursue some evaluation because it is such a big challenge facing the state, it is so deadly for certain vulnerable communities. And I think we still don't really know what is the best approach for using state dollars.

Yeah. Well, good. Thank you for that. And hopefully something we can come back to. I will mention, when I was planting trees recently, they said, they told me that there was 30 million for urban forestry that had been in the budget that was cut this past year. So that might be something - is something I'd like to look at as when we dive deeper into a few of those packages, we could wrap up on that. OPR, anything else you want to tell us about the extreme heat and community resilience grant program and how it's going so far?

Sure. So on the extreme heat, we are basically just starting the work sort of staffing up as well as using our Office of Community Partnership and Strategic Communications, has been doing a hard outreach to vulnerable communities to specifically want to educate around extreme heat, but more importantly, sort of listen and collect data and information in terms of what is needed from the community's perspective in terms of addressing specifically extreme heat. So we're starting that process now.

And then we are going to connect the extreme heat funding program with other interrelated programs, including community resiliency grant, for example, and also includes the regional resiliency grant program. So we're putting together notice of funding sometime this year, towards the end of the year, for the resiliency grant program. But that's going to be based on data and information from the engagement and the listening sessions that we're going to have over the next several months.

But one thing that we're looking at is a number of the interrelated climate adaptation program resiliency grant program in extreme heat. We want to maximize their impact by making sure that we connect their multiple benefit aspects. So that's what we're coordinating across the different programs, the grant programs specific to those two areas.

Great. Thank you. We'll look forward to future engagement there with you, but thank you for that. And maybe just in wrapping up on nature based solutions, we had considerable budgets, about 1.6 billion on a one time basis over three years, to implement a variety of nature based solutions. And we've discussed part of that. I just wanted to mention some of these programs have really been geared towards the 30 x 30 goal that the Administration has put out there. And my colleagues, including Assemblymember Ash Kalra and others, have led on this.

For CNRA, how is the Administration tracking funding spend and reaching 30 x 30? And how are you tracking? Is there a way that we can all access to see how are we doing in 30 x 30? Is that something that's accessible?

This is Brian Cash with the Natural Resources Agency. I'll turn it over to Jen Norris, who is leading the charge on 30 x 30.

Great. Thank you, Jennifer. Go ahead.

Mr. Chair. Thank you for the opportunity. Yeah, we are tracking both funding across all of our programs as well as the acreage that is moving forward, both in acquisitions and easements. We should have a report out in coming months that will go through all the different categories that we're tracking, but also identify the projects that were spent by program. We should have that to you very soon.

Okay, excellent. Good. Well, I know myself. My colleagues will look forward to that. Well, with that, again, I appreciate all of you, your patience and responsiveness in my questions and the questions of our colleagues. So we're now going to move to public comments, and for members of the public, we'll say, please state your name and organization at the beginning of your comments. The Subcommittee will institute a time limit on testimony accordingly. Each person providing comment will be permitted a total of one to 2 minutes each.

And as a reminder, today's participant number is 877-226-8216 877-226-8216 and the access code is 67-85-618 67-85-618 and we're going to begin with public comment for witnesses here in room 2200. Go ahead, please.

Good afternoon, Senator Becker. Nick Lapis with Californians Against Waste. We had concerns with several of the cuts in both the circular economy package and the sustainable agriculture package. But I did want to bring your attention to one specific program that was proposed to be zeroed out. That has not gotten enough attention in our estimation.

The community composting program at CalRecycle, which has been part of the circular economy package, was funded last year at $5 million, and they actually did a solicitation for applications at the end of last year, as they were receiving responses to that solicitation, the Jan 10 budget came out and it was proposed to be zeroed out, and they've stopped that solicitation. If you're not familiar with this program, it funds community composting organizations that are, these small scale composters that are often nonprofits, often use volunteers.

They put their blood, sweat and tears into educating the public, doing outreach about why we are composting, why we need the compost for our food systems. And they might not move a lot of tons the way the big composting facilities do, but they are really the tip of the spear for our organic waste reduction efforts because they really make the connection for the public between I'm throwing away this apple core and then it's going to be composted, and I see it being composted in my community, and I see that going to a community garden and that growing into a new apple versus all the other programs we do, it goes in a truck and it goes away. And so in order for our other programs to be successful. We really need to invest in these communities solutions and we hope that funding can be restored. Thank you.

Thank you very much. Next. Speaker.

Good afternoon, Mr. Chair. My name is Michael Jarred on behalf of the Community Alliance with Family Farmers, CAFF represents over 8000 small and midscale family farmers in California. First, we'd like to thank Senator McGuire and Secretary Ross for all their work and discussion related to organic dairies.

We appreciate those efforts to protect them. While CAFF appreciates the maintenance of essential drought relief funding for small farmers, we're very disappointed with the inequitable cuts to the infrastructure needs of California underserved farmers in the Governor's proposed budget. And we request the Legislature reject the following cuts. The elimination of the farm to Community Food Hubs Program, a program created by former Assemblymember Bloom. $5.8 million cut to the Urban Agriculture Program. $5 million cut to the Beginning Farmer and Farm Worker Training Program.

In addition, many farmers have been severely impacted by recent floods and some have lost their homes, farm equipment and more. These farmers have no financial support to help them get back on their feet. We recommend a portion of the Governor's proposed budget funding for flooding be allocated in the form of financial relief for family farmers. Thank you for your time today.

Thank you.

Hi. Good afternoon. Thank you, Chair. Dan Gluesenkamp with the California Institute for Biodiversity and a partner in the Power and Nature Coalition. First, want to start by thanking this Committee and the staff for all the hard work that you do and for integrating an incredible complexity of information into something that's really substantial. And second, want to appreciate what it is that you are building. You're building a set of solutions that we just did not see a couple of years ago when we had a lot more despair about whether there was a path forward. And now we know there is. It's been mapped over the last couple of years.

There's been investments made, but the architecture is much more important. And so I really want to ask you to preserve that, not cut those things that are seeds that have promised to grow into something very important and really provide solutions for the world. And that includes focusing on equity, communicating with frontline communities, and listening to scientists. And third, I want to ask you to defend specific elements of that architecture.

First, the nature based solutions and 30 x 30 investments really are transformational and are setting new goals for the world. They're just getting going, and it's too soon to nip them in the bud. I hope you will maintain funding for wildlife conservation board, the conservancies, coastal conservancy, et cetera. Second, coastal resilience.

It's great that the feds are putting some money in, but it's just a drop in the bucket of what we are going to need in the years to come, not even decades, to deal with what is already happening on the coast. And so I would ask that you sustain the funding for coastal conservancy and for coastal resilience, in particular for OPC, which has a very small budget but is very focused on science. And that's the third element that we need to preserve.

We need to be investing in these things that give us the baseline information that we need that we don't have now so that we can make good plans, we can set metrics and we can track our progress against metrics and that also make us shovel ready for the federal funding that's going to be coming and for any potential bond funding. So thank you very much for these considerations. We'll send you some letters in the weeks and months to come.

Great. As someone who serves on the coastal conservancy, I appreciate that. Thank you. Next.

Thank you. Michael Boccadoro, West Coast Advisors. And I very much appreciate your interest in dairy methane reduction programs here in California. Got legislation on it this year. Let me just follow up on a few of the metrics. We've heard about that today. We've heard about bang for the buck cost effectiveness. You heard from CARB directly.

The dairy digester program is by the number one program in terms of cost effectiveness, should not be lost on folks. That it's not only the number one most cost effective, it is getting about 2% of the funds and achieving more than 25% of all the reductions of all the programs funded. And as Secretary Ross noted in her comments, it's all methane. And so it's critically important.

And we should not lose sight of the fact that we are replacing diesel with renewable natural gas as a result of these projects in California. So we're getting tremendous air quality benefits in the Central Valley and in the South Coast Air Basin. Very appreciative of the Administration for maintaining funding in the current budget cycle. But we are concerned about the lack of funding in the new fiscal year that you'll be developing the budget for this year.

We'd like to see that restored. CARB has estimated that it will take at least $75 million per year for the next several years to achieve the state's 40% reduction by 2030. So we look forward to working with you to try and restore some of that funding in next year's budget. Thank you.

Thank you.

Good afternoon, Mr. Chair. Beth Olhasso, on behalf of Water Reuse California, the State's Association of Water Recyclers. Really appreciate your questions on water recycling, earlier this morning, as I'm sure you noted, your staff did a great job in the chart that was provided. See that the funding so far provided for water recycling in the last couple of years of the budget has been oversubscribed by almost three times in applications to the state board.

That program is an ongoing program, so we didn't have to stand it up. That money came in and is going out. And to reach the goals that have been outlined in the water supply strategy, we got to keep building water recycling projects. And to do that, we need some more funding. We can take as much as you can give us. There's tens of billions of dollars in planned water recycling projects up and down the state. So we have the projects that are ready to get implemented.

Just need some help with the funding to keep the cost down on ratepayers, keep those water rates low, and then we can get this drought proof supply and really create these local supplies that help our communities stay less climate dependent. So appreciate your support and look forward to some additional funding. Thank you.

Thank you.

Distinguished Mr. Chairman, Darryl Lucien here testifying on behalf of 40 Acre Conservation League, one of the state's only black led land conservancies, want to fully express support for all of the 30 x 30 spending. But more specifically, I want to highlight that Sierra Nevada Conservancy and Wildlife Conservation Board, in addition to the work that they do overall to get dollars out the door to fund projects, they're stand up agencies that have really been extremely helpful to us, relatively new relative to longer established organizations, really understand the process. We have a project in, based on a $3 million earmark that we received in last year's budget for about 650 acres.

And those agencies have just been stand up organizations in terms of helping us that funding, sort of maintaining it through this year. The other two issues we want to point out are the California Conservation Corps Forestry Corps program, which is effectively putting young people on the front lines to do prevention work. And I would articulate it to you like this, Mr. Chair, we're going to pay for it. The question is, do we pay for it sooner or later?

Do we pay for it under duress in terms of an emergency where, as we know, the Sierra Nevada has become a net emitter of carbon? We've got to switch that program, scaling that up and tying that into the work that many nonprofit land trusts are doing is extremely important. And then, of course, Cal Fire's Forest Health Grant, landscape scale, type of thinning and mastication, and all the work that effectively needs to be done in order to, again, ensure we're not a net emitter of carbon. There is a substantial amount of forest fuels in the watersheds, and it has substantial implications across the state. And so we want to urge strong support for that Mr. Chair.

Thank you. Certainly in big support of the Conservation Corps. We'll look into the forestry program you mentioned.

Good afternoon, Chair Becker. I'm Alan Abbs with the Bay Area Air Quality Management District. We're one of the original administrators of the Clean Cars for All program. You expressed an interest in hearing about the program itself, the challenges, as we expanded to a statewide program. More than happy to speak with you and your staff, bring in some of the other districts to have that conversation and let you know how important the Clean Cars for All program is. I'd like to talk about two other programs.

So in last year's LAO report on the ZEV package, there were three programs that were identified as being extremely cost effective for reducing criteria, pollutants and greenhouse gases. And those three programs were the Carl Moyer Program, the Farmer Program, which replaces tractors, and the AB 617 incentive program. And those are all programs run by air districts. The Carl Moyer program isn't a concern in the budget. It has its own funding stream.

But this year's budget is proposed, zeroing out the Farmer Program and a $60 million cut for the AB 617 incentive program. And so when we look at best spending our money, especially now that we know the Greenhouse Gas Reduction Fund may have more money than forecast, we should really look at some of these programs that provide those cost effective reductions in pollution burden communities, ones that are supported by business, ones that support our local farmers, and try to top up those programs to where they were last year. The other thing I'd like to talk about real quick is the Community Resilience Center program.

So right now, the funding in this year's budget is being moved to next year. And in the agenda packet, there was a suggestion that maybe this program should be scaled further back. There was a Bill that was passed in funding provided to what was called the Wildfire Smoke Clean Air Centers program in 2019 and 2020. And we've already received one year funding for this program.

It was rolled up into the Resilience Center concept, but with $5 million, we provided over 300 facilities throughout California with air filtration systems to allow community members to go there during wildfire smoke events. And so it would be a shame if we scaled back that Resilience Center concept and essentially didn't fund wildfire smoke clean air centers anymore. So one solution could be that instead of scaling back that resilience center concept, we go back and look at the wildfire smoke program. The guidelines are already written. Air districts are already familiar with how to administer that funding and get it out the door. Providing some funding to that program could make a huge difference as we battle wildfires in the future. Thanks.

Thank you.

Hello, Member and staff. My name is Michaela Elder. On behalf of Rethink Waste, a waste management joint powers authority in San Mateo County, we are requesting to protect $5 million allocated in last year's budget for CalRecycles Community Compost for Green Spaces program. Community composting opportunities in California are currently oversubscribed and underfunded, extremely cost effective in reducing GHG emissions and critical to helping us meet our organic waste diversion targets. This small amount of funding will go a long way to support California's communities and our climate goals. Thank you so much.

Thank you.

Good afternoon. Nicholas Mazzotti on behalf of Valley Clean Air Now in support of maintaining the $125,000,000 commitment for the Clean Cars for All program in the Governor's proposed budget. The proposal provides incentives to Californians to replacing their high polluting vehicles with cleaner ones. Valley CAN has helped get over 3000 customers living in disadvantaged communities in the San Joaquin Valley into used zero emission vehicles.

Maintaining these investments is critical to low income folks who otherwise wouldn't be able to afford ZEVs to transition into vehicles that reduce transportation costs, tailpipe emissions and allow the state to meet its ZEV goals. Thank you.

Thank you very much.

Good afternoon, Mr. Chair and Members. Erika Romero here on behalf of the California Association of Local Conservation Corps. I think you may be familiar with the San Jose Conservation Corps and in line with some of the previous comments here, in strong support of the $5 million to the CCC for the Forestry Corps, local corps perform fuel production projects across the state which help us meet our wildfire mitigation goals. However, I also wanted to raise to you, Mr. Chair, very concerning proposal in the Governor's Budget.

The Governor is proposing to cut by over 65. I think it's 65% the local corps funding piece of nature based solutions. There was a commitment last year which they're cutting 12.5 of in the $1.0 million if in the current year and additionally kind of moving the $11 million commitment for the budget year as well. It's kind of in one of those climate trigger corps, cuts for a total of $23.5 million in reductions to these programs.

As you know, and I think, as we've discussed with your staff and the Committee as well, these are critical conservation equity programs. They provide on the job training to corps members living in disadvantaged communities with a lot of barriers to education and employment, and provide them opportunities to get their GEDs and high school diplomas and then also kind of transition them into these green careers.

And without this funding, they'll be forced to reduce staff as well as provide less services to corps members, which will inevitably impact corps members in your district, but as well as at the 13 other corps across the state. So just want to flag that for you and look forward to working with you all to hopefully restore those funds. Thank you.

Thank you.

Good afternoon. Chair and staff Rebecca Marcus on behalf of American Farmland Trust, the Carbon Cycle Institute, the California Climate and Agriculture Network, and the California Certified Organic Farmers, we are in strong support of the Governor's proposed continued investments in the Healthy Soils Program, as well as the $20 million investment proposed for implementation of AB 1757.

Passage of this Bill last year was an important step in integrating the natural working lands in our state's climate strategy, we are opposed to the following proposed reductions. $40 million reduction to the Statewater Energy Efficiency program, $4 million reduction to the Climate Smart Land Management program and $25 million reduction to the Sustainable Aglands Conservation program. We also request the following additional investments $5 million for the Organic Transition Program at CDFA and $40 million for the Alternative Manure Management program, also at CDFA.

On behalf of the Union of Concerned Scientists, we support reauthorizing AB 8 funds. However, we would like funding directed more towards EV infrastructure and less for hydrogen refueling. We'd also just urge the Legislature to uphold its ZEV funding commitments made in previous budget cycles as much as possible, rather than to agree to the drastic cuts proposed by the Administration. Thank you.

Thank you.

Good afternoon. My name is Kim Delfino and I'm here representing Defenders of Wildlife, the California Native Plant Society, Mojave Desert Land Trust, Sonoma Land Trust, Audubon, as well as the Salmon and Steelhead Coalition, which is CalTrout, Trout Unlimited and the Nature Conservancy. I also work with the Power and Nature Coalition, which is more than 100 organizations across California dedicated to implementing 30 x 30. We submitted a letter with signed by 65 organizations to you earlier this month.

I won't repeat the reasons for why we think funding for 30 x 30 and nature based solutions. I think Dan Gluesenkamp, who spoke earlier, gave a great explanation, only want to say that we are dismayed by the substantial cuts being proposed in the budget, particularly to the state coastal conservancy, who did go through a very extensive strategic planning process and is now only getting to rolling out the funds to find out that they were being reduced by 65%.

We are also opposing the proposed cuts to the Wildlife Conservation Board. It's $233,000,000 just to four different programs. I think, as you heard in testimony from the secretary and Jennifer Norris, there's more than 100 projects already now in the pipeline, and many of those projects may not get funded if we do those cuts, plus other cuts to the WCB. And finally, I would just highlight that there are proposed cuts that cannot be backfilled by bond.

So the Administration is proposing to cut by 50% the fine scale vegetation mapping over at the Department of Fish and Wildlife. They just put out an RFP for that, which was robustly answered by many researchers who are willing and able to do that work. If we can finish fine scale veg mapping the State of California, we can make better decisions in terms of where we invest our grant funds, where we do our vegetation management for fire.

It is the absolute building block of information that we need to make good decisions. And finally, the Department of Conservation's Climate Smart Lands program is a really important program. It's small, it's just starting, but it's capacity money. And this is the hardest money to find, particularly for smaller organizations that are trying to scale up, to be able to do the kind of work that they're being called to do, to be able to do climate smart lands management and 30 x 30. So there's a lot more detail in our letters, but appreciate the opportunity to testify. Thank you.

Thank you. Yeah, I did not know a lot about Climate Smart Lands. That program particularly was mentioned a couple of times. So thank you. Go ahead.

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 very much appreciate your comments, Mr. Chair, on metrics, outcomes, cost effectiveness, and as my colleague Alan Abbs pointed out, Mr. Abbs, three air district programs perform at the top, mobile source incentive programs, and those are the Carl Moyer program, which I'm also not discussing today, but the AB 617 Community Air Protection program as well as the farmer program.

They rank at the top of cost effectiveness both for criteria air pollutants and greenhouse gas reductions. So I want to highlight that. And in addition to that, they also get toxics reductions. And so you have an opportunity here to be able to do both, do it quickly, get these reductions quickly, and cost effectively. And so we would also draw your attention to that LAO report from last year on the governor's proposed ZEV package.

We ask that you restore funding for both those programs back to $150,000,000 for Farmer, which was actually zeroed out, is proposed to be zeroed out in this budget, and then also back up to $300 million for the AB 617 Community Air Protection program. And then on top of that, again, looking at this through the lens of cost effectiveness and efficiencies, we would ask that you consider even augmenting those programs if GGRF revenues surpass current estimates.

And then the last thing I'll mention is I want to thank you for the Senate's past support on the Wood Smoke Reduction Program. The Senate has championed this in the last number of years, which we very much appreciate. There's no funding in this year's budget, and we ask that perhaps you could consider putting in 5 million to that program again, a program that gets you criteria pollutant reductions. It's been historically cost effective, short lived climate pollutant reductions, GHGs and toxics. So anyway, thank you very much for indulging me and appreciate your time.

Thank you. We're now going to move to those waiting to testify on the teleconference service moderator if you please prompt individuals waiting to provide public comments, we will begin. The moderator will ask all individuals waiting to provide comment to press one and then zero. Thank you moderator if you'll please open the lines.

Thank you, Mr. Chair. For those who wish to comment, please press one, then zero on your phone. We will first go to line 79. Your line is open.

Good afternoon, Mr. Chair and Members, Sylvia Felice Shaw for the San Joaquin Valley Air Pollution Control District. Given that the state may be facing deficits in the out years, we believe that funding should be prioritized for the programs with the biggest bang for the state's buck. And so we strongly support maintaining current funding levels for the Farmer Program and a potential increase if possible.

As mentioned, the LAO analyzed ZEV programs, and the Farmer Program is one of the most cost effective programs with immediate GHG and criteria pollutant emission reductions, as well as with immediate economic benefits in some of the most disadvantaged communities in this state. I also want to echo comments of CAPCOA and others in support of the AB 617 Community Air Protection Program funding. Thank you very much.

Thank you. Next caller.

We'll now move on to line 97.

Good afternoon, Chair Becker and Members. This is Megan Cleveland with the Nature Conservancy, and we're calling to request that the Legislature preserve critical funding in the budget to support climate resilience and biodiversity conservation. The Governor's January budget proposal makes significant cuts to natural resources and climate spending, and these cuts are far greater than the proposed reductions in other areas of the budget. In total, the January budget proposes reducing multiyear investments for nature based climate solutions by more than $1.5 billion.

Additionally, the governor's January budget proposal reduces General Fund expenditures to the Natural Resources Agency by 37%. We ask the Legislature protect the critical investments in nature based solutions and biodiversity conservation, and we recommend that the Legislature restore and preserve General Fund appropriations to programs that are considered ineligible for special funding or bond funding.

Finally, these cuts demonstrate that California urgently needs a climate bond and the disciplined investment plan that goes with it as a down payment to address growing challenges in managing natural resources for the benefit of all Californians. Thank you so much.

Thank you.

Line 94, your line is now open.

Good afternoon, Chair Becker and Members, Rebecca Baskins with Kahn Soares & Conway representing various agricultural organizations. First, I wanted to second, Michael Boccadoro's comments regarding dairy methane reduction programs, and secondly, thank you for the review of climate investments in the 2023 proposal. We wanted to highlight again the lack of funding proposed in the Governor's January budget for the farmer program. This program enables California farmers to turn over high emission diesel tractors and equipment to cleaner or zero emissions.

The program is administered by carbon local air districts and touches every area of California. It is historically oversubscribed, although in the transportation sector finances, Farmer is one of the most cost effective climate investments on a dollar per emission reduction basis. The best bang for your buck per se. But most importantly, funding for the program results in immediate air quality improvements for all communities. When appropriate, we encourage the Subcommittee to reevaluate the need for this program and reinvest in this year's budget. Thank you.

Thank you.

Line 99. Your line is now open.

Good afternoon, Chair and Board Members. My name is Meghan Hanebutt, Deputy Director of City Surf Project, based in San Francisco. We're an organization dedicated to ensuring equitable access to the coastline through surfing as part of the academic school day in San Francisco Public Schools.

Together with similar organizations in the Bay Area such as Brown Gulf Surf, Queer Surf, and the Me Water Foundation, we are working every day to diversify not just who is represented in coastal and surf communities, but also to increase leadership pipelines for individuals in the most underrepresented, underfunded, and climate vulnerable populations.

Explore the Coast funding has been absolutely critical over the past five years of our programming to help us sustain our organization's operations, increase the number of participants, and expand the demographics of the young people who have access to the California coastline, as well as supporting our expansion to ensure that program participants can be hired and trained as program staff, increasing our cultural relevancy, diversifying our leadership and instructor pool to better represent the identities of our participants.

40% of our alumni leaders attend or intend to attend coastal colleges and or focus their studies on marine biology and oceanography, strengthening our future task force of environmental leaders. I've witnessed firsthand over and over how vital it is for the youth we serve to have access to our coast and beaches simply to just be a kid enjoying all that Mother Nature has to offer. Explore the Coast support provides just this. It lets our youth breathe, smell, and touch our beaches.

And are we really talking about taking that away? To my knowledge, there are no federal dollars or California bond dollars that will replace this programmatic funding. And given that the program is so much in demand, with annual funding requests consistently at double or more than what the Coastal Conservancy has to award, cutting the last of what remains will have devastating impact to stakeholders like us who require this funding to improve equitable access to California's beaches.

Can't stress enough the impact that this funding has on elevating the overall mental health and well being of ... I respectfully urge the Members of this Committee to reject the proposal to cut the last of the Explore the Coast funding. Thank you so much for your time and consideration.

Thank you for that. Next caller.

Line 89, your line is now open.

Excellent. Thank you. Good afternoon, Chair Becker, and I guess just Chair Becker. Thank you for the opportunity to comment. My name is Doug Johnson. I'm the Executive Director of the nonprofit California Invasive Plant Council, and I'm here to respectfully request the restoration of $5 million to the state's Invasive Species Council as previously budgeted for this year on the Sustainable Agriculture Package.

Though it's under sustainable agriculture, this is also a nature based solution that builds climate resilience. A request for proposals was approved in November for this funding so it could be given out to support top priority invasive species projects across the state, but was subsequently pulled back in the budget. As the state Wildlife Action Plan, the natural and working lands climate smart strategy, and the 30 x 30 initiative all make clear.

Controlling invasive species promptly is critical to the health of our biodiversity and the protection of natural resources, infrastructure, and communities. This $5 million can be used where it's needed most to address invasive weeds that exacerbate wildfire risk, invasive animals that displace native wildlife, or invasive insects that damage forests. These funds have a high return on investment when compared to the consequences of letting new invasive species spread, and we urge you to consider restoring them to the budget. Thank you for your time and consideration.

Thank you.

Now go to line 96.

Good afternoon, Chuck Mills, Senior Grant Administrator for Tree People. Thank you for the opportunity for a very fruitful discussion today, Chairman Becker. And I really wanted to also thank for your comments relating to CAL FIRE's Urban and Community Forestry program, and follow on that a bit more. This is the state's preeminent nature based solution program for underserved communities to address extreme heat.

The reversions and withheld funds as proposed in the Governor's Budget and interagency agreements stripped just in fiscal year 22 alone. $50 million, effectively zeroing out the program. $50 million for this program, when looking at the awards of the last two years, translates into 66 awards across more than 20 counties, planting of 60,000 trees, 275,000 metric tons of CO2 equivalents stored, and the opportunity to address health inequities and disparities in vulnerable populations across California.

We do encourage the Legislature to restore the funding as proposed in the Governor's Budget from the $20 million reversion and the $30 million in interagency agreements that has also been withheld, and also want to note that the urban forestry program has previously been funded by the Greenhouse Gas Reduction Fund. So this is a place that the Legislature could look, especially in light of the fact that revenues are supposed to increase by several 100.0 million more than originally projected. Thank you for your time and consideration.

Thank you. Next up.

Next, we'll go to line number 38. That's 38 please go ahead. Your line is open.

Thank you, Mr. Chair and Members for the opportunity to provide comment. My name is Ben Grundy. I'm the Conservation Associate with Environment California. While we all expected a tough budget year, the Governor's recent budget proposal unfortunately assigned some of its biggest cuts to the environment, climate and zero emission vehicles.

As we mentioned today, the proposal would cut a critical $6 billion in investment meant to stave off the worst impacts of the climate crisis in California, including cuts to the Clean Energy Programs, Cultural Resilience Program, Zero Emission Vehicle Incentives, and Clean Transportation Funds. As mentioned today, the state has recently passed important climate legislation, but we're concerned that not enough resources have been committed to implement these programs and ultimately achieve our bold climate goals. Investments in climate are now more crucial than ever.

Just in the last several months, we've felt in California various extreme weather events, including heat waves, intense rain, and flooding. And unless we keep our climate investment strong, these impacts will only escalate in the future. I'd like to support and echo Secretary Crowfoot's comments earlier today regarding the urgency to move further and faster when it comes to developing key clean energy infrastructure for California's future. And I urge the Committee to consider a more climate friendly budget that sets us on a brighter path and better reflects the scale of the current and future climate impact. Thank you.

Thank you very much.

Next up.

Next up is line number 92. That's 92. Your line is open.

Courtney Brown, co-founder of the California Alliance for Community Composting. Thank you, Chairman Becker and honorable Members of the Committee. I'm testifying on the proposed 4.8 million budget cut from the 2021-2022 General Fund within the Circular Economy Package, which was allocated to CalRecycle, and CalRecycle already committed to run a second round of the grant program, Community Composting for Green Spaces, from April 2023 to April 2025. This is a well-performing and cost-effective program.

It's currently supported by GGRF and it exemplifies the future of a circular economy in California and achieves organics recovery and greenhouse gas reduction goals that are rooted in the principles of environmental and social justice.

Our organization has been implementing the first round of this composting program since October 2020, and last year we successfully launched or expanded 120 small compost hubs statewide that have collectively diverted 3,375 tons of organics and supported part-time and well-paid jobs for 60 people to do this work on the ground locally last year.

These projects have reduced emissions by almost 600 metric tons of carbon dioxide equivalent from just diversion, with another 1000 metric tons in reductions achieved by applying the 2750 cubic yards of compost that we were able to produce. And we did that on local gardens and farms, another 369,000 metric tons of carbon dioxide equivalent by planting just 59 trees, and obviously, an unknown amount of greenhouse gas missing reductions by a result of less vehicle miles traveled for conducting composting operations in this manner.

So in addition, these groups are reporting to grow fresh produce and feed and secure residents. So we're demonstrating that community composting offers substantive, positive social and environmental impacts that are more than just diversion capacity. And we're able to deliver our services at half the cost of commercial composting operations in California. So we advise the Committee to restore this 4.8 million to the General Fund or offset this cut with a portion of funding from the 198,000,000 TGRF allocation for organics material recovery. Thank you very much.

Thank you. Next up.

Next up is line number 28. That's 28. Your line is open.

Good afternoon, Chair and Members. My name is Erin Woolley, speaking on behalf of Sierra Club California in support of preserving adequate funding for nature-based solutions to ensure that California can meet its 30 by 30 goals and respond to the dual climate and biodiversity crises. The January budget proposal included significant cuts to coastal and flood resilience projects, as well as critical capacity-building funding faced with historic drought, atmospheric rivers, wildfires, and pollution burdens.

Substantial cuts to nature-based solutions, climate resilience, and access to the benefits of nature would delay urgently needed progress to combat the effects of climate change and support climate-vulnerable communities. I urge the Legislature to fulfill its commitments and ensure these programs are adequately funded to meet the 30 x 30 goals of conservation and equitable access to nature. Thank you.

Thank you very much. Next up.

Next up is line number 63. That's 63. Your line is open.

Good afternoon, Chair Bennett. This is Jennifer Caballero from the California Association of Museums, and I'm asking the Committee today to strongly reconsider the $29 million cut to the Museum Grant Program. Museums around the state are trusted sources of information and have the capacity to inspire real change in individuals and society.

As Secretary Crowfoot mentioned earlier, California is on the forefront in terms of ways that we adjust to the impacts of climate change, and we need to make investments to address the potential loss of cultural, historical, and irreplaceable artifacts and buildings, all increasingly at risk during the impacts of climate change. The retainment of these grant funds is critical. We are on the right track with this program and we see year round community level cultural change.

I urge you to reconsider this proposal to cut $29 million from the Museum Grant Program. As has been said earlier, it's not a ton of money, but it makes a huge difference. The recommendations from the report are not the only way to go. As Ms. Eller said earlier, you may not want to cut as deeply there. Thank you very much, and I appreciate the opportunity to speak to this.

Thank you. Next up.

Next up is line number 108. That's 108. Your line is open.

Thank you, Mr. Chair and Members. My name is Mark Ingstrom and I am the Policy Director for Ducks Unlimited. Ducks Unlimited is the world's largest and most effective private, nonprofit waterfowl and wetlands conservation organization. In our 85-year history. We have to date conserved over 15 million acres of wetland nationwide. I'd just like to add our voice to the comments made by others requesting to maintain and keep whole the entirety of the vital climate and drought resilience funding.

And most specifically, we respectfully oppose any budget reductions to the Wildlife Conservation Board. Thank you for your time and your consideration.

Thank you very much. Next up.

Next up is line number 93. That's 93. Your line is open.

Good afternoon. This is Mariella with Leadership Council. Programs that address critical community impacts need to be funded now, as communities are already experiencing the effects of climate crisis and need to be adapted, we strongly urge against moving the 85 million for CRCs to fiscal year 2425.

With floods and storms and consequent evacuation of the past few weeks, it is inaugurable how urgently we need resources for communities during climate disasters, and we must invest sooner rather than later in these critical social and physical infrastructures to ensure that communities have the resources they need to deal with climate events. Cuts to equitable building decarbonization programs are concerning.

These investments are both crucial to reach our climate goal and ensure that low-income communities are able to access the decarb programs which have co-benefits, such as improved indoor air quality and lower energy bills. There must not be cuts to the funding because of how crucial it is. Despite significant storms, we're facing severe drought challenges. We're encouraged to see and support the allocation of 125,000,000 for droughts in the draft budget. Unfortunately, current budget proposals do nothing to address California's ongoing water and wastewater affordability crisis.

Emergency steps have been taken to stop water shut off due to lack of payment, but the state must proactively address affordability this year by creating a universal low-income water rate assistance program. The production of and reliance on factory farm gas through the use of dairy digesters pollutes communities and sets us back on reaching clean energy goals. The state must not continue to fund dairy digesters or incentivize the production of factory farm gas.

As a result, we request that the budget does not allocate funding to DDRDP programs or CDFA for the potential use of funding for the DDRDP program, does not allow for funding for hydrogen programs to rely on hydrogen development in whole or in part from factory farm gas and does not otherwise subsidize or incentivize production or deployment of factory farm gas. Thank you.

Thank you very much. Next up.

Next up is line number 104. That's 104. Your line is open.

Good afternoon, Chair and Members of the Committee.

My name is Williams Lopez, Government and University Relations Manager with the Los Angeles Clean Tech Incubator, and we strongly believe now is not the time to be cutting funds from critical clean air and climate programs which would advance equitable clean transportation. People living with the impacts of pollution and the climate crisis have suffered long enough thanks to generations of systemic marginalization that puts them at greater risk.

You must find a way to deliver on your promise to California's low-income communities and communities of color by making previous historic investments in equitable clean vehicle and infrastructure programs. Again, in the 2023-2024 budget, we especially support continued investments in port electrification. Thank you.

Thank you very much. Next up.

Next up is line number 112. That's 112. Your line is open.

Good afternoon, honorable Budget Subcommittee Members. My name is Stephanie Chang, advocacy specialist with Brown Girl Surf, a nonprofit organization which provides programs that bring participants from inland, underserved, and historically marginalized communities to the coast. I'm calling to respectfully urge the Subcommittee to reject a proposal to cut the state's coastal conservancy's Explorer the Coast Grant Program. It's $2.6 million, and cutting this will do little to address the budget deficit.

What it will do is instead set back a decade of progress on increasing equitable access to California's beaches. Through our programs, I've witnessed firsthand how, in addition to redressing harms such as inadequate access to nature, community disinvestment, and disproportionate climate impacts, explore the coast also really educates and inspires the coastal stewards of our future. This is a small but mighty program, and it consistently awards all of its funding, explicitly serves thousands of underresourced community members, and is oversubscribed by at least two to one.

So many of our community members that utilize funding from this program live in inland communities and have never seen California's coastline before participating with us. Cutting this would be a great shame, and I thank you for your consideration.

Thank you very much. Next up.

Next up is number 111. That's triple one. Your line is open.

Good afternoon. Not too soon. My name is Maria Murata Mayas. My pronouns are they, them, theirs. Last year was actually a program participant with Brown Girls Surf. And this year I'm in the process of becoming a volunteer because of how helpful it has been to me. And I just want to ask each of you to think about your youth and anything that was formational to your confidence. Now, as adults, doing what I hope you've always wanted to do. And for me, that is surfing.

I came to the Bay Area two years ago, having fled violence in southern Arizona for being nonbinary. I had to fight for my life and chose to come here to Oloney Land because the Pacific Ocean is home. And I ask you to not touch funding from us. Please let us keep surfing.

To me, when I think about equity, when I think about racial justice, everything that you've been talking about, everything that you ostensibly work to protect and those whom you ostensibly work to serve, sometimes it doesn't need to be a political analysis of the systems that oppress us that are most healing. Sometimes it's just being out in the water and feeling held by people who look like us and talk like us, and who we don't need to wear masks just to be ourselves with.

And really, the power of Brown Girl Surf is not only the people who create it and who have fought to maintain it, but the fact that it's not just humans. It's the fact that we acknowledge the ocean as a living being. We acknowledge the earth as a living being, and that it's us together with them, listening to them, learning with them. And if you take this away from us, you're going to take away our connection to that which we all have a right to.

So please listen to us and allow us to keep growing our own confidence and loving and protecting each other, the Earth and the ocean. Thank you very much.

Thank you for those comments. Next up.

Next up is not line number 115. That's 115 your line is open.

Hello, my name is Roxanne Avant and I'm the Executive Director of Urban Surf 4 Kids. Thank you, Mr. Chairman and Members of the Committee. I am here today to oppose the proposal to cut 2.6 million of appropriated funding from the State Coastal Conservancy's Explore the Coast Grant Program.

Urban Surf 4 Kids is a nonprofit organization, and this year we're celebrating 15 years of surf therapy, mentoring, and life skills programs to address the mental health of children living in foster care, kinship, homeless, I'm sorry, unsheltered, and also children survivors of domestic violence. We use the transformative power of the ocean and outdoor spaces to address the critical mental health crisis that's currently impacting our most vulnerable youth.

And the funding from this program has allowed us, since 2019 to serve 2,500 children between the ages of three to 18 and engage over 3,000 volunteers on behalf of Urban Surf 4 Kids. The caregivers are volunteers and our entire ohana. We ask that you please reconsider the proposed cuts to the State Coastal Conservancy's Explore the Coast Grant Program. Thank you.

Thank you very much. Next up.

Next up is line number 114. That's 1114. Your line is open.

Hello, can you hear me?

Yes.

Great. Good afternoon, Chair and Members. My name is Kaiser Johansson. I'm the founder of Black Dot Surfers. The goal is really to attain equitable access to surfing by Black people through policy and community. And I'm here to advocate for maintaining the Explore the Coast Grant program.

I want to be clear that we're not funded by this program, but we do work closely with the organizations who are and in Black surfers, as a community and policy-centered organization, we often think about the pipeline for Black folks to get into the water and to surfing. Though ocean access and surfing are critical for mental and physical health outcomes, they're tied to additional economic opportunities, and it drives an increased interest in protecting our environment.

Now, given the systemic discrimination our community has faced with housing, parking, water safety, we need systemic policy work at all levels. But these policy changes often only work in the long term. Meanwhile, we have hundreds of thousands of Black residents excluded due to the acts of governments past and the inaction of governments present. Now, this funding has provided a critical stopgap solution to getting folks in the water today.

The work Brown Girls Surf, City Surf Project, Black Surf Santa Cruz are doing just in Northern California alone, is making large strides in bridging this gap of access to economic, mental, and physical health outcomes. It brings thousands of our community members into the water and brightens their futures. Removing this funding is really sending a clear message to our community that we are not prioritized, that this grave injustice can remain just to make an extremely small dent in a much bigger budget issue.

And I know that is not what you all would advocate for. Thank you for your time.

Thank you for a lot about this program. That's exciting. Thank you. Next up.

Next up is line number 117. That's 117. Your line is open.

Hi. Good afternoon. My name is Chloe Kidder, and I'm calling as a volunteer and participant with Brown Girl Surf, who I know we've heard from before. I'm urging the Committee to reconsider the proposal to cut 2.6 million of already appropriated funding from the State Coastal Conservancy's Explore the Coast Grant Program. I've witnessed firsthand how important providing equitable access to the coast is in our communities. Watching our participants' confidence and joy grow, I think, is so important.

And as Steph mentioned earlier, lots of people who have grown up and spent their life living in close proximity to the coast for reasons, as I think we've already heard, often do not get to recreate and enjoy and be in the ocean. And so this work that Brown Girl Surf and other organizations that would be similarly impacted by this budget cut is doing is incredibly important. Thank you for your time.

Thank you. And I think we have two left. Appreciate you hanging on till the end here. So we're trying to squeeze everyone in, but appreciate. Go ahead. Next caller.

Next caller is line number 118. That's 1118. Your line is open.

Hello and good afternoon. My name is Camille Ramani, and I am an advisor and volunteer with Brown Girl Surf. You've all heard among the wonderful things that have been said about these organizations and more importantly, their connection to addressing systemic barriers that people of color and nonbinary and others who don't identify with mainstream faith.

And I would like to extremely voice my support of the Explore the Coast Program and urge you and the Senate and other governing bodies and decision-making bodies to not cut the funding. Thank you so much for your time and consideration.

Thank you. Is there a last caller I believe? Go ahead.

Our last caller will come from line number 107. That's 107. Your line is open.

Hello, my name is Olivia Van Dam. She/her. I am a Mexican American surfer and a community scientist at the California Academy of Sciences in San Francisco. I've been in the environmental nonprofit field for 10 years in the Bay Area, and I'm here to advocate for the Committee to strongly reconsider the cut of 2.6 million for the Explore the Coast Grant and reinstate this critical funding.

Coastal Conservancy has supported me since I was a young girl growing up in California. Participating in Explore the Coast funded programs in Southern California, including Tide Pooling at Corona Del Mar, and a trip to Catalina Island in 8th grade, which were absolutely transformative to me, pursuing a degree and choosing a career in the natural scientists and dreaming of being a surfer in the California lineup.

As a past program director and environmental educator, I have led many trips along the California coast for youth surfing organizations and have witnessed how these experiences are transformative for youth and women of color. One of my first jobs in the environmental education field was completely funded by an Explore the Coast Grant and supported me in my leadership and my career pathway. And now I'm honored to be in a community advisory board member for Explore the Coast Grant.

I know this program supports staff salaries and it's crucial to have Black, Indigenous, and people of color staff members who are from communities that are participating in this coastal programming. I've helped review hundreds and many strong and deserving applications for this funding across the state, and each year our Committee has to decline requests for funding.

The Coastal Conservancy's Explore the Coast Grant Program provides grants to federally recognized tribes and indigenous communities also who are really reinstating their indigenous and traditional ecological knowledge in these spaces, which is crucial for the future of climate change in California. Everyone deserves a right to have public opportunity to explore the coast and the San Francisco Bay shoreline. Please reconsider and please reinstate the 2.6 million for this incredible grant that has supported my life as a Californian. Thank you.

As I mentioned, I've served on the Coastal Conservancy, so it's great to hear that. So with that, we need to wrap up the hearing. I want to thank all individuals who participated in public testimony today. If you're not able to testify, please submit your comments or suggestions in writing to the budget and fiscal review Committee or visit the website. Your comments suggestions are important to us and want to include your testimony in the official hearing records. Thank you. We appreciate your participation.

I want to make sure to thank Secretaries Crowfoot, Ross, and Garcia, as well as Ms. Ehlers, Mr. Aguilar, and Department staff for today's robust discussion on the climate-energy packages. As noted at the beginning of this hearing, we will take a closer look at the programs funded by these packages, as well as the governance proposed solutions in the January budget proposal. I want to thank everyone for their patience and cooperation. We've concluded the agenda for today's hearing. Senate Budget Subcommittee Two is adjourned.