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

Senate Budget Subcommitee number two on resources, environmental protection, energy will come to order. Good morning. The Senate continues to welcome public in person, as well as via the teleconference service for individuals wishing for public comment. Today's participant number is 877-226-8163 and the access code is 694893. We are holding our Committee hearings in the o Street building, and we will first start by establishing a quorum consultant. Please call the roll.

[Roll Call]

Quorum has been established. We will start our order of business here with a discussion with the Department of Toxic Substance Control, and I'd like to invite the Deputy Director up. Excellent. Thank you. We will start with the Department overview and go ahead when you're ready.

Great. Thank you. Good morning, chair and Members. My name is Francesca Negri. I serve as the Chief Deputy Director for the Department of Toxic Substances Control. And with me here today is Brian Brown, DTSC's chief fiscal officer. It's a pleasure to have this opportunity to share a brief update date with you on DTSC, our implementation of 2021 reform measures, including the Cleanup and Vulnerable Communities initiative.

In response to some questions that we received from your staff last evening, I'll also include an update on the exide residential cleanup to address a pending community soil study discussed by the LA Times. And I beg your patience if I go just a little bit over time so that I can answer your questions. Since the passage of DTSC reforms in 2021, DTSC has been hard at work representing or implementing their provisions.

We've worked collaboratively with the New Board of Environmental Safety to ensure it has resources necessary to meet its mission, including hiring, technology, communications, and access to legal expertise. For the past year, a team of DTSC engineers and scientists have been dedicated to the research and outreach necessary to develop a hazardous waste management plan, which is due by 2025.

The first stage of that plan is the hazardous waste management report, and this will provide data and information about hazardous waste generation, how we manage it, how we treat it, how we dispose of it, in and out of State of California. And it will set the stage for the policy discussions that the board will have to inform. Development of the final plan. The report will be the release this spring. In the meantime, the department's current approach to waste management has also improved.

Since the passage of 158, we've made significant progress on closing and preventing backlogs for continued permits over the last two years. During that time, we issued 33 final permit decisions, and now we're focused on the last, older and more complicated permit decisions. There are currently seven of these remaining. They've been continued for longer than five years, and we're planning on issuing draft decisions for them, all of them, by the end of the year.

Additional inspection and legal resources have allowed us to focus our enforcement of 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 our work in these communities because they are most in need of our attention and resources. The Cleanup and Vulnerable communities initiative, which was funded as part of reform, includes 500 million over three years to Fund DTSC's discovery, investigation, and cleanup of contaminated properties in vulnerable communities.

It's considered one of the boldest environmental justice initiatives in California history. Work is prioritized in communities with high cumulative environmental burdens and proximity to sensitive receptors such as schools and elder care facilities. We do this by identifying communities that have a score higher than 75% in CalEnviro Screen screen, as well as areas with high amounts of pollution and rural areas. Additionally, DTSC is intentional in how it coordinates with tribes on this program.

Because the CalEnviroScreen virus screen tool does not accurately reflect data with tribal communities, it often excludes them from the identification process. The initiative includes a grant program to Fund response action at brownfield sites and a work, development and training program to promote public health, community engagement, and equity while supporting local economies. With this funding, we've accelerated cleanup at 21 orphan sites, issued over 75 million in grant funding, and identified 112 dry cleaning sites in vulnerable communities that will undergo environmental site assessments.

Finally, I'd like to provide you with an update on the cleanup of residential properties surrounding the former excide battery recycling facility in East Los Angeles. This project has gotten a lot of media attention lately, and so I want to be sure I address questions that you've posed. For context, I'd like to clarify that the LA Times investigation they wrote about last month is based on a study being conducted by USC and East Yard communities for environmental justice.

DTSC appreciates community led science and wants to work collaboratively to protect the surrounding community. Until the full study is published, it's impossible for us to verify the data, methods and study details, such as sampling locations necessary to fully validate the results and replicate the study. Since we don't have the data, DTSC is working closely with your offices and other stakeholders to identify an alternative approach to determining whether or not there are unexpected high levels of contamination left on properties that have been remediated.

What has been made abundantly clear is that we need to improve the quality of the information we provide about how properties are cleaned, how residents and homeowners can engage with us on the project, and how we can better incorporate community feedback into our decisions. We're committed to that work, and we've held two public meetings since the LA Times story came out.

We've done a lot of listening and we've made our Executive team and project experts available to clarify information in the letters of completion, answer questions about contracting and labor issues. We intend to continue to be in the community and to work with you and your teams and local electeds and community Members to determine the best methods of engaging and communicating with residents whose homes are being cleaned. We've also suspended our recent contract bid that was scheduled to close on March 10.

From now through April 14, we will evaluate options to refine contractor selection and contract language based on input received in upcoming community workshops and roundtables, with the goal of releasing a new solicitation in early May with that input. As of March 10, over 4500 properties have been completed and this includes 77 schools, parks and childcare facilities.

Our actions to date have been guided by the publicly vetted and approved removal action or cleanup plan, which, consistent with state and federal law and practice mandates, quickly addressing the most urgent public health impacts and immediate harm resulting from exposure to lead contamination. Confirmation samples are collected at each property, but if conditions like utility lines or trees or sub structures or other barriers limit our ability to excavate to desired depths, we conduct additional sampling.

Compliance with the cleanup plan is certified by DTSC staff present in the field. Following excavation, all properties are backfilled with clean, certified soil and detail of the work is documented in the letter of completion that is shared with property owners. Residents are notified of cleanup, work completion and any barriers to soil removal through one on one discussions with DTSC staff.

We are currently working to make those letters publicly available through our website, which will be launched with a more user friendly design and content within the next few weeks. The 2018 Parkways Authorization totaled 6.5 million and DTSC used about 3 million of that to successfully complete the first phase, which was to investigate all of the roughly 8000 parcels.

In spring of 2020, the state was facing a very large multiyear budget deficit of 54 billion because of COVID. The decision to revert the remaining funds was made as part of the May revision process for the 2020, 2021 budget. However, work has been ongoing on the parkways since completion of the sampling in 2020. The data has been analyzed and a health risk assessment was developed with input from impacted communities.

The final draft health risk assessment was completed in 2022, with recommended cleanup of the park ways to 80 parts per million. This assessment helped us to determine that cleanup would cost approximately $70 million, an amount far exceeding the remaining 3 million available in the initial appropriation. We're working alongside the governor's office and with you, your colleagues, and your staff to identify potential funding solutions to address the cost of parkways cleanup.

DTSC and Cal EPA last year requested that the Exside residential and facility cleanups be listed on the National Priorities list, which would designate them as a Superfund site. We are working closely with US EPA to provide all data necessary for their assessment, and we expect a decision to be made by 2025. Finally, I'd like to address concerns about contamination outside of the preliminary investigation area, also known as the PIA, which is a 1.7 miles radius surrounding the former facility.

DTSC is concerned about lead contamination in communities all over California. We often find high levels of contamination in highly industrialized communities due to multiple and largely unattributable sources of lead from gasoline, lead based paint, and other sources. These contaminants have been prevalent for well over a century now, and the work needed to deal with that legacy is monumental. For the exide project in particular, the 1.7 miles radius was used as a preliminary investigation area to attribute lead to exide's activities.

And DTSC determined that area by looking at transects over about a four mile radius surrounding E xide using dominant wind patterns and lead disbursement models and ground measurements to come up with a 1.3 to 1.7 miles radius. To begin the work, we chose the 1.7 as the most conservative estimate.

After the current funding is exhausted over 2000 properties within the 1.7 miles PIA will still need to be cleaned up, and US EPA will evaluate the appropriateness of the 1.7 miles and assess the need to extend it during the MPL process. Thank you for your time today. I'll hand it over to Brian to present the BCP on today's agenda, and I'll be available for any questions that you have.

Okay, we're going to do a little discussion here first just on the overview, and then before we get to issue 28 questions. Senator? Yeah, start with Senator Dahle.

So you're talking about the Exide. I need a little help here on the budgeting side of it because we passed, I don't remember the number of the Bill, but it was Christina Garcia and a tax on batteries that went to that program. And what was the amount of that resource that was available through that tax.

Go ahead.

Good morning, Senator Dahle. Brian Brown, chief financial officer for DTSC. So you're right, there was an increase in the lead acid battery tax, or two taxes, one on the purchase and one on the manufacturer. Those were increased from $1 to $2 in the most recent Bill, and that went into effect in 2022. We currently project that that revenue will come in in about $40 million annually.

So did you take that equation into your budgeting process? Because that was really identified to do the cleanup at Exside. On top of that, I think we put in upfront moneys that are supposed to be at some point recouped from that fee on the battery. So we front loaded it and I can't remember the amount, but it was significant amount of money to get the cleanup started.

So we are certainly taking a look at the lead acid battery Fund as a potential option for pursuing monies for cleanup of parkways. And we're also thinking about potential federal funding sources.

So when you say parkways, you're not talking about the xide cleanup, you're talking about just where are the parkways at?

Okay, so the parkways are land. This is land that would be between maybe a resident and the street, or it could be in the middle of the street. These are outside of the residential areas, but adjacent to residential areas.

In the Exside footprint?

In the Exside footprint.

Okay. Are you asking then for General Fund? So the General Fund, are you asking for General Fund to move forward, or are you going to use the identified fees that the Legislature passed to Fund the project?

We're not proposing any General Fund use for cleanup of these parkways. We are working with our colleagues at finance and with your staff to identify appropriate funding sources for that.

Isn't the appropriate funding the funding that the Legislature, first up front, put up to get started and then second was the fee on the lead acid batteries.

So the Legislature put up funding initially to clean up residential properties.

And we focused on residential properties because the goal is to remove the pathway of exposure to the most sensitive receptors. And people spend most of their time in their homes and on their properties. And so that was the goal initially, is to address that highest potential risk. So parkways weren't included in the original appropriation. The parkways hadn't been evaluated at that point. We subsequently received some funding to begin that evaluation.

Right.

We finalized that evaluation in 2022, estimated the cost of cleaning up those parkways, and now are working with our partners at finance to identify potential funding sources. But at this point, we are not proposing a General Fund request for that.

Okay. I just want to make sure on the funding source because what's the risk for the middle of the street? Typically, I know most people aren't playing or working or walking in the middle of the street. So what's the risk to the community with your research that you did?

Well, the highest risk to the community is obviously the residential homes. Yeah, we did do a health risk assessment with a lot of community input, which gathers information about how community uses and transverses those parkways. And that's why the 80 parts per million was determined to be an appropriate level of cleanup. Remember, there's no real safe lead exposure. There's no real safe level of lead exposure. And so the 80 parts per million was determined whether or not it is at the highest risk.

Given that there are properties still needed to be cleaned up, that will always remain our focus. But we want to make sure that we leave this community in a safe status. And so we're looking to remediate all lead that could have been caused by this facility.

And then I have another follow up on that. So are the funds coming in from the corporations or companies that actually caused the damage? That was one of the big debates that we had. Is that why is the public on the hook? For in my mind was very horrible public policy at the local level. Who allowed these contaminators to continue to contaminate? And they were getting permits and it was really shady stuff going on. And how much accountability have they been able to put forth?

I know there were some that were out of business and gone, and it changed hands many times and the liability left some of it, but there still was an operating smelt there, I believe, when we were discussing how we were going to take care of the issue.

Right. So Exide did file for bankruptcy and the federal court did allow them to discharge their obligations. Nevertheless, we are pursuing all potential responsible parties for the cost and we'll continue to legally pursue all potential responsibilities for the cost of this cleanup.

And has there been any available funds that have been out of that process?

We have not yet secured any settlement moneys out of that process.

Okay. That's really sad, because at the end of the day, the local authorities that governed, that allowed them to take advantage of politics, quite frankly, and we're left holding the community. Number one, is getting damaged. And number two, they claim bankruptcy and everybody else has to pick up the tab. So, still frustrated about that. I want to move on before we go to discussion, item 28. I wanted to talk a little bit about the Office of Emergency Services readiness for the act, terrorism involving toxic chemicals.

Additionally, the program mitigates off highway hazardous waste bills in response to hazardous waste contamination resulting from illegal drug. I wanted to, that's where I really wanted to focus is on illegal drug laboratories. And I want to talk about DTSC's role in illegal. So the big challenge we have in the north state, and it's actually in the southern part of the state as well, is with Marijuana grows that are. So you regulate.

This is a frustration as a Legislator, is that you have coupas and you have all the abilities to put fees and taxes on people who actually are abiding by the law. So if you're selling roundup in California, you tax them for, and then that money goes back to the program. It helps pay for the regulation.

In an illegal situation, there is no base for the people to go out and do the work, but we have a huge liability or risk to local agencies and people that are living in these areas, and there's no enforcement ability because they're illegal. So in my case, I'm a farmer, and we use lots of chemicals and we use fertilizers and we use water. And I'm regulated by Department of AG. I'm regulated by DTSC. I'm regulated with all those products.

But upstream from me, there's a marijuana grower who is just using all kinds of chemicals that aren't labeled in California, and they're just doing just, they're bringing them in from wherever and they're polluting the source, but there's no enforcement. So you have the local law enforcement, you have fish and game. And I've brought this up to the other committees that we hear that are part of that scenario. But DTSC is the arm that has the enforcement to do something as well.

So what's your role in the ability to go after illegal people who are not abiding by the laws? And that's exactly kind of the same scenario we have with excite, is basically they weren't complying with our laws, and now we're stuck holding the bag. You go after the people that have a permit, and if they don't abide by your rules, you take their permit or you find them. So the good guy who sometimes mistakenly makes a mistake and ends up getting fined, you penalize him.

But there is no penalty for somebody who is illegal. And we don't put anybody in jail anymore. We don't do anything. And it's destroying our aquifers and our streams and our environment and our wildlife. And there's no teeth in this program to be able to go after those illegal people. So what's the incentive to get a permit in the first place if there's no way to actually enforce something?

Well, I really appreciate that question. It's very timely and I agree and share your concerns about illegal activity and the impact on our environment. SB 158 did provide DTSC with additional investigative resources, and that's to hire. We have sworm peace officers and DTSC. We're the only board, Department and office under Cal EPA that has swarm peace officers. And so with that, we are filling the additional positions you provided us with that funding.

Some of those positions will help with some of our border control work where some of the pesticide is coming in. We've had insufficient resources to deal with that problem. We work collaboratively with Homeland Security and border control to provide training on how to best identify the mechanisms that are being used to bring illegal pesticide into the State of California.

And that also is going to give us additional resources to partner with federal, state and local law enforcement to do more inspections and to bring these situations to account and to be held accountable. So I think the additional resources is a good start. I think the whole problem needs to be taken a look at more holistically because I don't think, to your point, there's a sufficient amount of resources to the problem.

So have you hired up those peace officers?

We haven't filled all of those positions yet. Hiring of peace officers is a very lengthy process. It takes about a year to bring them on. And so we're in the middle of that process. Recruiting and filling those positions now.

Well, I have the ability to be here for one more year if the Senate allows me to stay on this Committee. And next year I want to report on how many actually enforcement. What was the Bill?

158, which is fiscal and governance reform.

But when did it go into law?

2021.

So it's been now two years.

Enforcement actions have you taken those positions were established in 2022 with the implementation of the fee structure to support them. And so we're in the middle of recruiting to backfill those positions or to fill those positions.

How many of those positions?

I don't have the stats on how many we fill. But again, it's about a year long process to fill peace officer positions. So it's going to take a bit of time.

And then do you see the ability to be able to do that, not just the border work, but the work that's in the state that is for these illegal operations that are hugely impacting our environment. Are you going to be focused on the places where we have waterways and we have violations of toxic materials?

Many of these resources were designated specifically for investigations in vulnerable communities, but I would expect our ability to handle more inspections in the type of areas that you're referring to to increase with the additional resources. How much it can increase, it's still up to seeing what the workload is, and it may be that we'll have to ask for additional resources to manage that effectively, but we manage that in partnership with other state and local and federal law enforcement.

We don't independently go out on our own because it's the combination of different authorities that makes it so that we can pursue action. And we typically hand over our evidence, or we work in collaboration with those who take these cases to court and prosecute.

But you actually don't go out and enforce. I'll just give you a scenario. So we have illegal grows. Siskyou county is one of the, by the way, we have salmon spawning in these streams, all right? And we have illegal people taking bulldozers and taking the water, number one, and then using all kinds of illegal herbicides and pesticides to manage their grows. So the local sheriff is very limited in the same scenario with his law enforcement.

We've had the AG's office actually out and flew them over the problems we have. And I've pushed on the resources agency to come up with what's the plan here? Because at the end of the day, and as a producer who's somebody who has the ability to be fined and taken to court, which they do, they do that all the time to the guy that owns the gas station. They go after him full force finding.

And here, a quarter of a mile away, is an illegal grow doing more damage than the guy that's actually trying to get the job done. And trust me, my constituents and my producers are frustrated. At the same time, there's people out there that are armed and they're protecting their grow.

And so law enforcement goes after the guy, or you show up to the guy that's been in a wrench in the gas station or fixing somebody's car, and there's no ability to go after the guy that's sitting out there with an AK 47 trying to protect his grow, and he's polluting and damaging the environment a lot more than any other people are. So somewhere there has to be.

When you talk about the coordination, and I've hit all the agencies, they've been in front of me, I've asked about it every time. And we still to this day don't get very much. Thank God the price of Marijuana is going down because other states are now legalizing it and it's harder to make a living at it, which is helpful.

But at the end of the day, there's still tens of thousands of illegal grows and manufacturing not only of Marijuana, but Meth Labs, which you talk about in here. But we have to coordinate. So I'm encouraging you to work with your colleagues and the other agencies that have a part to play in this.

Thank you for that. And I'm very interested in having follow up discussions with you and your staff on how we can do a better job.

I'm going to tell you right now, I will be asking next year because that'll be the second year. I want to know how many enforcements you've actually done out on the ground because I haven't seen any yet. I haven't seen anybody except for our local law enforcement who is strapped. They have the same problem, trying to find deputies to get it done. And Fish and Game is in the same. Our wardens who go out and do the initial work with our counties, they're strapped as well.

And it's not fair. It's not right. It's not fair. And we punish the people who try to do what's right, and we don't punish the people who are definitely doing it wrong and don't care. And it's incentive to not get a permit at the end of the day because if you happen to get caught, okay, nothing's going to happen to you. And there's no ability. And then they just leave like Exide?

They just file bankruptcy or leave or go back to the country that they came from, that they're not even citizens. A lot of these folks. Thank you.

Thank you. I appreciate your comments.

Thank you. Back to Exide. And I appreciate your question. Senator Dahle, some of this happened, obviously, before I was to you mentioned community outreach. I have to tell you that some of my colleagues have been unhappy with the community outreach that's been done by the agency. In particular. There's a workshop, I think it's last week, where very few community Members showed up and belief was that outreach was inadequate. So how is DTSC improving outreach for the next workshop?

So we are working with facilitators, we're working with community Members, we are working with community organizations to identify better ways to engage community. And that's to be in community more frequently, to be there in ways that are more accessible to them and to learn from past experiences. And every time we're out, we should be learning how to do it better. And so we have some different approaches that we're in the planning stages now about how we talk about specific topics, how we gather information.

And it's all going to be part of an iterative process or a learning process where we get better and better as we sit and listen to how community needs to receive information and how we can engage in ways that are convenient for them to attend.

Okay, well, thank mean I'll be watching and my colleagues will be watching to make sure the community really does feel properly engaged in that process. Getting back to Senator Dahle's question, why does it take a year to hire? Is it lack of applicants or are there applicants and it just takes a year?

Well, it is actually pretty difficult to recruit for classification across all state agencies. But also it's just the process of getting through the training and the background checks and all of that that goes into hiring.

Training would happen after they're hired.

Right. But it's part of the process of looking, doing the background checks and everything that goes into that takes quite a bit of time.

Yeah, it just feels like it shouldn't take that much time. And it sounds like you're saying this is a problem in other maybe standard for some of our state agents.

And we are certainly looking at ways to streamline it as much as we can. And we're conducting recruitment fairs and outreach to backfill to get these positions filled as quickly as possible. We just know that our sister agencies struggle with that as well.

Recruitment is one thing. I understand, and law enforcement agencies across the state are struggling with recruitment runs. And if we have an applicant, I mean, background checks are done in the private sector in a couple of days. Right. So maybe that's something to follow up across agencies and look at how we can do that hiring faster.

Yeah. Okay, let's move on to issue 28. Mr. Brown, would you like to present. Yeah.

Absolutely.

Again, good morning. Brian Brown, chief financial officer for DTSC. Yeah. Issue number 28 on your agenda is staff support for expedited cleanup of National Priorities list sites. We are requesting 1.4 million on an ongoing basis from the Toxic Substances Control account to support six new positions in our site mitigation and restoration program. I do want to note that we will be seeking federal reimbursement for these costs through the Multisite cooperative Agreement, or MiSCA grant program.

The purpose of these positions is to work with US EPA region nine, our partners there, to expedite the projects on the National Priorities list, or NPL or Superfund site. We work closely with US EPA on the assessment of sites, remedy selection and remedy design phases for projects on the NPL list. US EPA is accelerating the pace at which they are hiring staff and moving NPL projects to the construction phase because of significant new funding available from the Federal Government.

So we want to ask for these positions in order for us to be able to keep pace with them and make sure that we can keep those projects on pace and completed on the time frame that USDPA has identified. In particular, we want to focus on eight priority projects identified by US EPA over the next couple of years with the intention of getting them shovel ready by 2025, which will make them eligible for bipartisan infrastructure law funding that will benefit the state.

And I'll talk more about that in just a moment. Ultimately, the approval of this BCP will have three major benefits for the state. The first, and most importantly, is it's going to allow the state and us EPA to accelerate the cleanup of some of the most contaminated sites in California. These are sites that contain arsenic, lead, mercury and other hazardous chemicals that increase the risk of cancer, reproductive problems and other illnesses.

So, by accelerating these projects to the construction phase, we'll be able to increase the protection of local communities and the environment sooner than would otherwise occur. There are also significant near term fiscal benefits to this proposal. Normally, states are required to provide a 10% match on the construction costs for NPL projects cost to the state that can be millions or even tens of $1.0 million on these very large, complex projects.

However, the bipartisan infrastructure law provided significant additional funding to benefit states, including the waiver of that 10% match on those projects that can be shovel ready by 2025. So by focusing in the near term on those eight priority projects in particular, we will be able to save the state millions of dollars in match cost. In fact, we estimate that we'll save $10 million just on the first two projects in the queue. Lastly, we do think there are longer term fiscal benefits to this proposal.

And that's because ultimately, as projects move to the operation of the maintenance phase, the state is required to bear 100% of the cost. And so, by having DTSC staff available to work with US EPA on the remedy selection and design phases, we'll be able to ensure that the state's longer term fiscal interests are taken into consideration and incorporated in those final decisions in the planning process that. Happy to take any questions you have.

All right, let's hear from the LAO.

Okay, thank you. And Department of Finance.

Good morning Mr. Chair. And Committee Members, Frank Jimenez with the Legislative Analyst Office. Our office has no concerns with the proposal. We find it reasonable for the augmentation for DTSC to go after additional federal funds and potentially reduce out your costs for the state.

Nothing to add, Mr. Chair? Thank you.

Okay. Well, I will say this takes me back. My first job out of college was doing regulatory support for EPA around Superfund sites, among other community right to know act as well. So this is quite interesting. I guess the budget in 2021 restructured the Fund for TSCA and increase the taxes supports the Fund. So could you say again what is the current health of that account?

Yes. So the Toxic Substances Control account, or TSCA, we sometimes refer to it as is in good financial health. We monitor the cash available in the Fund on an ongoing basis, and it's in good fiscal condition. And largely because of the steps taken by the Administration and the Legislature in recent budgets, as you're referring to, the TSCA used to have a structural imbalance because our revenues were not sufficient to keep up with our budgeted authority.

But in SB 158, the fee reform Bill that provides additional funding and increased the environmental fee that is one of the main funders of TSCA. And so right now we are in the process of collecting those funds. They were due from fee payers at the end of February. So I don't have an updated report on what that revenue was looking like, but we are in good shape right now.

Okay, thank you. Okay, well, thank you for the presentation. The recommendation is hold open, and we will take the recommendation at this point and move on to the next item. Thank you all for being here. Okay, next up, I'd like to invite up the Department of Water Resources.

And I believe we'll start with a department overview. Excuse me.

Okay, we will go right into issue 29. Thank you. Go ahead when ready.

Thank you. Chair Becker. Senator Dahle, it's a pleasure to be here. I'm Paul Gosselin. I'm Deputy Director at the Department of Water Resources over the Sustainable Groundwater Management office. I'd like to start with the cornerstone of the Sustainable Groundwater Management Act. Thank you. Which was passed by the Legislature in 2014, and that's local control. And that's really at the heart. And the balance of that is that locals discretion that local control to manage and sustain basins with a state backstop.

And that's the role that the department plays. The law calls for local agencies to form groundwater sustainability agencies, and there's been over 250 formed since the act was put into place. And those agencies are responsible for developing local plans to bring their basins into sustainability within 20 years. And these are through their sustainability goals. The plans are very technically dense, they're very detailed, and there's a lot of work that goes into them.

One thing I will say about the act, that there's been a lot of deadlines that were established in the act on agency formation, submission of plans, and even deadlines for the department. And by and large, all those deadlines to date have been met, which I think is a real testament to all the hard work that's going out locally. And I want to describe to the role of the department. We do have a dual role.

One is to provide technical assistance, financial assistance, and other assistance to local agencies because we're really vested in helping them along their path to groundwater sustainability balance. Against that, we do have responsibility to set standards, the regulations and guidelines on how these agencies need to view the act and comply with the act to bring the basins into sustainability to ensure that one - it also is a good feedback for us when we do our compliance oversight on how we need to shift our local assistance, but also the role that may come into play if basins aren't on track to achieve sustainability or are not compliant with the law, and the state board will come in as a backstop.

So with that assistance, we have, there's been, over the last two years, $400 million in grants for local agencies, and that doesn't even account for the local fees that local agencies have been starting to put in place. So all those plans, we're kind of pleased that every basin subject to Sigma now has a locally adopted plan, and those plans get implemented upon adoption by local agencies. Our role is once the plans are initially adopted, we have a two year deadline to review those.

So, let me begin by describing the status of our review plans. These plans provide the roadmap for local agencies working with local communities. The community engagement in Sigma set a very high bar for community engagement. So, when we evaluate the plans in two years, we look at a couple of things. Did they use the best available science?

It's recognized that all the data, all the information, is not going to be there, and there's going to be data gaps and other things that they're going to work on over time. But we also want to make sure this initial plan approval is other sustainable management criteria consistent with the law, and they're going in the right direction towards sustainability under the law. And that's principally our initial plan review. So, we did the critically overdrafted basins. There was 21 of them.

They had to submit plans in 2020, and we had a two-year review cycle, which we completed in January. The rest of the basins have till 2022, and they submitted their plans at the end of January. So, in 2020, we received 46 plans from 21 basins. And then right now we have 65 plans from 63 basins that we're in the process of evaluating in two years.

For the critically overdrafted basins in January of 2022, there were 12 basins that we deemed incomplete, and that was mostly because of sustainable management criteria, was not compliant with the law and regulations. So, under the regulations, they were afforded six months to resolve those deficiencies. We've consulted with the agencies, and they did resubmit their plans. At the end of July, we completed our review, and on March 2, we released our determinations of those plans. There were six basins that were approved.

They sufficiently made enough progress for us to approve the plans. There's going to be corrective actions to go on because we're going to continue our oversight of those plans. And there's things that needed to be improved, but they didn't rise to the level of being significant enough for us to preclude approval. So the basins, we did have six basins that were deemed inadequate and that was Chowchilla, Delta-Mendota, Kaweah, Tule, Tulari Lake, and Kern.

Right now, after consultation with the board, now they're under state board intervention, and we'll be working with our state board colleagues at their behest on working through those issues. But right now, the remaining work we have is the 59 remaining basins for the non-critically overdrafted basins. In July, we released four approved plans. We're going to start releasing determinations on those 59 on probably a quarterly basis. We have till next January to complete all that work.

And again, these plans are very detailed, over 1000 pages with analysis. And so we're working through that diligently, and we are going to meet that deadline. So, all of our determinations and invite you to visit our portal. They're all publicly posted, all public comments, all our correspondence with those agencies are displayed out in the public portal. And it's actually a nice place to look.

It has a map view and you can actually look in and see where your agency is, who to contact, what their plan looks like and the status of meetings and who to contact.

But as we move through and complete this work next January on initial plan review, it turns us into the shifting focus into this long-range plan of compliance oversight, keeping track with the agencies to make sure that what they have in their plan and particularly the five-year update, which is a performance check-in, they have to demonstrate through monitoring data that they're on track to meeting the sustainability goals as well as conducting all their project and management actions.

So we're shifting our work towards some additional guidance and all the data and tools to continue and help those agencies, one, make sure that they're on track to achieve their sustainability goals and two, we can provide those assistance to help them along. The law has been in place almost 10 years, but I've been quoting Winston Churchill going out because people feel like they've been at this a long time, but we're just really at the beginning of the end, the end of the beginning.

There's a long way to go for those critically overdrafted basins to 2040, non critically overdrafted basins of 2040 to achieve sustainability. And as that journey goes on, there's going to be changes that are going to go on. These agencies are going to need to adapt, and there's other issues that we've identified we're going to need to follow up.

So we're really looking forward to continuing this and working with the local agencies and all the stakeholders on ensuring that groundwater is sustained for our communities, our growers, businesses and our environment. So I want to thank the legislature for all your support and funding of the department and particularly local agencies on Sigma implementation. So thank you.

Thank you. I'm sure we'll have some questions on this, but let me turn to LAO first and see if you have any comments.

Thank you, Mr. Chair, Senator Dahle: Sonia Pettick from the Legislative Analyst Office. First, we'd note that because of the budget problem facing the state this year, the legislature is probably going to want to apply a high bar for proposals for new spending. Against that backdrop, we do think that the proposal put forward by DWR, it's for 14 million general fund and authority for 11 new positions on an ongoing basis, likely meets that higher bar, and we think that this warrants legislative consideration.

We'd note that successful implementation of Sigma is really vital to the state's water supply, both for drinking water, particularly in vulnerable communities that rely on groundwater wells, as well as for agricultural irrigation. As my colleague from DWR noted, the state and local agencies are really in kind of the early phases of the actual implementation of the activities that were laid out in the local groundwater sustainability plans. And there's obviously even been challenges with the plans.

And we think that the local agencies are really going to need help from the department to stay on track. We'd note that Proposition 68 funds that are supporting some of the positions at DWR for Sigma implementation, some of those funds are nearly expended. So, for the department to continue providing support to local agencies at the existing level and to even sort of expand their role, they're going to need additional support. In addition, just a couple of other things we'd note.

It's our understanding that the department has taken on a greater role for collecting sort of centralized data statewide, rather than having the local agencies each do this on an individual basis. We think this makes a lot of sense. It takes advantage of the department's economies of scale. In addition, we understand the department will be collecting more enhanced data and also doing some greater analyses of the sort of characteristics of the groundwater basins. So, for these reasons, we think it probably makes sense to approve this proposal.

And then I guess I would just end by noting that ultimately meeting the deadlines and ticking off the boxes is one thing, but ultimately this is about helping the state achieve groundwater sustainability. And so as we move forward, the legislature will likely want to keep conducting oversight of how implementation is going by, for example, having updates like today's at budget subcommitee hearings. Could also consider maybe doing some oversight hearings at key milestone dates or even requesting additional reporting when it's warranted. So thank you very much.

Thank you. Department of Finance.

Good morning, Chair, Members. Brian Fuller, Department of Finance. Nothing to add, but happy to give a brief overview of the BCP itself, if that would be helpful.

Let's see, let's get into questions and see where we are. I guess I'll just start. As was mentioned by Ms. Pettick, the goal of this really is to do sustainable groundwater management. So the plans are one thing, and the process of the plans and doing the plans and setting up the local authorities and such.

So where do you think you mentioned sort of the end of the beginning in terms of the process itself, but kind of beyond the plans and looking to what actions this is going to lead to? How do you feel? Are we on track to really improving areas with lots of overdrafts, and how are we doing overall?

Yeah, one thing I didn't really bring up too, is when those plans were adopted locally, the agencies have been very aggressive in implementation. So there's been a lot of action locally, both in recharge programs and projects, as well as trying to be creative with demand reduction, trying to work with their growers and other things to try to navigate that.

So even though we're in plan review, some plans have been deemed inadequate, and with the board and some approved with corrective actions, they're all continuing to implement and doing incredible work out there. They're still eligible for grants. All this critically overdrafted basins got approximately $7.6 million last year that they're implementing. So we're going to continue to work and continue to help work with those agencies on their journey. So I think generally the approach, they're all going in the right direction.

It's a matter of making sure that when they achieve their sustainability goals, the one facet of Sigma that was important was how they take into account how where the basin is going to be sustainable, how that affects all groundwater uses and users, and in the case of subsidence, the lowering of land surface, how that affects critical infrastructure. And that's really the lens to make sure that the people, property and other things that are dependent on groundwater affected by groundwater impacts are addressed and sustainable.

Looking ahead, some of the challenges we have, there's one aspect is interbasin interaction, and obviously water doesn't stay within boundary lines and it crosses. So we're going to have to evaluate and work with basins to ensure that one basin's plan is not going to preclude an adjoining basin from achieving their plan. That's going to involve a lot of interaction with basins, a lot of modeling work, a lot of analysis to ensure as they go forward, they're all going to be able to keep pace.

The other aspect is this continuing climate change aridification. And we're starting to see, obviously, the past three to five years has been just skyrocketing on the changes, and it would have been not realistic for anybody to put in their plan five years ago, sort of worst case scenarios that people wouldn't anticipate that we're seeing now but this is the reality.

And so that's going to be something working with them on when water reliability changes or other changes, they can adapt their plans as well as land use. So again, long answer is that I'm real confident that we are going to achieve groundwater sustainability through local actions. And it's our job to make sure that we help guide them and keep them on track through local assistance, and we're confident we're going to get there.

Thank you. Just last question around. I'm sure you heard from a colleague in the Assembly. I know he did a bill last year about just people, the incentive to just dig deeper and deeper wells. How do you feel these plans are kind of combating that issue?

Yeah, groundwater sustainability agencies. They're stewards of the basin for all the groundwater uses and users. So that's one of the things we expect them to look at, not just domestic wells, AG wells, municipal wells, groundwater-dependent ecosystems. So many of the plans that we approved, what they did is where they set the basin, they did inventory and identify all the domestic wells in the basin, recognized ones that may be vulnerable in the future for not having water supplies, and had put in some ways to address that, either through lowering wells, some mitigation measures, deepening wells, or some other consolidation kind of things. And so that is really what's being looked at for addressing those kind of circumstances and demands.

Thank you, Mr. Chairman. Thank you for your report. Thanks to the I've actually today Northern California Water Association, which is part of my base in this meeting. And so I'm missing that meeting today to be here with you and glad to be here. So just an observation, somebody who has been monitoring or our base, and I'm just going to talk about where I live. We've been monitoring and following these.

But when you said you're the hard backstop to the local agencies, and we have basins that are healthy, and we have basins that are maybe not so healthy, and we have ones that are mainly in the central valley where the basins that are, the six that you've identified are in critical overdraft, and there's a problem there. So I want to just kind of take holistically, maybe some comments. The reporting that has been collected was during the drought. We had a major drought last three years.

So surface water impacts groundwater, let's be clear about that. And when we have these cycles that are quicker and faster, I would say like we've seen in the last two months, we've seen a heck of a lot of water, but 95% of it's going to the ocean and it's not able to spread out and recharge those ground basins. It's coming harder and faster. On the flip side of that, we have these extended drought periods as well.

So the goal in my mind is to figure out how we marry those two together so we actually can find where we are sustainable in a time where we're changing, which we don't talk about a lot on our side of the, we talk about just regulating. We're going to go out and just stop people from using water. But at the end of the day, if you allow that water just to go to the ocean, you don't spread it, it's not going to recharge.

And we've seen practices on the AG side and at municipalities. Now municipalities, if you look at the LA basin, they do a really good job there. I mean, they recycle water better than, I think, probably anywhere in the world in my mind. And I've had, in my office, I've had the agencies in where they're doing, we say toilet to tap, they say showers to flowers.

All right, so there's two different terminologies, but at the end of the day, that water is being reused and a lot of it's being purified before it's put back in the ground. Now, as you move north, you don't see that type of investment because the economies of scale aren't there. So, in your deliberations, I mean, these six basins are critical. And their plan, what's the challenge with their plan? Because they are connected to surface water.

And that's, I think, something that we miss when we look at trying to, in our basin, we were trying to gather data in a drought. Well, those groundwater basins change very quickly when you have wet years. And so I think some of those were maybe being penalized by the drought and it stretched over time.

I know that we passed it in Sigma was 2014 or whatever it was, but a lot of that first years was just planning on how we're going to get to where we are today. So can you talk a little bit about today where we're at? Obviously, these six basins are critical to, because they're an overdraft. A lot of the other basins, we still have some time to figure out what does it look like? But can you talk about that for a second?

Excellent point. The here and now. I mean, this is where people living between the drought and these heavy storms and trying to manage through that, the plans take into account a long history of record. So they're intended to set a water budget over a 50 year span to take into account the wet and dry periods to evaluate. So this would be part of that historical record when they do their planning that they'll take into account.

So none of the basins were dinged or evaluated based upon current circumstances. And the 21 critically overdrafted basins, they all have different complex issues to work through, but they're all, again working very diligently on that. The six have some deficiencies in their plans that they're working with. The board now will be there to assist as we can, as the backstop to resolve those. Now how we're working with those agencies to, one, capture this water.

This gets back to a lot of the funding and support from the legislature on groundwater recharge. We've had over, out of the $400 million, probably in excess of $100 million have gone to recharge projects. We've been working with the board on their 180 day and five year streamline groundwater recharge permit projects. As the Governor pointed out in the water supply strategy last August, there's a target for half a million acre-feet of capacity and groundwater recharge.

We've already had about 180,000 acre feet of additional capacity and groundwater recharge. And we're working right now with those agencies through these storms in the snowpack to help facilitate and make sure that when that snowpack comes down, those permitted facilities can receive the water and recharge. There's a lot of activity going on the sequoia exemption in the EO. We have over 25 agencies that are in the planning stages for groundwater recharge that have got secret exemptions.

And we're going to continue working with the Board and Department of Fish and Wildlife on regulatory assistance with those agencies, helping them through the permit process so they can get online. And this is not going to be the only year of, we're going to see this sort of pattern next year and the year after. We're going to build the capacity to capture that water so when it comes down, it'll be captured and help sustain the basins. So I hope that answers your question.

Follow-up question on reporting. And I know this is the legislature and the governors; we call it diversion, whether you're pumping it out of the ground or you're diverting it at the surface. And there was a lot of laws and budget trailer bills that forced people to monitor. And so when you talk about California, there's a significant part of the state that has gravity, which you can't stop water from flowing downhill if you can't catch it. It's going to go downhill. And we're seeing that now.

But reporting those diversions above the main infrastructures that we have, I think, has been cumbersome and down to two acre feet, which I know that if you're maybe in Sacramento and in a populated area, two acre feet may seem like a lot of water. But when we're talking about millions and millions of acre feet of water, to report down to two acre feet, I think is extreme. So can you talk about that process there, especially above the big infrastructure that we have available to us?

I mean, if you're above Shasta Dam, you can find out exactly what the CSF is every day, by the hour, by the minute, for that entire watershed. Same with Orville, same with Folsom, all the way down the Sierras. And there's reporting requirements above those that really don't make sense.

Yeah. And I don't know if, because we don't require surface water reporting and it. Might be-

Diversion, though. You do. And whether it's groundwater or surface water, it's a diversion.

Yeah, not on Sigma. What we require is those groundwater sustainability agencies annually to report to us estimates of pumping within their basin and change in storage. And they've been doing that once they approve the plan. And the only other reporting we have under this program is groundwater elevation reporting, which many agencies, and I know Sacramento Valley NACA have been doing it for decades and decades, so it really fit into historic portions. So those are the reporting requirements that we have.

And I know from Sac Valley that's consistent with what's been going on there for a long, long time. And other basins have been doing it that way also.

I thank you for the opportunity to have a conversation. I think we. Mr. Chairman, when it comes time, this is very important. I mean, at the end of the day, especially those six bains, I'm really concerned that they don't have a plan. And when we have those wet years, to be able to actually do something about it is unfortunate.

Well, thank you for that. The staff recommendation is hold open. So with that discussion noting concerns raised and our interest in the topic, we'd like to, we'll keep the hold open recommendation and move on to the next presenter. But thank you very much for the detailed presentation here. Thank you. We'll next be following with the State Water Resources Control Board.

We will start with a department overview when you're ready.

Thank you. I really appreciate the opportunity to be here this morning, Chair. Morning, Members. My name is Joaquin Esquivel. I'm Chair of the State Water Resources Control Board. You may know, but the State Board is a five member board. We, along with our nine regional water quality control boards, oversee water quality regulation in the state of California.

About 50 years ago, we were brought together, and the State Board also administers then water rights, bringing together a water rights office and pollution control boards from the Porter-Cologne Act. So the Board, like I said, additionally administers water rights, which these last two years have been a significant historic movement for the Board when it comes to actually just curtailing rights, being able to understand what's hydrologically available, where everyone falls in priority, and managing, hard to recall, I know these last two months with all this wet weather, what were incredibly dry circumstances historically.

So after 2017, which was a similar year like the one we're experiencing now, and then just prior to that, our most then recent, then historic drought. So the Board's proud of the work that it's been able to do, along with the resources that the Newsom Administration and this Legislature have provided the Board to be able to better administer rights at a time when it's really critical that we really match our water use to what's actually hydrologically available. Additionally, the Board, in 2015, had the Division of Drinking Water transferred over to it. There, the Board has been pursuing maximum contaminant limits. We set drinking water standards.

We also invest not just on the drinking water side, but also on the wastewater side, a critical amount. I'm here joined by both our Director of the Division of Water Rights and our head of the Division of Financial Assistance. And so when we look at just, again, the work of the Board these last years, it's certainly been intense. There's a lot of challenges for our water systems. Affordability comes critically to mind. They're proud also of the fact that we were able to get out debt relief for water systems, both drinking water and wastewater systems that accrued through the COVID crisis, somewhere around 600 million out within a year.

So we're focused on making sure that we support our communities and systems, both through drought and then now here through these incredibly wet period, where we know we need to be taking advantage of years like this. Seeing that the last 20-30 years have been dominated by dry years, these opportunities to have managed water, to manage and to manage it wisely, is really critical. Amongst that, as well, is the balancing that goes on with decisions like approving permits for groundwater recharge.

And would just note that the Board over the last years has done a critical amount of streamlining for groundwater permits, and this year alone have approved eight. We have a couple of potential pending permits that may be on deck, but we're able to approve and process all the requests that were made this year for groundwater recharge.

So we certainly feel the strain and the intensity of the challenges we face on our water systems, both at the drought and the flood extreme, and are here to continue to do our part. I can gloss over what are some of our requests within this budget, specifically on the Underground Storage Cleanup Fund and Orphan Cleanup Site Fund. Again, we have our head of the Division of Financial Assistance.

Actually, our Division of Financial Assistance is our largest by staffing. And this program is a critical one, although amongst our drinking water, water recycling, and wastewater investments maybe sometimes doesn't get as much attention, but is really critical for this moment when we're looking at housing, we're looking at redevelopment in our communities that need it most. And oftentimes these orphan sites, these cleanups, storage cleanup sites allow for redevelopment and are really critical.

Additionally, we have a request on our Cannabis Cultivation Program. That is a critical need to both ensure that we get the legal cannabis industry into compliance, onto the books. There is also, I know, a lot of interest and discussion around the illegal cultivation side.

This is to, again, make sure we're supporting the legal cultivation side and the programmatic improvements that we've made to make it easier for growers to do the right thing to come into compliance, but then can also talk about enforcement work that I know has been ongoing and is a priority for the Board as well. Also, we have our high priority stream gauges implementation work and our water rights modernization request as part of the budget here.

You'll hear further from our head of the Division of Water Rights around what we call our Upwards Project. There, last year, we received $30 million for a new water rights data system here. This is really the foundation for our decision making in water rights. We deserve a 21st century system that lets us be more real time, lets water right holders have confidence that the Board is administering water rights in a way that is allowing us to hear, adapt, and know that there's going to need, with these drier droughts we're seeing to curtail, we need to do so in a way that is orderly and that provides everyone trust in the system.

So those continued investments be very important. And I can gloss on our water recycling work as well, but, actually, maybe just go to questions through the course of discussion, talk about that as well.

Yeah, that's great. Thank you. Certainly very excited to discuss the water rights modernization. But we'll give this overview. I'll have a couple of questions. And then turn it over to Senator Dahle. As you know, obviously the quality of the drinking water has been a major issue across our country, but here in California as well. Tell us what improvements you made to drinking water and how you're tracking that.

I really appreciate that. The reality is that California is one of the few states in the nation that actually has a human right to water. We just celebrated the 10th anniversary of that adoption and actually the 50th anniversary of the Clean Water Act.

And I bring up the Clean Water Act because, although that's on the water quality side, we know that the cost drivers in drinking water are actually the contamination that many communities face or have and many times in many regions, legacy issues that we've been dealing with for here decades and generations. So 10 years ago, the Human Right to Water Law was passed.

And since then, again, as I mentioned in my opening remarks, the Division of Drinking Water was actually transferred over to the State Board in 2015, 2014, 2015 in the middle of what was the height of, again, that last drought. And since that moment, we've also had the Safe and Affordable Fund that was passed through the leadership of the Governor and the Legislature here.

In the three years since a Safe and Affordable Fund was actually here being implemented, we've reduced the number of Californians who are served by failing systems by 40%, going from 1.6 million Californians down to about 900,000 now. That's still a lot of Californians that don't have access and are committed to ensuring that we continue to bring down that number.

I think important to note as well that in these three years, these first three years of the implementation of the Safe and Affordable Fund, we have been able to also nearly double the amount of construction dollars that have gone out to communities. And here, importantly, just recently passed an expedited drinking water guidelines or program, rather, for ensuring that we're prioritizing and expediting those projects that have the most urgent public health nexus. So I'm proud of the progress we've made.

I know we have a lot more to go. These are, again, issues that we've struggled for here in the state for a generation. And nationally, though, you don't see the emphasis and the funding and the consolidations alone as well that we're seeing here in California. And so I think for us, it's continuing to make sure that we're planning out what the capital cost needs are for things like consolidations, continuing to improve the tools that the Legislature has provided us on drinking water.

And I would note that there are places like Placer County Water Agency, Coachella Water District, also the Water Replenishment District in Southern California, where we're really seeing agencies step up and say who within our service area are failing, which systems can we consolidate? It's one of our strongest tools. The Water Board oversees nearly 3000 drinking water systems in the state of California. 400 are our largest urban water agencies, representing 90 plus percent, oftentimes, of the water that's delivered.

But we have many smaller systems and the solutions are really needing to be community driven. So we're thankful for the resources we've had. We have a lot of momentum around drinking water. And I note that it's not just drinking water, it's wastewater as well. Recently we received both dollars for wastewater sewer to septic projects, or at least an emphasis on those, noting that we still have a lot of communities on septic.

We still have to manage sanitation in a way that doesn't actually impact, again, our drinking water systems. The last thing I would really quickly say on drinking water, we are going to be adopting maximum contaminant limits potentially this year for chromium-6. And with the recent PFAS announcement at the federal level, we know that there's going to be additional pressures on cost as we treat. And being very aware of the affordability, ultimately, of water in the state is front of mind for the Board.

And that's where our various programs, both on the infrastructure funding side on things like that Arrearage Program that we were able to do, are all here necessary to keep the cost of water down, even as we pursue, again, things like PFAS and other contaminants that we know we're going to have to deal with.

Well, thank you. Yeah, nothing's more critical than safe and affordable drinking water, and great work to bring it down 40%. But as you note, a lot of work still to do. I got two more things. Very interested in water recycling, and maybe you could tell us about the Board's work on improving increasing water recycling and how you're measuring that and what the goals are.

I'm really proud of, again, the work, largely, that California has done on water and access and particularly on water recycling. We're a leader in the nation when it comes to recycling our water. We're still not recycling as much as we need to. I appreciate the comments from Senator Dahle around the fact that you see a lot of reuse in Southern California. We have great examples, of course, with Orange County Water District, who's continuing to expand the amount that they're recycling.

Leaders like Metropolitan Water District as well. I think of San Diego, I think of Monterey, but importantly, I also think of Turlock and Ceres where Del Puerto Water District is here recycling water, receiving recycled water. It's going into the Delta–Mendota Canal. And so these opportunities in still yet more rural communities to recycle, I think, are there. It's just that the economics, like so many of our challenges within water, are what kind of fundamentally dictates sometimes what you're able to do.

And when you don't have the economies of scale to spread out the cost, which is higher cost. Recycling water is up there. It's not as expensive as ocean desal, but it does increase the cost for communities is a front of mind. But finding out how we especially make these historic investments, both from the state side, importantly, and the federal side, amount to investments in communities that have needed the most. So it's not just the big cities that are drying down funds.

It's not just the larger communities, which are just as deserving. But instead, we're really looking at a different service model, if you will, for how we have to address the needs of water in smaller communities. So we're proud of the water recycling that's gotten done there. I'll just have to definitely note that just in the last two years we've provided here, I think it's like well over $1.2 billion in recycling. In dollars for recycling projects, that amounts to about 15 projects and about 75,000 acre feet a year that will be produced from those various projects. We also have in the pipeline an additional 21 projects that are seeking funding currently.

And importantly, the water supply strategy really sets goals in the immediate term for 800,000 acre feet, which we think we can really get to, and then longer term goals for recycling that, especially as the Board this year adopts direct potable reuse regulations, we think that we can meet and will actually be this next generation of projects, where we're, for the first time here, developing regulations that don't just allow you to recycle water and augment your groundwater, recycle water and augment your surface water storage or your surface water reservoirs, but actually is directly plumbed into our systems.

It's a huge undertaking. It will bring down the cost of a number of projects and, again, usher in the next generation of work. We currently recycle about 750,000 acre feet a year.

How would you want to percent? I mean, because you always hear stats like, Israel recycles like 90%. Maybe Spain is at 20-25, us as a whole, maybe at five to 10, I think. What would you say? Can you make an estimate there? And what do you think our goal should be by 2030?

I can definitely bring up. I don't have, what we have is our Volumetric Report online and in dashboard form that shows you, region by region, how much recycling is going on, how much over the last decade and plus has been reported in the increase. Again, I have a top level number.

Sure. Maybe we can follow up and just to think about how to make that intelligible to the general public, but definitely, I think it's quite important. Thank you. One last question for me, talking about the issues of kind of water flow standards and some of the recent decisions. And there's a waiver that was issued in February to issue reduced water flow standards through the Delta. So how did the Board determine to cut the flow down to 15,000 cubic feet per second? What factors did you consider, and was there a concern about how a significantly lower flow would impact salmon and other fish species?

I think I have to be careful because we have a pending petition on reconsideration for this. But, I will just say, that petition aside, which is calling into question the Board's decision making, amongst the approval of that Temporary Urgency Change Petition and then the issuance of that Temporary Urgency Change Order within just, we'll just say, the working of the order, what we were signaled to was, and we saw, was this real cut off in our precipitation after early January.

At that moment, with the dry conditions that we were seeing, there was going to be a water cost to then meeting certain requirements. So it's important, I think, to note that the Temporary Urgency Change Order, what it did was relax what's known as an X2 line, which is where salinity is at X2 in the Delta. Down from Port Chicago, which is the most western sort of point within what's known, and I apologize, it's going to start to get into jargon.

But decision 1641, which sets the current water quality standards that the projects have to meet. It's its most western point, Port Chicago. It's based off of a table that's based off of that January month's precipitation, and then calculates off of that where it should be then for that next month. The modeling that was done in the mid 90s, the way that that table reflects, is supposed to reflect a wet water year.

And what we've seen these last years, especially, we think last year, where we were at 200% of precipitation in December, but January, February, March, April, the spigot turned off. And here we were concerned around very similar circumstances. So the ability to manage a little more in real time to make a decision to approve this Change Petition that came from the projects was made. It relaxed that standard a bit. It was in effect for 17 days.

We've since rescinded it because the order had a condition that said if conditions change, if we're not seeing this temporary, urgent need for this change, then it goes away. And so it did, because, again, it had good consideration for that. It was in effect for 17 days. Nine of those 17 days, the Port Chicago requirement was actually met. There was enough water starting to move through the system.

So I say all that to kind of put a little more context into what the Board's decision and balancing was at that moment. Hopefully, I didn't speak too far over, and lawyers are fine with what I did say. Trying not to get too close to what the petition is, but just kind of giving you an overview of what we did through that decision making. And again, right now, that Temporary Urgency Change Order has been lifted. It was last week.

Thank you very much. Senator Dahle.

Thank you, Mr. Chairman. Thank you for your testimony. I know that you knew I was going to talk about illegal grows, and I want to still touch on that a little bit. Because we did put money in there for legal, and I know that Senator McGuire, who sits on this Committee as well, we both have the same issues. We want to fund and help those people be able to become into the legal market, and that's part of the solution.

But you really can't have a legal market if you have an illegal market that is just running rampant and there's no incentive or no punishment for those who are illegal. And that's really where we're at. That's something that, I know that you're getting the pot of money to work on the legal side, but there needs to be some enforcement on the illegal side as well.

And I implore you to work with the DTSC, Fish and Game, and the other agencies to go after these illegal growers. Because at the end of the day, your job is to, when we have illegal diversions, we have a lot of illegal diversions, and thank God we have water because there's still water flowing. But in the previous years, we had zero.

I mean, there was really low flows. And we could actually see in real time when a water truck threw the hose in a stream that it dried up. And there's small salmon in those streams that are trying to survive on water. And so I just want to encourage that we focus on those illegal grows, and that will help the legal market work better as well. And I know you heard me before you were here in the room, so don't need to go on that.

I want to talk about PFAS for a second because it's something that is evolved and we really are focused on, and I think that we should, quite frankly. But when we look at water and we look at the PFAS in water, we don't take into consideration all the other things that have PFAS in them, which is a bag of popcorn has PFAS, a pizza box has PFAS in it.

And the Legislature really hasn't focused in on. They focused on the water side of it because our drinking systems. But there's a lot of PFAS out there that is. So could you touch on that just a little bit? Because I know your area is really only going to be water, but there's this broader issue of where are we really getting it from and what are those other factors playing in, not only to our constituents, but also into the water system.

Thank you. I appreciate that. To your point, it is unfortunate that so much of this right now is sometimes borne on the backs of ratepayers who are downstream of the impacts from other decisions made, mainly PFAS getting into the system to begin with.

So some of those aside, I'll say, within the CalEPA system, we have been meeting regularly for a number of years now with DTSC, with the Office Environmental Health Hazard Assessment, with our other partners, because, as you said, it's not just about the impacts on drinking water or wastewater or characterizing the extent of PFAS pollution in, say, just groundwater, which on the water quality side, the Board has really attempted to try to tackle it from both of those sides. Again, characterizing it on the water quality side, where is it?

And then what are we seeing? And then here, working on the drinking water side. It's obvious that especially on the wastewater side, it's in our clothes. We're seeing it influent and effluent from wastewater treatment plants. So I know there's concern from, whether it's a wastewater treatment plant or drinking water systems, that they are saddled with all the cost. Importantly, there are federal funds for PFAS that we're looking to make sure we get out. I know they haven't started to move yet.

We're prioritizing, trying to get the program up and making sure that we're supporting communities on the funding side, even as we work with our other state agencies, DTSC and others, around the product side. We do consider this when we set MCLs. We're not going to set a maximum contaminant limit, I think we need to figure out what this means. Now that the feds have set their limit, it likely means we can then move on to what we know are other constituents amongst PFAS.

There's thousands within the class. But I think what it allows us to do is continue to focus on our role, but also work again with DTSC and others to actually get things out of products. So I appreciate the points. Again, I think on the funding side and the regulatory side, we're here for drinking water and wastewater systems and recognize that it's really about how do we get these products out of the system to begin with so it's not burdened by our systems.

And to the extent that there's responsible parties, that they be held accountable as well, so that the ratepayers aren't the ones that here absorb all the burden of responding, treating, and addressing a real issue.

Has there been any analysis on the clothing side of it? When you wash your clothes that have PFAS, which is water resistant stuff, has PFAS in it? A lot of it. That's how it works. Has there been any analysis on from the washer to... We know that firefighting was one of the, we curtailed that. Yeah, it was a lot of PFAS. But when you throw your stuff in the washer, that PFAS is coming off and going into the drinking water system. And so have we had any nexus between those type of products or has there been any studies done to know where we're getting it from?

I'd have to lend on the expertise of some of my sister agencies around what is the share, like how much is coming off? Because it's in your clothes. Just, we definitely know it is. And because there has been, you see this impact in Anaheim, in places along the Santa Ana River where there's kind of a plume that follows the river because you have discharges from the wastewater treatment plants into the rivers and then it gets into the groundwater.

So we know that there are those pathways and are being mindful of them, and is why we're asking for the reporting information we have for PFAS from a number of those agents so we can get a handle of how much is coming in, what's happening. The fate and transport, I guess is what we call it, of PFAS so that we know where we're having to address the issue.

I appreciate that. I think as a Legislator we try to figure, we have to define the source, then we can figure out how we're going to treat it. We did do the, I think, the easy stuff, right. We knew that in firefighting, and the firefighters came to us because they were seeing... That's really where it started. But I've learned a lot more in the recent year about where all this product is in a lot of other areas. So I just want to kind of think about that for a second.

I appreciate that.

I'm going to be a little bit, because this is really. So diversions. I wanted to touch on diversions, which I spoke about earlier. I got the wrong Committee, but I want to talk about diversions. And I want to talk about, if you could expand on, diversions, again, above our big infrastructure. Obviously I represent the largest geographical district in the state, but 60% of the California's water comes from my district. And so gravity obviously plays a role.

We would love to hold more of it up there, and we have opportunities for that, which I want to talk about in the next question. But below the reporting has been burdensome for a lot of the ag community and those folks. And really it's down to a really small amount. And when you look at the amount of acre feet that's generated in the Sierras. So can you talk about that has been a real contingent.

I heard a lot from producers down to a guy that had a stock pond. And it's in real time. When the water is coming in and the water is going out, and trying to do that where we don't have cell service. And it was really cumbersome. I know that they relax some of that and work towards getting that. But really at the end of the day, on most of these systems we have pretty good reporting.

In fact, at our farm we had a gauging station that was there that the Water Resources Control Board did for years. And now it's all electronic. In real time I can see what's happening. And that really takes a giant watershed before it gets to our farm. And then below that we have big structures, like we have Shasta Dam, which we know that whole watershed is going to end up there. So could you talk about that for a second? The difference between below the structures and above the structures is really what I'm focused on.

I appreciate the question. And so it might be helpful to clarify. The two acre foot requirement, I think is a sigma. We don't make it easy, of course, in the state, there's all these overlapping sort of ways in which we report. And so on the Sustainable Groundwater Management Act side, I think there is a requirement for anyone that's pulling more than two acre feet to then report. And so I think that's where the two acre foot number comes from.

There to the State Water Board for water rights purposes, it's down to 10 acre feet, I think, a year. That is still, I know, and it's an ag, not a lot. It isn't a lot, but I think what we're trying to, the goal is to have more granularity so that we, especially during droughts, can actually manage better through those very precious moments.

And even here in these flood moments, be able to make decisions like when someone comes to us for a permit, for a new diversion for groundwater recharge, that we can understand well, who's using what, how do we remain protective of everyone? And I think to your point, the challenge is it comes at cost. And I won't at all pretend that it's just an easy thing that we can all just suddenly do. I would note that I'm interested in making sure we continue to have resources to make that easier for growers.

I know in the Delta Watershed, specifically in the legal delta, there is currently what's known as an Alternative Compliance Plan that's being developed that gets away from, say, like a direct diversion measurement and instead uses like satellite data to look at evapotranspiration and say, we know what the ET of some land is that's not being irrigated is. The basic premise. It's a lot more complicated. But not being irrigated, this land is evapotranspirating a lot more. It means that there must be supplement irrigation that's happening.

And so whether you won't know necessarily if it's groundwater or surface water, but growers themselves saying that's a tool, that's low cost satellite data. And I don't need to then have some expensive device, and that the Board, importantly, says, yes, we see the requirement. It's an alternative compliance to what is on the books for direct diversion measurement. I think it's exciting because I think it points to ways that maybe we can more get that data.

And here I'm sensitive to satellites and people feeling like the government's understanding things that they shouldn't. But perhaps everyone can use tools like that to have better faith that we are... And whether you're above a dam or below it, it's still important, I think, to know and everyone have fidelity amongst who's be able to take what. Because that dam owner, that reservoir has actually a permittee as well. So it's kind of being able to create an even playing field amongst everyone. And by having the data, it allows us, hopefully, get there. But I know that, again, easier said than done. Far more.

Well, I appreciate, I got a couple more questions. I know that I've gone long, but this is very important. I think we have some real huge challenges in the future. So first, I want to thank you for the work that you've been able to do by getting grants out to our Community Service Districts and those who are trying to do water recycling and trying to stop leakage. But I want to touch on a little bit one of the biggest challenges.

So my father in law happens to be a manager of a Community Service District in a really small community. And so I hear from him, like all the problems. He has old infrastructure that is steel piped, and so you have leakage issues. But we also have Prop 218. So when you come in to try to go to your ratepayers and say, hey, you have to get, I think it's a two thirds vote or 60.

I don't remember the law, but it's high bar, 60 or over. And you have constituents who are not going to, who are on a fixed income and everything's going up. So you're trying to balance the conservation part of it to make the system run efficiently. But at the same time, we have, on the books, laws that don't allow you to raise taxes unless you meet this bar.

And I hear from the constituents as well, like, hey, they vote against these measures because everything is going up and they can't afford it at the same time. So the person who's running the agency or the Community Service District or the water district or whatever it is, is in a box. There's no way for them to be able to raise the resources. The state doesn't have enough money to fix all these, as you said, tens of thousands of districts.

What do you think the future looks like for those type of situations? Maybe more is the message back to the Legislature on how we combat 218 and educate our constituents that you built the system, it's paid for, but it needs maintenance along the way.

I really appreciate that question here. I want to acknowledge that so many of our small systems are volunteer boards, right. You have folks that...

If you can get people to run for them.

It can become very difficult for a small system. And because of those pressures on the local ratepayers, where again the communities are already stressed. I'll be candid, you sometimes hear a pride in some boards that haven't risen rates in 10 years or say we have those same rates, which is actually a sign of disinvestment. Right. You need to be keeping up, otherwise you have a large slug at some point and the problem becomes overwhelming.

So for us, it's getting to systems before they fail and starting to figure out is there a consolidation path? Is there a way that a number of those systems can really come together and be then better resourced? It's not as big a hit when aging infrastructure requirements come up.

And I think it speaks to, again, you heard me at the top about affordability, just continuing to be front of mind, and need to think about the way we support all systems, including the larger ones too, who are there for support. But it's a different service model when we really talk about smaller systems. Consolidation is one of the more major tools for the long term. That's what helps.

And to your point about Prop 218, I know there's a healthy, robust discussion around. And I think that to the heart of your question, it's really about the value of water. How do we value water? How do we communicate that value of water to communities and help them support what we know are these needed investments for aging infrastructure, for just new investments that get us ahead of the next drought and that, yes, the state's here to help complete it.

I think it's that trust from communities to know that, yes, the rates may be going up, but the state is helping add a 1% loan or with grants that are drastically making affordable what are difficult decisions. But I hear a lot of the confusion out there oftentimes and the feeling that nothing's happening in water.

And I think that that's where we as water managers, we as leaders in the space need to be better communicating to everybody what is happily actually going on and how they can connect to conversations in their communities around things that are really critical and help build that trust for rates. But then know do what we can to think about the landscape of supporting those smaller systems.

Well, I appreciate that. I thank you for those comments. These are, I understand where we have communities that are next to each other and have all these little water districts. I know that Assembly Member Gipson brought some bills together because there was a whole bunch of these little water agencies all serving the same people. But when you're in Fall River Mills, where my father in law runs. It's the one town, and there is no other way to do it.

And so I wanted to say thank you for the grants. I know that they are trickling out there and they're trying to do it. And we're going to see budget times that aren't going to allow those same types of programs to be available. So we're going to have a challenge, and we really need to take a look at maybe some sort of legislation or something that allows us to be able to spread that cost and fix those systems that need maintenance, quite frankly. So last question.

Surface storage and the ability to be able to build real infrastructure. The Legislature saw in 2000, and I think it was 14, when we did the water bond to do big projects like sites and those. What's your thoughts on those types of water storage facilities? We can conserve all we want, but at the end of the day, more water from the system. And quite frankly, recycling water that's been through the process once is really expensive. When you grab the Sierras, it's already pure.

I do a tour for the legislators and they come up to the McCloud where Crystal Geyser bottles water right upstream, and it's pure water. I mean, you can drink it right out of the stream. It's awesome. Doesn't need much treatment. Same thing with Folsom. The San Juan District is very efficient. It's good clean water and it takes very little to make it drinking water standard. So just your thoughts on that maybe and where we head there.

I'll talk about storage. I'll note first when it comes to Prop 1, that proudly, the Board has gotten out all our dollars on recycling, stormwater capture, reuse, conservation. We're glad that those dollars are actually making real differences and did in this last drought. On storage, as you know, it is a more complicated discussion. What the Board has before it are a sites application and potentially Los Vaqueros, others.

There's other things that are kind of moving through that are part of that Water Storage Investment Program, the WSIP programs, that were part of Prop 1. We've been meeting and making sure that we're communicating very clearly to project proponents how best to create the information that lets the Board make good decisions. And I think that that's really critical as we think about storage and say even groundwater recharge or other real important discussions. I know that the Administration is pursuing like conveyance that the system, as we update the water quality control plan, update.

As there's VAs as there's all this activity that is going to happen within the Bay Delta writ large, San Joaquin, Sacramento watersheds, that the decision making be done in a way that lets us know that we're aiming toward a future system that is more resilient, that is going. To be able to operate, if you will, all amongst each other.

The decision making before the Board in the next few years will be very intense. And to the extent that we can all collectively. Because, yes, these water rights decisions for some of these storage projects will be before the Board, but it's actually collectively because there's many protestants, there's other folks in that whole proceeding that their considerations have to be taken in.

So the more data we have and the more certainty that we have that we're aiming toward a future system here where these things can all work together and we're not just oversubscribing the system even further than we already have, I think will be really important. So hopefully that's helpful.

Senator Becker asked about the diversion model based on last year. So I want to talk just real quick on the systems that was built. Basically, when you look at the infrastructure was built for flood, flood control orginally. And now with technology and be able to model these storms and figure out these atmospheric rivers, which I know we're a long ways there, but we're still not there. We're never going to know, hey, in June, what is it going to do? We're never going to get there. But those facilities were built and we use them mainly for flood control so that we're not standing in water right here today. And we would be if those structures weren't in place.

Yeah, very much.

But to look at them maybe in a little different light with climate change, we have these events like we have right now, and we have droughts. To use those as more, maybe not just as a flood control device, but also for retention of water for those drought times. What's the Board's thought on looking at that? And I know that it's federal, state, there's a huge amount of players in the game.

But those of us who are trying to figure out how we can make our water stretch further, one of those is when do we release? When do we not release that water and when do we hold it back? And that's been some of my criticism towards the Governor, is like, hey, we're letting this water out when we don't know what the future holds. And we have room in our reservoirs. And he actually did an Executive order to change that.

And I was happy to see that happen because we want to capture as much water as we can, get those reservoirs as full as we can keep them, because we don't know what's going to happen a year from now. So what are your thoughts on modeling and reuse of those facilities?

It's been exciting to see the growth of all of that. The birth of it really was with. Scripps and Mendocino Lake and Sonoma County Water Agency and the Army Corps starting to really unpack, well, what do we know? What certainty can we have, and how to bring that flood control side, which know it's about saving lives and ensuring that, can't be sacrificed amongst this too much creativity. And so I know it's taken a number of years to really get there, but seeing it expand to the Yuba, seeing it expand to the State Water Project as well, has been exciting.

And the Board's role has been to approve a Temporary Urgency Change Petition for the Sonoma, for the Russian River, for Lake Mendocino, to adjust what would otherwise be some of the requirements on our side for various releases. And I know that just leading into this dry period, Sonoma County was able to have 200,000 acre feet of additional water to manage because of activities that they took around forecast informed reservoir operations. So it's exciting.

I think for me, it really dovetails with then on the water rights side, how do we continue to actually have a better understanding of these opportunities to hold back to balance, because that holding back is beneficial to then fulfilling biological opinions or the needs of other. And to your point, the water supply benefits, while not sacrificing the protection, especially as everything's flooding right now and we're very sensitive to protecting human life.

What about the CVP? Do you see it come into the CVP as well?

I think so, as well. You talked to Ernest Conant and other managers on the CVP side, and they're working hand in hand, I know, with the State Water Project, DWR, in relaying that sort of confidence and ability to just better manage what we have. I know on the Merced, there's been work there as well with local managers. So it is an important tool and hopefully gets people continue to feel like there is success to be had around, looking a little differently at these systems, letting go of some of the tensions that sometimes dominate the discussions.

Mr. Chairman, thank you so much for letting me go on and on, but these are really complicated issues. I appreciate your testimony here today, and it's been very helpful.

Thank you. Appreciate it, Senator.

Thank you. These are important questions. I just have one quick one, then we'll move on to the issue 30. In the 15 projects you mentioned, water recycling, what is the breakdown of Northern California, Southern California, roughly?

I don't have a... We can get that for you.

Sure.

I don't have a breakdown before me, but there is a spread. It isn't just Southern California. I was up again recently in Monterey, actually, for the Pure Water Project with Assistant Secretary Tanya Trujillo from Department of Interior, Assistant Secretary of Water and Science, around their Bipartisan Infrastructure Law grant for recycling project there. So it's up and down the state. I'll make sure we circle back with all those specifics for you.

Excellent. And good that we're tapping the federal funding for that, too. Well, good. Well, let's move on now to issue 31. Sorry, issue 30. So the water rights monetization. And let's see. I believe that perhaps Deputy Director Ekdahl is going to present.

He is. I'll go ahead and just stick around on the side in case I...

Sounds good.

We didn't hear from the LAO on those.

Okay, go ahead, please.

Good afternoon. Chair and Members of the Committee, my name is Erik Ekdahl, Deputy Director for the Division of Water Rights. I'm here to give a brief overview of the updating water rights data for California or upwards project and how that fits into the broader kind of scope of water rights modernization. To start, I'd like to offer a little bit of background on kind of why we're here and how we got here, and if we go back in time all the way to 2003, 4, 5 era.

The board's data system for water rights was primarily developed to track fees. It was originally not developed or intended to track diversions or kind of other related water right information. It was with a series of kind of new legislative requirements. 2009 required new reporting so that reports had to come in every three years. 2012 required reports to come in electronically. It wasn't until 2015 that reports were actually required to be submitted every year.

And it wasn't until 2016 that regulations were passed that drive this kind of diversion reporting that has been brought up earlier today. So over that time, the kind of funding and architecture and infrastructure that goes with our data system hasn't kept up with kind of these new requirements and new things that have been required, so that essentially now we have almost like a Frankenstein's monster type of data system. It works in part.

Bits are stuck on, and it gets where we need to go, but it's very cumbersome. It's very outdated. There are huge issues with data quality and the timing by which we receive information that makes it essentially very difficult to make data-driven decisions, especially during drought, but also in looking at things like flood operations and groundwater recharge permits, understanding what are the needs downstream, whether from senior water right holders or environmental purposes or others.

And so the kind of vision behind the upward program is to take our existing processes, take our existing data system, and really update it with a new modern data architecture so that it lives in the 21st century. We have about 7 million paper and physical pieces of documents that drive the water rights system. So we are still a paper-driven system.

Part of the request is to digitize those documents and bring it into what we call a geospatially driven platform that just means map based, like Google Maps, where you can click on a river or a point of diversion and understand, here's the records that we have. They've been digitized, they've been scanned, they've been brought in, made accessible. Everyone can look at them. It ties to the diversion data right now, kind of basic information and diversion data are not conjoined.

So you really have to either be a data scientist or somebody who's pretty savvy to get at that linkage and then just bring in other basic kind of availability of data and processes, being able to cross collaborate with other agencies or whether at the state, local, or federal level, with an ultimate goal of creating more efficiencies, making it easier for everyone both to submit their data and to operate the system, and then allowing the data to drive local decisions.

And so having that high resolution, accurate data does have kind of immediate benefits to the local level. We look at the Russian River the last couple of years, for example, where they were able to develop a voluntary water-sharing program. It was really derived by having high-quality, high-resolution data. It took the board a year and a half to develop that data, working very closely with diverters in the Russian River watershed.

And I think the goal is to create a system that makes it a little bit easier to get that data, to have accurate data and make it usable and understandable. And so I think with that, I'll pause and see if there are questions or follow ups.

Sure. I'd like to ask that LAO had a comment.

Oh, Sonia Pettick with the LAO. We've reviewed the proposal. We don't raise any concerns. We'd note that the project has gone through all four stages of the project approval cycle with the California Department of Technology, and we recognize the importance of the Water Board having a more nimble and comprehensive system in order to manage water rights. As with any technology system, it'll be important for the Legislature to maintain oversight of progress.

Thank you.

Lizzie Urie, Department of Finance. Nothing to add, but happy to help answer questions.

Okay, well, I will say, yeah, my wife's family had agricultural property in Colorado, and I was always conscious that Colorado had a much better, much more sophisticated and delineated water rights system than we have in California. And to hear about the 7 million pieces of paper is scary. So excited that we're personally excited that we're doing this, and I think it's very important, and I just hope that we employ the right technology and can get it done expeditiously. Any questions? Yeah, thank you.

This is really important. We are going to still hold it open at this moment, but really appreciate it, and we'd love to keep abreast of how this goes going forward. Great. Thank you. With that, we'll move on to item 31. And I guess you're going to lead the presentation from Department of Finance.

One of my colleagues will.

Okay.

Good afternoon, Chair, Members. Brian Fuller, Department of Finance I'll be providing a brief overview of our drought and water packages over the last two years. So the 2021 and 2022 Budget acts committed 8.7 billion for water and drought resilience. The Governor's Budget maintains 8.6 billion, or 98% of the total funding. So, as has been discussed in previous hearings, the Administration used a General framework on climate and resources General Fund solutions, which included several different considerations.

I will not go through the full list at this point, but some of the pertinent considerations for this particular package include the following to prioritizing protecting the majority of funding for most programs and in cases where a particular program was reduced, the majority of funding for those programs was generally maintained. Protecting funding for the most immediate climate risks, such as water and wildfire, which are 98 and 97% protected, respectively.

Minimizing disruptions for programs already underway, including considerations for the status of previously appropriated programs and where they are in awarding processes and finally, the potential availability of federal funds. I'll now step through the specific reductions and delays that were included as part of Governor's Budget within watershed resilience programs, a reduction of 24 million General Fund in 2324 and a delay of an additional 270,000,000 General Fund to 24-25.

This maintains approximately 470,000,000 or 95% across various watershed resilience programs, including both programs within the Wildlife Conservation Board as well as the Department of Water Resources. Next for PFAS cleanup. Governor's Budget proposes a reduction of 70 million General Fund in 2324 and a delay of an additional 30 million General Fund to 2425. This maintains approximately 130,000,000 or 65% of PFAS cleanup resources. Next is water recycling. The Governor's Budget proposes a reduction of 40 million General Fund in 23-24.

This maintains approximately 760,000,000 or 95% of total funding to support water recycling and groundwater cleanup. Next is the state water efficiency and enhancement program, or sweep. Governor's Budget proposes a reduction of 40 million General Fund in 22-23 and this maintains approximately 120,000,000 or 75% to support water use efficiency projects. Next is the aqueduct solar panels.

Governor's Budget proposes a reduction of 15 million General Fund in 2122 and this maintains approximately 20 million or 57% to support aqueduct solar panel pilot studies and finally water refilling stations at schools. The Governor's Budget proposed a reduction of 5 million General Fund in 22-23 which does eliminate funding for this purpose. Happy to answer any questions. Thank you

Thank you. I'd like the LAO to comment.

Thank you Mr. Chair, Sonia Pettick from the Legislative Analyst Office. As Mr. Fuller noted, the governor's proposal does retain almost all of the funding for water resilience and drought response, and it maintains funding for some of the most critical activities. We think that the proposed solutions generally seem reasonable, for example, the reduction to water recycling. There is a lot of federal funding available at the moment that can be used for that purpose.

And just as another example, the reducing funding for the aqueduct solar panel demonstration projects, we'd note that funding has gone out the door for one project, the Turlock irrigation district, and so reducing the additional funding for other projects might make sense because the state can wait to see how that project with Turlock goes and whether it makes sense to fund additional projects.

We would note, however, that the approach proposed by the Governor does reflect the administration's priorities, and the Legislature can craft its own package of solutions that reflect its own priorities and criteria. We also think that the budget problem is going to be bigger than was initially anticipated in January. So the Legislature may need to look for additional solutions to close the budget gap. So, as noted in the agenda, we do offer some additional options.

These are not meant to be commentary on the merits of the program. Rather, we tried to take a look at some options that would provide a little more flexibility for the Legislature. So, for example, one option would be to convert spending delays into spending reductions so that the Legislature isn't sort of locking in future funding and can instead consider additional funding within a future year's budget context. In addition, the Legislature could consider reducing planned budget year funding for some of the newer programs.

So, for example, the Natural Resources Agency has funding for water resilience projects. If the Legislature were to decide to reduce the planned budget year funding for that, it could instead require some assessment or evaluation of how progress has gone to date with the initial funding provided in the past two budget years. We'd also note that where there are programs that are receiving a lot of federal funding due to the Infrastructure Investment and Jobs act, the Legislature could consider reducing funding in those areas.

So, for example, drinking water, wastewater and water recycling programs will be getting sort of significant amounts of federal funding. That's sort of atypical. And then finally, we would just note that there were numerous augmentations to a variety of habitat restoration type projects and again, not commenting on the merits of all those programs. But the Legislature could take sort of a holistic and comprehensive look at all of those programs together and maybe make some targeted reductions to programs that have sort of similar or complementary goals. So with that I'll stop and happy to answer any questions. Thank you.

Thank you. I know we have a number of folks available for questions as well. Here's the aqueduct project. When do you believe, can someone comment? When do we think we will hear back on the pilot?

Mr. Chair, Senator Dahle. Kris Tjernell, Deputy Director for Integrated Watershed Management at the California Department of Water Resources. Pleasure to be here. Thanks for the question. It's my understanding that the Turlock Irrigation district is giving us quarterly updates on that first pilot project, the $20 million project that you mentioned, and that it plans to go to construction later this year. So good progress being made there.

Okay. Federal funding was mentioned for some of these items. Is there a point person? Is it project by project basis? Obviously, there's different sources of federal funds for. There's the Infrastructure act, there's the other pieces. Is there like a point person within, say, each Department, or. I'm just wondering how folks are managing that in terms of thinking about the federal dollars available.

Krystal, Department of Finance so we do kind of have high-level tracking, including here at the Department of Finance for federal funds. So I think we've talked previously about some of the dollars that California has already secured across numerous sort of funding categories. I'm happy to kind of provide that kind of high-level overview.

So as of January, the state had secured $48 billion in federal funding, and that was largely from the Infrastructure Improvement and Jobs act, and that's funding that has already been secured by California. So when we're talking about the water space in particular, there's 5.2 billion of that that would be for water infrastructure and climate resilience. There's also funding available in the Infrastructure Reduction Act.

And so I don't have specifics on how much of that that California will actually be securing, but there's $100 billion there, and 4 billion of that is for drought mitigation. So that might include some of the investments in this space. In terms of tracking. As I mentioned, we've got a federal Fund tracking unit at the Department of Finance who is working diligently to sort of understand what kind of investments might be available to the state.

But also there are several working groups across the water agencies where there's discussion to make sure that we're really trying to take advantage of any federal funding that might be available in this space. So there is ongoing coordination, as I mentioned, to make sure that we're taking full advantage as we can in terms of whether that funding is coming to the state. Though a lot of the funding won't necessarily go to the state agencies. They might go to local entities.

So in the water recycling space, for example, it might be local districts, water districts who are applying for that funding. And so some of that tracking isn't necessarily coming through the state. But we also kind of have an infrastructure working group where we're trying to kind of manage and understand how that funding is going to be flowing into the state.

Thank you. Very helpful. And some of the things we'll follow up in writing. Just one last thing, and then see if Senator Dahle has any questions on the Save Our Water Campaign. How are you measuring the success of that?

And I ask because the question about sort of effectiveness of sort of general advertising versus and or using, say, social psychology methods, which I know have been effective for various efforts I've been involved with in the past in the energy space, in terms of getting people to reduce. Any comments on that?

If possible, I'd like to defer that question and we can get back to you in writing. I will say that we're pursuing the full range of approaches, whether it's earned media, paid media, social media and everything between, including the social psychology approaches that you mentioned. But I'd love to be able to get back to you with some more specifics on that.

Yeah. Comparing people to their neighbors and victories. But it's going to proven effective in the energy space, and I've seen it time to time in the water space, but doesn't feel like it's broadly deployed. Senator Dahle.

Just one question. So the $5 million for the water we last year appropriated, I can't remember who carried the Bill, but it was one I supported for the drinking water systems for schools. It's such a small amount. It was one time funding, and literally we wouldn't have these kids using these if we had a place for them to actually get filtered good water that they could just fill up their reusable, what do you call them? Bottles.

Yeah sorry.

Yeah. So what's the justification of zeroing that mean? I think the LA even commented on it and stuff. I read that it doesn't make sense not to go ahead and just spend the money on that program.

Sure. And thank you for the question. Understand that it is a relatively modest amount. However, we've also seen relatively modest demand for the drinking water schools program. Considering the total number of schools in California, I believe about 75 schools have benefited from the program. And when you consider there are about 8800 public schools, we do see that demand being relatively modest. But happy to let my colleague add any details possible.

Yeah. Thank you for the question. Joe Karkoski with the State Water Resources Control Board, Division of Financial Assistance. So we did quite a bit of outreach with some of the initial investments in the drinking water for schools program provided a lot of technical assistance, and as my colleague said, the demand was relatively modest. We actually shifted the focus of the program from water refilling stations to dealing with some of the water quality problems that some of the schools have, because some are their own water system.

So we've focused those resources on point of use treatment and that sort of thing. Coming to the state to get modest amount of money, and there are a few $1000 for these water refilling stations can be challenging, especially if they're not used to dealing with the State Water Resources Control Board. So we tried to do a lot of outreach. We also looked at efficiency gains by. We're now going through nonprofits, so they don't have to go directly to us as schools. But still, I think the program seems to have run its course.

Out of those 75 we've heard from, we've had lead pipes and those issues. And I know that this might not actually direct that. Is it a matter of. I mean, one of the problems we saw early on with fixing furnaces in schools is that they're not used to having. A lot of these small districts don't have somebody to write the grant or figure out the program, but there's a need. So can you just touch on that a little bit more?

Because I want to make sure that we don't. There was a Bill a long time ago that by the time you get through the program and hire a grant writer, there was really no money to change the light bulbs or fix the furnace that was emitting carbon. And so is that the same scenario you're seeing here, or do you think it's just that there's not a need?

Yeah. Part of our experience has been schools have so many other things on their plate, larger infrastructure challenges, of course, educating kids and figuring out how to do that. And a lot of these programs took place during COVID too. So that became another challenge is even when we provided the funding, delays in getting contractors in and suppliers in to do that. So I do think we've seen in dealing with schools, there are these larger issues that they're just struggling to deal with.

So being able to pay attention, put enough attention to something like, even though it's free money, right. $5,000 or $10,000 worth of bottle refilling stations is just beyond sort of what they can handle, even when we provide a lot of support to try to facilitate the process.

Thank you.

Yeah.

Thank you. Yeah. Even in my district in Pescadero, and I was just trying to get a quick update, but has had issues for years and not had available drinking water. So like, to kind of keep following up on this.

Could you give us the background on the process? Maybe somebody could actually access it. I think about Porterville, where we have really huge water quality problems, and getting drinking water to students would be one of those things that. Anyway, maybe there's a way we can make the program better so people will use it, because I really think there's value in not only for reducing our plastic consumption.

But at the end of the day, providing good, healthy drinking water at someplace they can get it. Maybe they don't even have it at home, and that's a place where they can get good, healthy water. Just if you have some information, it'd be great to get back to me.

All right, well, thank you again. Mentioned that we'll probably have some other pump in writing, but this is time we're going to move along. The staff recognition is a hold open on this item. But thank you all for being here and being available. Excellent. With that, we'll move to Cal Recycle, and looks like we're going to move right to issue 32. We'll move right to issue 32 when everyone is ready and it's.

Senator Dahle, happy to see I brought my reusable bottle this morning with me, thanks to Joanne's. Good reminder to bring water with us. Excellent Director Wagoner, go ahead when ready.

Thank you so much, Chair Becker and Senator Dahle. It's nice to see you all this morning, this afternoon. Thank you so much for having us. I'm joined today by our Chief Administrative Officer, Brandy Hunt, and my colleagues of the Department of Finance. Very happy to be talking to you guys today about the zero-waste plan. The Administration has proposed and is asking for $2,000,000.01 time funding and $301,000 ongoing in two positions to develop and maintain a zero waste plan for the State of California.

California programs in recycling have led the nation and made incredible recycling and reused in recycling. We have recycled 455,000,000,000 bottles and cans since the inception of that program. 2.5 billion tons of e-waste, 264,000,000 tires, 2.2 billion gallons of used oil, 5.6 million gallons of paint, 8.5 million mattresses since the inception of that program, and 6 million tons of organics waste has been composted. However, in our most recent waste characterization plan done in 2021, California still disposed of 41 million tons of waste in our landfills.

That's a million tons per californian in a year. We recycled 42% of our waste, but 17% of that of what was recycled was exported. And that doesn't include the recent changes that were made in legislation last year. Obviously, because that was 2022, that still allowed incineration to be considered recycling in the State of California. So our recycling number still includes what was incinerated.

California is moving from a linear economy to a circular economy, much in thanks to the recent investments that have been made by this Legislature and Governor Newsom to improve and expand our circular economy programs, which much, much appreciated, especially in the area of organics waste, which we are seeing incredible progress. And we were really appreciative of that because of investments that have been made and statutory and regulatory changes that have been made.

The largest co digestion plant for organic waste is located in North America, is located here in California, in Rialto. We have companies like us, rubber, that are turning our used tires into very usable sports mats. We are recycling everything from paint to the copper and glass in our e waste. We are making incredible progress. But there's still so much more to be done, as shown by how much we're disposing of in landfills.

A successful circular economy can realize $142 billion of value here in the State of California. By 2030, it brings hundreds of thousands of new job opportunities. In fact, reuse and recycling brings nine times the number of jobs as waste does. A zero-waste plan is a strategy that will transition us from our current linear economy to our circular economy. It moves from that end of pipeline management.

So those successful programs that we currently have that are end of pipeline management, to avoiding landfilling altogether, and in limiting and diverting to high value reuse, designing waste entirely out of our system for a net positive value. There are four types of wastes. I think this is important to understand. There are resource waste, that's our materials and energy capacity, which is the assets that are not fully utilized.

Our life cycle waste, which is poor design or design so that we bring our materials to a premature end, and then the embedded value that is not recovered in the materials that all of our programs up to this point have really been aimed at capturing. If we do not decouple growth from resource use, we will exceed our planetary boundaries by 2060. By making a concerted resource efficiency and sustainable resource management, we can reduce our resource extraction by 25%.

By 2050, we can cut our emissions from heavy industry here in California by 56%, and the materials input mobility will fall by 75%. California can reduce our overall carbon emissions by 6 million metric tons of carbon annually by moving to a circular economy.

Zero waste planning is not so much looking for the deficiencies in our existing programs, but rather developing a whole systems approach and strategy that's necessary to move from our current linear economy to our circular economy, and realizing the full and true value of all of the resources and eliminating all of the waste that I've outlined. It is a roadmap for sustainable production, sustainable consumption, and then sustainable management at the back end through a hierarchy of materials management.

So, to quote a Senator I spoke to yesterday, it's moving back from waste, from being a noun, to turning it back into a dirty verb. So with that, thank you so much for the opportunity to present.

Thank you very much. I'd like to invite the LAO to comment. Mr. Mendez.

Thank you, Mr. Chair. Frankie Mendez with the Legislative Analyst Office. When it comes to the zero waste plan, we recommend that the Legislature reject this proposal. We find that many of the activities that would be undertaken with the plan should already be occurring within the Department. This includes assessing programs and identifying gaps and improvements needed for the Department to meet its mission and its statutory goals. This includes the 75% statewide recycling rate that is targeted in AB 341, which the plan would scope out to achieve by 2035.

If you look on page 38 of your agenda, there's a figure that shows the state's current progress towards meeting that AB 341 goal by 2020, and the state has made minimal progress in meeting. We also find that the plan could be quickly outdated. Based on the proposal, the plan would be completed in 2025. Also noted in your agenda, the Legislature has passed significant legislation that has expanded CalRecycle's role in various waste streams.

In many cases, these programs would begin their initial years of implementation around the same time as when the plan would be released. So the plan wouldn't be able to incorporate the implementation of these significant changes. And a plan of this nature should include the successes that these new policies are having or not, and improvements to those as well.

We also note that the Department has completed similar planning activities and reports related to AB 341 based on a previous existing statutory reporting requirement that sunset. And the Department was able to complete that plan without any additional augmentations. I'm happy to take any questions.

Thank you. Throwing finance.

Christian Beltran with the Department of Finance appreciate the LAO's input, but we're happy to address any questions that you have, Mr. Chair.

Thank you. Thank you, Director Wagoner. Certainly, LAO raises some. You know, I do think mean this is an area where really trying to lead the country in, and it feels like we've made a lot of progress, as you said, but it's probably still a good time to do this kind of plan. But how would you respond to the LAO's concerns?

Excellent. Thank you so much, Mr. Chair. So I think perhaps we didn't do as good a job as we could have in our conversations with our LAO colleagues of really outlining what we're trying to scope out here. So to address the concerns in order. Yes, absolutely right. We're not meeting the 75% recycling goal, and today I couldn't tell you why. These are individual programs with individual recycling goals in them.

And we need to do an economics analysis to identify the gaps in our current industries and economies, not just in the industries, but regionally, and figuring out how to diversify. Additionally, these programs are not, again, they're aimed at a very linear structure. Our statutes are developed to be very linear.

We are trying to transition to a circular system, but figuring out exactly what we need in terms of either statutory change, regulatory change, or I wrote down social psychology changes that we are needing are all factors that we need to figure out how to address the deficiencies in our current recycling rates. But this isn't just about recycling. This is about recycling. It's about reduction. To Mr. Dahle's point, we're using a lot more water bottles.

In the last 10 years, we've increased the number of water bottles sold in the State of California by almost 70%. I read a CNN article earlier. Sorry, in the United States, a CNN article that came out in the last couple of days, we are increasing the amount of single use products that we're using. So this isn't just about recycling.

This is about changing the way we do business and changing the way we consume and thinking about this differently, and then realizing the true value out of all of our resources. So it's a much bigger picture than any of our individual projects, to the point of being outdated. This isn't a report, it's a strategy.

It's a living document and a living principle that would be integrated into all of our programs and then also brought back to the Legislature to look at our existing statutes and our existing funding structures. It'd be integrated into our grants and our loan programs. The idea is really, again, a transitional principle more than a specific paper document.

The legislation that we are implementing today, SB 54, as we all know, is well on its way to being rolled out in regulation, as are the changes to our beverage container recycling program, not to mention our new battery recycling program and our expansions to the e waste program. The Legislature passed and the Governor signed 15 major pieces of legislation that we are very excited to be implementing today.

I would argue, though, that this is exactly the right time to think strategically about how do we build an economy that integrates all of these principles and doesn't think about them in silos, but rather thinks about a strategic roadmap for where we want to go so that we aren't creating any waste. And then the 341 reports we continue to do. But again, that is really aimed at addressing the successes of a linear system.

In our organic waste itself. How do you ensure, help local governments that are having to implement these regulations? And how do you make sure they're going to be able to meet some of these ambitious targets?

Thank you so much for bringing so SB 1383, our predominant organics waste recycling legislation, is really what really started inspiring us two years ago to think about zero waste, because it is a truly circular system and by necessity, is done here in the State of California, very hard to export your organic waste to China. We are working really hand in hand with our local partners, and I'm very proud of the work that the department staff have done to build that partnership.

The SB 1383 mandate is 75% reduction by 2025, and we are working very hard to divert that organic waste from landfills, and that is incumbent on us building those partnerships. So we have one division that provides local assistance, and every local government has local assistance staff assigned specifically to them that they can reach out to and discuss their specific compliance issues.

And then when we do have enforcement actions and compliance or corrective action plans, we work with them on how to devise those compliance plans and we go back to our local assistant staff to work the specific challenges that each local government has. Additionally, we started last year doing monthly what we would affectionately refer to as brown bags. But they're zoom because obviously we're all doing them remotely with our local governments so that they can share strategies for overcoming specific challenges.

And so we're doing some peer to peer work on some of the specific things. Additionally, at Calrecycle, we are developing statewide tools around education ordinances and other formulaic around procurement, other tools that all of the local governments can adopt.

So as much as that we can do on a statewide basis, we're doing, and fourth, but certainly not final, we are working very hard to get the dollars out the door that the Legislature has appropriated over the last two years to help local governments fill the gaps in compliance with those organics recycling strategies.

Well, thank you. Even in this building, we can improve our composting, I believe.

I was just really impressed to see the trash cans with the composting and recycling.

Yeah, it's progress for sure, in terms of the massive compromise, really important compromise last year, the legislation led by Senator Ben Allen on plastics, how is that affecting your role in your Department and this strategy?

So I think that that's a really important component of thinking about zero waste. SB 54 speaks specifically not only to recycling, but source reduction. So again, everything that we've seen in the last five years or so in this space, whether it's extended producer responsibility or I guess actually 10 years or so, or product stewardship or expansion of the beverage container recycling program, is really looking at a more circular system.

It's talking about how do we design products not for end of life, but rather for their next life? And SB 54 very much models that. It's an extended producer responsibility program. And so in the context of building a zero waste plan or a zero waste strategy, that absolutely would be one of the pieces of the larger plan. So when we're thinking about getting things out of landfill, single use packaging is going to be one of those largest components next to organics waste.

Senator Dahle, thank you Mr. Chairman. So I didn't vote for SB 54. I actually laid off of it. And the reason that I didn't vote for it was because there's really not a great plan. I know we got the producers, they brokered a deal with Senator Allen, and he worked for years on this. So I want to talk a little bit about SB 54. In your best estimate, how many CalRecycle staff will be expected to work on SB 54 implementation?

Oh, that's a good question. We had a BCP that we passed in September on the number of new staff. Do you remember? Approximately 54.

Approximately 54 for the SB 54. Okay, good. And then how does it compare to the staff that you have working on the bottle Bill program?

The beverage container recycling program has, I want to say, just under 200 staff currently working for the program.

And then my third question is, how many companies do you estimate will be required to join the producer responsibility organization or the pro, and be subject to the requirements of SB 54?

Oh, that's a really good question. That's thousands and thousands of companies. That's manufacturers all over the world.

So actually, you don't really know what that is. It's just a lot.

Well, we are just starting the regulatory process around SB 54, and so we don't have a registry of all of the manufacturers who utilize or are producing packaging at this juncture. So as the pro is created, that will become more apparent. And as we begin our registry process, that will become more apparent.

Okay, so I just have some brief comments that I want to know. When you look back at where California started, the bottles, really, we started out recycling aluminum cans and bottles, and there's a CRV value to it, and the program is great. It worked very well, and the education came along with it. I can remember back the schools engaged. Everybody engaged on, hey, we need to recycle. But there was a value to it.

So four out of the $0.05 really went back to the person who got the redemption, and then the $0.01 went to the organization or to the CalRecycle. And we've seen a success so successful that the bottles that we didn't get recycled, that which really helped fund the program, diminished. And the program then had a problem because there wasn't extra revenue. That stuff that got landfilled wasn't redeemed. The legislatures came along and we passed a lot of these bills that 341 and all these, and we.

We're using a stick, but we really, I think, need to maybe focus on implementation and how the plans out. That's the problem with SB 54 is it tells you what we're going to do, but it doesn't tell you how we're going to get there. The devil's in the details for the many programs in the Legislature puts out and the Administration puts forth. There's all these goals, whether it's a percentage of how much we're going to reduce carbon, how we're going to recycle water.

We heard, and this is the Committee for all that, and we hear about it, but we keep getting back reports that, hey, we're not getting there. We're not getting anywhere close to where we want to be. But we're spending a lot of resources to try to implement these programs. As a Legislator, I get calls from constituents who can't afford to live here anymore.

Literally, if you're on a fixed income, I'm going to tie this to recycling because organic waste is going to be developed by the city or the county or whoever picks up your garbage is really the person that's going to decide that and it's going to be now, I think, another garbage can or something that you're going to put this waste in, which there's a tipping fee that is required to go to and which is passed on to consumer at the end of the day.

And so I just want your thoughts. You called and we did a zoom the other day, which I appreciate, but I actually want to reduce waste and I actually want to use it and I want to make it work.

And we saw in the 10 years I've been here that when China stopped taking our recyclables, which was really the reason we met most of those other programs, is because they were taking our products to their market and then repurposing them or whatever they were doing with them and shipping a lot of that back to us.

And we've seen such a change in our ability to be able to say we're recycling, but really we were just diverting it from California, by the way, we were paying for a lot of that. And now that market stride up. So can you give me your vision for what it looks like? And so I can pass that along to my constituents and give them some confidence that we are actually going to have this circular economy.

Because when we talk about a circular economy, there's a cost to that. And the reason that it's hard is it's very easy to use this and throw it away, because to recycle this, it has to be hauled somewhere, it has to be repurposed, and there's a huge cost to that, especially with transportation costs in California and labor and all the other requirements that we, you know, there has to be some discussion with the Legislature and your agency on the cost because the cost really goes up.

It goes up a lot. When you start talking about a product that would just go straight into the landfill versus a product that we are going to make something else out of, and then is that product affordable at the end or are we just pushing it back onto the, we went now to the business community and said, hey, we're going to force you to make stuff that we can reuse.

I'm looking for a better thought process than going to the Legislature and passing some Bill that sets a target that gets me nothing, doesn't actually reduce waste because we've seen with 341, we're not getting there, but the cost is going up. The tipping fees, the people that are moving it around, it's still going up. And that's what is making California not competitive. And at the same time, we're not meeting our goals. So that's the overall big picture, 1000ft off the ground. What do you tell the Legislature on how we're going to get it and we're going to make that circular economy work?

Well, that is exactly why I'm here today, Senator, thank you so much for that. That is exactly the question. When our waste characterization plan came out in the fall, that was the exact question I was asking myself, is how do I go back to the Legislature and explain where we are today and how we're going to move forward in the future? How do we devise a plan for that?

And that is exactly what the zero waste plan is meant to do and the work that we've been doing over the last two years to start building that circular economy and realize that value here in California. It is so important, especially around organics, because we are seeing those rates go up for our constituents across the state right in every jurisdiction. How do we go back for your constituents? How do I go back and tell them how we're realizing that value here in the State of California?

And I can say, yes, we are investing. We are taking those public dollars that we have in our loan programs and our grant programs, and we are putting them back in your communities so that we can attract private funding. But I want to know, how do I do that better so that economic value is realized in your communities across the state, big and small.

So that is exactly the point of the zero waste plan, is to identify how do we attract those private dollars here in California to make those investments? How do we attract those jobs here in California to make those investments in building the circular economy? I don't want to come back in 10 years. It probably won't be me in 10 years, but I don't want us to be having this conversation again in 10 years about how we get to a circular economy.

I want to do it today. As we're rolling out of all this new legislation, how do we make sure that it is successful not only in building a circular economy, but realizing the economic, environmental and social benefit here in the State of California for the people of California? So thank you. I appreciate the question because that is exactly the point of this. The 41 million tons of waste in a landfill was, in my mind, staggering.

And I didn't take it so much as a failure of the part of the people of the State of California or the failure of state government. It's just simply that our economy has grown so much in this linear fashion that we need to change our strategy and this is our opportunity to do it.

So one last comment. Thank you for that. And as a Legislator who really does want to see us do the right thing, very frustrated with more of the stick. And what do I mean by that? And this is not just on the Legislature, this is on the industry as well. And we were focused on plastic bags. There was a Bill to eliminate plastic bags. I voted for the Eggman Bill. She had a great Bill on the renewable ones. What are they compostable, I guess, right? Yeah.

And I was like the only one on our side of the aisle. And I'm like, this is a great Bill. I think I got a few Republicans to go for it. But when it comes to the stick, there's two ways legislators do it. They either go, we're going to force you to do it, which drives the cost up.

And then the business side of the communities are reacting to whatever the Legislature is going to put out, which is unfortunate because we see bills like the plastic bag Bill, which is in my mind the worst kind of legislation. And I voted against it as well. It allowed the stores, the people who buy the bag for a cent and a half to be able to charge 25 cents. And they do go to the store. I personally use paper bags because I know they can be.

But a plastic bag is $0.25. They're a little better quality, they're a little heavier. Maybe you can reuse them some, but they're pocketing 23 cents. So what happens? We go out, we're using a stick now, we're driving the cost of a bag up so the disadvantaged poor people that can't afford a bag don't get a bag.

And the rich person who wants to be able to take a bag home gets a bag and the grocery store profits, that is bad legislation, that is bad policy, and that is a disincentive to recycle. And I just two days ago drove down the levee right here in Sacramento on the American river. And I should have took a photo. I cannot tell you when the waters came up. There are bags hanging in every one of those trees.

So this is more of a statement and a comment of how frustrated I am with the ability to be able to manipulate the system. And at the end of the day, the Enviro supported that. It doesn't help recycling, it helps people get rich. And the goal is to have them not use the bag because it's too expensive. That's wrong. For the life of me, that doesn't help the Environment.

It's the same thing I talked about earlier about, you go after the guy that has the gas station, but you don't go after the illegal grow guy. And that's the kind of policies that have to be changed around here. And we actually have to focus on how are we going to reduce the waste stream. And at the end of the day, the cost is going up. I'm sure Senator Becker gets it, too.

I get a call from the person that's on Social Security who owns their home in California, is in a disadvantaged community and can't afford to stay in California and can't afford to leave. And they're crying, literally crying on the phone like I'm making a decision between a carton of eggs or my prescription. And that's the frustrating part as a Legislator. So I just want to air it out. I want to say it in the public. I'm frustrated. And those kind of laws don't work.

They don't help the environment. All they do is make people rich and the wrong people, the people that are already getting rich off the system. So I'm here to solve problems. I want a circular economy that works. And when we talk about producing jobs, you can produce all those jobs in the economy of recirculate, but it drives up the cost of the original product when you do that. And that drives up the cost for Californians.

So when you do figure this out, if you can, this is very tough to do. I want you to keep in mind of that widow that makes that call, because at the end of the day, it is really tough on their life.

Well, thank you. And I do get concerns. We made some plastic bags in stores more sturdier. How many of those are actually getting reused, and how much is providing more difficulty in our landfills? I just want to ask you, just curiosity, with the pandemic where people started ordering more and more and more online or more and more takeout, I don't know how you measure, but have you seen an increase in waste from that?

So we did see a slight fluctuation from our waste characterization study. So the way that those studies are done is that we go out and do, or our contractor goes out and does a sampling at landfills. So we did see a little bit of a bump of that single use packaging material. But what's really interesting is we think that it transitioned from more of a commercial setting and the waste we would have seen in a commercial setting to the residential setting.

So it wasn't a statistically high or major significant increase. But what will be interesting is in our next waste characterization to see if those changes in consumer behavior continue. And we also have the additional commercial waste, if we see that trend, then fluctuate that way, or if we go back to the way things were before the pandemic.

So the beauty of these new waste characterization studies, and we've only started them in the last couple of years, is that we're going to be able to start seeing some of these trends and address those trends in our policies.

Okay, thank you, Senator Dahle.

I remembered now what I was going to. So the homeless population is really a big generator of our waste that doesn't get recycled. Now, they do recycle very well because they come by and pirate my recycle Bin and take stuff out. That's valuable, which is great, fine, because there's a revenue source there. But is there any grants available or programs available for the local waste haulers or cities or counties to actually place a recycle Bin on the levee?

And I'd be happy as somebody who cares about the environment to figure out some little percentage that goes out so we can provide a place where they can put their waste so they don't just throw it on the ground. Is there any programs available in CalRecycled or with cities or counties that have the ability to be able to do that?

So, as you know, Senator, that waste programs are devised on a local basis through their local authority. So many of our local governments do choose to put waste and recycling receptacles in places where they see a high number of homeless populations. So on a local government basis, they make that determination. I think one of the bigger issues that we do see is then that illegal dumping that happens across the state, and local governments are also trying to address that. And we work collaboratively with our local governments in running conversations about how to address that.

So I know, because I'm a landowner, that we had a huge problem with illegal dunking of tires because there was a fee at the landfills or the transfer stations, which we have, and we were a recipient of Lily because they can pull off, and then they go out in the forest a little bit and they're on our property and they just throw it out. And so there was a program that I know the rural counties used.

It was a great program where we could apply, and then they had whatever, amnesty day or whatever, and we would, I mean, literally hundreds of truckloads of tires. And then that's what I'm thinking about. I'm thinking about something along that line where, I don't know, the rural counties have recycling for oil and they have these tire programs.

That's what I'm thinking along the lines of placing these in places where we know there's encampments mainly along, right here in Sacramento. I mean, you can go along the American river and see those encampments, and there's just waste all over the ground, and it's polluting our waterways and the environment.

I think it's a great idea. We don't have a program to that effect at this juncture. The tire program, which has been a very successful program and has resulted in helping alleviate the waste from illegally dumped tires and then putting them into a recycled use, is partially funded from the tire fee, or the tire fee partially funds that program. So we don't currently have a program like that. But I think it's great idea to bring back to our local governments, and so we'll have our staff bring that back to our local partners.

Good afternoon, Mr. Chair and Members of the Committee, John Parsons with the Department of Finance. I'm here to discuss the general fund solutions for the circular economy package as part of the administration's general framework for general fund solutions on climate and natural resources.

The approach for the solutions related to the circular economy package included several considerations, including, but not limited to, protecting the majority of funding for most programs prioritizing equity and investments in priority populations which face disproportionate harm from pollution and the climate crisis minimizing disruptions for programs underway, including considerations for the status of previously funded programs, potential availability to shift to other funds, providing equitable reductions across categories and availability of program funding by fiscal year.

All of the reductions in investments related to the circular economy package are designated as general fund triggers to be restored if the fiscal outlook improves. This demonstrates the administration's continued commitment to these programs. The overall reduction to the circular economy package is $24 million across three programs. This maintains approximately 95% of the original 468,000,000. The overall general fund reductions derive from 2021 and 2022 appropriations, which include funding for the Composting Opportunities Program, the Recycling Feasibility Grants program, and the Recycling Market Development Zone Loan Program.

The administration remains committed to protecting these historic investments as much as possible for the state to continue to make major strides in reducing the amount of waste ending up in our landfills and meeting our statewide goals for waste reduction. This concludes my presentation. I'm still joined by Director Wagner to help answer any questions the committee may have.

Thank you. I'll turn to LAO next to any comments.

Thank you, Mr. Chair. Overall, the Governor proposes reductions to programs that are relatively new or modest, reductions to programs that receive significant general fund augmentations. Overall, we find this approach to be reasonable. We note that based on more recent economic data, our office estimates that the budget problem could be much larger than estimated in the governor's January budget. We note that within the circular economy package, the department has greenhouse gas reduction funds that have not been committed.

At the time of our report, it was around 240 million. The legislature could consider reducing funding for these programs and shifting its highest priority general fund-supported programs to GGRF. This would provide budget solutions and sustain those programs. For instance, the department has roughly 180 million in unspent GGRF funds for SB 1383 implementation grants. While a reduction to this program would reduce the number of grants that are intended to help local agencies in planning, this program may not be the legislature's highest GGRF priorities.

Happy to take any questions.

Thank you, Senator Dahle, any last...okay. I'm also going to defer on this one again in the interest of time. We do have a hold-open recommendation, so we're going to accept that recommendation from the staff. But I thank everyone for your time in presenting us, being, answering all of our questions here today's. With that, we'll move to public comment. We will start with folks here in the room. Again, there is available online 877-226-8163 on the phone and the access code 694-8930.

Again, in this time, we'll have to keep comments to 1 minute and we'll have to cut people off who go longer than that. But we do value your comments and please go ahead.

Thank you, Mr. Chair. Beth Olasso, on behalf of WateReuse California, again, we appreciate your strong support of water recycling. Wanted to take a quick moment to take respectful issue with the LAO's characterization of water recycling funding that's available, specifically on what's coming from the federal government. Encourage you and your staff to talk with the division of financial assistance to kind of see what they're actually getting in and able to get out.

We're not seeing what they say is out there in particular to the SRF program. DFA is talking about funding no new projects for this year. So that's kind of contrary know they're trying to get the sustainable loan capacity of the program under control, which we understand. So there is a little bit of a disconnect of what they're saying is available versus what our projects are being able to apply for.

And as you know, there's a lot of need and a lot of want for water recycling funding and we encourage as much possible to go into that program to get these projects up and going. Additionally, you didn't speak about the budget change proposal. I think this is the appropriate hearing for that discussion. It just wasn't brought up. The BCP for a water recycling permit fee, which is new. If we're coming to this later, you give me a headshake and we can come back another day.

But I thought that this was the appropriate hearing for that.

We will come back.

You don't want to take your time?

Yeah, sure. If you make a quick comment on that. Thank you for coming on recycling. Noted. And we will certainly follow up. Do you want a quick comment?

On the BCP for a new recycled water permit fee? We understand there's more water recycling permits that are going out there and they need the staff to get those moving along and anything we can do with direct potable reuse regulations coming in to get those projects moving quicker. Water reuse actually supports the fee. We are looking for just some assurances that that fee just won't get escalated very quickly. We don't want projects to be priced out because of permit fees.

So we'd love to discuss with the State Board and the committee a cap on fee increases every year, whether it's 5%, whether it's to - however we do that, I think it's a worthy discussion. We would also love the fee proposal process to the public process to go before they propose a fee to the legislature so that there can be a public process to influence their proposal so that we can all make sure we're on the same page.

So we'd love to talk to you guys about that.

Yeah. Thank you. A little longer because it didn't come up today, we will look into that but thank you. We'll move on to the next comment.

Hi there. Jamie Minor, Niemela Pappas and Associates on behalf of Eastern Municipal Water District, Santa Margarita Water District, Monterey One Water and West Basin Municipal Water District want to echo Ms. Olhasso's comments about the water recycling funding. It's not a sure bet that it's coming from the feds, and we have projects that are ready to go. The program is over prescribed, so now is not the time to claw back that funding in the sake of thinking that it's coming federally.

Additionally, in regard to the drought resilience funding package and what the Governor has proposed for urban flood risk, on behalf of the California Stormwater Quality Association supportive of that funding, but also we're hoping for a little bit of flexibility on stormwater capture and ensuring that projects could be eligible that both reduce flood risk but also capture stormwater flows. So thank you for your time.

Thank you. Important topics for sure. Thank you. Next up.

Hi. Good afternoon, Mr. Chair and Senator Dahle: Ivy Brittain with the Northern California Water Association and on behalf of Association of California Water Agencies here today to support issue 30, the State Water Board's water rights data modernization continuation. We really appreciate Chair Esquivel's comments, and we wholeheartedly agree that the Water Board needs good, reliable, modern data to effectively implement the state's current water rights priority system that California relies on so heavily for its economy. Its environment, its agriculture.

So, for that reason, we respectfully urge your support for this budget allocation. Thank you.

Well, thank you. I think you heard some support here, but I appreciate that.

Next up, good afternoon. Rebecca Marcus: on behalf of the Union of Concerned Scientists, I'm just going to echo my colleague's comments about issue number 30. We also support the $30 million investment in upward. Additionally, I'm speaking on behalf of the California Climate and Agriculture Network in opposition to the $40 million reduction to sweep contained in issue 31. This oversubscribed program provides grants to farmers for projects which integrate water and energy conservation as well as lower GHG emissions.

CDFA estimates this program saves 144,000 acre feet of water annually and each year reduces 93,000 metric tons of CO2e, the equivalent of removing 20,000 cars per year from the road. We look forward to discussing these programs and possible funding. Thank you.

Thank you. Yeah, we did note the decrease in sweeps. Thank you.

Thank you. Mr. Chair, Senator Dahle, I'm Mark Fenstermaker here on behalf of Sonoma Water as well as the Salinas Valley Basin Groundwater Sustainability Agency. On issue 29, we certainly appreciate support the department having the staff and resources needed to implement Sigma continue to provide assistance to our GSAs. But I wanted to highlight a little bit what's happening at the local level. There are basins and sub-basins like the ones I just mentioned.

My clients where trying to have the resources and the staffing support to implement Sigma and cover some of the fixed costs is really, really challenging without passing along exorbitantly high fees onto our pumpers. These basins and sub-basins, we're talking about pumping volumes less than 10,000 acre-feet per year. So we don't have the pool of people, of pumpers, to pass along some of these fixed costs as we administer and implement Sigma, we're talking about fees in the high acre foot per year.

And for rural residents who are relying on this for groundwater or for small farmers, that's just something that they can't take on. So we're looking for some assistance. We're talking with the Department, and we're not just coming to the state. We are trying to figure this out at the local level. As know in the county of Sonoma last year, they had a little bit of surplus.

They dedicated some of that for funding to bring the fees down to a more manageable level for pumpers, but it's a temporary subsidy. So, we look forward to working with you and the committee on trying to figure this out.

Thank you for your comment.

Hello, Chair and Senator Dahle: I'm Nicholas Mazzotti on behalf of California Compost Coalition and CRNR Environmental Services, voicing concerns about the Legislature potentially withdrawing funds appropriated last year for the implementation of 1383.

The state is in desperate need of additional organic waste processing capacity to meet our targets, and without this funding, we risk losing several projects in the development pipeline that are counting on this funding allocation this year. Thank you so much.

Thank you very much.

Hi, Chair and Senator Dahle, I'm echoing concerns that my colleagues stated. I'm Amara Eger on behalf of Rethink Waste, a waste management authority located in San Mateo County. We have concerns with the LAO's suggestion that the legislator may want to consider cutting back the funding allocated for last year's organic recycling infrastructure. This funding will be critical to help our member agencies implement the important goals of SB 1383.

And as we mentioned at the last hearing, we're also concerned about the administration's proposal to eliminate the community composting program that was approved last year as part of the budget. Thank you.

Great noted. Thank you very much.

Good afternoon, Senator and Brian Dahle...excuse me, Chair and Senator Dahle. On issue 32, Nicole Kurian and with California's Against Waste, on issue 32, we'd like to express our support for the proposal to create a zero waste plan for the state. The legislature has recently passed groundbreaking waste reduction legislation spanning a wide spectrum of materials and products, from plastics to organics to electronics and more.

Now is an appropriate time to take a holistic look at how these programs fit together and how CalRecycle will achieve the targets that the legislature has set out for it. And the zero waste plan is a good way to do that. A specific issue that merits extra consideration in this plan is developing a strategy for achieving the food waste prevention targets in SB 1383.

While the state and local jurisdictions are working at full speed to achieve the composting targets in the law, not enough attention has been paid to the target of recovering 20% of all edible food waste for human consumption. We believe that the zero waste plan should have a particular focus on creating a roadmap for reducing food waste and for supporting food recovery efforts. On issue 33, we have a couple of comments regarding the circular economy package.

We're concerned that the LAO suggestion that the legislature should consider withdrawing the money that was appropriate last year to fund implementation of SB 1383. This funding has been a crucial part of the state's plan to meet these targets, and reducing it would be a significant setback for our efforts to cut methane emissions. Additionally, as we mentioned the last hearing, we're very concerned about the administration's proposal to eliminate the community composting program that has been approved as part of last year's budget.

And then, finally, we'd like to see the circular economy package expanded to include funding for the grant program established in last year's AB 1857. That program was designed to help local communities transition away from incineration, but that was left unfunded in both the bill and the administration's proposed budget. Thank you.

Look into that. Thank you. Thank you for your patience.

Last but not least. Yeah. Good afternoon, Chair and Senator Dahle. It's good to see you both. My name is Jamie Fanous. I'm the Policy Director at the Community Alliance with Family Farmers. We represent over 8000 small and mid-scale and underserved family farmers across the state of California.

While we, of course, appreciate the maintenance of essential drought relief for small scale farmers and underserved farmers, we're super disappointed with the inequitable cuts that have been made to several existing programs at CDFA, namely the $15 million cut to the Farm to Community Food Hub, which was a program that was created by former Assemblymember Bloom to stand up new food hubs which are essential for our small scale farmers to access larger markets. A 50% cut to the urban agriculture program.

So that was a $5.8 million cut and a $5 million cut to the beginning farmer and farm worker training program, which is an essential program for our small-scale farmers and beginning farmers to access agriculture as an industry. And, of course, I want to highlight the extreme floods that have happened on the coast. This has decimated hundreds of small-scale farmers. Their homes, their infrastructure, their yields are completely gone overnight. There is no current federal or state funds that they can access.

Many of these farmers are potentially undocumented and can't access federal programs. And so we know that the Governor has set aside flooding money, and we'd like to ask that $5 million of those dollars go actually to relief for primarily small-scale farmers and underserved farmers in order to get them to get back on their feet, especially since many of them don't have access to crop insurance. So, yeah, I appreciate your time, and I know it's been a long day, so thank you very much.

Thank you. We will now move to folks on the conference line. Operator, are there folks on the conference line?

Yes, Mr. Chair. For those who have not spoke to an operator and wish to comment, please press one than zero at this time. We're now going to go to line 16. Your line is now open.

Good afternoon. My name is Nataly with Leadership Council for Justice and Accountability. Regarding item 31, California must continue to provide funding for drought-impacted communities, and we support the proposed drought contingency funding of 125 million in the January budget. At the same time, this is not the time to construct investments in drinking water and sewer projects. Approximately 1 million people still lack access to drinking water and there remains filling and nonmet infrastructure needs.

On issue 29, we support continuing Sigma implementation funding to DWR and also note that the state water borders will need implementation funding to manage inadequate basins. Regarding investments in recharge, it is important to invest in aquifer recovery and flood control. At the same time, it is equally important to ensure recharge does not degrade groundwater quality. The state must invest in analysis and mapping of safe recharge sites that will not flush contamination from the soil into drinking water.

Also, we do not support funding for groundwater trading because it would exacerbate existing inequities and result in dewater drinking wells. Finally, drinking water and sewer affordability continue to be a high priority for the communities we work with. California must fund a low-income water rate assistance program as proposed by Senator Dodd and SD 22 last year. Thank you.

Thank you very much. Next caller.

We'll now go to line 15. Your line is now open.

Thank you, and good afternoon. This is Pilar Onate Quintana on behalf of the Irvine Ranch Water District, here to echo WateReuse's comments with respect to concerns pertaining to the proposed recycled water funding cuts. Thank you very much.

Thank you.

We'll now move on to line 23. Your line is now open.

Thank you. Chair and Senator Dahle, Jordan Wells on behalf of the National Stewardship Action Council in strong support of issue 32. We agree with the LAO's analysis regarding the state having made minimal progress towards reaching our diversion goals to date. However, we believe that is due to the fact that we set the wrong goals with AB 341. Striving for a statewide 75% diversion rate goal is not working because we never had a plan to achieve the goal.

Instead of focusing on waste diversion, we recommend a zero waste goal with a plan to achieve it that includes real source reduction targets, just like the Legislature did last year in passing SB 54. We must have source reduction and reuse targets to achieve a circular economy. In order for California to get to zero waste, we must have a well-developed plan that includes a reduction in waste generation. Therefore, we support the proposal for CalRecycle to develop a zero-waste plan. Thank you again.

Thank you. Next caller.

We'll now move on to line 25. Your line is now open.

Good afternoon, Mr. Chair and Senators: Rosanna Carvacho Elliott. On behalf of the California Groundwater Coalition, I want to express our opposition to the cuts in item 31 for water recycling, PFAS funding and the sweep program, and additionally want to express support for issue 12, the stream gauge funding and issue 29. Excuse me, money to DWR for Sigma implementation. Thank you very much.

Thank you.

We'll now move on to line 30. Your line is now open.

Hi, this is Gail Delihant with Western Growers Association, and I'm calling in today to support issue 29, the Sigma delivery ram of the $14 million, issue 30, as well the $31.5 million for the Upward Program, which is much needed, and to ask the Legislature and the budget committees to reconsider funding sweeps as it is critical to agriculture. Thank you very much.

Thank you.

Now go to line 19. Your line is now open.

Good afternoon. Julia Levin with the Bioenergy Association of California. I'd like to speak to issue 33 on the circular economy regarding calorie cycles funding for diverted organic waste programs. Climate science is very, very clear now that the most urgent thing we can do to address climate change is to reduce methane emissions and other short-lived climate pollutants. Landfills are the largest source of methane in California, so this is by far our most urgent climate solution.

In addition, the Legislative Analyst Office and the California Air Resources Board have found that California's climate investments in converting organic waste to energy are by far the most cost-effective of all of the state's climate investments, reducing carbon emissions for a small fraction of the cost of most of our other climate investments. So, these should be the last programs that the Legislature proposes to cut. We urge you not to cut the current year funding. That proposal is already out on the street.

Local governments and private companies have invested a lot of money in preparing to apply for the current year funding, and it would be extremely disruptive to the market to cut those. We also urge you to continue funding with at least cap and trade revenues, if not general fund money, in this next year, given that this is the most urgent climate solution and the most cost-effective. Thank you.

Thank you very much. Next caller.

Line nine. Your line is now open.

Thank you. Good afternoon, Chair, Members: Erik Turner with Niemela Pappas & Associates on behalf of Turlock Irrigation District in support of budget item number 30 related to updating water rights data for California modernization project. Thank you.

Thank you very much. Next caller.

Line 18. Your line is now open.

Good afternoon, Chair and Senator Dahle: Martin Radosovich, on behalf of Santa Clara Valley Water District, we're the regional water supply wholesaler for Santa Clara County. Wanted to speak on issue number 31 and align our comments with water reuse. It's opposing the recommended cuts for funding for water recycling. We have quite the ambitious goal of meeting 10% of nonpotable reuse and potable reuse water by 2025, and that'll take strong state investment. So we'd like to encourage that funding to remain. Thank you for your time.

Thank you very...thank you very much. Next caller.

Line 21. Your line is now open.

Hello, my name is Monique Figueiredo with CompostableLA. And I'm here to express opposition to budget cuts for composting programs in the face of meeting the demands of SB 1383. Community composters are established. We're passionate, and we're adaptable partners. And so by cutting funding community composting programs, California is effectively deprioritizing local small businesses and nonprofits right at the time they are needed most. It signals that our work is not seen as important.

We are here and ready to diversify the options available to Californians to divert their food scraps in a way that is most meaningful and value-aligned for them. And we really need the Budget Committee to stand by the work we are doing to continue to scale our impact. Thank you so much.

Thank you. Good, concise comments. Thank you, everybody. Next caller.

Line 20. Your line is now open.

Mr. Chair, Vice Chair, this is Robert Gore from the Guelco Group on behalf of Kings River Water Authority and Modesto Irrigation District, both longtime fee payers, in strong support of items 29 and 30. On item 30, we'd note that data modernization is essential statewide benefit and worthy of continuing general fund support for future funding. Thank you.

Thank you very much. Next caller.

Line 27. Your line is now open.

Good afternoon, Chair Becker and Senator Dahle. My name is Kourtnii Brown. I am calling from the California Alliance for Community Composting. Commenting on issue 33, we opposed LAO's recommendation that you reduce funds for the circular economy package coming from compost opportunities based on two reasons. One, it is not new. This program that we are doing. We've been operating community composting for green spaces since 2020.

It's a really important time because we were providing the most essential services to local communities during the onset of COVID to keep organics out of landfills at a time that commercial industries were not able to provide that same service. And secondly, this program, the fund for it, has already been committed.

I am a little frustrated that power cycle was not able to communicate to you today that they have already run the RFA process for the second round of this program, and there are a lot of communities that are looking to expand under it. So we implore you to consider the innovative solutions we're providing for SB 1383 right now.

And Senator Dahle, I should have been speaking to you because we actually do have a site that works with houseless individuals that help collect their materials, bring it to community gardens, where if they do so, we then offer and grow food and feed them. So we are realizing the circular economy through this program, and we are doing it in environmentally just and socially just ways. So thank you very much for your time.

Please reach out to us if you have more comments about this program or any questions.

Thank you. Thank you very much. Next caller.

Line 31, your line is now open.

Good afternoon. Elise Fandrich from TrattenPrice Consulting here on behalf of the Asia Pacific Environmental Network, the California Green New Deal Coalition, and the California Environmental Justice Alliance expressing strong support to protect budget funding for the state's Community Resilience Centers program.

This program is critical and, with adequate funding, would enable construction and rehabilitation of neighborhood-based community facilities to serve as resilience centers that address the growing needs of working-class communities of color in the face of converging climate, economic, and public health crises, many of which you have heard about today, such as flooding, drought, wildfire impact, as well as extreme heat and power outages relevant to today's items.

These resiliency centers can also serve as a hub for community education and distribution of information pertaining to many of the items covered, like education around residential recycling and composting, water use, and resources available to residents regarding water affordability and water recycling. We urge the state to protect the full $160 million of funding for the SGC community resilience centers program. Delays in funding could leave these planned projects without the necessary resources to implement and would significantly hamper the program that has extensive community input and support. Thank you.

Thank you very much. Next caller.

Line 32, your line is now open. Line 32, your line is open.

Hi, can you folks hear me? Okay. Good afternoon, Mr. Chair and Vice Chair. This is Abraham Mendoza with the Community Water Center. We'd really like to thank the Committee for advancing drought positions in issue eight and recharge support in issue nine.

But we really want to note that the recharge of groundwater can have water quality impacts if there are contaminants in the soil, and we need to see more support for mapping where recharge can be conducted safely, as well as active monitoring of water quality for the recharge projects that are next to or near domestic wells and small water systems. Similarly to our colleagues from leadership council, we support investments in stigma implementation, but we're extremely concerned about impacts on drinking water from groundwater training.

And lastly, we're concerned about the proposal to cut up to 1 billion from the drinking water infrastructure. There is a 10 billion need gap to ensure safe drinking water in the state of California. And while your analysis points that there are other resources available, these are insufficient for a variety of reasons. And we urge the legislature not to pull this critical funding because we need a pipeline to keep these projects going until we fulfill the human rights of water for all. Thank you for your time.

Thank you.

Now move on to line 29.

Hello, my name is Elinor Crescenzi, representing the Integrative Development Initiative. I'm a community composter in Southern California and one of the core stewards of the community composting for green spaces $1.5 million pilot program run by Cal Recycle. I urge you to retain the $5 million of funding for community composting as critical community and environmental health funding.

Community composting provides opportunities for composting at the level of communities that are acceptable to all communities, not targeting disadvantaged communities, and instead providing, along with waste management, a whole suite of community environmental programming, such as green space development, gathering space, groundwater infiltration, educational programming, et cetera, et cetera, et cetera. All this for the same dollar that's meant to divert waste from the landfills. You don't get that with large-scale composting. Thank you very much.

Thank you. Next caller.

Line 33. Your line is now open.

Good afternoon, Mr. Chair. Jessica Sankus. On behalf of the League of California Cities, representing 479 California cities, we would like to submit our respectful opposition to the recommendation from the LAO for item 33, the recommendation being to reduce grant funding included in the 2022 Budget Act for local governments to comply with the Organic Waste Diversion program regulations pursuant to SB 1383.

To echo the comments you've heard previously, these grant funds are a critical resource for local governments, and it is a symbol of state and local partnership to achieve our shared policy goals. For these reasons, we urge the legislature to maintain this funding. Thank you.

Thank you very much. This is the last caller.

Final call for anyone who wishes to comment, please press one, then zero.

Okay. No one further-

Mr. Chair, I apologize. We do have two more people who've signaled that they wish to speak. Just a moment, please.

Okay to move very quickly.

Yes. And we'll now go to line 34. Your line is now open.

Good afternoon. My name is Nathanie Wentworth, and I'm a previous owner of a shut down community compost site called the Compost Group. One of the most important climate mitigation qualities of compost, the actual application of compost onto our land. It not only sequesters carbon from the atmosphere but also removes toxins from water runoff and builds stability in the soil.

While the recent major efforts in organic waste infrastructure have helped us divert organic waste from landfill, we do risk disconnecting our communities from rebuilding soil and from reaping those benefits by keeping our compost local. Unfortunately, it's extremely common for California municipalities to have an exclusive franchise hauling agreement with our major waste haulers, which in most cases does not allow community composters to ask for composting for their community. And therefore, in order to ensure all of our existing community compost organizations can continue operation in this regulatory.

Thank you for a comment. I do appreciate the comment on community composting. I do have to cut you off at the 1 minute mark. Next caller, please.

Line 35, your line is now open.

Hi there, good afternoon. My name is David Better, calling on behalf of the Keela Collective, a group of UC Berkeley students that are looking forward to building out community composting opportunities in our area and looking to echo the sentiments of previous callers that are hoping to secure the funding that we've been looking forward to bringing to life. So, I'll keep my call brief, and thank you for your time.

Thank you. Thanks for that call in support of community composting as well.

And with that, we've concluded public comments and we're going to move on to the vote only calendar. We're going to start out with issues number 6,8,9,12,19,20,26 and 27. Do I have a motion on those? Call the roll, please.

[Roll Call]

The motion is approved on a vote of three, nothing, and those budget items are out. Now we will go to items 1,2 and 3, 5, 11,13, 14, 17, 21, and 24. Do I have a motion on those items? Moved by Mr. McGuire. Senator McGuire... call the roll, please.

[Roll Call]

That motion is approved on vote of two to one, and those items are out. We now move on to items 4,7,10,15,16,18,22 and 23. Do I have a motion on those. Senator McGuire moves, please call the roll.

[Roll Call]

Motion is approved with a two to zero vote and those items are out as well. I want to thank everyone for a long and productive hearing. Thanked everyone who testified. If you are not able to testify, please submit your comments or suggestions in writing or visit our website. Thanks to all the panelists who came and presented and all who gave public comment today. We've now concluded the agenda for today's hearing on Senate Budget Subscommittee two, and we are now adjourned.