Assembly Budget Subcommittee No. 3 on Climate Crisis, Resources, Energy, and Transportation

Good morning. Like to welcome you to budget Subcommittee three, heavily attended by many other Members. Here today. We'll hear from departments under the California Environmental Protection Agency, except for the Water Board. We've moved all the water agencies to next week, where we will also hear the spring finance letter from the departments. We have sort of a representative of the other side here today. Thank you.

Spring finance letters from the Department we've moved all the water agencies to next week, where we'll also hear the spring finance letters from the departments under the California Natural Resources Agency. Today we'll also vote on 15 items that were heard at our March 29 hearing from the Department of Parks. We have five items that are planned for discussion. For each presentation item, I'll ask each of the witnesses in the agenda to introduce themselves before they begin their testimony. At the end of the presentation.

Items Members of this Subcommitee may ask questions or make comments on any of the 26 nonpresentation items. After all the items are heard, we'll take public comment in regards to the departments before us today, first in the room, followed by phone testimony. Each member of the public will have 1 minute to speak. The phone number is on the Committee website and should also be on the screen if you're watching over the Internet.

That number is 877-692-8957 the access code is 131-5447 if you encounter any problems, please contact the Assembly Budget Committee at 916-319-2099 and a staff member will assist you. We are jumping over our quorum and consent calendar, and we're going to go right to our first item, and that's the circular economy implementation update and general fund solutions. If the panelists will all please approach, and we will let Director Wagoner decide who's going to go first.

Good morning, Mr. Chair. I do have some documents that I think would be helpful for this discussion. We'll leave copies for the other Members as well. You're good legislative staff. See, that's always my reaction when I see a color chart. It was like, zero, it's legislative staff. It was always such a treat to get something in color.

This is heavy enough cardboard, you could.

Use it as a place mat for your lunch later.

Recycling. Exactly. I was going to say, this is my place mat. Exactly what I was going to say. Right. Good.

Well, good morning, Mr. Chair and staff. This morning, very happy to be here with the Assembly Budget Subcommitee. I am Rachel Machi Wagoner.

I am the Director of Cal Recycle, and I'm joined today by Brandy Hunt, my Deputy Director for Administration and budgets and my esteemed colleague from the Department of Finance and you know, our friends from the LAo, thank you so much for this opportunity to come and speak to you about the incredible work that we're doing to implement and really realize the circular economy here in California.

Thanks to the work of the Legislature, over the last several years, Calrecycle has appropriated over $800 million to realize a circular economy in many of our really important markets across the organics recycling systems and our beverage container recycling systems, as well as the development of additional markets through our RMDZ program, which is our recycling market development zone program.

And so we have been hard at work over the last couple of years to truly try to realize the true benefit of a circular economy here in California through the appropriations that you've given us, as well as the legislation that has been passed over the last several years. Last year alone, the Legislature passed 15 pieces of monumental legislation that will really help transform the way we look at recycling, the way we look at reuse, and the way we look at waste reduction here in California.

And so really an incredible pleasure and honor to be with you today to tell you about how we've been doing so far. So the place mat, if you will, in front of you, the chart that we've provided is an outline. The top portion is an outline of the appropriations that we've been given to date for circular economy. And as you can see, it is our timeline for implementation of those expenditures.

Very proud of the Cal recycle grant staff who are lean and mean in terms of really embarking on grants, and particularly proud of the work that they've done over the last couple of years to expand our grant programs into communities that have not traditionally applied and relook at our grant programs to make sure that all corners of California have the opportunity to participate in the circular economy. Not the least of which you will see is our community compost.

It's $500,000, but it is specifically for our tribal nation partners and has really allowed us to foster a really constructive and exciting conversation with our tribal nation partners around composting, which we have so much to learn from them, and it's such a great opportunity for us to do so. Additionally, you will see across the top our edible food recovery program.

It is one of the ones that, again, lean and mean, we are most proud of for very small appropriations over the last five years, ranging in the amounts of anywhere from three to $5 million. For one or two years, we've been able to realize such great opportunities to be working with food banks and other redistribution of edible food.

Courtesy of this particular program, we have been able to help our food banks facilitate 150,000,000 meals served across the State of California from food that would have otherwise gone to a landfill that was still very fresh and still very edible. In addition, it created almost 300 new jobs in communities, and it was the equivalent of taking somewhere between 20 and 30,000 cars off of the road for a year.

So as you can see, our organics infrastructure programs, our local assistance programs are well on their way to help build out the infrastructure for our organics recycling programs. And we are working with our local partners. The local governments are now reporting over half have their residential food recovery or food collection systems in place, excuse me? And more than that have embarked on their commercial recycling and collection systems for organic materials.

So we have built a really constructive partnership with our local partners and we are working together to reach our 75% mandate under SB 1383. I can stop there as that's on organics if the chair or if Mr. Conley have any questions, or I can go on to BCRP.

Member Conley, you okay with her going on? My questions are probably going to be more appropriate after you pull the whole thing together. Is that all right?

Excellent. Okay. Excellent. So on the next portion of our place mat, we have the beverage container recycling program. And you can see it's broken down by the different types of funding sources. The two top funding sources on the quality incentive payment program, the first of which is well on its way to be awarded next year, and then the second of which, which is thermoforms. We have delayed somewhat as we are rethinking how we create incentives around sorting on thermoforms.

But I can go into more detail if any of the Members would like. Additionally, you can see we have started scoping the startup loans for processors and recyclers, and the workforce development and deposit for reusable containers. Those are all new programs that as we look at implementation of SB 1013, which is last year's reform to the beverage container recycling program authored by the Pro Tem, that added wine and distilled spirits, as well as create a new dealer cooperative system.

The expansions and flexibility added to the program by AB 1311, by Mr. Wood, and additionally Ms. Kamlager's bill to create the bottle reuse program. As we're looking at those things in their individuality, they would have been great programs to start, but what we would like to do is build a systematic approach where we're implementing all of those together. And so our dealers and other stakeholders have a sense of a larger picture.

And so finally, what I would say is on the bottom, under, in the, I don't know, peachy color orange, maybe you see the regulations that the department is embarking on and the timelines on those for the Department. And with that, I'll stop because I feel like I've let go of a lot of information.

Great chart. Much easier to sort of look at this than to try to just read all the verbiage that would go to try to describe this. So I appreciate you doing that. It does help me make the point that what recycling is in California right now is a series of piecemeal programs and the challenges that that brings for us. And so I'll have more conversation about that actually, when we get to the circular economy.

But on this item, the other panelists that we have here, do you either have your assistant or does the Department of Finance have anything you would like to add?

I don't have anything to add. Thank you, sir.

And then LAO.

Good morning, Mr. Chair and Committee Members Frank Jimenez with the Legislative Analyst Office. When it comes to the circular economy package, the Governor proposes reductions to programs that are relatively new or proposes modest reductions to programs that receive significant General Fund augmentations. We find this approach to be generally reasonable. As our office has mentioned before in budget hearings, the budget problem estimated in the governor's January budget could be much larger than originally estimated.

Within the circular economy package, we find that there could be opportunities for additional General Fund solutions. The department has currently $240,000,000 of uncommitted GGRF funds. The Legislature could consider reducing funding for these programs and shifting its highest General Fund-supported activities to GGRF. This would sustain the highest priority programs for the Legislature and also find General Fund solutions. For instance, the Department has roughly $180,000,000 in uncommitted GGRF funds for the SB 1383 implementation grants.

While these grants support local agencies in implementing SB 1383, this may not be the Legislature's highest GGRF priorities.

Thank you very much.

If I could just on that particular point, we did go out to solicitation on those grants for local assistance last month, and so we are preparing to award those to local governments. So just to be aware, as that was appropriated last year under GGRF, we are working very hard.

I know that our local partners are really in need of the state's assistance in order to meet the 1383 objectives, and so we were working very quickly to get them the additional funding, but making sure to do so that it truly realizes the intent of the organics recycling program that the Legislature passed.

Thank you. I think maybe we have a quorum, is that right? We will pause for a second because these are precious Members to get hold of and take a quorum so you can have an official hearing now.

[Roll Call]

Thank you. Okay, and let's go ahead and vote on the consent calendar while we have everybody here. And there will only be one motion and the recommendation is to approve as budgeted vote only issue items one through 15. Can I have a motion for that, please? Moved and seconded. Please call the roll.

Bennett

Aye.

Aye.

Aye.

Friedman, Garcia, Patterson, Rivas

Measure passes towards you.

Connolly

Essayli

Aye.

Thank you. We'll leave the roll open. And Members, do you have questions or comments about issue one? Appreciate both, all three of you showing up.

Couple of questions and also appreciate the chart really handy with the widespread closures of recycling facilities in the state as well as changes in international recycling markets. What is the current status of our bottle Bill recycling program? Is it working at the present time?

Mr. Connolly, thank you so much for that question. I think that's a really important question. About 10 years ago, we started to see major changes in the recycling market that led to closures of recycling centers across the state. It's been relatively stable since 2021 with plus or minus five or six coming on board and leaving the program every month. I still see that as not where we want to be.

These are typically small businesses and that stability is really important and an indication of the success of the program, I really want to thank the Legislature, the Pro Tem, especially for her passage of SB 1013 last year, which in addition to adding wine and distilled spirits to the program, which will bring a very stable material source into the program and hopefully alleviate some of that month to month instability.

Additionally, for our unserved parts of the state, which is really my concern right now in our underserved communities, it allowed us to work with dealers and retailers to develop a program very similar to our EPR programs that are dealer cooperatives.

So the dealers would work with recycling centers, with processors, hopefully with some of our remanufacturers to create a cooperative to bring the material into maybe grocery stores through reverse vending machines or mobile recycling, depending on the region of the state, to really increase the availability and convenience of this program for every californian. My main goal with this program right now is to make it accessible to every single californian, and that may look different in different parts of the state,

but that every californian should have ready access to this program. It is their money, ater all. This is not our money. This is their money, and I want to get it back to them.

No, I appreciate that. Next question is, as we know, local governments are responsible for compliance with SB 1383. We're hearing a lot about that organic waste diversion requirements. Wouldn't cutting the funding for implementation and infrastructure, in effect, just move those costs to local ratepayers?

It needs to be a partnership, I think, between local, state, some federal and private partners to build out the necessary infrastructure. A study done about five years ago estimated that it would cost about $40 billion for the State of California to build all of the infrastructure needed. And so it's kind of an all hands on deck situation.

The state has invested roughly over the last, we'll call it five years, roughly half $1.0 billion into the infrastructure, whether it's recovery grants or direct grants to the locals in the last couple of years. I think the $60 million that helped jumpstart the programs two years ago for the locals was much appreciated. I don't want to speak for the local governments, but based on our conversations with them, it really did help facilitate jump starting their programs.

And the additional money that the Legislature appropriated last year is very much anticipated and needed. I think if you look across the top of the chart at the various types of programs, we're really trying to make sure that we have enough to jumpstart. Co-digestion projects, anaerobic digestion projects, compost, which happens to be my favorite, and I could talk about all day, but these are all wonderful projects that will be not only an environmental and climate benefit, but they're community benefit.

So when we grant the monies this way, we are putting that benefit, that economic and environmental and public health benefit back into the community. So I think it's an all hands on deck kind of situation.

Great. And just wanted to ask a couple of questions on some of the proposed cuts. Given that CalRecycle is accepting applications for organic waste infrastructure grants, do we have a sense of how reducing or delaying this funding would impact projects already in the pipeline?

So I am going to pass it over to my esteemed colleagues at the Department of Finance as they have the bigger picture view on how we're going to achieve our overall financial and environmental goals through this year's budget.

Yeah, thank you, Assembly Member for that question, Christian Beltran with the Department of Finance. I just wanted to specifically talk related to the $4.8 million reduction that we're proposing. So the $4.8 million is a reduction that we are intending to completely reduce from General Fund. However, the Administration is working internally to identify potential other funding sources for that specific amount, given the nature of the equity that surrounds that particular program. So we're working internally to see if that is a possibility.

But as of right now, it is a General Fund reduction to the extent of the delay or how that impacts programmatic, I would defer back to CalRecycle to see how that could play out.

And then similarly, I appreciate that. Similarly, in terms of the composting, how are the proposed cuts going to affect small scale composting programs, particularly in disadvantaged communities?

Well, as Christian said, we are working to identify other funding sources to meet the community composting need and demand on the local level. We see great value. The Administration sees great value in those programs, especially because they are an opportunity for everyone to participate in composting. But as you noted, we have need across all of our composting programs, large and small. So we are in recognition of the fact that the projections for the General Fund are what they are.

We are looking to find other funding sources that are available so that we can meet that need.

Other Members have questions. I have a few questions, but first, Department of Finance, whoever is the appropriate person from the Department of Finance, could you please read the cuts into the record?

Good morning. John Parsons, the Department of Finance. The overall reduction to the package is $24 million across three programs. That would be the Composting Opportunities program at 4.8 million, the Recycling Feasibility grants program at 15 million and the recycling Market Development Zone loan program at four and a half million.

Thank you very much. Could you provide an update on the bottle Bill recycling rate? Where are we with that and recent expansions in closures as a little bit of a follow-up to Assembly Member Connolly.

So we have been pretty stable between 68 and 70% for our overall recycling rate. It's been an interesting trend to watch over the last couple of years because the number of beverage containers purchased during the pandemic actually was a very steep incline and we have anticipated that that would start to taper off, but hasn't really. But the rate of overall recycling, so by percentage is still the same. So we are recycling more beverage containers. We recycled more beverage containers last year than we ever had before.

So we see the recycling rate by percentage stay relatively stable at we are now up to 70% or just over 70%. We were down to 68%, but in terms of number of containers, we are seeing an increase.

How are we advertising to disadvantaged communities the availability of these funds?

The new funds that the Legislature appropriated last year. So we did some initial outreach and conversations with some of the recycling centers and our stakeholders in the group, and I should say I took a step back in January. The money was appropriated in September. And we started to think about how could we get this money out the door?

And we took a little bit of a step back because this is what was appropriated last year was, I believe, roughly 73 million for deployment of technology in unserved areas. What we weren't seeing were recycling centers coming forward and asking for this money for this technology.

And it gave me a little bit of pause, to be very honest with you, on making sure that this money goes out the door in a way that when we make an investment in technology, say we gave $1.0 million grant for a bagdrop system, that that investment was sustainable by whoever we gave the grant to. So we are learning a lot and continue to learn a lot from our pilot projects with our local governments.

And one of the main lessons that I'm learning so far is that those partnerships are really important, that having those grant funds go out and making sure that we're able to maintain the technology, sustain the particular site for that technology will be absolutely critically important. So we have started some conversations with some of our other stakeholders, some of the dealers, etcetera, on how can we build partnerships even before the co-ops come on board so that we can start deploying this technology.

Additionally, I think there are a number of concerns around the supply chain, as we all know. I'm sure you are only too aware from all of the committees you all sit on that the supply chain and building out this technology is going to take us a little bit longer than we were hoping. So what we are looking to do, and I'm giggling to myself because the CalRecycle cycle staff don't even know this yet.

We are looking to build out some small regional test opportunities to get some larger grants out so that we can deploy technology in regions to see how we can do that and do it with partners that can sustain that technology and the cost associated with it.

You heard it here first in budget sub three. You really, really don't miss another meeting, right?

This was pursuant to some conversations I had yesterday.

Wonderful. All right, thank you. The whole piecemeal aspect of our recycling program, I think is highlighted by both the chart by what you're talking about as we're moving forward. And so I'm looking forward to moving on. If we have no other questions on this. So we're going to go ahead and move right to issue two and start over again and let the Director decide who goes first. Right.

That is the development of the statewide zero waste. It's just a small issue that you have a little interest in.

Well, this is perfect because you let us write off. And the piecemeal feel of our recycling system is felt by every single Californian. I often tell a story that happened a few months ago, and not to sell out the colleague that I was observing, but we were in the US EPO building in San Francisco, and she had a cup in her hand, and she was looking across six bins and trying to figure out what to do with her cup.

And it was in that moment that it fully resonated with me. Why I'm in the spot that I'm in is to resolve that for every single Californian, it is really important that we reinstate the faith in our recycling system and our waste reduction systems for every single Californian. Every Californian knows that nationally, we are recycling 9% of what we're putting in the blue bin.

We're doing slightly better here in California, but of the 42% of our waste that we are recycling, 17% of that is still going overseas. And unfortunately, in 2021, California landfilled 41 million tons of waste. That is a ton per Californian. We can do better. We need to do better. And it's really incumbent upon us as the state to really set the stage and provide the infrastructure and the resources for Californians to do their part, because we know they're your constituents.

We all know that they want to do that. So what we have put forward is a plan for a zero waste plan. And I really want to highlight the fact that we have been very successful as a state since the inception of our programs. We have recycled almost half a billion. Half a billion, did I get that right? Half a billion beverage containers. I can't even get my head on exactly what that means. Millions of gallons of used oil. Millions of gallons of paint.

Hundreds of millions of tons of e-waste. Our programs are very successful for what they are built to do, but to the chair's point, they are very piecemeal. And what we really need to do if we're going to realize the $142,000,000,000 economic benefit of a circular economy for California is that we need to come up with a strategic plan that connects all of the dots that makes us truly circular.

So what we've proposed in the budget is $2 million plus two positions to develop a strategic plan to get California to zero waste. It would be the first ever statewide plan. Our local governments who have embarked on this journey over the last decade, many of which you represent, have asked us to do this on a statewide basis because it is very difficult, if not impossible, to do it. Local government by local government.

So we are very excited to work with the Legislature to come up with a strategic plan that will identify the gaps in our current recycling and waste systems, identify the opportunities for remanufacturing and recycling in our communities, and where we can cut down on additional waste. One of the first things I noticed when I came to the Department are the places where we have these massive gaps in systems that we really could provide for.

But I can't quite put my finger on how to fill those gaps. For example, paper is eminently recyclable. We all know that. But we send our paper to other countries and other states to recycle and repulp, and then it comes back to us. We can cut back on our global emissions, we can cut back on our pollution, we can cut back on the amount of transport if we can build that infrastructure for California, which is to the economic benefit of the state.

And so actually, I have more props. I have more. As former staffer, this is my dream. So give that to the sergeant. So this just is just an illustration that we put together, and it's also on our website that shows where California has had great successes and where we can do better.

Give us a moment to take a look at this?

Absolutely.

Is there anybody else besides LAO, Department of Finance that has any questions or comments?

Sorry. I think I'm okay. I know it off the top of mostly.

LAO. Would you like to give us your assessment?

Thank you, Mr. Chair. We recommend that the Legislature reject this proposal. We find that many of the activities that the Department would undertake with the plan should already be occurring within the Department. This includes assessing current programs and identifying gaps and improvements needed for the Department to achieve its mission and statutory goals. This includes the 75% recycling rate target that was established under AB 341, which the plan would assess ways to achieve by 2035.

If you look on page 31 of your agendas, we have a chart that shows the statewide recycling rate relative to the original goal set out in AB 341. We also find that the plan could become quickly outdated. Also notified in your agenda is various significant pieces of legislation that the Legislature enacted which expanded Cal recycle's role in various waste streams. In many cases, these policies and programs won't be underway until 2025, which is around the time that the plan would be completed.

So the plan wouldn't be able to incorporate to the extent that these new policies are meeting their intended targets or are achieving them. So once those programs are in place, it makes the plan quickly outdated. We also note that the Department has conducted similar reports without additional resources. For instance, the Department completed a report related to AB 341 as part of that policy's statutory reporting requirement, which is sunset, and the Department was able to complete that without any additional resources. Happy to take any questions.

Members, do we have questions?

Assembly Member

Thank you, Mr. Chair. I really appreciate this update, and I have questions about your proposed statewide zero waste plan.

I'm reading from the agenda and also looking at your handout that maybe this high level plan may not be the best approach given that the different challenges that are associated with each program, like 1383, and then the beverage container program, and the rest of the programs that you have listed on your handout. How do you envision this plan addressing the unique needs of each of these programs?

So that is such an incredibly good question. Thank you very much, Assembly Member Rivas. So that's exactly the point of the program. The point of a zero waste plan is to look across all of the programs that we have within the Department and all of what local governments are doing and identify the gaps. It doesn't replace the requirements in any one of the programs, but you have alignment and overlap between things like 1383 which are all of our organic waste, which includes paper and other fiber.

When we talk about implementation of 54, and I would argue that this is exactly the time that we should come up with a strategic plan, as we're implementing the 15 new pieces of legislation that were passed last year. We should have a plan for how do we align all these programs so we don't create more gaps in our system, but rather envision a whole system's approach to basically eliminate anything going to a landfill.

We need to be thinking right from the beginning of how we manufacture our goods, as we talked about in the implementation or passage of SB 54. How do we design things to not end up in a waste situation? It's very similar with how we think about organic waste or even our beverage container recycling program.

Even though the programs are all run separately and differently, the circular system needs to incorporate all of the points from very first touch of that product to how it ends up used and then ends up into its next life, which could be edible food recovery over here or packaging recovered over here and recycled. But if we don't envision an infrastructure that covers all of our programs, we end up, I think, not achieving our goal of reduction and diversion of waste in landfills.

We are landfilling more by tonnage every year. And unless we come up with a systems approach and a plan for how we move away from that overall, I don't think we get there. Thank you.

I'm going to speak up here at this point in time because this is of everything we have on the agenda today, this, in my mind, is the most important issue for us to talk about. And as I mentioned, we have a piecemeal approach to recycling at this point in time.

I very much respect LAO's analysis week after week as we come in here, today I disagree with LAO because I think that the approach that LAO talks about, which is let's improve on what we're doing right now, is sort of a piecemeal solution to a problem that is not getting better with our piecemeal approach. I would say the recycling effort is enormous effort. We're working hard at it, but it's like we're swimming upstream and it just keeps coming at us more and more.

You look at this chart and we don't have the upward slope that we're looking for. The idea of separate programs sort of implies that if we improved each one of those programs, which is very difficult to do, but if you did improve all those programs, that would be the solution to the problem. We still have the gaps in between there. When I think we have to think about recycling by saying start at the beginning.

Beginning is when a product, when something is created, that's when you need to think about how is it going to be recycled. And we have a challenge in that. I don't think that the Federal Government in the United States is ever going to come up with a national plan for recycling that creates the kind of coherence that would be best done at the federal level.

And so over and over again, we see the State of California having to do sort of what a national government would normally do better. We have to do it with the handicap of not being a national government, but just being one state, but a large state in there. So if you look at mean in Canada, they have on a national level embraced the concept that you produce it, you're responsible for it being a closed loop.

You don't have the right to say, I'm going to produce something, I'm going to make a profit off of it, and somebody else is going to deal with the problem at the end of the waste stream. And that's the system that we have at this point in time. And I know when you say that industry immediately kind of gets nervous, but I would offer to industry, industry is actually better off with a closed loop.

Everybody has the responsibility, plan it in advance approach than they are with the Legislature passing 15 bills last year and how many bills next year and constantly just piecemealing this thing both legislatively and then process wise as we're going forward.

So the reason that I support the plan, in spite of the fact that we could also use the money to improve what we're doing now is I don't think if we don't stop and just step back and say, how do we do a much better job of starting at the beginning?

So I hope that the plan will look hard at the Canadian model that says if you produce it, you've got to play a major role in being responsible for how it ends up becoming a part of the circular economy, because so many of our things, we know if you would change how it was produced in the first place, it would be a whole lot easier to deal with the recycling side of it.

So I do respectfully disagree with LAO and I appreciate the concerns of my colleagues, but I want to use this opportunity to throw out, I'm fired up about this plan, and I want this plan to be ambitious and come to us and say, what's the big fix? Because we again will piecemeal this to death. And the big fix I'm going to go to Canada this summer to look at their whole recycling program.

I know a number of Assembly Members already have, and I think we can go there and then we can say, well, that's really nice, too bad we can't do it here. Or we can go there and say, at least we have a study that might show us how California could begin to take the steps to adopt that, because that's the solution. That is the grand solution and a solution that would be worth putting significant amount of energy into.

It's a little hard to get fired up about putting more energy into another attempt to try to improve the bottle Bill. We can do that. Good. And we'll still have to do that. But it will be much better if we plan at the very beginning that the responsibility for that bottle is the person who created and profited from creating that bottle.

Final thing I'll say the economics major, is if you don't price things properly, you don't send the proper signals in a market economy, and we're not pricing things properly. When the person who sells it determines what the price is, is not responsible for the circular loop of that particular product, and instead fosters that off to somebody else who didn't get to be involved in the pricing of it.

So things may cost slightly more, but imagine if they meant we had to do a whole lot less of this piecemeal recycling. We'd all be better off, and the public would certainly appreciate not getting piecemeal to death as we go forward. One final thing I want to mention here, which is separate from the circular economy, is the organic waste. I forgot to mention that here, but absolutely essential for climate change that we get this organic waste thing.

And to the extent that we can factor in what the true carbon costs are of doing better with this as we're doing the plan, that would be helpful also. So other Member comments I'm sorry to. Yes, Mr. Essayli.

Thank you, Mr. Chair. I want to understand what this program actually is. So you're asking for $2 million to develop a plan. What would the $2 million actually be spent on?

So the $2 million would go to a contract to develop a plan, a strategic plan for how do you get to zero waste? So you would have an evaluation of how all of our consumer products go out into the market today and how they follow their path into the waste stream or into the recycling stream. Identifying the largest areas that prevent us from keeping things from a landfill and identifying gaps in remanufacturing or gaps in collection by both a regional level or just a statewide level.

So to give you an example of a place where our circular economy is really starting to succeed and places where we have gaps. So the gala wine corporation has started their own recycling and bottle manufacturing in California, and they are now doing the majority of wine bottles for the state's wine industry. They are and have told us they are in real need of clean glass cullet because those machines need to be running on glass, very hot furnaces.

And so you can't just turn them on and turn them off. And so they need consistent material coming in. And you see this in a lot of our recycling industries and our remanufacturing industries. You have to have consistency in your supply chain, but to keep that consistency, you have to know that that's coming in from your recycling, and we can't show that yet.

I appreciate that. I think my question isn't the goal to plan. I think the goal is lofty. My question is more specific. The $2 million is going to be spent on what staff?

On a contract.

On a contract to who?

To a contractor who would develop the plan.

How big is your agency? How many staff do you have?

We currently have just under 800. And given the expansion of the additional legislation that's been passed over the last two years, we will be just under 1000 employees.

So 1000 employees is not enough people to figure this out in your agency. I have to agree with the LAO. This is your job. You should be doing this already. Why you need $2 million to hire outside contractors and two additional staffers when you've totally failed to meet the goals that we're supposed to be at 75%. We're down to 40%. We were at 42 two years ago. You have almost 1000 employees. And I agree with LAO that you should be doing this already.

So why should the taxpayers pay $2 million to an organization that hasn't performed up to the standards yet?

Well, to be perfectly honest, it isn't the organization that actually does the recycling. And that's exactly because we haven't hit that 75% that we are looking for efficiencies in our systems. So while we do do the full evaluation in each one of our programs to figure out where the gaps are and what we're coming to the Committee today to ask for is help to figure out why our systems aren't better aligned. The reason you go out to contract for something like this, as opposed to using our existing employees, is that we don't have the expertise.

And rather than develop the expertise over a long term and develop a staff for something like the scoping plan that CARB has to put together, or that large strategic plans for other departments, rather than bringing in a staff of 20 or 40 or 50 to do that, what we're suggesting is that a short term contract is a much more effective way where we can utilize the workforce of a contractor, the 50 to 100 employees that would do that on a short term, and then have just simply two employees on our staff that would be responsible for maintaining that plan.

It needs to be a living document. I very much agree with the LAO. It doesn't do us any good if this is outdated by the time it's printed on paper or on our website. So for us to keep that document living, having scientists whose responsibility is both economics and the science of recycling, and that expertise to keep that document moving is exactly what we're trying to do. It's efficiencies that we're trying to realize here in our system.

Let me ask the LAO, do you agree with that assessment, or do you believe this is something calrecycle should be doing in house already?

Thank you for the question. When it comes to existing programs and assessing how they're currently doing and how they relate to one another, we believe that that should be an assessment that's continually being done by the Department and seeing what is the baseline and to what extent are these programs not able to achieve the goal. And we feel like that's an activity that should be already occurring within the Department.

Thank you. Thank you, Mr. Chair.

Thank you. I'd like to point out, if I could just real quick, I don't think the statement that you have failed is accurate. I think the statement is we have failed because the recycling Department can only work within the legislative boundaries and the budgets that we've given them and given the enormity of the task here, which is why I support the idea of a plan, because we're really trying to decrease the enormity of the task by coming up with a plan.

That means from the very beginning of the design of the product, we're thinking more globally about the end, getting that product right back in. You talk about Gallo. If we made sure all the wine bottles fit, but that comes from industry, giving that information about this is the right way to design the bottles. The other thing I'd like to respond to is, why go out and bring in experts? I think LAO is correct.

The Department should always be constantly evaluating all of their activities that are going on. But when it comes to thinking about a new overall approach. I think there's tremendous advantages to bringing in outside experts who are familiar with a place like Canada, familiar with what's going on in the world, and not having somebody internally who's already sort of committed to our current way of doing things. This plan should be very innovative, almost. You need the advantages of some experts there. Assembly Member Connolly.

No, I appreciate it, chair, and just wanted to kind of delve a little bit more into the prior line of questioning. I noticed in particular a statement from the LAO where it says, in many cases, the proposed new zero waste plan is very similar to the one that the Department previously was required to complete under AB 341. CalRecycle indicates it was able to complete its AB 341 reporting requirement within its existing resources. So to me, that raises a question.

Why were the original AB 341 reporting requirements eliminated in the first place? And secondly, should they be reinstated in order to perhaps spend that $2 million more on actual programs?

Despite the fact that the statutory requirement for 341 evaluation has ceased, we continue to do those evaluations again, the zero waste plan isn't so much a reporting requirement of evaluation simply of our existing programs. It is really looking to how do we find the alignments in manufacturing and recycling? How do we find the alignments in source reduction?

How do we look at where waste is going as a commodity or waste is going as a burden, and how do we change that for the betterment of the State of California? An example that really made me start thinking about this and go to the Department of Finance and the Governor about this is that we have a really innovative company in Riverside County that is recycling high quality tire crumb into exercise mats. But they have struggled, and they receive grants from the State of California.

It's a really great example of how our small grant programs are actually creating really innovative and exciting products and companies. They do workforce training within their company. They employ around 70 people. They do some of the former incarcerated placement, and they have brought in their own psychologists. They are really a community benefit company. They continuously come to us and say, we don't have a supply chain here in California that we can rely on for the quality of material that we need. Can you help us?

And we go to the recyclers who are collecting it and that are going to recycle it and say, okay, so what do you need? Is it different machinery? How do we ensure that you're placed in a place in California where the economics of transportation work? It is that kind of big picture planning across all of our material types that we can't do piecemeal by program and succeed. We need to be looking about everything that lands on that truck.

How do we prevent it from landing on the truck? I try not to use this example, but there are things that go into our recycling Bin that have three separate trips that ultimately end up in a landfill. We are creating environmental burden. When we are attempting to create environmental benefit, how do we prevent doing that? I don't think we can do it simply. And we do, we evaluate each of these programs on an annual basis and look at how can we increase efficiencies.

But you have entrusted upon us, like I said, 15 new pieces of legislation for the coming years very quickly. Some of the timelines are very quick.

In addition to the existing programs that we have, and an extraordinary amount of faith in our ability to expend the money as we went through in terms of the circular economy budget, I want to make sure that we are expending this money at the greatest level of efficiency and to the greatest benefit of the people of State of California, while also realizing the economic benefit of a circular economy.

We are leaving billions and billions of dollars every year on the table because we haven't realized this for the State of California. We are further along than many of our other states. But you look at Europe, you look at Canada, they are starting to realize the economic benefit of doing away with waste. And we have a real opportunity right here. And you have given us the responsibility, and I want to make the most of this particular moment in time for all of us.

And I think the plan comes back to the Legislature and it says, here are the gaps in our systems, here are the gaps in our statute. Here are the places where encourages waste. Here are the places where we have effectively discouraged waste. It's an economic review, it's an environmental review. And it is a holistic approach that hopefully makes the most of the dollars that you've entrusted to us.

If we don't have anything else, I'm going to close on this. And that is Halleluja. And how refreshing. From my perspective as a county supervisor, we had about 25 departments. And here in State of California, I've come here, you have huge. All these departments, all this stuff. I wish every Department was saying, you know what? We'd like to come up with a holistic, brand new way to do business.

And we're willing to hustle to try to do that, and we're willing to take the chances in terms of what that may reveal. We don't have this kind of request often enough when we're thinking about all the challenges. What if we did this with foster care? What if we did this with housing? Let's start at the beginning.

So I can appreciate, I would not support this just in general, but when you have a Director that is as on fire about doing this as we have with recycling, I think it is an appropriate investment in this situation because somebody's coming and saying the system is broken, which I think most of us would say is true, and we're willing to roll our sleeves up. And $2 million is a small price to pay.

I'm not optimistic that even if you came up with the right plan that we would get the Legislature to adopt it, because the right plan will have a lot of tremendous political concerns related to it because people won't see in the long run we're all going to be better off. They'll see the short term consequences.

But if we don't at least make a shot at it now, we will be sitting here 15 years from now and this line will still be broken and we'll be wondering why we're not able to do things like Canada and some of the other places are out there. So I'll leave it on. What I hope is that upbeat note and fired up about that and appreciate the Members asking their questions.

And we're going to go on to issue three, and that's California Unified program for accidental release. And what's that? Oh, yes, we could take role again and add Assembly Member Fong.

For roll Friedman good.

And then would you like to add on for the consent calendar?

Friedman? Aye. That measure passes 5-0.

Great. Thank you. All right. If the Administration would like to start with issue three and identify yourself, and I'll let you guys figure out what order you want to go with.

Good morning, chair and Committee Members. Brandon Merritt with the Department of Finance, the California Unified Program Accidental Release Prevention, otherwise known as CalARP and Hazardous Materials Business Plan, HMBP program support and Trailer Bill. Governor's Budget proposal requests 719,000 unified program account funds ongoing in four permanent positions. These positions will help provide greater legal and regulatory oversight than the CaLIPA legal and regulatory teams have historically had the resources to provide, and those needs have grown in recent years.

With that brief introduction, I will now hand it over to my colleagues with the California Environmental Protection Agency to provide further background on this proposal.

Thank you. Good morning, chair and Committee Members. My name is Jason Bateser, assistant secretary with CalEPA. And with me this morning is Rachel Zwillinger, assistant General counsel for enforcement. Thank you for this opportunity to present as Brendan mentioned, CalEPA, in coordination with other state agencies, is responsible for the implementation and enforcement of the unified hazardous waste and hazardous material regulatory management programs, otherwise known as the Unified programs. The unified programs consolidates, coordinates, and makes consistent the Administration, permitting, inspection, and enforcement of six environmental regulatory programs.

CalEPA oversees the overarching Unified program implementation, which local certified unified program agencies implement within their jurisdiction, otherwise known as coupas, and CalEPA also oversees, as Brandon mentioned, the California Accidental Release Prevention Program and the Hazardous Material Business Plan program. These are the programs that are subject of this BCP are critical to protecting public health, safety, and the environment, and they are a centerpiece to a robust, equitable, and forward leaning enforcement and compliance. Environmental regulatory programs. CalEPA has managed the Unified program since 1997.

In that time, the unified program has matured into a robust program with established standards and fully integrated environmental reporting system, raising increasingly numerous and some complex issues along the way. On July 1, 2021 the Legislature transferred state authority for the Hazardous Material Business Plan program and the California Accidental Release prevention programs to CalEPA and to give a sense of the scale of these programs.

Currently, there are approximately 140,000 regulated businesses under the Hazardous Material Business Plan program and nearly 2500 businesses that handle highly toxic, inflammable regulated substances that are regulated under the CALR program, and these are our highest risk facilities within the State of California.

CalEPA is requesting inspection enforcement authority for the Hazardous Material Business Plan and CALR programs from the trailer Bill and staffing to implement the new authority from the BCP Coupas implement enforce at the local level, but if they fail to execute their duties or need assistance, the secretary must have some ability to task an authorized state agency to leverage resources to protect public health and the environment.

Similarly, CalEPA State Water Board and Department of Toxic Substance Control currently have such authority for the underground Storage Tank program and the Hazardous Waste Generator program, which are other two other programs that fall under the unified program. The requested positions will help CalEPA manage the greater legal and regulatory needs for all three programs and implement them in a manner that is efficient, effective, and equitable.

The addition of these positions will ensure basic elements of a proactive state environmental inspection enforcement programs to promote strong local action through work sharing, resource utilization, and effective oversight, enabling CalEPA to further protect California residents and its natural resources.

The additional resources will also allow CalEPA to further promote and enhance consistent statewide implementation of the unified program and especially focus in disadvantaged communities, and these additional authority will benefit all affected businesses in California by providing a level playing field and will benefit all Californians through equal application environmental protection. And again, further supporting our local certified unified program agencies. And that's our presentation. And I'll pause for any questions. Thank you. Unless, Rachel, you have anything to add?

Nothing else from the Administration. Right. Anything from LAO before we return to the Members?

Sarah Cornette with the LAO, we find the request reasonable given growing legal need and don't have further comments or concerns on this proposal.

Great. Thank you very much, Members. Any questions or comments? Overall, it's nice to have an issue that is an important issue, but not one that we all have. Lots of questions to delay this hearing on and stuff, but keep up the good work.

Thank you.

You have obviously hugely important responsibility with hazardous waste and quite frankly, hope that hazardous waste is something that when CalRecycle comes up with their plan, we have better planning from the beginning in terms of hazardous waste so that we have fewer problems at the end of the pipeline with that also. So thank you all very much, and we'll move on to issue four.

And we'll have the administration decide what order you're going to begin in and introduce yourselves. Sorry about the chair.

So give me a second here. And good morning, chair Bennett and members. I'm Meredith Williams and I'm the Director of the Department of Toxic Substances Control. And with me today is the Chief Deputy Director for the Department, Francesca Negri. It's a pleasure to have this opportunity to update you on our implementation of SB 158, which included funding for the cleanup and vulnerable communities initiative as well as funding for the exide cleanup.

Residential cleanup. 2021's SB 158 was a collective effort to bring more transparency, accountability and fiscal stability to DTSC. Those changes built on DTSC's efforts to address longstanding departmental challenges. Since the bill's passage, DTSC has been hard at work implementing changes to its governance and fee structure. As called for in the bill. A major provision was the establishment of a five member board of environmental safety.

The board began its work in March of 2022 and is providing a forum for communities, advocates and the business community to be heard. The board is in the process of rulemaking on its permit appeals process. We've worked collaboratively with this new board to ensure it has the resources and infrastructure necessary to meet its mission. Another provision of SB 158 provides resources for California to begin to strategize about the future of hazardous waste in the state.

Some of the issues just raised during the consideration of CalRecycle, circular economy, and zero waste requests have an intersection with this work. For the last year, a team of DTSC engineers and scientists has been dedicated to the research and outreach necessary to develop a hazardous waste management plan by 2025. The first step in developing the plan is to compile data and information about hazardous waste generation in the state in a hazardous waste management report.

The report establishes a foundation for board policy discussions to inform the final plan. Data compilation is complete, and we anticipate submitting the report to the board in the coming months. We will also hold several public workshops on the report and will brief the legislature. In the meantime, DTSC's current approach to waste management has also approved. Since the passage of SB 158, we've made significant progress on reducing the backlog of continued permits over the last two years. During that time, DTSC has issued 33 final permit decisions.

Continued permits are permits, old permits under which facilities are allowed to operate until DTSC makes a permit determination. On a permit application, the department shares community's desires to have up to date permits in place with the most current protective conditions on a facility's operations. We're now focused on the last few older and most complex permit decisions. There are currently seven permit permits that have been continued for more than five years, and we're planning on issuing draft permit decisions on those before the end of the year.

Our permits are stronger, more enforceable, and more protective than ever, and include significantly more financial assurance to make sure that should a facility cease operation, the state isn't left on the hook and communities aren't left unprotected. Additional inspection and legal resources afforded by DTSC's new fee structure have allowed us to focus enforcement efforts on metal recyclers and shredders, as well as hazardous waste transporters, precisely because they operate within communities that have a disparate burden of multiple sources of pollution.

We prioritize work in such communities because they are in need of our attention and resources. SB 158 appropriated $500 million for the Cleanup In Vulnerable Communities Initiative, or CVCI, for the state to invest in communities disproportionately affected by with environmental burdens. We are prioritizing our CVCI work by identifying communities that have Cal Enviro screen scores higher than 75%, significant poverty scores, and those in rural areas. We're also coordinating with tribal governments because the calamvirus screen scores don't often capture them in the prioritization process.

The CVCI team is partnering with environmental justice stakeholders to improve equity outcomes across the initiative. Round one of the Equitable Communities Revitalization grant, or the ECRG program, resulted in more than $75 million granted for local brownfields projects in 31 cities in 15 different counties of the state. We're working with 53 grantees on 84 separate project sites, and 70% of those are in the most compromised areas of the state.

End uses for this funding include parks, housing, community services such as services for the unhoused schools, and commerce, such as grocery stores in food deserts. The average budget for grant awards in round one was $2.3 million. We're excited about these first round projects, but community representatives have advocated for more involvement in the grant framework. To that end, we consulted with environmental justice stakeholders to update application guidelines for round two grants so that they more directly address stated community needs and priorities.

The new guidance places more emphasis on community acceptance. We will share this new guidance with potential applicants and environmental justice stakeholders in May. After the close of that feedback period, the second grant cycle will open in July, and grants are expected to be dispersed in January of 2024. The biggest lesson learned in round one is that communities need deep and meaningful support to take advantage of the ECRG recycling brownfields for beneficial uses is a slow process and requires deep and consistent investment from cleanup to buildup.

The $7 million grant cap has not been a significant burden for ECRG thus far. Because of the specific requirements of CVCI, such as a very short expenditure timeline, many sites really aren't well suited for these funds. The cap will be raised to $10 million for round two, and this may lead to more eligible applications with higher dollar requests. However, that could mean fewer grant awards. Whereas the grant program is focused on end uses, site discovery and orphan site funding is focused on reducing risk.

For example, at many of these sites we're trying to stop vapor intrusion or drinking water impacts to surrounding neighborhoods. Future use of an orphan site would be consistent with its prior use. Most of these sites were occupied by businesses and would be cleaned to commercial standards. The goal is to reduce exposure and not necessarily change the property in use.

Of the 112 dry cleaners prioritized in the first year 91 phase one site assessments have been completed and approved, three sites have access agreements, and six work plans are undergoing review to allow discovery investigations to begin, and tribal notification letters have been submitted for 18 sites and three tribes have expressed interest in further engagement thus far. The program expects to add additional sites every year for the next three years. CVCI provided $40 million to expedite a path to cleanup of 21 orphan sites.

In general, orphan sites are prioritized based on exposure risks to the community. These particular sites for CVCI. These orphan sites, however, were selected based on the likelihood of being shovel ready. The technical assistance grants, community benefit agreements, and workforce development elements of CVCI are being put in place to build capacity in the communities we serve. One last area of funding in SB 158 was for an Environmental Justice Advisory Committee.

This EJAC will be a vehicle for DTSC to hear from community members directly impacted by our work. DTSC and the Board of Environmental Safety are working in coordination on a framework for this EJAC. The framework will be workshopped with interested stakeholders this spring. Turning to the exide cleanup, SB 158 provided $291,000,000 in additional funding over three years to support the cleanup of residential properties surrounding the former exide battery recycling facility in East Los Angeles.

We will bring you up to date on our work there and also respond to some of the questions that were raised in the letter we received from you yesterday. You're aware that a study is being conducted by USC Occidental College and East Yard communities for environmental justice in the area surrounding the exide facility. DTSC appreciates community led science and wants to work collaboratively to protect the surrounding community.

Until this study is published, the full study, it is impossible for us to verify the data, methods and study details like sampling locations as necessary to fully validate the results and replicate the study. Since we do not have those data, DTSC is working with experts and stakeholders to identify alternative approaches to determining whether or not there are unexpectedly high levels of contamination left on properties that we have remediated.

What has been made abundantly clear over the last several months is that we need to improve the quality of the information we provide about how properties are cleaned, how residents or homeowners engage with us on the project, or how we can better incorporate community input into our decision making. We are committed to that work and have led two public meetings in recent months and will host a third tomorrow in Maywood.

We've done a lot of listening to make sure we understand community concerns and experiences, and we've made our Executive team and project experts available for conversations with residents, community based organizations, workers and union representatives. We intend to continue to be in the community and to work with you, your teams, local elected officials and community Members to determine the best methods to engaging with impacted residents. We also suspended a recent bid process for a new cleanup contract so that we can incorporate community input on contractor selection.

The goal is to release a new solicitation in May. We are making these changes in our engagement approach while continuing the cleanup and as of April 7, 4554 properties have been completed. Speaking to the parkways the 2018 Parkways Authorization totaled $6.5 million. DTSC used $2.9 million of that to successfully complete the first phase, which was to investigate approximately 8000 property or parkway parcels. Although we didn't fully expend that appropriation, work has been ongoing in the parkways.

We worked to complete sampling and understand from the impacted communities how they use these parkways. The data have been analyzed and a health risk assessment was developed based on that community input. The final health risk assessment was completed last June with a recommended cleanup standard of 80 parts per million for lead. Based on the assessment, we forecast that parkways cleanup would cost approximately $70 million, an amount far exceeding the remaining $3.6 million that was available through the initial appropriation.

That $3.6 million reverted through the May revision process for the fiscal year 20202021 budget as the state worked to close the $54 billion budget deficit resulting from COVID. Per your recent question, anticipated revenue to the lead Acid battery cleanup Fund for the next three years is roughly $40 million annually with an annual baseline operations of $14 million, this can be a possible funding source for the cleanup of parkways and would allow the parkways cleanup to be done alongside the residential cleanup efforts without impacting other operations.

DTSC will continue to work alongside Governor Newsom, the Department of Finance, and you and your colleagues in the legislature to identify potential funding sources and to address the parkways cleanup. One last note on exide. The continued urgency around the cleanup is why DTSC and CalEPA requested that the exide residential and facility cleanups be listed on the National Priorities list, which would designate those areas as a Superfund site. We're working closely with USCPA to provide all necessary data for their assessment. We expect their decision to come in 2025. Thank you for your time today. I'll take any questions you may have.

Thank you. I got promoted. Thank you. Thank you, Mr. Chair. So I have questions related to know. Assembly Member Wendy Correo was invited to be part of this hearing, and she's currently in another hearing right now, and she asked me to bring up some questions. She's from Los Angeles, represents a lot of the area affected by, you know, I also care about this, but I'm asking these questions on her behalf.

It was brought to Assemblymember Wendy Carrillo's attention that while DTSC has been responsible in removing soil contaminated by the exide battery plant and other contaminated areas, that this contaminated soil was then taken out of state and dumped in other states with less restrictions, many of that soil dumped near Native American reservations. How can DTSC be the state's watchdog and then, in turn, contaminate other vulnerable communities in other states? And how are you taking responsibility and accountability for this?

That's a big question that the state needs to face as a whole. DTSC is not alone in transporting hazardous waste that's generated out of state. Typically, there is kind of a national network of how we manage hazardous waste. For instance, there aren't incentive incinerators in every state, and so there's an expectation that some waste will move around the country. That said, of course, we are concerned about impacts to other vulnerable communities, not just communities in California.

And to that end, I'll return back to my comments on the hazardous waste management report and the hazardous waste management plan. The objective of that plan is to take a holistic view of where waste is being generated, where it's being disposed of, and what are the incentives and disincentives for managing that waste within the state versus exporting to the state? There are economic considerations that go into where the state is disposed of specifically for exide.

I will say that one of the biggest concerns for us was the sense of urgency to keep this cleanup moving. And in order to do that, we wanted to have absolute certainty that there would be capacity to manage or to dispose of the waste on a day in, day out basis. Although on paper, there is capacity in the hazardous waste landfills in the state, those hazardous waste landfills have the ability to decline to accept waste.

We wanted the certainties, and so that was taken into consideration as we identified locations to dispose of the waste. But as I say, this is an ongoing conversation that needs to happen at a larger scale.

Well, I know my colleagues that represent the areas affected by exide have been very active and have urged or like the sense of urgency that you said. I know it's because of their work and advocacy and pressure that they have applied to your department, but I'm concerned now that this hazardous waste is now being transported and affecting now another vulnerable community. Even though it's not in our state, it's hard to imagine that we're now doing this to another vulnerable community and potentially harming them.

I think we really need to think about these things before they make the news or before the legislators are alerted. We don't want to do that as California, and we shouldn't be doing that. And I really hope that the state takes this seriously, especially with the exide. The hazardous waste from, you know, has made national news because of the harm it has done to our communities in Los Angeles. But I know none of us want them to harm another community.

And so how do those decisions get made of where? How are we selecting these locations without taking into consideration where they're located and how close to a vulnerable community they are, even though these locations are out of state? I know that we don't regulate them, but we are selecting where this waste is going to. Right. We're taking it to there. So how can we evaluate those locations and make those decisions on where or where not to take this waste?

Do you want to add something?

Sure. I just wanted to say I think, and thank you so much for supporting the department's effort in creating this statewide hazardous waste management plan. I think you raised some really important and critical policy issues. Nearly 50% of the waste, hazardous waste generated in California, some of which is classified as hazardous in California, but not classified as hazardous outside of California, is deposited out of state. And it's done so because of that historic review of national capacity versus state capacity.

So this focus that you've supported is going to enable us to raise these policy issues about how does the state dispose of hazardous waste. We share your concern about ensuring that we dispose of our hazardous waste in state and we manage it appropriately and responsibly. And the support for this effort will help identify where specifically waste is being deposited and help to make those policy decisions about managing it in state and even looking at in state capacity for disposal of all of its hazardous waste.

But are you going to have a set of criteria on how to decide, we're not going to take it to this location because it doesn't meet our own criteria as a state, even though another state may decide that they may not prioritize, I guess, those locations affecting vulnerable communities. But I think we should, and I know we can't do anything about where those locations are in those states, but we could make decisions. We're not going to take our hazardous waste there.

Absolutely. That's a great question. And we're looking forward to bringing the report, which is a compilation of all the data of where waste is being generated and disposed of now, and having the conversations with the newly appointed Board of Environmental Safety, whose charge it is to have these conversations about what do we include in the hazardous waste management plan, including those policies, decisions about where we deposit hazardous waste.

And deciding if we need to have a structure and a process to do exactly what you're saying, which is to assess facilities that aren't in the state and maybe have different criteria. We're also charged with. One of the other things that came through the reform is we'll be looking at hazardous waste classification and the broader picture to really understand how these decisions are being made, whether or not there's an opportunity to add more considerations into those decisions.

Okay. I think several of us will be looking forward and following up with you to make sure that that does happen. Thank you.

Certainly.

Yeah. Really good line of questioning by my colleague in a similar vein on brownfields more generally. If you could talk a little bit about how are you prioritizing which properties to remediate in that regard.

So brownfields in particular, a lot of times brownfields are voluntary cleanups, and so those come based on a flow basis of who is interested in remediating a facility in order to put that, or an area in order to put that land into better active use. And so it's all a question of what comes in, how that works. However, there are also orphan sites that don't have an orphan.

Yeah, and I wanted to bring that up.

And then we have this one-time funding for the Cleanup and Vulnerable communities initiative, for some brownfield's work, for some brownfield remediation. And so each of those we look at a slightly different lens as we do the prioritization. When we do our annual site remediation assessment for the site remediation account and the orphan sites that are funded through our Toxic Substances Control account, we look at truly the emergence of how emergent the potential exposure is.

We categorize sites in different tiers, and the top tier includes those sites for which EPA is the primary responsible oversight agency for the cleanup. And we have obligations to support the operations and maintenance once the cleanup is done. And then as we go through those different categories, we look at how likely or what's the risk associated with the releases, the known releases of chemicals for a given orvisite. We never have had enough money to take care of known releases of toxic chemicals.

And so, to be quite Frank, we're making some tough decisions based on site readiness potential for exposure, funding, just trying to optimize the funding across multiple dimensions in order to keep those cleanups, those orphan site cleanups moving. There are other ways to prioritize based on vulnerability, community vulnerability, as we've been having conversations internally about how to take those things into account more explicitly. But historically for the orphan sites, it's really about how immediate is the potential risk of exposure.

As I said in CVCI, we did take on some orphan sites and those were prioritized based on kind of shovel readiness and how quickly. Because the time frame for those expenditures was quite short. We really focused on the ones that were really ready to move.

What's the typical end use of those sites?

Largely commercial. For orphan sites, they were in commercial locations they tend to be in. And so that tends to be where those sites end up. Brownfields writ large. There's quite a range of housing, all sorts of things, open space.

Anything else? Director Williams, I just want to compliment you and thank you for, we sent a letter to you yesterday and I think you probably had a late night last night because you completely responded to it all today in your comments. So we really appreciate the prompt response there.

Well, thank you for the letter and we will follow up in writing.

And it's not me, it's the team. It's a great team.

Great.

And you have a hugely important responsibility to the people of California, and we recognize that. And thank you very much for your professionalism and dedication to trying to get this problem solved. We will now go on to issue item 45.

Thank you.

Appreciate it, everybody. I'm sorry we didn't have an LAO report on this, correct? Yeah, exactly.

The Administration decides who's going to begin and introduce yourself please.

Good morning, Chair Bennett and Members. Brandon Merritt with the Department of Finance. The Expanding Mobile Air Monitoring in Communities April 1 Spring Finance Letter proposes to provide four limited-term positions over four years at $750,000 annually by reverting and reallocating $3 million of Greenhouse Gas Reduction Fund from an appropriation approved in the 2022 Budget Act.

These positions would administer and support technical and community engagement deliverables for the duration of the mobile air monitoring contract, two years, plus two additional years for four years total. With that brief introduction, I will now turn it over to my colleagues at CARB for further discussion.

Good morning. Thank you, Chair Bennett and Members. My name is Walter Ham. I'm Chief of the Monitoring and Laboratory Division at CARB. I'm joined today by Mike Miguel, who's our Assistant Division Chief. I'm going to discuss a request to revert 3 million from a 2022/2023 appropriation and use the reverted funds to fund four-year limited-term appropriation. CARB is requesting to revert $3 million from the Greenhouse Gas Reduction Fund to fund these four limited-term positions.

This represents a four-year limited-term appropriation of $750,000 per year to support the statewide mobile air monitoring initiative. The four limited-term positions will provide technical air monitoring and community engagement services to support the contracted deployment of mobile air monitoring in communities throughout the state. Two associate governmental program analysts will oversee contract administration, support community engagement, and coordinate activities with local air districts and community-based organizations.

The two staff air pollution specialists will focus on technical air monitoring components of this contract that require more in-depth knowledge of mobile air monitoring methods, data management, data analysis, and visualization. This proposal will provide limited-term staff resources needed to oversee and manage this initiative, which did not receive administrative funds in the original proposal. This mobile air monitoring program supports CARB's larger AB 617 goals by providing a snapshot of criteria, toxic air contaminants, and greenhouse gas concentrations in communities across the state.

It also supports CARB's larger goal of expanding benefits to communities that have not yet been selected for AB 617, including 65 communities that have been consistently nominated. Approving this proposal will ensure CARB has the necessary resources to oversee the implementation of the program and ensure community stakeholder input is included throughout the duration of the contract period. Thank you, and I'd be happy to answer any questions at the appropriate time.

I'm sorry, I was talking there. Did you just finish? LAO.

Okay, great. Thank you. So we find this request itself to be mostly reasonable. It's not asking for new resources. The Legislature could consider requiring some prioritization of certain communities as the existing program. That would all be determined by the contractor. And although you did approve the 30 million to support this program in an appropriation last year, given the budget condition, you may want to consider reverting that funding back to GGRF, as it doesn't appear as if the Administration has expended any of that 30 million yet.

This would also be a new program, and we do have an existing program that addresses community air protection, the AB 617 program. Should you be interested in reverting the 30 million that funded this new mobile air monitoring program back to GGRF, you could use that 30 million for higher priority activities or backfill the reduction proposed to the AB 617 program, which is proposed for a 50 million reduction.

And resources for that program have been stretched more thinly in recent years as more communities have been added. So we just think this could be an option worth considering if you feel that this program is no longer a high priority.

Certainly appreciate LAO's analysis and options here. I have questions here, but, Members, I'll let you. All right, go ahead. I think I'll go ahead and start that. Things that are important for us and budget cut sub three staff to know, how will communities be selected for monitoring and technical assistance?

Yes, that's a good question. Thank you for that. So, as a part of our contract, we are looking to conduct some stakeholder engagement with a number of CBOs, community-based organizations, that we are already working with as well as those we are not working with under the AB 617 program. As we mentioned, there have been 65 communities that have been nominated for participation in 617 but have not yet been selected.

So certainly within the confines of the scope of work in this contract, we are looking to highlight where activities are occurring in terms of where, is there existing monitoring under an AB 617 style program, a district-led program or a federal program, as well as what other needs have we identified through the AB 617 process in terms of communities that have been nominated but not selected?

So what we would like to do is to look at what monitoring is already occurring in different communities to see what gaps exist, as well as what communities have expressed the need for additional monitoring and use that to bound, sort of, and prioritize where we would work with the contractor to conduct the monitoring.

What's the technical assistance that's going to be provided to help the community members sort of interpret the other monitoring programs like AB 617?

Right. So we do provide technical assistance under AB 617, as well as other what we would call special purpose monitoring style projects like the study of a neighborhood air and petroleum sources. So for those projects, we do meet with community steering committees that participate in AB 617 as well as community-based organizations where we will often discuss air monitoring technologies, air monitoring methods and results, and try to provide context for what that data mean.

So, for example, we'll often work with our stakeholders to describe here are the concentrations of different pollutants we're seeing in your community. How does this relate to the national ambient air quality standard? How does this relate to relevant health metrics, perhaps that, like AIHA would establish? And then, how do these sort of trends compare know across time and space?

So we really try to conduct workshops and sort of do some cross training with community-based organizations and other stakeholders to provide context for what the data mean.

And so, under this proposal, what we are looking to do is, again, bring on four staff who will really be working with these community-based organizations to understand and clarify what is it in terms of the data deliverables that we would like to get out of this mobile monitoring initiative and ensure that their input is included throughout the whole duration of the contract.

In this case, the communities would be providing input into how the monitoring is conducted, how the deliverables are established, and what data products, for example, they would like to see come out of this.

So you think the benefit of this, even though it's a one-time monitoring program, the benefit of this is getting that community?

There are multiple benefits. So we really view this program as complementary to, say, what we would be doing in sort of AB 617, where we're really doing a deep dive in a specific community. So, as you know, we have about 19 communities that participate in AB 617, a subset of which have community air monitoring plans. And in those communities, which local air districts are conducting very detailed monitoring to understand sort of different issues that are specific to the conditions of that community.

This takes a slightly different approach and complementary approach in that it's more broad-based. So what we're able to do with this is evaluate the conditions and concentrations of criteria, air pollutants, toxic air contaminants, and greenhouse gases across the state, across multiple communities, using a consistent method. So that allows us to look at differences and evaluate maybe which communities might need a little bit more help in certain areas.

Maybe there's more monitoring that might be required or other follow up actions. They're very complementary approaches that work really well together. So one is you would evaluate broadly, and then if you identify there's a need for more specific monitoring, then you could perhaps use sort of an AB 617 model or snaps model and use this information to inform those other programs.

I have to speak honestly. I'm still having trouble getting my head around this versus 617 and the advantages. I certainly respect the people in the trenches and doing this day in and day out. But just for me, digesting all the stuff that we have there, this is the one that I need to understand better as it moves forward. Members, anybody else?

No, and I appreciate that. I was going to ask a similar question, but kind of stepping back and looking at bigger picture for a sec. In your opinion, does the state currently have enough air monitoring systems to accurately measure emissions for the state? If not, how much more do we need and how much would it likely cost?

Thank you for the question. So it might be helpful to frame this by sort of exploring the portfolio of monitoring tools and the data sets that we have available to us. So we at CARB and at other agencies conduct regulatory air monitoring criteria air pollutants at a number of stationary sites throughout the state. I think we have. I might ask, how many sites do we have now?

Over 200.

So over 200 stationary sites across the state. A subset of those also measured toxic air contaminants. We have about 14 toxic air contaminant sites where we measure tax. We also have about, I want to say it's about 10 sites that also measure greenhouse gases. So these sites are really often designed to look at regional long-term trends and assess attainment with national ambient air quality standards. Another technology that's come out are air sensors.

So, as many community-based organizations have learned, air sensors have made monitoring more accessible. And so these are usually consumer-level devices that cost a few hundred dollars and has allowed more individuals to participate in monitoring. So these sensors, of course, are primarily focused on criteria air pollutants and we have thousands of them now in California. So, in terms of sensor coverage, we have quite a few in California. On the other end of the spectrum, we also have satellite remote sensing.

We have a couple of satellites that are already in orbit and a few that are coming online. Most of those satellites measure what we would call criteria air pollutants, like PM and ozone and that sort of thing. So we do have this geospatial understanding of those types of pollutants, and then soon, hopefully, we'll have a methane satellite, which will also cover greenhouse gases. What's missing from both those sets are toxics. And so what mobile monitoring can provide is that many vendors are measuring toxic air contaminants with their mobile platforms.

Are measuring, what did you say?

Toxic air contaminants in the mobile platform. So where we feel that this mobile air monitoring initiative, the gap that this fills, is really looking at intra-community toxics because that is the piece that is missing from sort of the other two types of tools in our portfolio.

Thanks. That's really helpful. And perhaps we can defer a discussion of likely costs, but that's always out there as well. Going to the issue of AB 617. So essentially what you're proposing here is kind of a one-time allocation toward air monitoring, technical aspects, community involvement and the like. Why is that more valuable than allocating those funds to AB 617 when at the same time the Administration is proposing a $50 million cut to AB 617?

Brandon Merritt from the Department of Finance. The focus of this proposal is on staffing. As you acknowledged, the air monitoring appropriation that was approved in the 2022 Budget Act. The Administration does believe the 250 million in net remaining AB 617 after the backfill from the GGRF and the proposed 22-23 Budget Act is sufficient for the program needs for AB 617.

Sure, it might help to sort of provide the context for how the two programs differ and sort of what efficiencies we gain. So going back to the breadth-versus-depth. So again, one-time snapshot looks at greenhouse gas, toxic air contaminant, and criteria pollutant concentrations across multiple communities using a consistent method. It is a one-time snapshot, but it will provide a view that we don't have right now in terms of looking at the tax, as I mentioned earlier.

So looking at the toxic air contaminants in the intra-community space. AB 617 is fundamentally different in that that is a district-led air monitoring program with CARB oversight and those monitoring programs are tailored specifically to the communities that the monitoring is occurring. So each community has its own specific community emissions inventory. It has its own sort of known issues that community stakeholders are concerned about.

For example, we have some communities under 617 that are in refineries and then some are in rural communities and they're more concerned about pesticides. So those monitoring programs are very tailor-made and specific to those specific needs. Whereas with the mobile air monitoring, it provides more of a broad assessment across the state and where that really helps is to identify any sort of issues that we're not already aware of or sources that aren't reflected in our inventories that we may not know about.

So it helps fill, again, the sort of the toxic air contaminant gap in looking at communities across the state. And also, too, I'll just reiterate that it does support CARB's larger goal of extending sort of the AB 617 and community air monitoring benefits to communities that aren't already a part of AB 617.

Question I have. We still have 65 communities that want to be part of 617 and there isn't funding for them. So how do we square that with saying we do have sufficient funding if we have 65 communities that still want to be part of the program?

I'm sorry, I didn't catch the last part where you said, how do we square that with the?

With cutting. Your statement was we can go ahead and cut 50 million out of 617 because the funds we have are sufficient. If the funds we have are sufficient, how is it that we still have 65 communities that want to be in the program that aren't in the program? You've got somebody there who wants to help you.

Thank you, Mr. Chair, for the question. Christian Beltran with the Department of Finance. So I think what I'd like to clarify is that the point that the Administration was trying to make was that the funding that we are discussing today for today's item is the reversion of the $3 million. The $30 million has already been appropriated. So what we're trying to avoid is rehashing the $30 million appropriation in the discussion.

In terms of the $250 million and how that will be utilized in the coming budget year, it is the Administration's viewpoint that the $250 million will be available and the 65 communities that you're referencing will be available to, of course, compete for those funding. So the 65 communities haven't been funded with the existing resources that have been appropriated thus far. However, they do have the opportunity to also apply for this upcoming potential budget year of appropriations.

What's the average cost of these 65 communities? How much of the remaining 250 plus that you have?

Thank you. That's a good question. Unfortunately, I don't oversee the Office of Community Air Protection, so we would have to go back to our colleagues at CARB to get you that answer.

Could you do that for us?

We can.

Great. Thanks. And then, do DISC and CalRecycle, do they have toxic data?

Well, I can't say for sure whether or not they have toxic data as related to air quality. From earlier discussions, it sounds like they probably have sort of multimedia understanding of toxics, but I'm not aware or I'm not sure if I'm the right person to answer that, frankly, whether or not they have sort of air toxics data in their program.

I respect your professional sort of request and judgment about wanting to get this $30 million and how it can fill a gap for you. I would encourage you to try to be more clear with us about the benefits of that, just for my own sake, and I think to the extent of others, just to make sure we understand the benefits of that as it goes forward. Thank you very much.

Understood. Thank you.

Anything else? That takes care of that. Before we go to public comment, I'm going to make a comment. I hope the Administration's Department of Finance people can hear this and that is in this issue where we have 24 staff positions to approve as temporary. And I know many organizations face this. The State of California does.

If you make a position temporary, the argument is, well, you can't get good candidates to apply, but if you have a temporary revenue source and you make that a permanent funding position, you also run into a deficit down the road and I want to make sure that we have the proper balance there.

So I think that given the variability of our revenue sources, we ought to think hard and consider a policy where we say if you have a temporary revenue source, you need to make it a temporary position, unless it is an extreme position where you just can't recruit. But we adopted that policy at county level and everybody was concerned about that.

But it ended up working out pretty well because those people then came in, they established themselves, they had a good reputation, and as other positions opened, they moved to permanent positions. And so, given the fiscal challenges we have in the state, I just hope that we would start to identify temporary funding sources with temporary positions as much as we possibly can. Thank you very much. We'll now go to public comment in the room, and you have one minute for your public comment. Do you have any questions on non-discussion items? Yeah, hold on one second.

Thank you. I just wanted to make a comment on the funding allocated to AB 2238 which is the extreme heat statewide ranking system. I just want to thank you for investments being directed towards the implementation of this system that was created by AB 2238. This $2 million investment is important to set up a statewide heat notification system. And I just want to thank you and hope that we're also able to restore cuts, of course, to extreme heat and community resilience program.

Because while we're investing in this notification system, we also have to invest in mitigation efforts too. But thank you.

Thank you very much. All right, we're here for public testimony.

Good morning, Chair and Members. Kayla Robinson, on behalf of RethinkWaste, Californians Against Waste, CR&R Environmental Services, and California Compost Coalition all in strong support of maintaining the funding for SB 1383, the state's organic waste recycling targets. The state is in desperate need of additional capacity for organic waste recycling and local assistance, and without this funding, we risk losing some projects already in the development pipeline.

And I'd also like to echo your comments, Chair, as well as Director Wagner's, about maintaining the funding for the zero waste plan. So, thank you so much.

Thank you.

Good afternoon, Mr. Chair and Members. My name is Genesis Tang. On behalf of the North.

Could you bring the microphone down a little bit, please?

On behalf of the North American Insulation Manufacturers Association. They are comprised of manufacturers producing fiberglass and mineral wool insulation. NAIMA is supportive of beverage container recycling given that their fiberglass insulation uses high volumes of recycled glass. Beverage containers and fiberglass insulation are the two major users of recycled glass, and fiberglass insulation accounts for 30% of the recycled glass market in California.

Fiberglass insulation is made at three California facilities to supply the state's buildings, and although the law requires at least 30% recycled glass and fiberglass, manufacturers actually use 50% or more due to its high energy efficiency. Unfortunately, some of the bill's prohibitions are cutting out a whole market for fiberglass insulation and recyclers rely on processing payments to offset some of the costs of sorting out recycled glass. Quality incentive payments was available to recycling processors regardless of the end use.

However, late edits to SB 1013 narrow these processing payments to beverage containers use only. With these edits, the state has unintentionally cut the valuable insulation market out of the QIP program and will inadvertently penalize recyclers who supply insulation manufacturers. NAIMA seeks to reinstate the processing payment for the use of recycled glass into fiberglass insulation that will offer a long lifecycle benefits, lower the embodied carbon of fiberglass insulation, keep insulation prices affordable, and prevent a 10 to 15% tax, and keep manufacturers and jobs in the state. Thank you.

Thank you very much for your testimony. Anybody else in the room? We'll now start with the phone lines. Operator, if you will let us know, and the number is 877-692-8957. The access code is 131-5447.

And if we do have anybody online at this time that would like to make a comment, please press one zero at this time. Again, it's one zero. And currently no comments from the phone lines.

Thank you very much. Thank you everybody for your attendance and this meeting is adjourned.

2 hours.

Yeah. Much better.

New record.