Senate Budget and Fiscal Review Subcommittee No. 5 on Corrections, Public Safety, Judiciary, Labor and Transportation

Safety, judiciary, labor, and transportation will come to order. Good morning, everyone. The Senate continues to welcome the public in person and via the teleconference service for individuals wishing to provide public comment. Today's participant number is 844-291-5491 and the access code is 704-2477. We are holding our Committee hearings here in the Capitol. I ask all Members of the Subcommitee to be present in room 112 so we can establish our quorum and begin our hearing. We don't have quorum. We can do it. Okay.

We have 13 issues on today's agenda. Before we hear a presentation on the issues, let's establish our quorum consultants. Please do the roll.

Senator Durazo.

Here.

Here. Senator Newman. Senator Seyarto.

I'm here.

Here.

The consultant notes a quorum has been established. We will begin with the Board of State and Community Corrections. Today's hearing will also cover the Office of the State Public Defender, the judicial branch, and the Department of Justice. Before we actually get started with their presentation, Senator Seyarto, you want to say a few words?

Yes, I would, and I apologize in advance for my abbreviated attendance today. This particular issue, all of these issues that we're dealing with today, a particular concern for me, is our judicial branch of government. Right now, we're having a public safety crisis in California, and all of the different aspects of public safety have to work well. Right now, the judicial branch is not working well, and part of it is underfunding of judges.

We have a lot of increased burdens put onto the judicial branch, and I'm concerned that our funding isn't up to par with what they need to do the job. And if the judicial branch isn't working well, the rest of public safety does not work well. And so I'm hoping that in our proceedings of going through the budget and ensuring that departments have what they need, that we ensure the funding that is necessary for various agencies to do their jobs.

The County of Riverside is 22 judges short, and it's causing mass releases of people that aren't even being held accountable for some of the crimes that they are committing or they have been accused of because they don't even get to the part where they're being charged. So that's something that I think we should pay a lot of attention to.

In the Department of Justice area, we have a pretty large Litigation Deposit Fund, and there are some other areas of the public safety system and CDCR and things like that that we're actually realizing savings from because we've created less prison inmates. And I would hope that the savings that we realize from these different areas can be put into areas that are suffering.

Because if we don't get a handle on this, I fear that the people in California will lose confidence in our ability to keep them safe. So, with that being said, Madam Chair, I hand it back to you. Thank you for allowing me to just say those words. I wish I could be here for the whole proceeding, but I cannot.

Thanks, Senator.

Let's begin now with our first item, our proposed reduction in Public Defense Pilot Program. First, we're going to hear an overview from Katie Howard, Executive Director of the Board of State and Community Corrections. Good morning.

Hi. Thank you. Microphones on. My name is Katie Howard. As you said, I am the Executive Director here at the BSCC. It's a pleasure to be here in person today. Good morning, Senator Durazo, Members of the Committee, I will give a brief overview of the Public Defender Pilot Program which the BSCC administers. And if you don't mind, I'm going to refer to it as PDPP to save time. This program was established

Another one I'm going to have to remind. Right.

The program was established in the Budget Act of 2021. It was to be a three year pilot program funded with $50 million each year. In the first year, $49.5 million was available for indigent defense matters, and 500,000 was available for the BSCC to contract with an independent evaluator, we're working with the RAND Corporation on this program. Subject to future state appropriations, we anticipated funding in the subsequent two additional budget years.

Very quick overview, because this is going out per a formula that we established in consultation with the language that was provided in the Budget Act, as well as working with the Office of the State Public Defender. And, in essence, we did a calculation based on the total adult population by county, and that number would fluctuate each year, depending on the number of counties that wanted to participate in the pilot program.

So, for each year, it was a matter of determining how many counties were interested in receiving the funding and then, in turn, how much they could contract for under this pilot program. So our first application was released in October of 2021. In that year, 34 counties were funded for an agreement that goes through March of 2025. That's with that initial year of appropriation. Then, in 2022, we learned from the Office of the State Public Defender that more counties were interested in applying, so we worked together to figure out how to put that funding out.

We wanted to be sure that interested counties could receive the funding and participate. This wasn't a competitive grant, it was more of who's interested, and then you could get the funding. So we created a modified application process and shortened that grant time period so that for round two, if you will, it would be funding for March 2023 through March 2025. We modified the time frame. We did several other things.

I don't want to give you too much detail here. In the fiscal year 22-23 funding, we had five new counties come into the program. That was Amador, Kings, Madeira, San Benito, and San Luis Obispo, and then two counties that did not apply for the second year of funding. Those were Imperial and Merced.

So the issue now with this proposed reduction in year three, we have all of these programs up and running, the grantees are aware of the funding that is available to them, and they're under grant agreements for the specified period of time.

So with the proposed reduction, it, in essence, just put a stop on getting that third year of funding out into the field, it doesn't change the agreements that are already out there. Obviously, a third year of funding would provide more resources to do more of this indigent defense work. But that's kind of the level of overview I wanted to offer.

And, of course, I'm happy to take any questions that you may have.

Thank you very much, Executive Director Howard. Next we're going to hear from two public defenders, starting with Graciela Martinez from Los Angeles County.

Yeah. Good morning, Senator Grasso and Members of the Committee. Thank you so much for having us here today, having me and my esteemed colleagues on this week of the 60th anniversary of Gideon. And at this time, I would like to briefly pause to acknowledge my colleagues that are in the room. I believe they may be holding some signs before I proceed. This is obviously a Budget Committee, and there will be numbers that I will be discussing.

I'm sorry.

If we could just. Thank you very much. Appreciate that. So others who are in the room could see. Thank you very much. Go ahead.

Okay. Sorry. And I'm sorry, I'm not exactly sure if I identified myself or not, but I'm Graciela Martinez and I'm the Assistant Public Defender here in Los Angeles County. I'm also the President of the California Public Defenders Association and a longtime advocate of immigrant rights, especially those individuals who are in the criminal legal system and impacted by the system.

So today, the focus is going to be on some of the Los Angeles numbers, but also on some of the numbers statewide and the reason why we should continue to maintain the funding that was originally appropriated for Los Angeles County. So, in Los Angeles County alone between January 2019, I'm sorry, January 2019 and June 30 2022 there were 189 individuals who were resentenced and by those resentencing for individuals who were no longer required or should be in prison given the changes in the law, there was a savings of nearly $470,000,000.

Additionally, that restored nearly 4400 years to them, to those individuals who were previously incarcerated, and to their families. The projected savings for the SB 1437 and SB 775 is projected at 1.1 billion alone at this point in time.

And so now I'm going to talk a little bit about the intersectionality of these laws and why they are so important not only to our communities here in Los Angeles County, but also to the communities statewide throughout this wonderful State of California. I would like to talk about the beauty of this program is how we have established a framework within our offices and infrastructure that tries to restore these individuals back into their community in a safe and productive manner.

Because part of the funding that we requested, and that this legislative body so graciously gave us, was to fund not only public defenders who are obviously critical to the implementations of these great laws, but also to fund other resources, including social workers, who have been very critical in creating reentry plans for our clients and for the community so that when they get released into the community, they are productive members, they have employment, because it's critical that people are employed during this time.

So I'm going to give a couple of examples now of how we have used these resources here in the County of Los Angeles. We have social workers that have been hired. We have a unit that has been created to litigate these cases, to make sure that we have an infrastructure in place as we move forward. An example of such a case is Charles. Charles was released from prison after serving 26 years, and he is now living in Norwalk.

He has been a part of our collective holistic team. He's now been referred to a union labor organization that works with previously incarcerated individuals so that they can get union jobs with the film industry.

One of the other things that we have been able to do is expand the use of Penal Code Section 1473.7, which allows immigrant communities to access the wonderful relief under 1473.7 to restore individuals who are subject to deportation based on the invalidity of the laws as they existed at the time, and because they didn't meaningfully understand those consequences.

And here in Los Angeles County, I am happy to say we have had many successes. I'm going to highlight two successes. One of them is of Giselle, who had been convicted of drug related offenses. We were able to successfully recall those convictions based on the constitutional invalidity that existed at the time.

And now she, on Martin Luther King weekend here in Los Angeles County, she became a US citizen. That's one example. We have other examples of individuals intersectionally of these laws where people have been released from state prison and they had immigration issues, and we were able to work with them so that they, upon release from state prison, could be reintegrated into the community with their families and stop the pipeline from county jail and state prison to deportation.

So those are some of the many examples that we have here. But more importantly to this Committee is how these laws and these resources allow us to prevent and to remedy some of the racial inequities that are so prevalent in our communities, in the state, and in our nation. We, as public defenders, know only too well that the laws on the books are not always the laws on the street.

And what these laws really allow us to do is to have equity in situations where so many young men, especially young men of, women of, brown and also women of color, of course, brown and black men, are brought into the system based on over policing, based on the inequitable applications of these laws. And what we are able to do is to go back and restore this.

And if we don't have this money on the third year, the foundation that we have laid and the work that we have done will go to waste. And it will prevent us from continuing to access the power of these laws so that we can fully implement the vision that this state so proudly promotes in terms of diversity, equity and racial justice. And with that, I will submit, and I'm here to answer any questions. Thank you.

Great. Thank you very much, Ms. Martinez. Appreciate all the work that you do and to help us understand the program. Next we're going to hear from Tracie Olson, the Yolo County public defender.

Thank you.

Good morning.

Yes, my name is Tracie Olson. I'm here on behalf of the California Public Defenders Association, where I'm an Executive Board Member, but I am also, as you noted, the Yolo County Public Defender. To my left is Carlos Hernandez, and he is actually a person that was released under this grant, and he will address you in a few minutes. My county is about 220,000 people. We received $289,000 from this grant program.

And even though there are four categories of work that we could dedicate this money towards, with that amount of money, we decided that really the most bang for our buck would be to focus on resentencings. Our District Attorney in Yolo County had actually shown a willingness to relook at people, to relook at people who had received really long sentences, to see who they were today and to see whether or not rehabilitation had been demonstrated, and they would get a second chance in the community.

We were also, Yolo County was one of nine counties in the state to get another small pot of money just to do this work. So between the two grants, we set up a post conviction unit. It's one attorney and two paralegals, and they do all of the work. And when I say all of the work, what they do is they come up with presentations for what was the person like when they committed the crime? How old were they? What was going on in their life?

Were they in a stable environment? Were they subject to mental health, behavioral health, whatever those issues might be? Were they gang entrenched, et cetera? And then who are they today?

What have they done in prison to demonstrate that they are different people? Different to the point that they can be released into this community, not create new victims and give back in a way that is very, very meaningful, not just because their lives have been saved, but because they're going to contribute to their families and be successful human beings. So that we do those presentations and we also create reentry plans. We're very cognizant that without a good reentry plan, where are you going to live?

How are you going to get to where you need to go? What's your income going to look like? If you need medications, can you still get those when you're released? We don't want people to be released and falter. We don't want people to be released and ruin, really, that chance that they've really been given. And we certainly don't want new victims.

So we spend a lot of the money from this grant making sure that we're identifying the proper people and we're getting them released in a way that's going to be successful for them and safe for the community. So what that little unit has done in my county is earned the release, actually, I can't say we earned it. They've earned it, the people like Carlos have earned it, but helped them navigate the system to be released. And that was for 17 people just in year one.

So just in year one is 17 people. Of those 17, 71% were persons of color, 41% were serving life sentences, may have never been released. 288 years were saved and returned. Coming up with either, depends how you calculate it, but either $30 million of costs avoided or, if you look at the marginal costs, almost $4 million of actual savings. So your $289,000 investment in Yolo County returned almost $4 million in actual savings.

And I'm going to cede some of my time to Mr. Hernandez, but I want you to know that he was 18 years old in 2010. He was driving a car with two other adults and one underage person that the police decided to pull them over for whatever reason. And before they actually stopped, an adult in the car handed a gun to the youngster and said, "Here, youngster, you take this gun because you're going to take the time."

Now, that youngster didn't agree with that, so he kicked the gun under the seat. When Carlos, who was driving the car, pulled over, nobody was threatened, nobody was hurt, nothing happened. But the car was searched. The gun that was stolen was found, and all four gentlemen were arrested, booked into the jail. Carlos had always maintained that he didn't know there was a gun in the car. He went to a jury trial, he was convicted, and he got 26 years in prison.

So in June of 2022, he was one of our first PIR releases under this grant. The District Attorney's office had looked at everything Carlos had done in prison and concluded, in their words, that he had shown overwhelming rehabilitation and deserved to be released because he was serving a sentence that wasn't in the interest of justice anymore. And this grant, before I turn it over to Mr. Hernandez, this grant is, my DA's budget is $26 million. My budget is $10 million.

Of the District Attorney's 26 million, 16 of it comes from taxes and grants and things I do not have access to, I will never have access to many of those things. But even though this grant won't bring me into parity, it at least giving me the resources to implement the laws that are going to be affecting people like Carlos Hernandez and releasing him in a safe manner. And without this grant, I can tell you assuredly that most of this work will just stop. It just won't happen.

And people like Mr. Hernandez will be sitting in jail or in prison, waiting for a turn that may never come. But I want you to hear directly from Mr. Hernandez, because I think what he has to say is more powerful than anything I will ever say.

Good morning, Madam Chair.

Thank you, Ms. Olson. Appreciate very much making the presentation and the introduction, and welcome, Mr. Hernandez.

Thank you very much. Good morning, Madam Chair and Members. My name is Carlos Hernandez Chavarin. I'm a justice policy intern with the nonprofit organization, the MILPA Collective. Appreciate the opportunity to speak before you guys today. As Ms. Olson touched on, I was recently last summer, after doing serving 12 years in the state prison system, I was originally sentenced to 26 years. Eight years was a base term, the other 18 came from mandatory alternative sentencing enhancements.

During my incarceration, I quickly learned and found that that's not how I wanted to live my life. And I realized that the mentality that I came into the prison system was flawed, and I decided to change it through rehabilitation programs, through maturity of time, through education. And by the time my base term was completed, I received an AA degree in sociology, and I facilitated multiple groups of rehabilitation, financial literacy, alternative violence project, multiple range, tutored students through college, elementary statistics, you name it.

But if it wasn't for this grant, I wouldn't have the legal assistance from the Yolo County Public Defender's Office, and specifically from Sarah Johnson and her staff. I wouldn't have been able to be released, even though I felt in my heart that I was truly be released, that I should be truly released.

And although a District Attorney, the very same DA who prosecuted me, agreed that I should be, and I overwhelmingly show that I should be released, without this grant, there would be nobody to advocate on my behalf, nobody to navigate the legal process on my behalf.

So for people who are still in prison, who have no other legal remedy or means to provide themselves legal support, this grant gives them the legal aid they so badly need to come before a court, to come before the DA to provide documentation and testimony of their rehabilitation. So without the Public Defender Office's help, I would still be in prison today, possibly spending a wasteful 13 more years of taxpayer dollars of a detriment to my own well being.

But because of this grant, I am finally home. With my family, I'm finally home. I'm able to pursue my goals of a higher education, of working with community leaders, policy teams, and nonprofit organizations to help heal and uplift our community and specifically our youth.

So, in closing, I ask that you please do not cut the funding for this grant, but instead continue to support our heavily understaffed public defender's office because they do so much for us, even post-release. The services that they have provided post-release is even more important, maybe, than the service that they provided while we were inside. So thank you very much for your time.

Thank you very much, Mr. Hernandez, and congratulations not only on your release, but on the change in your life. That's good for you, for your family, for the neighborhood, for the community, and for our whole state. So again, congratulations. We want to move on now to Ms. O'Neill from the LAO's office. And by the way, welcome. It's great to see real people here. I love seeing Senator Newman, but, okay. More new people and real people. So welcome, Department of Finance and LAO's office.

Thank you very much, it's good to be here in person. Caitlin O'Neill with the Legislative Analyst Office. We don't have comments on this item, but are available for questions.

That's the way you're going to start? That's all you're going to say the first time I give you a chance? Okay. We're going to move to Department of Finance.

Thank you, Madam Chair. Patrick Plant, Department of Finance. The Public Defense Pilot Program was crafted to include three years of funding totaling 150 million. The Governor's Budget proposed to reduce the third year of funding for the pilot program, while retaining 100 million from cohort one and cohort two. This approach allows the state to fund 100 million for the program and evaluate the efficacy while reducing 50 million one time General Fund for the final year of the program. Notwithstanding the merits of the program, difficult decisions had to be made.

With difficult decisions to make, we identified areas where funds had not been committed or dispersed and largely selected limited term programs. The origination of the authorized spending did not play a part in the decision making process. Thank you. And with that, I'm open for any questions.

Okay. Senator Newman, any questions? Okay, I have some questions. Department of Finance, given the potential for the long term savings through reduced incarceration, and so many other ways that we are saving as presented by our public defenders and Mr. Hernandez, why did the Administration make the decision to cut the funding when on the other side of it, there was so much more savings and real dollars and cents?

The idea was to evaluate the efficacy of the program itself. And as Ms. Howard stated earlier, she has contracted with RAND organization to evaluate those results.

Are those results? I'm sorry, I know you mentioned them.

But those will be forthcoming in a few years. We are working with the RAND Corporation on the evaluation of this pilot program.

Okay, but if we don't have the results in the report yet, what were you relying on?

It to make the decision. I'm sorry, you said it was based on the efficacy of the program.

To evaluate the efficacy of the program. The state is still committing 100 million for these purposes and then will be evaluated at the end, as a pilot program would be, and then the data would be available to make further budgetary decisions.

Okay, but we already have a good idea of the savings that we're getting. Are you disputing the savings that we're getting out of the program so far? I understand it's good to have the study, and we'll get to that. But right now, as far as the program is going.

There is no dispute of the efficacy of the program, but simply that this was a pilot program and the funds for the third year had not been encumbered or spent.

Okay. With regards to, there was a mention, I think it was Ms. Olson, maybe Ms. Martinez, that the indigent defense offices are significantly outspent by the District Attorney's Office. How do you think we can better support public defense, especially given the benefits that are, especially given the benefits that we could see, not only by the testimony of someone who's gone through the program like this, but we understand dollars and cents benefits. Does the Administration consider funding for defense when providing funding for the prosecution? Do you take that into account?

I'm sorry. Cynthia Mendonza, the Department of Finance. I apologize. Not introducing myself earlier. I think you're asking an important question, and I think it's a larger question about fairness and supporting the public safety efforts on both sides. Really, when it came down to looking at the budget and the lack of resources in the coming year, it was really a technical process. But I would agree, in terms of looking at the disparities in funding, that hasn't come to us yet as a proposal, but we would definitely consider and work with our Administration on those items.

Okay. I know you mentioned, Ms. Olsen. Yes. Ms. Olson, you mentioned something about some of the cases and the savings and all of this. What, review again the timeline of maybe one of those cases. Do you have an estimate? You might have mentioned this also, an estimate of the individuals in your counties that could potentially be eligible for resentencing. Do you have any idea?

Yes. So it depends on what category. Under SB 1437, which is the one that recategorized felony murder rule, we're working on about 20, a little bit less than 20 of those cases in my particular county, one of whom we've already gotten released. The gentleman was serving a life sentence, and once we reapplied the law, he was only convicted of a misdemeanor after he'd served 20 years.

As far as the resentencings, we have a little over 500 people in state prison that are serving sentences from Yolo County. Technically, everyone is eligible for a resentencing, but the trick is trying to get to know their case to see whether or not the rehabilitation has been demonstrated. As far as youthful offender parole, which is actually how we've been identifying a lot of our clients, people that were convicted under the age of 26 and served at least, or were sentenced at least 15 years in prison, which Mr. Hernandez would fall into that category.

We had, in 2018, 79 of those individuals that we needed to prepare for parole. And with the start of this grant, we'd only successfully completed about 20 something of those files. So we have at least 50 people like Mr. Hernandez that got excessively long sentences when they were under the age of 26, and for whom that we're still in the process of trying to find out what they've been doing in prison since they were convicted. Some of these new laws created backlogs.

So, for instance, when I get through my SB 1437 cases, I'll be done. Those are the SB 47 cases were the ones that were sentenced under the old felony murder rule. After I get through all 20 of those, I'm going to be done with those. And I don't need more funding for that. But I think I'll always need a post conviction unit for people that are resentenced.

Because even in my county, I think Mr. Hernandez was sentenced in 2010 when, at a time when my District Attorney was very adamant about targeting young men that they perceived to be gang involved and giving them excessively long sentences. I can tell you I believe that that has passed. But what will always be present is, when someone does commit their crime when they're 18 years old, there's always room for transformation.

So in the decade that Mr. Hernandez was in there, even if we could ever argue that 26 years was appropriate at the time, which I wouldn't agree with that, but let's say we agree, you can never predict who's going to be taking the rehabilitation seriously like Mr. Hernandez did, and then therefore have transformed themselves. I believe I'll always need a post conviction unit to address those cases. Is that helpful?

Yes. Very good. Very thankful. I just want to ask the LAO's office if you have any thoughts on this difference, significant difference between the district attorneys and defense attorneys, the budget that they face, and especially when we can see over and over, it's not the first time I've heard, you filled it in with a lot of details. It's not the first time I've heard the benefits of being able to help individuals who are either wronged or need the services, need the attention when they are released.

Sorry. Anita Lee with the Legislative Analyst Office. We did actually release a report earlier this fall, in September, that assessed the resources that were being provided. And one of the figures is actually reflected in your agenda today. We also found that there was really kind of a lack of information to appropriately assess the levels. There were different definitions, which is no surprise. From county to county, the operations are a little bit different. And so we used the best available data that we could find.

And in that report, we did notice that there were differences in funding levels, in staffing levels. In terms of staffing levels, that also included things like ratios of support in terms of attorneys versus other staff. You heard social workers being mentioned. And so that was different as well. And so we did offer a few recommendations to sort of get the ball rolling. And our first recommendation was to define appropriate metrics that the Legislature was interested in to really directly measure the quality of indigent defense.

And so to make sure we're having conversations about what that means to the state and that we're appropriately measuring it across the different counties. We also had a second recommendation to require counties actually collect and report data. We did acknowledge that that would cost money, but we did think it was that important to really determine sort of what we were doing and the quality of the work that was being provided in that area, to then also determine whether or not additional resources were needed.

And so the final recommendation was to use that data to inform legislative action. And for us, that really could fall within different ways. That could include things like establishing statewide standards to make sure that quality was consistent across the state, providing grants, working with OSPD, who you're going to hear later from, to kind of work in that area as well, or also to do evaluations of ways that indigent defense services were provided.

In the testimony today, I think from Ms. Martinez, you heard this conversation about holistic defense. And so that is kind of a more well rounded approach, which is maybe a little bit different from sort of the day in and just going to court, and that's it. And so there are some really interesting policy questions for the Legislature to consider regarding what the state believes constitutes good quality indigent defense.

Yeah, I just want to note that we provided, in the last budget, DA funding for the retail theft program, even though that hasn't been dispersed, that wasn't cut. So I do think we need to evaluate this. As you said, not just holistic for the individuals, but holistic for us. Is not be so narrow in how we're approaching the dollars and cents, but what does it really bring to our community?

So I look forward to getting the kind of funding that our community needs, not only to help individuals. But again, the justice system has to be equal, and we have to have the resources both for prosecution, but also for defense. We don't want to commit any more trauma that's already committed from the crimes that are committed. So thank you. Anything? I think nothing else. Okay. All right. Thank you. Thank you for coming and for testifying. Thank you very much, Director Baker. Okay. Thank you. All right. Okay. Issue two is an increase in federal spending authority for Safer Communities Act funding. Again, Director Howard.

Thank you, Senator. And again, good morning. Katie Howard with the Board of State and Community Corrections. Yes, this item is for a rather technical item in the budget. It is to increase the BSCC's federal funding authority, which we routinely do when new federal grants come available. And understandably, this Committee and the LAO is very interested in this particular set of issues. So, very quick context here. I'm going to try to provide a quick overview, and then, of course, take any questions that you may have.

So, in June of 2022, Congress finally came to an agreement. This is following two tragic, each mass shooting is tragic, but we all remember Buffalo, New York, and Uvalde, Texas, May of 2022. Those events both happened, and I feel like that finally motivated Congress to figure out what they could reach agreement on. And that came in the form of the Bipartisan Safer Communities Act, which was signed by President Biden on June 25 of last year. And as part of that, the law allocated.

And from the people I work with in the Federal Government, we learned that Congress actually allocated the funding with the budget. So kind of like the conversations we're having here today, there really is a commitment that this funding will be going out to the states over a five year period to fund very specific things related to gun violence. The program's administered through the Bureau of Justice Assistance, which is part of DOJ.

And the BSCC has been the state administering agency for a number of federal grants that are administered similarly to the way this one is. So this is called the Byrne SCIP Program. SCIP stands for State Crisis Intervention Program. Sorry, Senator Durazo, more alphabet soup. Right. So the Byrne SCIP Program formula came out, and the state of California, they actually decided to put the first two years of funding out together. And the state of California received, this is on a formula basis, $29.2 million.

Part of that is a state allocation, and part of it is a pass through to locals. We moved as quickly as we could as the state administering agency, and we do, of course, need the California budget blessing to increase our federal spending authority. But we got right to work in putting a plan together for this new gun safety related legislation. And so we had to put an application in.

And some of these things, I realize this sounds a little bit of cart before the horse, but we have to follow all the federal application deadlines and that sort of thing. We had to put our application in in December of 2022. We wrote a program narrative that was very high altitude, but it did focus on, obviously, the requirements of the federal legislation, which are largely court centric.

So we are in planning partnership with the Judicial Council of California to fund more collaborative courts where there is a very specific connection to gun violence issues and firearms relinquishments and those sorts of things. So mental health courts, veterans courts, those sorts of things. One of the requirements of this federal law is that the state administering agency, which is the BSCC, in this case, form a Byrne SCIP advisory council.

So we held an initial meeting of the Byrne SCIP Advisory Council in February because we have to sort of meet some of these timelines that are, in a certain way, pretty quick. We're working closely with the Judicial Council on a proposal to fund programs addressing the behavioral health needs for people who are involved in the criminal legal system and who are likely to use guns or be the victim of gun violence. We'll also be conducting research.

The judicial counsel will be conducting research to identify best practices for firearms relinquishment in the criminal courts and to support local jurisdictions in their efforts to improve firearms relinquishment procedures. So, if I may, we feel pretty good about the program that we're working through at the state level for the $17.5 million. There is still $10.7 million available for local pass through. That work is still in development. So we anticipate we need to have an April meeting of our Byrne SCIP advisory group.

We anticipate having another meeting in June to more fully flesh out a plan for the local pass through. And, of course, we're interested in hearing input and suggestions from this Committee about legislative priorities around this funding, just with a reminder that the focus of the federal legislation is fairly well structured in terms of the activities that it can be used for. So I'll stop there, and I'm happy to take your questions.

Thank you very much. Ms. O'Neil.

Caitlin O'Neil with the Legislative Analyst Office. While BSCC's planned uses of the funds, at least the detail that we have at this point, do appear to be permissible under the federal guidelines of the program, the Legislature may simply have different priorities for this money.

And to ensure that the Legislature has sufficient time to deliberate on its priorities, as well as to provide any guidance to BSCC and take any corresponding action in other areas of the budget, we recommend directing BSCC not to finalize the use of these grant monies until after the budget is adopted. And then we have a few guiding principles to offer for the Legislature to consider as it deliberates on its priorities for these grant monies.

The first is that, given the deterioration in the state's budget condition, it would be beneficial to use these funds to support new or expanded programs that would otherwise be supported with General Fund. So, for example, the budget proposes 10.6 million General Fund in 2023-24 increasing to 33 million at full implementation to support increased child welfare social worker workload related to participation in what's called Child and Family Teams for certain families at risk of child removal.

So to the extent the Legislature is otherwise interested in supporting this program and prioritizing it, it could explore the possibility of initially funding it with SCIP funding rather than General Fund, which would then free up the General Fund that would otherwise go to that program to support other areas of legislative priority. And then our second guiding principle is to focus on limited term activities, such as pilot programs, so as not to create ongoing General Fund cost pressures.

In addition, we recommend that the Legislature consider what types of activities it's interested in supporting and the extent to which those activities would be better done at a state or a local level. Because there is a minimum amount, as Ms. Howard noted, that must be passed through to local governments. But the state could choose to pass more through, such as if it wanted to pilot, say, crisis intervention teams with local law enforcement.

And then finally, we recommend that the Legislature ensure that whatever priorities it has for this funding, they are reflected in the final budget package, such as through the adoption of trailer bill legislation. And then our last recommendation on this item pertains specifically to the technical issue around the federal funding authority increase that is specifically before you right now.

And BSCC has requested an increase in its federal funds authority of 50 million per year for five years, which was, those numbers were estimated at a time when the state thought it would be receiving more money than it ultimately will be receiving under this grant program. In addition, the Administration is requesting authority for, not just the current allocation that it's expecting to receive and planning for, but for future allocations that it's expecting to receive.

And so we recommend that the Legislature align the federal funds authority that it provides with the actual amount of money that the state is expecting to receive in the first allocation, which is 29.2 million, and provide provisional language allowing BSCC to spend that money over the five year grant period.

And to the extent it needs additional federal funds authority in the future to receive and spend future allocations, BSCC can come forward with the request at that time when it's more clear how that money would be used. Thank you.

Thank you. Okay. Department of Finance, please.

Patrick Plant, Department of Finance. The request to increase the spending authority was necessary to ensure that BSCC could meet its ongoing federal grant obligations of those new award. The Byrne State Crisis Intervention Program, the Alphabet soup that we spoke about earlier. The Byrne SCIP provides funds to implement state crisis intervention, court proceedings, and related programs or initiatives with a nexus to gun violence and must be used within that scope in ways including, but not limited to, extreme risk protection orders, order programs that work to keep guns out of the hands of those who pose a threat to themselves or others, mental health courts, drug courts, and veterans treatment courts.

There is no General Fund impact, as the statute will set aside special funds specifically to allow the BSCC to administer the grant program in full compliance with the requirements. Thank you. I'm available for questions.

Great. Thank you. Director Howard, if you could go back to this issue that we keep coming back and forth, there's the timing that you're asking for this authority before we finalize our budget.

Right.

And then there's the amount. And probably a third one, which is the use of the funds. Right. But which goes first? And we want to give the Legislature, of course, our responsibility to do a budget. But if you're going to, then before that budget is finalized, you're asking for the authority to spend the money. So that really puts us in a bind here. So if you could respond to that.

Sure. In general terms, the request from a state agency to increase federal funding authority is kind of routine and technical. And sometimes it's a grant that everybody already is very familiar with, and we might say, oh, the funding amount went up in the way the LAO was pointing to. So in a few years ago, we had to make some sort of a really technical change because we were going to be getting a larger federal grant in a particular year.

So it's that kind of a technical adjustment just so that the federal funding can come into the BSCC budget. You can think of it that way. But the conversation today is much more into the details of the program and how the funding is going to be used. So I really agree with you. It's at least two, if not three, different issues that we're talking about. The first one, I would hope, would be easy.

And if it's determined that that amount should be somewhat lower than 50 million, that wouldn't make any difference to us in terms of operating the program. We just need to have the authority up to the amount we anticipate getting. So no problem on that. And then in terms of the Legislature's interest in setting priorities, this is a federal grant that lays out a fairly short list of kinds of activities that can be done, and we are still in our planning process.

I certainly would prefer to have discussions and input, and we will carry that back to the Byrne SCIP Advisory Board. The prospect of having trailer bill language directing how we do this funding actually does not sound awesome because that might throw in different timing wrenches for us. So we've already put in a program narrative, like I said, that's at a high level of doing various partnerships with the state courts as well as with local governments, consistent with what's in the federal law.

And I'm here very happy to take suggestions. It has to have a nexus to gun violence. So I understand the suggestion LAO is making, but if there's not a nexus to gun violence and gun safety, it wouldn't be a fit. And so our preference would be to know the kind of discussions that we routinely have about, well, would you consider this or that sort of thing? And we'll take it back to the table, so I hope that helps.

Yeah, but the Advisory Board is still planning to adopt the final plan at the April meeting?

Only the state part, only what we're working through with the Judicial Council. And that plan has various components to it, including research on best practices, funding more collaborative courts, as Patrick outlined. So veterans courts, mental health courts, and drug courts. And then where we still need to do more planning work is in the local pass through, and that could encompass a lot more things that we would be very interested in getting your input on. Should the priority be for crisis intervention teams?

Should the priority be for firearms relinquishment and safe storage? There are a lot of good things allowed on that local pass through, and that's where I think plenty more conversation can take place.

Okay. Is there anything that you want to add to that?

Anita Lee with the LAO. So when we reviewed the federal language for allowable uses, it talks about crisis intervention. Gun violence is one of the key examples, and there is a focus on that. But we would also note for the Legislature that in the guidance provided for allowable, it included things like behavioral health deflection. They gave specific examples related to triage services, mobile crisis health. And so because of that, we do think it is open broader to just beyond gun violence.

And so that's one of the reasons why we said it really depends on sort of legislative priorities in terms of where you want to focus. In relationship to that, Ms. Howard mentioned that for the state share, a large chunk of the money, about 15 million is going to go to collaborative courts, mental health, drug, and veterans courts. The connection with gun violence is not necessarily the clearest. Like, not everyone who is participating in a mental health court is going to be a victim of gun violence, Is someone impacted by that.

Or drug court, drug court might actually be a better example of that. And so because of that, we do think that there is more room for legislative choice in that area. To the extent that the Legislature is interested in focusing in on firearms, we have options to do that. To the extent that the Legislature thinks that behavioral health, whether at the state level or the local level, is a greater priority, there are options there as well. And that goes to my colleagues' comments in terms of thinking about where the money would be best placed at the state level or the local level. So hopefully that's helpful.

Yes. Thank you very much. I appreciate that, because we're having to make decisions based on what we hear from you all as to where and where it can be cut, where it can be delayed. I mean, there's all those sorts of options that we're facing, and if this is an opportunity to fill something that we wouldn't have to cut somewhere else, I think that's what we face in timing. Senator.

Thank you. And thank you, Director Howard, for being here today and for your testimony. So I want to talk about the third category, use specifically, and go, I guess, a layer deeper. I mean, clearly, these federal funds are welcome, but to that question about how to use them and how we as the Legislature can ensure that they're used in ways that aren't duplicative with existing programs. Particularly programs, for instance, MHSA funded programs at local levels.

So in my county, we're making, I think, great strides, make good effort on lots of different approaches to behavioral health crisis intervention. But how do we ensure that these funds are used well, given kind of the logistics of accepting them and passing them through, in ways that support either existing efforts or, at a minimum, don't duplicate existing efforts and create kind of what we're used to seeing, which is siloing and redundancy.

And to your point, trailer language might be less than ideal for you, but that's really the only way that we can ensure that these funds are properly programmed to allow for other activities that are in the same nexus which are considered to be allowable. That is our obligation, and in a tough budget year, that's our incentive. So how do we think about that, given kind of the practicalities of accepting this money?

I hope that our commitment to continue to being in dialogue with you, understanding the input that we're receiving today. And as I've outlined, there are decision points for the BSCC, both at the April and the June board meetings, that we can be in conversation, completely support what you're saying about there ought to be some focus on what should be prioritized and not duplicating efforts for sure. I mean, there is even non-supplant language in this federal grant.

So we are happy to continue to be in conversation, and I hope we can just work to make sure that the timelines are as seamless as possible in terms of when... There's always that balance between doing a good job at the planning and getting the funds out into the field. But we're very happy to work with the Committee and staff and LAO and all of our colleagues to ensure that we have a plan that's reflective of your input as well.

And I do appreciate that. Probably the only way to do that effectively is through the trailer bill process with your full collaborative input. So thank you. Thank you, Madam Chair.

Thank you. Thank you very much. Okay, if nothing else, we're going to move on to issue three. This is the post-release community supervision funding, and we have the honor of having, again, Director Howard.

This is my favorite time because I get to say I'll defer to the Department of Finance on this.

Patrick Plant, Department of Finance. The Post Release Community Supervision Act of 2011 authorized California Department of Corrections and Rehabilitation to release certain incarcerated individuals to county supervision. When Proposition 57 was approved by voters in 2016, our county probation partners received extra funding to assist with the additional individuals released to the post release community supervision. The Budget Act of 2023 continues this funding, providing 8.2 million General Fund to counties based on the increased population being returned to the counties due to Proposition 57. Last year's budget allocated 20.9 million for this purpose. And with that, happy to answer any questions.

Great. Thank you. Ms. O'Neil.

Thank you. I'm just going to quickly highlight some key, very briefly, some key historical information just to build off what Mr. Plant said. So the PRCS population was created with the 2011 realignment, and along with that responsibility to supervise that portion of individuals after they're released from state prison, the state provides counties with a portion of state sales tax revenue to pay for that and other workload that was realigned.

Proposition 57, which was implemented beginning in 2017, has resulted in some people being released from state prison earlier than otherwise. And when people are released from prison earlier than otherwise, that means they go on to supervision earlier than otherwise and also leave supervision earlier than otherwise. So it hasn't increased overall, on net, the workload of county probation departments. It's just shifted workload forward in time somewhat. So, essentially, that means that Prop 57 created a temporary increase in the PRCS population.

And because the state sales tax revenues that pay for that and other workload do not get shifted forward in time, there was a concern that county probation departments might face some cash flow issues in terms of handling those individuals who arrive on their caseload earlier than otherwise. So, in response to that concern, the state has provided a series of one time augmentations to counties through the BSCC's budget to pay for that accelerated workload, essentially.

And in our review of the current funding and the current landscape, we found that the policy rationale appears to be essentially no longer present. And that's because the post release community supervision population has been declining in recent years and is now lower or around the same level as it was prior to the implementation of Prop 57. So it seems unlikely to us that counties are experiencing cash flow issues, and the Administration also hasn't at least provided any information to the contrary.

And then the second main concern here is that we find that there's a higher bar for approving new spending this year, given the state's General Fund condition. Every new dollar, as the Committee is well aware, of spending in the budget year, comes at the expense of a commitment the Legislature deemed a priority for in the past. So we do recommend rejecting this funding.

Yes. Mr. Plant, would you like to respond?

Thank you. The general incarcerated population is down, which is why the PRCS population is also declining. However, more credit earning opportunities are available to the incarcerated population and are continuing to be released to the county probation.

Okay, so is that in response to why you wanted additional funding? I mean, I think the question here is about additional funding.

Sorry, Ms. O'Neil was saying that the total population has been declining and, as we stated earlier, with 2014, it started with the wild three judge panel, and so there was an increase. But then with those early releases and earning credit opportunities, the population has been decreasing, but there is still the need for the individuals being released to the counties to assist.

Okay. But I guess the question is, have you provided information as to justify why continue the additional funding?

Cynthia Mendonza with the Department of Finance. There have been recent credit earning changes where opportunities have increased, which there's still more individuals leaving prison to post release community supervision, which is why we're continuing that funding. And it's something that the state has done since 2014 that we've sort of looked at under the umbrella of credit earning. And that's how it stands. Although the language at this point in the budget bill states it's, it's related to Prop 57. However, there, there have been continued expanding credit earning opportunities, which has had effects on our county partners.

Well, it seems to me the more we can really numerically show right year after year, then we could be able to, that would help to explain why you want, why you feel the additional funding continues to be needed. So anything, information that you could provide that will help explain that, I think we would appreciate it. Okay. Yes, Senator.

I just want to reinforce that. So the crux of the disagreement here is about cash flow, whether or not a prospective cash flow issue at the county level. So that's not subjective. That's based on data. So DOF, do you have the data to show that it's reasonable to expect a cash flow problem for which this funding is needed? Because the LAO seems to have data that suggests the opposite.

We'd be happy to work with your consultants to get back to you.

I think that'd be helpful in this case. Thank you.

Okay. All right. I think that might be. Thank you so much for being here and presenting and answering all the questions.

Pleasure. Thank you.

Thank you. Okay. Issue four is recruitment support for the Office of the State Public Defender. And we will begin with Charlene Bennett, the Administrative Chief for the Office of the State Public Defender.

Good morning, I'm Charlene Bennett. I'm the Administration Chief for the Office of the State Public Defender, and next to me is Mary McComb, the state public defender.

Thank you for having us here. I wanted to just start by giving you a little bit of introduction about us and why we're requesting these funds. The Office of the State Public Defender is requesting two positions and the related funding of $280,000 to support recruitment and retention to embed equity, inclusion, and belonging best practices into our agency culture.

Our agency has a modest budget that is solely from the General Fund. The Office of the State Public Defender views DEI and belonging as integral to the agency's ability to accomplish its legislative mandates, to represent indigent clients in appeals process of their death penalty convictions, and to improve indigent defense across California. These positions and the related funding will provide dedicated, consistent, and sustained equity and inclusion efforts. This equity and inclusion work is important to OSPD clients, our partners, and our employees, and here is how.

This work supports our attorneys to relate to our clients. Currently, 78% of OSPD death penalty clients are nonwhite, while 76% of OSPD appellate attorneys are white. These attorneys need ongoing cultural competency training to better understand, relate, and effectively communicate with our clients. It's important to our partners and our agency's ability to relate credibly to our partners.

Where OSPD is encouraging these partners to have diverse teams and develop cultural competency to better understand and relate to their clients, OSPD must follow its own teachings and show up as a diverse and culturally competent team. And lastly, but probably most importantly, this work is important to our employees, without whom none of the agency work gets completed. So it's important for us to build a culture of equity, inclusion, and belonging so that we can recruit and retain a workforce that looks like California.

Creating a work culture that supports and encourages staff to show up as their authentic selves where each person is treated with dignity and respect, regardless of their role, age, gender, race, education, or other attributes. Achieving such a culture requires a coordinated, sustained, and intentional effort in this regard.

Having these positions and the associated funding will be a good start to demonstrate to our clients, our partners, and our employees that the agency and the state are not just checking a box when we publish our commitment to diversity, equity, and inclusion and belonging. But we are serious in our regard for the importance of practices that encourage and support diversity, equity, inclusion, and belonging, to build and sustain the workforce that looks like and is relatable to the Californians we serve. Thank you.

Thank you. Thank you very much Ms. Bennett and I appreciate everything, every word that you just said to us. Checking the boxes is the easiest thing to do. Ms. McComb, would you like to say a few words, anything to add to that?

Not to Ms. Bennett's presentation, but if the occasion arises, it can help address the issue that was previous on the Public Defender Pilot Program. I can also talk about that.

Okay, well, maybe we should take that up before we get into.

Yeah. I just wanted to respond to Ms. Lee's invitation to answer any questions this Committee might have about that program and generally about the importance to this Committee and to the Legislature overall of addressing this parity issue between the public defense and the prosecutor. I think we have seen the way forward is with parity between the public defense and the prosecutor.

You can see through data that OSPD has provided this Committee that even a modest program, a modest pilot program that addresses a small fraction of the problems that the public defender faces, leads significant results in three areas. One is reduced in cost incarceration. Second is the implementation of this Legislature's goal in setting forth these statutes.

And third is addressing the systemic racism through the unfairnesses created through the previous criminal justice system. OSPD created a few years ago, the Indigent Defense Improvement Division, and expanded its mandate to provide both training and technical support to line public defenders. And I can tell even from the few years we have been in this work that there is a chronic underfunding of public defender systems.

And while I really appreciate Ms. Lee's invitation for this Legislature to gather more information about what a good public defense would look like, I think we see the way forward. We see the way forward to provide more resources for our colleagues in the trial public defender offices.

This will not happen without a greater commitment on the part of the Legislature and a part of the government overall to be actively involved in assuring that the kind of public defender system that California wants to have really is able to happen. Thank you.

Thank you. Thank you for your words. Going back to issue four, Ms. Lee.

Anita Lee with the Legislative Analyst Office. So we do believe that seeking to improve DEI policies and procedures is a laudable goal, and it merits consideration. However, there are different ways that you can go about achieving that, and so we do have kind of seven key questions as the Legislature considers whether the governor's proposal is the best way of doing it. It is laid out in detail on pages 16 and 17 of your agenda if you want to follow along.

But I'm going to cover those seven questions at a high level as well. So the first question is, should resources be provided before CalHR develops the statewide DEI strategy? So the 2022-23 budget package included both positions and resources for CalHR to implement various proposals to make the state a better employer, which included improving state workforce data collection to then inform a statewide DEI plan.

That plan hasn't been completed yet, and so the Legislature might want to consider whether the Department has an immediate or high priority enough need to move forward before the statewide plan is completed. The second question is, should OSPD efforts be coordinated with others? So to the extent we have an attorney diversity problem, just generally, it could be important for OSPD to coordinate with others, such as the State Bar of California, to make sure efforts are sort of complementary and going in the same direction.

The third question is, should OSPD first develop a clear plan before resources are provided? Our understanding is that the requested positions would also help OSPD develop a tactical and strategic DEI plan. The challenge with that is, without a plan before the Legislature, it is difficult for the Legislature to determine what goals or outcomes are seeking to be achieved, what steps would be taken, as well as what level of resources is appropriate. Question number four is, are ongoing resources needed at this time?

So one approach is the Legislature could provide limited term resources, for example, to fund the completion of a DEI plan that the Legislature could then consider. On the other hand, if the Legislature thinks that there are very particular activities that are justified, ongoing funding could be provided for those specific purposes. Question number five is, would consultants be better positioned to obtain the desired outcomes?

So DEI expertise is usually built up over time through research, study and experience, and it might be difficult for the state to generally recruit those individuals into less senior, lower paying positions, like the AGPA positions being requested as part of this proposal. On the other hand, paying for higher level positions might not make sense for an agency of OSPD size because they have under 100 staff, and so that might be like a bigger picture, broader statewide kind of conversation.

The sixth question is, to the extent the Legislature thinks that state employees are appropriate, then the question is what position classifications are most appropriate. So we would note here that CalHR received authority for five staff service manager positions, SSM positions, to work on that statewide DEI plan that I mentioned, and they reported recently at the beginning of this year that they had difficulty filling those positions due to insufficient applications.

And so that might suggest that OSPD would face similar challenges because the positions they're requesting are of a lower technical qualification than what CalHR requested. And so that's just something for the Legislature to consider. And the seventh question is, to the extent resources are provided, how should legislative oversight be conducted to make sure that the Legislature understands how the money was used, what outcomes were obtained, whether there were any unanticipated challenges that emerged.

And the Legislature could use that information to assess future proposals, whether it's from OSPD or other departments, as well as to determine whether or not DEI needs to be more broadly coordinated across the entire state to make sure there's consistency. So we're happy to answer any questions.

Okay. Mr. Jimenez?

Hi. Mark Jimenez, Department of Finance. I just want to highlight that this is a modest request to support the Office of the State Public Defenders existing efforts to improve recruitment and retention, to improve staff diversity, and existing efforts to address issues of diversity, equity and inclusion. Given the OSPD's unique mission, and their lean operating budget, we determined that it was appropriate to provide them a modest augmentation to support their efforts in this area.

I think a lot of the questions that Ms. Lee has raised are questions that the office is already addressing internally within existing resources. And I should also point that DEI is a matter that many state agencies are addressing within existing resources. However, the OSPD's budget is really just $20 million, and we figured that this modest augmentation would support them in their existing efforts and in addressing recruitment and retention, given their lean operating budget and their unique mission.

Great. Thank you, Senator.

Thank you. And thank you both for being here. I think it is self evidently true that in very few areas is representation more important than in public defense, that public defenders should mirror the clientele they're serving. But I think the LAO has raised some interesting questions, and both have kind of a chicken egg quality. One is, should you wait for the state policy?

I'm sympathetic to time being kind of critical, but to the broader question of should you develop a plan and then hire to implement it, or hire to develop and then implement the plan? Not an easy question, but I think she points out something even more important, which is how do we as a Legislature participate as part of our oversight function as you do that? So do you envision a process that would involve some metrics and milestones that we could track as you move forward in DEI?

Because if so, that, I think would represent a good pilot program for us to learn from and apply more broadly.

Yes, thank you for the question. So in terms of a plan, OSPD does have a plan and we will be partnering with other statewide efforts. I have six areas that we already have outlined for these positions to address, the first of which is our participation in the California State Bar DEI Leadership Seal Program that is just rolling out now.

We plan to apply, applications are due at the end of this month, and pursue a gold tier achievement, which signifies to other attorneys that are coming into the state bar that our agency has done some work to demonstrate our commitment to DEI, including DEI, into our culture. We've done the work of actually taking some predetermined actions that the bar has outlined in the application process. Secondly, these positions would represent our agency on the Government Alliance for Racial Equity.

This is an entity that exists with government agencies to help provide best practices to help put together DEI strategic plans. And I want to also note that there are over 20 state departments that are already Members of this alliance. And we found out about this alliance back in 2019 and we just recently joined the alliance.

Thirdly, they will coordinate and track our ongoing staff training to respond to and identified training needs in a 2021 agency assessment that we did have conducted by consultants that identified that we have specific training needs for our employees. We need to know about implicit bias. We need to learn about power dynamics and how they play out in our agency and impact the way we do our work. Number four, we want to coordinate and expand the efforts of our volunteer committees.

We have a racial equity Committee and a recruitment and hiring diversity Committee. The involvement of these dedicated positions will provide consistency for these volunteer groups, which have only experienced minimal success due to their volunteer status because the work that they were hired to do ends up taking precedence over their ability to get any traction going. Number five, they will represent our agency in CalHR's DEI forum.

CalHR, although they haven't filled their positions, they do have a DEI forum where agencies, state agencies, come together and share successes and gather information and best practices from each other. And number six, they will serve in implementing DEI goals that our agency is putting into our agency strategic plan, which is currently under development. We just had our last meeting yesterday and we expect to have the finalized plan within the next few weeks. And then you talked about the metrics.

We are happy to provide any data that we already have from the assessment that was completed in 2021. We are also happy to collect, which we are going to be collecting data because that is part of the requirements for the state bar leadership seal program. So we're happy to share that and we're happy to respond to any other requirements that the legislature deems are necessary for their information gathering.

And I do appreciate that. I think one thing that needs to be noted here is that you are recruiting in a field which is traditionally very undiverse. Moreover, you are competing in a field where your compensation creates challenges in hiring, obviously, right? Yeah. And so real quick question. Obviously, if this is about client facing diversity, what's the spread between lawyers, paralegals and others?

Is it just lawyers or are there other paralegals and staff that you're looking to recruit to improve your diversity as it relates to your client service? Is it everybody? I assume it is.

Well, we currently recruit everyone. However, our attorney population is where we are lacking diversity.

This is the issue. So it's probably hard to address diversity above, beyond this conversation without talking about compensation, which is not part of this conversation. But I think at some point that becomes necessary. I think you'd agree.

Well, for sure. So because the compensation is what it is, the statewide compensation is what it is, we are still able to recruit attorneys because on the defense side, it is a labor of love type of a job that, yes, they come in. We've had staff that have turned down higher paying positions because they were going to have a higher impact with us. We would love to have the compensation conversation.

Appreciate it. But it is currently, as I read the analysis, it's a 76% white labor of love. Right. And that's part of your challenge, I think. And so I think, again, to Ms. Lee's point, that's probably where some level of expert consultative service is probably necessary to improve these outcomes and change the spread. So I guess we'll look forward to working with you. I'm glad to accept the offer, but this is inherently challenging.

So I think the Legislature's participation, irrespective of cost, to try to ensure that we are a good partner to that and that you have the resource to do it, are probably essential to making progress in this area. So thank, thanks.

Thank you. I just want to say I do agree with the Office of Finance. This is a modest request. I think based on Ms. Lee's on the recommendations being done, you're on the right track for addressing those issues.

We don't have full, complete, but I also don't want with a modest request like this to get the new staff to end up doing these other things versus actually digging in and doing the recruitment so we can get too caught up and go to the extreme on the planning and all of that and then end up not getting what we need, which is more diversity amongst the attorneys. But I think you're on the right track.

I appreciate that you've done a number of things and I think it's in a very solid way addressing the issues that the Lao's office has raised. So good luck and appreciate all of your efforts. Thank you very much, Mr. McComb. Really appreciate you being here and your comments on the other issue that we had addressed. We're going to take those on. That's just wrong. Thank you.

Thank you very much.

Thank you. Okay, we're on to issue five. It is our first judicial branch item. The proposed reduction in the Court Appointed Special Advocate, or CASA, funding. We're going to have Mr. Jimenez from the Department of Finance and then Sharon Lawrence, CEO of the California CASA Association, and then the LAO and or Judicial Council. Mr. Jimenez.

Mark Jimenez, Department of Finance. So, to address this year's revenue shortfalls, difficult cuts were made across state agencies, all state agencies, including reductions to the Judicial Council's Court Appointed Special Advocate Program. So the budget generally includes a baseline funding of about 3 million General Fund on an ongoing basis to support the Court Appointed Special Advocate Program. The 22 Budget Act provided or included a one time augmentation of 20 million each year over three years.

So totaling 60 million General Fund for the CASA or the Court Appointed Special Advocate program. This budget proposes to maintain 20 million that was allocated this year, but brings down the 20 million allocated next year and the year after. So 40 million. And this reduction was selected because this is one time funding. The funding has not yet gone out or hasn't been allocated since it's budgeted for the next fiscal years.

And the 20 million allocated for this year can still be used up until the next fiscal year, the end of next fiscal year. And lastly, the budget still maintains the ongoing baseline funding of 3 million General Fund on an ongoing basis to support the CASA program. And so with that, I'm happy to take any questions.

Okay. We're going to hear from Ms. Lawrence.

Good morning.

Okay. Sharon, there you are. Couldn't find you.

Here I am. Hello. Yes, I am Sharon Lawrence, the CEO of the California CASA Association, which assists the 44 local Court Appointed Special Advocate programs that operate in 51 counties statewide. As many of you know, California has the largest number of children in foster care in our nation. Over a year, approximately 80,000 are wards of the state who were removed from their homes because of abuse or neglect and are part or under court jurisdiction.

The professionals in the child welfare system do their very best to help these children and families. But foster care was always meant to be a temporary solution. In fact, it can go on for years, and it is a terrible place to spend a childhood. Court Appointed Special Advocates, or CASAs, are an important part of the system. They are community volunteers who are screened, well trained, and supported by a professional staff at local CASA programs.

A CASA is assigned by a juvenile court judge to a foster child, and, working one on one, they get to know the child, become familiar with the families and caregivers, review records, conduct interviews, and ultimately provide a powerful, in depth recommendations to judges about the child's best interest. Most important to a child, a CASA is by their side during a traumatic, chaotic, challenging time. And often, a CASA is the only consistent adult in a foster child's life. So how does a CASA impact a child?

By showing up the very first day at a child's new foster home when she was panicked that her CASA would never find her again, by advocating for a kidney transplant and saving the life of a three year old little boy who had been abandoned by his mother in the hospital. By attending a choir performance at school to cheer on their child, who would have had no one in that audience had her CASA not been there.

By talking to their children about hopes and dreams, exploring museums together, playing catch in the park, helping with homework. On the child's birthday, it is often the CASA who bakes and brings the cupcakes to school for the entire class, just like all the other kids do. A CASA is there to let the professionals know that a child desperately wants to go home when it's safe to do so, and helps ensure that services for parents are offered.

But perhaps the most powerful thing that A CASA does for a foster child is simply to listen, encourage, reassure. Simply being there, no matter what. In 1963, President John F. Kennedy said, children are the most valuable resource and it's best hope for the future. I know this Committee and your Senate colleagues agreed with that sentiment last year when you and the Assembly made CASA a legislative funding priority In the 2022-2023 budget.

You allocated $60 million to us over three years so that we could strengthen CASA local CASA programs infrastructure, stabilize operations, pay staff a living wage, and develop innovative growth programs so we could serve more children with CASAs. Today, we are serving only 16% of the foster children who need us. But last year's funding agreement was the foundation to implement our California CASA to serve every child in foster care who needs a CASA, which is estimated to be 50,000 children.

I am very grateful to you, as are the 11,000 CASA volunteers, who last year served more than 12,000 youth in the dependency system, and the 500 CASA staff members and the hundreds of community leaders serving on 44 local program boards of directors. Thank you for recognizing the value of CASA. While we know that our child welfare system is changing to provide more families with needed support and services, there will always be children who must be removed for their own safety because of abuse or neglect.

And we owe it to these children to provide them effective and compassionate advocacy. That is what our local CASA programs do and our CASA volunteers do every single day. We deeply appreciate the first payment of $20 million, which is already working across the state in every one of our local CASA programs. But our strategy was based on your funding of $60 million over three years.

With the Governor's proposed budget that eliminates the two payments in the next two years, much of our hope for progress cannot occur. Without continued funding, key stabilization and operational support will end. CASA staff will lose their salary increases and benefits. In some cases, there will be layoffs resulting in fewer children served by CASAs. We will have to short circuit many innovative growth ideas that would have helped more children.

We fully understand that the Legislature has some very difficult decisions to make given the current financial situation and projections for the state. I don't need to remind you of the human cost of the foster care system, the terrible human cost of the foster care system. Every year, California spends approximately $1.6 billion on those former foster youth who have aged out of the system only to find themselves homeless or imprisoned.

The $60 million you allocated to us is but a fraction, a tiny fraction, of that societal cost. We respectfully request that the Legislature restore the remaining $40 million of funding in your budget. Restoration of these funds will go a long way to helping California's foster children, children who are indeed the world's most valuable resource and our best hope for its future. Thank you very much.

Ms. Lawrence, if you could stay on the line available for us, I really appreciate it. Any comments from the LAO or from judicial? No, none. Okay, Senator?

Sure. So I'm a former CASA and my wife and I kind of get emotional. So I have several years of experience with the cost system. And so I was an advocate last year for the $20 million a year. That's $60 million. And Ms. Lawrence has spoken, I think, very eloquently about the benefits of the system. The system is currently underfunded. The statistics around foster outcomes are well known and really sad.

The CASA program is not only cost effective, but it fills a need that otherwise goes completely unfilled. And the outcomes that it produces are nothing short of amazing. So it would be a shame to not restore these funds. You can make an argument that this isn't nearly enough, but the promise we made to the system last year, we should make good on. And it is both morally, I think, appropriate, but eminently sensible and hugely cost effective over the long term.

So that's my two cent, and I'm glad to vote for and argue for the restoration of these funds.

Thank you, Senator. Really appreciate that, especially coming from your personal experience. I guess the question for the administration is why did you propose to cut the funding for this program? And I haven't given you the opportunity yet. Again, we're looking at the potential for long term savings. Was there anything about the program itself? Or what is it about the why? Pick?

Mark Jimenez, Department of Finance the decision to reduce the CASA program was not based on the merits of the program. When we were looking at reductions to address the 30 billion revenue dollar shortfall, we were looking at one time funding, and funding that has not yet come out the door. Right. And so in this specific case, the 40 million is allocated for the next fiscal years, so it hasn't been committed.

And the 20 million allocated for this fiscal year is available until the end of the next fiscal year. So two years. And lastly, there is a baseline funding of $3 million on an ongoing basis for this program. So we support that program. We're maintaining the 3 million that's already built in within the structure of the budget. We're just looking at. We were primarily focused on the one time augmentations and fundings that were not committed, that have not yet been committed.

So that's our thinking when making reductions. But we recognize that this is just a starting point for the budget development, and we look forward to working with the legislature on refining the budget as we work towards finalizing the budget.

Okay, thank you. I want to go back to Ms. Lawrence. Can you just comment a little bit more on the planning part that has already occurred for that second and third year of funding, how these proposed cuts will affect the program?

Yes, Chairman Durazo, if I could just address the previous question, which was, yes. CASAs, across the state, local CASA programs receive $2.7 million in the Judicial Council budget at an average cost of $4,000 to serve a child with a CASA, the state is taking care of 675 children. The rest of the 11,000 children that we served are paid for by philanthropy.

And the idea behind this three year funding was that we would increase our programs and serve more children, while at the same time increasing our fundraising capacity by hiring staff to help raise more funds from the community, so that in year four, we wouldn't fall off a cliff and we would be able to absorb all of those new children because we had ramped up our community fundraising.

So when we received this money, we decided on a three year plan that we devised in consultation with our executive directors. And there were three categories of funding. The first was unrestricted operational dollars to pay for the rent and the computers and the paperclips that CASA programs often cannot get support for. The second bucket of funding was on staff compensation and benefits. Some of our local CASA programs cannot provide health benefits to their staff. They are paying them minimum wage.

And we know that in order to attract and retain competent staff, we need to expand their compensation. So the bulk of the money of almost seven, or $8 million, was given to staff compensation. The third bucket of funding was innovative growth, and the idea was that the funding in the next two years would continue to support operation and staff compensation at a decreased level, but then would grow and serve more children in bucket number three.

So what's happened is the Governor proposes his budget on January 10 as required, but we had already dispersed the first funding payment with this vision in mind. And so right now, CASA programs are wrestling with the fact of, do they hire staff to help them with the fundraising and to expand the number of children that receives CASAs, or do they wait? Do they give staff salary increases and take them back in June of 24? So there's a lot of uncertainty.

And what the money did over three years was give us a Runway, a foundation, that we could strengthen our programs so that we could serve more children. In order to reach the goal of serving 50,000 children with cost of volunteers, it would cost $200 million annually, which is again a fraction of the societal cost of 1.6 billion. We're not asking the legislature to fund us at 200 million a year.

We are asking you to please reinstate that 40 million over the next two years so that we can build our organizations to be strong nonprofits that are ready and able to help more children in foster care.

Thank you very much. Appreciate that. There's a familiar sound to what we were talking about earlier here about public defenders and the public defender pilot program and the inequity or the unequal funding between the prosecutors and the defenders. And it's just we keep coming up to programs that are, in fact, saving US dollars, saving tax dollars. On the one hand, if that's all we care about, it would at least show that we were being more efficient. But at the same time, the human issue.

I mean, we had a testimony from a young man whose life was saved because of the pilot program. Now we're talking about people who can't take care of themselves aren't going to be able to address the problems that they face and taking away from them, because we are taking away from the children. When we cut these $40 million, we're taking away from their ability and their right and our moral responsibility to serve them.

So I'm unfortunately beginning to see maybe a pattern here of really important programs that are getting cut or proposed to get cut by the Administration, and there's no justification. And yet other programs, we're just continuing on with them without any problems. So I just ask you to take that into consideration to the administration.

Yes, just to add, so one distinction you can make between the public defenders program at CASA is public defenders. There's no argument that we need to Fund this. The CASA program grew up by a bunch of really wonderful people addressing a need the state did not and still has not addressed. And to Ms. Lawrence's point, there are only 13,000 out of 80,000 children in California who are receiving the benefit of this program. Right.

And so that you wind up with kind of a Russian roulette situation, depending on where you live, who volunteers. But the outcomes are incontrovertible, and the situation faced by every child in the foster care system is really bleak. And so I would point out that not all one time funds are created equal. You can make an argument that we should invest on a continuing basis at a much greater level.

To Ms. Lawrence, to the chair's point, you would see a return on an investment, both in money and lives, that is really meaningful. The data already exists, and so there are lots of other places to save money in this budget, and we should not take it out of this program.

I'll just end by saying that what's most impressive to me is that these are dollars going towards recruiting volunteers, thousands of people who are volunteering their time to do this. So our investment is not just for those who are actually getting paid and barely getting paid, but for the many thousands who don't get any money whatsoever to help save children's lives. So with that, thank you very much for everybody who made the presentation. We'll keep that open.

But I think it's pretty clear where you and I stand on this.

Maybe.

Okay, we're moving on then, to issue six. Issue six is ongoing care act support. We will again with Ms. Depner, Director of the Center for Families, Children, and the Courts for the Judicial Council.

Good afternoon, Madam Chairman and members. I'm Charlene Depner from the Judicial Council. And I think the first order of business I was asked to cover was, what is our progress in implementing the program so far? This is a very complex process. It involves people at the local level, people in the courts, people in the communities, of course, the courts themselves, the steering committees that each county has put together and is working zealously with. And so all of these folks have to come together at some point.

And the first phase of our planning was to get started, to roll up our sleeves and figure out what we needed to do for the courts. Also, three days after the act was signed, we started meeting with our colleagues in HHS, Department of Healthcare Services and the like so that we could, as much as possible, align our efforts from the very beginning. And I will say that I'm very pleased with that collaboration. In addition, now what we're doing is working with the courts.

And the courts have also impressed me very much because they were ready the week after the act was signed with their teams to roll up their sleeves and tell us what they were thinking about and what their questions were. So they've been great partners and all of that and really take this very seriously. In addition, many of them have experience working in adult mental health and had great ideas about how to proceed. We worked with them, and then we started connecting them.

We had a platform where they could share their ideas and communicate with each other. And then after that, we started having cohort meetings, which included all the people in each county who were working on mounting this program. The first one was at the end of October. The second one was, unfortunately, last Friday. So weather affected the attendance there. And so we're going to do some follow up on that.

It's been a very robust conversation, and the work that we've put on our websites and communicated out is not just the work of our team, but of all of the folks we're working with. Our team has worked really carefully and quickly for our rules and forms process. They've been working with the Probate and Mental Health Subcommitee to do the rules of court, and also now 16 forms to facilitate the completion of the process.

And those documents will be going to the Rules Committee on April 5 and to the Judicial Council for final approval in June. I'm sorry, May, the end of May. So once they are approved, then our team will be starting to work on the enhancement of those forms to make them more like a Turbotax kind of process, where you put in the name once and it'll repopulate all the other forms and things like that. Anything to try to facilitate the process for the petition.

We're also now back to working with all of our partners and trying to figure out and prioritize training and technical assistance so that all of the parties involved in this have the information they need and training and working with this population, if they don't have it already. The data collection is just really get. The planning of that is just getting underway. It's the responsibility of HHS and also the Department of Healthcare Services. And they have a consultant who's just started.

So they're meeting with us to look at the very, very long list of items to collect. That is in Chapter 6 of the act. We and the Judicial Council are committed in the act to providing three different metrics. One is the number of petitions submitted. The second is the initial appearance on petitions, and the third is the number of hearings. But there's a number of other items that are in the act that will be working with HHS to decide how to proceed with that.

And I could just say that all of this is very coordinated process and a very vocal process with lots of meetings.

Okay, thank you very much. Ms. Lee, do you have any comments?

Yes, thank you, Madam Chair. We have two recommendations for you on this item. Our first recommendation is we do recognize that ongoing funding will be needed. However, we are recommending the Legislature only provide the 29.9 million requested for 23-24, and this is because the care program has not been implemented yet and there is significant fiscal uncertainty with the assumptions underlying the estimates, and those assumptions are laid out on page 23 of your agenda.

And so if you have major differences between the assumptions and actual data that could actually impact the amount of funding that is needed in the future, potentially significantly. For 2023-24, it's reasonable to provide it based on the assumptions because that's all you have.

The program hasn't been implemented, but moving forward, actual data collected from cohort one would be really helpful to inform those future funding levels, as well as to help the Legislature monitor the program and determine whether legislative changes are needed to make sure the program operates as intended or to control costs.

In line with that, we would just note for the Legislature, kind of given the state's budget situation, the Legislature might want to consider whether to limit the number of counties in the second cohort that start early before July 1 of 2024 because that would increase the amount of general fund needed in both 2023-24 as well as 24-25. Our second recommendation is, as noted by Ms. Depner, the SB 1338 does require annual reporting on key outcome and performance measures.

However, the first set of information is likely to be reported after you complete deliberations for the 2024-25 budget. So because of that, we recommend the Legislature direct the trial courts in the first cohort, the first group that's implementing to report monthly once they begin operations on key metrics that are critical to calculating future funding needs.

And so those would include the number of petitions received and dismissed, the number of people who are enrolled, the number of court proceedings that are generated, as well as the amount of time that judges, court staff and legal representatives spend to address those cases, provide assistance to the individuals in question, and all of that information would be really helpful to then calculating the appropriate level of future funding needs. Thank you.

Thank you very much, Mr. Jimenez?

Mark Jimenez, Department of Finance so we agree with the LAO's comments that the funding needs of the program is uncertain. It's a new program. Implementation is still underway. However, we respectfully disagree with the recommendation to provide only one year of funding. The program involves the commitment of many stakeholders, so this involves all 58 counties, the courts within each county, county, behavioral health services, legal service providers.

It's important that we build in the necessary resources in the budget to demonstrate the state's ongoing commitment to the success of this program as needs change. We expect that through the budget development process that we would make adjustments to reflect the needs and what we're seeing on the ground. And lastly, we appreciate the LAO's recommendation for data reporting. However, we think that monthly reporting might be a bit onerous for the Judicial Council.

So we look forward to working with legislative staff on the details of the reporting requirement.

Thank you very much, Senator.

I think I am sympathetic to the argument that we need more than one year of funding. But I would also point out to the extent that this is a new program and it's to address a very specific problem, there's no assurance at all that the uptake will be a smooth curve. What I think most people agree we're going to see a much larger number in the first year or the first year of a cohort, but that's not necessarily predictive of the subsequent path.

And then there's also going to be lots of friction around what qualifies and the costs associated with figuring out what are the standards, what are the proper procedures to address what is actually a fairly narrow band of kind of the unhoused population that have to meet a very specific set of criteria. So I think you do need more than a year, but I think we should be deliberate in assuming that the first year's number is not necessarily going to predict the second year's number.

So data is important, and the question is how best to collect that data in a way that doesn't interfere with the ongoing work. But the Legislature should be fully involved in all of that if we're going to have a sensible program, but more importantly, if we can budget effectively for it in upcoming years. So I do appreciate your input.

Thank you. Thank you very much. I have a few specific questions. We've heard previously about the difficulties legal aid organizations face in recruiting and retraining attorneys. So how can the state ensure you have the capacity to take on this new duty?

What we've done so far is partner with the state bar, who has issued planning grants for interested providers. And the goal of the planning grants is to identify what the problems and challenges are and also to get a sense of how many legal services providers would be interested in participating and what locations to map it geographically.

Okay. That's not really getting to the capacity, though. I mean, you're taking steps, but how do you get to that level of capacity?

Probably will not know until April or so, after the may revise maybe what number of legal services providers want to contract with us, and that's when we'll know the number. At that point, as the act shows, we then go to public defenders as representatives.

Actually, it's been weeks, right, since LA jumped in to include themselves in it. That will mean that almost half of the state population will be in counties as a result of LA jumping in. How has this changed your ability to implement, especially on a quicker scale, and ensure that the smooth rollout that we're all looking to see.

You want to take?

Yeah, sure. Maybe I should point out that the budget that we proposed in the Governor's budget does not assume LAO starting or LAO sorry, Los Angeles starting. Right. And so we're working with, the Administration is working with the Judicial Council to determine the resources necessary to accommodate Los Angeles eagerness to start the program early. So, we're in discussion.

I should also add that from the very beginning, we started sharing all the resources with LA that we share with the cohort, one cohort. So they have all the information, they're working in their plan, so they will not be delayed, depending on which way it goes.

Could you talk a little bit about the number, the estimate? I actually remember hearing early on last session that it would be somewhere around 7,000 participants. You're using the number of 18,000 petitions and 12,000 participants. The LA noted that some stakeholders think there will be even more. So how would the system handle these larger numbers or unanticipated influx?

Maybe I can address that. So the range that the Health and Human Services Agency provided was about 7,000-2,000 participants. And so what we assumed in the budget was on the higher end of 12,000 participants. The 18,000 that you're referencing is the petitions. The number of petitions coming in, 12,000 is the number of participants eligible after determining whether or not they are eligible.

And to the extent that the additional resources are necessary to accommodate maybe an influx, an unanticipated influx, there are tools within the budget that we can utilize to address any unanticipated costs, and we would exercise those tools to support any influx and resources.

Okay, any more questions? No? Anybody? Okay, well, you didn't get to answer any questions.

I managed the budget, so if there's any questions on that end. But I think we've done well.

Okay, thank you very much. All right, thank you all very much. We're going to move on to issue seven, which is capital outlay and facilities. We'll begin in with Hela Mccormick, Director of facility services for the Judicial Council.

Thank you, Madam Chair, I'm Pella Mccormick. I'm the Director of Facility Services for Judicial Council of California. The Judicial Council's facilities portfolio consists of approximately 450 facilities with over 2,100 courtrooms across the state and more than 21 million square feet. Program's goal is to prolong asset usefulness to ensure reliable, safe and functional court facilities for all Californians. Recently, two capital projects and one study have completed 22 capital projects and one study are ongoing. These projects will activate 259 courtrooms and vacate 41 substandard facilities.

The program completes approximately 1,100 facility modification projects and 70,000 maintenance service work orders annually. The 23-24 capital project requests include continuing phases for trial court projects in San Bernardino, Monterey, and Nevada counties and a new start capital project for the 6th District Court of Appeal in Sunnyvale, Santa Clara County. Funding is also requested for the design fabrication installation of a new signage for the newly renamed Charles James Ogletree, Jr. Courthouse for the Superior Court of Merced.

The facilities program is requesting consideration for operations and maintenance funding for nine facilities that have recently completed or will complete construction in the upcoming year. Currently, the eight projects that commenced construction just prior to or during the pandemic have experienced scheduled disruption due to mandatory Covid closures, supply chain challenges, and scarcity of labor during the pandemic, these projects were affected by missing components which disrupted the sequence of construction and the ability to complete the buildings timely.

The Judicial Council and our contractors worked diligently and collaboratively to minimize the impacts. However, schedule overruns have occurred as California emerges from the pandemic, schedule certainty is returning. The projects in Shasta, Imperial, and Glen will open this year and other projects are progressing with more predictability. The ongoing study for the Los Angeles Superior Court that was authorized in fiscal year 21-22 is completing as scheduled this calendar year.

The study analyzes and develops a plan for improving and modernizing Los Angeles 43 court facilities and Judicial Counsel has identified the need for 80 capital outlay projects statewide. 17 of these projects for the Los Angeles Superior Court, based on the LA study's preliminary analysis, coupled with post pandemic adaptations in court operation adjustments will be made to the future Los Angeles Capital project proposals. Next year's Judicial Council five year infrastructure plan may be adjusted after considering the study findings.

Your conscientious support for the Judicial Council's facility program is appreciated and I'm happy to answer any questions.

Thank you very much. Ms. Lee, any comments?

Yes, thank you. We have comments on two different parts of the proposal, so I'm going to cover financing first and then the proposals related to the state courts facilities construction fund SCFCF insolvency so, first, related to financing, broadly speaking, the Governor's Budget includes a total of nearly 2 billion in cash from the General Fund or lease revenue bonds to support capital outlay projects across the state.

The Judicial Branch specifically has three projects in which the Governor's Budget proposes to shift 89.3 million in construction costs from lease revenue bonds to cash from the General Fund. These projects would otherwise need to use taxable bonds to finance the costs because they exceed the three year window required for tax exempt bonds. Using bonds or cash are both reasonable ways to finance capital outlay projects, but there are trade offs with those approaches.

So, for example, if the state has a budget deficit, and we're talking, we are well versed in the budget condition right now, bonds can fund important projects without forcing the state to cut existing programs that are receiving General Fund. On the other hand, using cash to fund the programs means that the overall spending for a project might be less because the state doesn't have to pay the interest.

And so, given the current budget problem facing the state, including the fact that the problem might be worse than the Governor projects, the Legislature might want to switch to lease revenue bonds instead of cash financing for these projects or some of the other ones proposed by cash in order to maintain funding for other existing programs.

We would note that even though interest rates are relatively high right now, if interest rates come down in the future, the state typically has the option to effectively refinance at a lower rate. So, that's one set of comments. The second set of comments relates to the FCFCF insolvency proposals.

We do recommend that the Legislature approve shifting the 55.5 million in support for trial court operations from the SCFCF to the General Fund, as well as providing a General Fund backfill to the SCFCF because that would permanently sort of address the issues that we're facing in terms of its solvency.

However, because the backfill amount needed is going to change over time, we do recommend the Legislature direct Judicial Counsel to report annually on the SCF's long term fund condition statement as long as a General Fund backfill is required, and this information will help the Legislature ensure that the budget is adjusted appropriately to reflect any changes that could be higher.

So, for example, if revenues continue to decline or lower if expenditures are less, and a key example of that is debt service expenditures are expected to decrease by about $40 million annually beginning in 2032-33 with additional declines of 50 million in 2039 and another 40 million in 2039-40. And so adjusting that backfill amount would mean that General Fund is then available for other purposes.

Our final comment is that related to this proposal, a part of it would permanently extend 15 million in facility modification funding that was scheduled to expire at the end of this budget year. And so in thinking of that, we do recommend the Legislature weigh that against your other budget priorities, since that would result in General Fund cost pressures. We do acknowledge that the Judicial Council has facility needs. They definitely have that,

but if you reduce or reject kind of that proposed ongoing spending, it would provide the Legislature with a budget solution to help address projected out year deficits that are already kind of part of the Governor's Budget.

Okay. Thank you. And Mr. Osborne?

Yeah, I can speak to the first part, Phil Osborne with the Department of Finance, and so we support the proposal as presented, the use of the General Fund for the three projects that have expenditures outside of the three year federal window. We think it's more prudent to use General Fund than it would be to have to issue taxable bonds for the entire project.

Thank you.

Just to address the second issue, we appreciate the LAO support for the SCFCF proposal, and we look forward to working with legislative staff on the details of the reporting requirement that she referred to.

Thank you. I know this is my question is very much a part of what has already been discussed, but if you could comment on the need for the permanent increase in the facility modification funding and then proposed cut to the deferred maintenance funding, if you could explain that more, and where the priority is/

Certainly, so facility modifications is really kind of a misnomer. That is, capital renewals of failing assets. So, for example, it's like replacements of large mechanical equipment, air handlers, chillers, that sort of thing. If you don't do facility modification, capital renewals, that adds to your deferred maintenance list. And the problem becomes when you defer things, you run them to failure. So then you have to repair them under an emergency situation, which is typically more disruptive and more costly.

So, the ongoing facility modification money really does reduce the deferred maintenance spending over time. And the last four years, with your support, we have been fortunate and been able to reduce our deferred maintenance backlog quite a bit with the funding that has been received, and it's really paid dividend with these storms that have come through this year, we have not had any major building closures due to leaking roofs or other storm related damage.

So it does pay dividends to go ahead and do the deferred maintenance and the facility modifications will avoid building the deferred maintenance backlog.

Good.

If I may, I can.

Yes, go ahead.

I can address the deferred maintenance part of your question. The Governor's Budget proposes a reduction of 49.5 million General Fund in the Judicial Council's deferred maintenance budget. This pot of funding has not yet been encumbered and should not impact existing projects. So the context is that the 2021 Budget act provided 188,000,000 to the Judicial Council for deferred maintenance. So by reducing this reduction, we'll still leave the Judicial Council about $138.5 million to support their deferred maintenance budget.

So this is just one of the solutions we're utilizing to address the revenue shortfalls in the budget.

Good. Thank you very much. Okay, I think that's it for this issue. Thank you very much for being here and presenting. Thank you. Issue eight is elimination of sunset dates for expiring civil fees.

Zlatko Theodorovich from the Judicial Council, if I may.

wait, wait, let me try.

Sure, go ahead.

Theodorovich. Okay, got it. Theodorovich.

Thank you, madam.

Thank you so much.

I am Zlakto Theodorovich, budget services Director from the Judicial Council, here to just briefly discuss issue number eight. I think the agenda does a really nice job of addressing the background on the issue. These fees were increased in 2012, in large part due to the great Recession and general fund reductions that were occurring at the time. There was negotiations, the budget development, that these fees would be increased to offset some of these general fund reductions over the years.

When they were initially approved, they were put with a sunset to possibly revisit the fiscal health of the state and possibly undo the increases. But the fiscal condition has been such that there's not been that type of restoration. And so these are a variety of fees in the civil filings, motion fees, complex fees, first paper fees. They generate approximately $40 million that support trial court operations, critical operations.

To the extent that these fees are not continued, that would either require general fund investment of that amount or a reduction in trial court operations. And so we believe that these are a reasonable and appropriate method to go forward to make them permanent. I mean, it's been over a decade that these revenues have been part of our funding streams. And I know that the Legislature and the Governor agreed to increasing the fee waiver income thresholds.

And that's a question I think that we might have in terms of how does that action from last year impact these revenues? And they are individuals who are eligible for fee waivers in these fee categories as well. There's just a couple that are related to complex, and they tend to be businesses that are involved there. And there still is an opportunity for judicial discretion on waiving those fees if necessary.

So should be no impact on any of the actions that you took last year relative to fee waivers increase eligibility.

Okay, thank you, Mr. Jimenez. Oh, Ms. Lee. Sorry. No questions. No comments. Okay.

Yes, available for questions.

Okay, great. Just if you could go back to the you mentioned the waivers. Could you explain that a little bit more? Because obviously there'll be individuals who can't afford the fees. Who can expand on that a little bit.

In brief, in statute, there are income thresholds in which if you are below those thresholds, you can apply to the court and they are automatically granted for you to not pay your fees. And so an individual can come to the court, complete their form, and the fees are waived for them to proceed with their legal issues. So, there's no barrier to access to justice because of their inability to pay.

Okay. Do you have any guesstimate as to what that could amount to?

Unfortunately, we don't. We've talked to staff about that over the last few months about how you could possibly isolate the change in the threshold to the 200%. But we don't have an ability to understand who is coming in more or less overall because of the increase in the fee waves. But we do have budget processes that to the extent that there are reduced revenues to the branch, that there are backfills, so they do get captured there.

To the extent that there is reduced revenues so that the branch operations are not impacted.

Okay, I have no further questions. Thank you very much. Appreciate your presentation. Our first proposal for the Department of Justice is the DNA Identification Fund backfill. And we're going to begin with the Department of Justice. I don't have a name.

And to cover the DNA ID Fund backfill, we have Barry Miller, who's our forensic lab Director.

Thank you, Madam Chair. Just discussing some of the items that were presented in the agenda. The Bureau of Forensic Services was required to provide a report that talked about alternative funding options related to Non-General Fund options. And we did submit that mandated report. The options that we explored are listed in that report. But the history of the bureau and what we represent was important as well, because in some of the comments that came back from the report, there was a talk about equitable resource ability.

So basically that the bureau was providing some sort of substantial subsidization of the municipalities that we service. And that was intentional. When the bureau was formed, there was an inequitable access to forensic services. In the other direction, the large cities and counties that had their own laboratories were not providing those services for the rural counties that needed that access to justice.

So when the bureau was formed, it was formed on a grant, and then it transferred over to the state to monitor those funds and provide those services to those municipalities. We've continued to do that free of charge for many decades, and we've had some changes in funding that went to criminal fines and fees. But the idea that we would want to charge local communities is still something that we find we don't want to pursue.

And the reason that we don't want to pursue it is because we still feel that it doesn't provide equal access to justice, and it actually incentivizes local law enforcement to decide whether or not they submit evidence. And one of the terms that is used in the comments is that it gives them the incentive to decide what they turn in and think about it.

That places the idea in my mind that that means that they somehow control what we analyze, how we analyze it, or our workflow in the laboratory, and that doesn't happen. The laboratories that we run and the communities that we serve turn in their evidence, and we process it based on either discussions or evaluation of that evidence. And it's erroneous to assume that we will analyze every piece of evidence that they turn in every time.

So there is fiscal responsibility that goes on within the bureau as well. The other issue that we have been dealing with is a matter of who pays for these services. And in 2003 and 2004, San Diego, at the sheriff's lab, they actually have a crime laboratory at the sheriff's office in San Diego, and the Grand Jury for the County of San Diego had done a study on whether or not the county wanted to charge their agencies for their services.

And in that study, the Grand Jury did present a conclusion that the bureau also presented in a report that we provided to the Legislature in the LAO as well, in 2020. And that conclusion was that inserting fees into criminal investigations could become a deterrent to effective investigations, be divisive, or motivate cities to shift the financial burden of laboratory tests to other agencies. We agree.

The idea that we would charge these agencies for this service is something that we would not want to do, because we don't feel that that would be an equal access opportunity. Thank you. I appreciate your time.

Thank you. Thank you very much. Did you want to add anything more? No? Okay. All right. Okay. Ms. Lee?

Yes. Thank you, Madam Chair. We do have three recommendations for the Legislature on this item. First, we recommend the Legislature require users of BFS services to partially support its operations. Beginning in 24-25 agencies would be required to pay for a portion of the services that they receive under that recommendation.

And just to briefly walk you through that, if we first look at local governments, it's local law enforcement agencies and prosecutorial agencies that are responsible for collecting and submitting this type of evidence for testing and then using that to pursue convictions under the existing system. We do find it is inequitable because there are agencies in 46 counties that are receiving service, generally at no charge.

So that does mean that we are effectively BFS, DOJ, and the state funding of it is effectively providing tens of millions of service to those agencies. That is in contrast to the agencies in the twelve counties and eight cities that pay to support their own laboratories. And so because they're paying for when you're paying for the service, that does provide incentive to think about what workload is being submitted and tested.

We would note that, as mentioned by Mr. Miller, DOJ did submit a report, as required by the 2021-22 budget, to identify options other than the general fund to support BFS operations that is laid out on page 39 of your agenda. We, in our review, found concerns with most of those alternatives which are laid out in detail on pages 41 and 42 of your agenda.

The one that we thought was possible and is folded in as part of our recommendation, was for non-local entities to pay for a portion of this support.

And so this recommendation, requiring users to partially support BFS operations to us in our analysis, would be more equitable than the existing system, would increase user incentive to use BFS services more cost effectively, and would reduce the General Fund backfill needed in 2024-25 and in future years, and then delaying implementation until 2024-25 would provide time for that new funding framework to go into place and for the entities to adapt.

In line with this, our second recommendation is for the Legislature to direct DOJ to submit a plan for calculating each agency's share no later than October 1 of 2023. We would also recommend that the Legislature provide DOJ with direction on how much of BFS operational costs, whether it's one half, one third, whatever amount should be coming in from these types of payments.

DOJ would have flexibility in that calculation, such as charging more or less based on the type of service that's offered or the size of the requesting entity. Our third and final recommendation is for the Legislature to approve the proposed increase support from the DNA identification fund as part of this proposal. It's an increase of $17.3 million.

But in terms of the backfill, the backfill of 53.4 million would only be provided for one year to allow for that new funding structure that we recommend to go into place. Thank you.

Okay. Mr. Clark?

Good afternoon. Kevin Clark with Department of Finance. I just want to respond to a few of LAO's recommendations. Specifically, number 1 and 2, which recommends having users of BFS services partially support their costs for the program, and also directing DOJ to calculate each agency's share of BFS services that they be provided or pay. So, again, like Mr. Miller mentioned, this really isn't an issue of access to justice.

And having users of BFS services partially support costs for the program could create a disincentive for locals as well as state agencies to utilize these forensic services, testing services. And we note that that may raise equity issues for counties that don't collect sufficient tax revenues. So these are smaller rural counties throughout the state.

In terms of the third recommendation, which is to provide the proposed general fund backfill for one year, we've evaluated the different proposals put forth in the DOJ reports as well as LAO, and our focus as the Administration is addressing the DNA ID fund backfill, the structural insolvency of the fund, as well as focusing, like we mentioned, on access to justice by providing these forensic services. And so an ongoing general fund backfill continues to be the most effective solution for addressing both of those issues.

And also happy to answer any questions that you might have.

Okay, thank you very much. Could either Mr. Ryan or Mr. Miller, sorry, Could you explain how it is that we end up with some counties paying and other counties not paying? How do you determine that? Or who decides that?

Yes, Madam Chair, and I apologize. I don't think I introduced myself when I started speaking last time. So, Barry Miller. I'm the Director of the Bureau of Forensic Services. The determination of who would pay and how they would pay is something that we'd have to come up with a plan. The recommendation for, and I assume we're talking about if we were to come up with a plan for some sort of sliding scale, or are you talking about.

Talking about currently?

Currently, we don't charge any of the counties or cities that we service currently. So there is no charge that goes to them for this service. There are some fees that are set up in the statute, such as a DUI or driving under the influence fee. It's a $50 fee that if a public crime laboratory has its own laboratory, it receives the full amount of the $50 fee. And if the State of California does that analysis, it's a split between the local municipality and the state.

The other one is set in the health and safety code, which was a controlled substance crime laboratory fee, and I believe that was set at around 25, $25 somewhere in there for that. But those are the only ones that happen for the state. We don't charge anybody else.

Okay, then I'm a little bit confused that 46 counties don't pay and 12 counties do pay. Is that Ms. Lee, did you say that or misunderstood here?

Let me provide a little bit of clarification. So BFS is providing service to agencies in those 46 counties, no charge. There are 12 agencies in 12 counties and eight cities that pay to support their own laboratories. So they are local laboratories, and so local tax dollars are being used. And so that is kind of the difference. Right, so if you're in a county where you're submitting the evidence to the state and you're not paying anything, it's the state that's basically paying to test for you.

And so then really it is constrained. And I want to acknowledge DOJ, as part of their work, will be sorting through the priority. But for the local agency size, when they are submitting it, they're not thinking about DOJ's capacity. And so it's really limited by what funding the Legislature is willing to provide. That is in contrast to those cities and counties that are operating their own laboratories. Right, so they're making those decisions at the local level in terms of how to fund them.

And so part of those decisions about how to fund them include what evidence is going to be tested, how do they move forward, and you have discussions around those areas. And so that's kind of what leads to us, when we think about it, as it's a little bit of an imbalance. And so for us, our first recommendation is to partially support.

We do recognize that there might be challenges related to agency size, and so I think that there are various options that could be implemented to the extent that the Legislature was interested in implementing our recommendation.

Got it. Okay. My other question is about the non-local agencies, and they pay for their services. Right now they don't. Right. Or do I have that? Also?

Barry Miller with forensic services. Just a point of clarification. 46 counties do receive our services. Primarily. We do work for all 58, for instance, in the data bank, the DNA data bank program, as well as some of the other nuanced analyses that those counties can utilize us for. So as far as to your question, if you could repeat it.

I'm sorry. Well, I think we were talking about local districts or local agencies before. What about non-local, our state agencies, like CRDC or whoever else might use their services, because right now they don't pay for services.

That is correct. And it's a little bit complicated as well. For instance, CDCR, as you mentioned, does not pay for our services when we do work for them. The California Highway Patrol passes that cost on to the local agencies in which they're doing their operations. And so, yes, the California Highway Patrol wouldn't pay, but in the end, the local agency takes on the burden of that prosecution or case filing, as well as the costs of the chemical tests and everything else.

Okay. What about the idea that they pay the share for their services? I think that this has come up right in terms of a recommendation.

It was one of the alternatives raised in the report identified by DOJ. So that's what we referenced to when we made that comment.

So could you respond to that in terms of requiring non-nocal agencies to pay for their services?

Yes, Madam Chair. The idea simply was that we provide a certain percentage of service for non local entities, and so transferring the estimated amount of money that it costs to provide those services to the bureau would be an option.

Okay.

I'll just add Kevin Clark, Department of Finance, that we did look at that. The Administration did look at that as well. And at the end of the day, for one of the users of BFS, CDCR, they're entirely funded with general funds. So at the end of the day, it's going to be the same impact to the general fund.

We have to pay for it anyway.

Madam Chair, if I might. I think the one thing on that one is that you would potentially be shifting general fund from DOJ to CDCR. But one of the key things that we want to just highlight is one reason for the recommendation is to promote greater thought in terms of what is prioritized and what is sent.

And so just to add to that, for example, in CDCR, if CDCR started being charged for it, it could change behaviors in other ways that generate what is being submitted, et cetera. And so there are possibilities that the amount could actually be reduced as well. It really depends on how they adapt to it. So, we just want to add that comment.

Do you want to do the next one?

Thank you very much. Issue 10. Okay. Issue 10 is the fee increase to maintain operations of the Missing pPersons DNA Program. Again, Mr. Ryan or Mr.

Thank you, Madam Chair. Chris Ryan, Department of Justice. This proposal really has two pieces to it, there is the request for resources, the additional budget authority associated with an increase in position authority and funding. 1.5 million from the Missing Persons DNA Database Fund in one position and 1.4 million in the out year. The other component to this proposal is the fee increase. This is a fee that has not been adjusted in approximately 20 years, and it does not provide for a CPI adjustment.

And so, in order to generate the revenue needed to support the additional expenditures, we're requesting a fee increase through the trailer bill process.

Okay. Ms. Lee, no comments.

No comments, but available to answer any questions. Thank you,

Mr. Clark?

Yeah, no additional comments. Happy to answer questions.

I have a couple of questions, Mr. Ryan. Administration is proposing to increase the revenues by more than 80%, yet there's no predicted increase in output. So how would you describe what we're getting for the additional resources?

I think the calculation was about a 50% increase. But I think the cost of operations and Mr. Miller can speak to more of the operational items, but there's been a cost increase in the supplies. Also an increase in the cost of the position associated with this workload as well. If you need more detail, I can ask Barry Miller to provide additional clarification.

Yes, please. Do you have a shorter version?

Yes.

Madam Chair? Barry Miller, Bureau of Forensic Services. As Mr. Ryan pointed out, this is something that hasn't been increased in over 20 years. And the costs of doing business have increased. Supplies for the DNA kits, personnel expenses, all those things have increased over the years, and so this is really about right sizing or making the program right for the funds that are coming into that system.

So along those lines, I understand that our budget conditions and we want to keep everything as is or increase where we find that there's a need to. The fee for death certificates just sounds like going to a place where people, many people, most in need would now be paying more. What was your thought behind that, Madam Chair?

The fee was set into the penal code in 2001, and currently the program receives a $2 fee on death certificates, which was a proposal that was accepted and put into statute in 2000, 2001. So the thought was it was already there, and that's the most likely place where we would continue to support that program from.

Yeah, I only say that because we've done so much to reduce fines and fees. And it's like you're saying we reduce it over here, but if we're going to increase it over here, then we're not really getting the kind of financial relief that many of those families would need. So, I probably ask to reconsider that. Okay, I think that's it here. I don't have any more questions or comments. Thank you very much. Issue 11 is legal workload and implementation of legislation. Mr. Ryan? Thank you.

Madam Chair, Chris Ryan with the Department of Justice. And this is an issue where there's quite a bit of proposals, quite a few proposals to unpack. So we're going to have Thomas Patterson give a brief overview of the AG's office.

Thank you.

Good afternoon, Madam Chair. Thomas Patterson from the Department of Justice. I'm the Senior Assistant Attorney General over the government law section. This afternoon, we're discussing a broad array of areas in which the Department of Justice, under the attorney general's direction, is diligently working to protect and serve the people of the State of California.

At the Department, our core responsibility is to do justice, and we'll address various ways in which the Department is doing just that, whether that means addressing homelessness and housing shortages, investigating officer involved shootings, enforcing California's common sense firearm laws, helping to solve cold cases through DNA, or protecting consumers and workers' rights not to mention various other equally important areas that are not prominently featured on today's agenda, such as improving health care, fighting the opioid crisis, protecting children's rights, ensuring environmental justice, and many other important missions.

In considering the department's work, the attorney general's constitutionally granted discretion plays an important role as he identifies the best way to utilize the department's impact to effectively meet California's diverse needs at the right moment, as he enforces the rights and privileges for Californians under the state and U.S. Constitutions and the laws that the Legislature passes.

There's a long line of authority found in the Constitution, statutes, and California Supreme Court decisions recognizing the importance of the AG exercising broad discretion in the types of investigations and cases he brings and how he litigates those cases and how he organizes the Department so that it can remain nimble to meet the state's needs in a broad array of areas at the time that they arise.

While there are many state agencies that address areas of governance or oversight that may overlap to some degree with the AG's authority, the AG is unique and distinct from those state agencies under the Constitution, the Attorney General is one of the few independently elected statewide executive officers, specifically the chief law officer. On the criminal justice side, the AG oversees sheriffs and the district attorneys, and he handles most criminal appeals as well as some criminal prosecutions.

He also has charge over DOJ peace officers with specialized missions such as enforcing state firearms laws by keeping guns out of the hands of persons who are prohibited from having them on the civil side and regarding public rights, the AG has broad ranging authority to enforce rights as defined by the Constitution and through legislation.

Indeed, the constitution and statutes authorize the AG to have charge over nearly all legal matters in which the state is interested and to file actions to enforce the Constitution and to protect public rights and interests. And the AG has ability to dictate the department's priorities and arrange resources in a manner that serves the goals of justice. Importantly, the Constitution wisely gives him power to determine the laws and the public rights to prioritize.

This discretion allows the AG to use the department's full complement of diverse tools to address multifaceted problems. As just one example, in addressing the housing crisis, the AG can use tools related to consumer protection, tenants'rights land use, environmental justice, and civil rights. He isn't bound by a narrow and cabin restraint in any area. As the Attorney General exercises his duty to serve justice, and particularly when he has the resources he requires to effectively exercise that discretion, there are distinct and valuable benefits for all Californians.

First, the AG gains flexibility to address emerging and often systemic issues as they arise. And we've seen this over the years, when the AG has quickly pivoted to address corporate offenses, environmental violations, the public health emergency during the pandemic, and pendulum swings in federal policy under the prior Federal Administration, as well as many other areas.

Second, by addressing these issues with his full scope of authority, the Attorney General gains the ability to obtain compliance where California's laws have previously been violated and reform through successful litigation and settlements. And third, he's able to discourage violations from occurring in the first place simply by maintaining a strong and nimble Department that can readily enforce public rights created by the Legislature and that are woven into the fabric of the Constitution. As the Attorney General determines how to use the department's resources to its best ends.

A nimble and well resourced Department gives him flexibility to identify the greatest areas of impact for California, which often include one or more of the following issues of broad importance protection of vulnerable populations leveraging California state law to address unique problems, and filling in a void in enforcement by other agencies, including federal agencies, in order to protect California's consumers and economy. The department's request that we present this afternoon address these very types of issues.

For example, legal resources to defend the Covid-19 Tenant Relief Act of 2020, which established protections against evictions for those facing hardships from the pandemic augmenting the worker rights and fair labor sections robust enforcement against the most egregious violators of workers rights, including serial violators and those who engage in labor trafficking, bolstering the department's antitrust enforcement concerning gasoline pricing, agriculture, and tech enforcement work that not only protects consumers but nets substantial sums for the state to facilitate additional consumer protection action and providing resources for the housing strike force, which has expertise from diverse legal backgrounds in land use, consumer protection, civil rights enforcement and environmental law to address the housing crisis and to alleviate its effects.

Thank you for the opportunity to discuss these important ways in which the Attorney General seeks to more effectively serve California's interests.

Thank you very much. Appreciate that, Ms. Lee.

Thank you, Madam Chair. Staff thought it would be helpful if we provided some key context and kind of walked the Committee through our recommendations on an overarching basis. And then we have a couple of key specific comments. We do have a handout for you for those who are following along. It is also available on the Senate website as well as the LAO website if you turn to page one of your handout. The DOJ division of Legal Services is responsible for most litigation in 2022-23 53 oh,

I think she needs, she needs a copy of the handout, the handout. The handout, which no.

It. All right. Okay. Apologies. So if you turn to page one of your handout, you can see on the image before you that I'm just going to take a quick step back. So in 2022, '23 53% or 645,000,000 of DOJ's budget supported the broader legal division. As you can see on the figure before you, there are various Fund sources that support that activity, ranging from the General Fund to special funds and litigation, federal funds and reimbursements.

DOJ then organizes the division into various sections and units at their discretion. DOJ litigation is initiated in two key ways. The first is that state agencies can request and be billed for those services. And then the second way is that DOJ can self initiate actions and they would pay for those from their own budget. DOJ does have flexibility over its litigation workload within existing resources, particularly for that self initiated workload.

So if you turn to page two of your handout, the state has a special Fund called the state Litigation Deposit Fund or the LDF, and this was created to receive litigation proceeds in cases where the state is a party to the action and there's no other state law that dictates how the money should be used. The Fund primarily supports payments to individuals or businesses that have suffered harm, as well as for transfers to DOJ special funds that then support their litigation workload.

If you look at the figure before you on the page, you'll see that the Fund balance in the LDF has steadily grown over the past decade and reached just under 1.1 billion at the end of December 2022. The LDF, because it is a trust Fund, is not considered as part of the annual budget. Instead, state law puts full kind of control and Administration with DOJ, and that includes decisions about when payments are made. There is requirement for some limited statutory quarterly reporting.

If you turn to page three of your handout, tens of millions of dollars are regularly transferred each year to four DOJ special funds, the unfair competition Law Fund and the antitrust account, which you'll be discussing in more detail today, as well as the False Claims Act Fund and the Public Rights Law enforcement special Fund. State law specifies what litigation proceeds can go into those funds, as well as then what they can be used for if you turn to page four of your handout.

Just at a broad level, the Governor's Budget is proposing a total of 24.5 million in '23, '24 of which 15 million is coming from the General Fund to support 18 budget proposals to address increased workload. If you want the particular details, that is on pages 50,51, and 52 of your agenda, where there's just more detail on that. But they really fall into two key buckets. 14 of the proposals are related to implementing recent legislation, and that's about $11 million from the General Fund.

And we would just note that some of that enacted legislation requires DOJ to engage in certain activities while others authorize but do not require action. The remaining four proposals, approximately 13.4 million in '23, '24 with 4 million coming from the General Fund and 9.5 million coming from various other funds, would support increased workload in housing, antitrust and wage theft areas. But the key thing on that one is it's not to enact legislation.

So if you turn to page five of your handout, we're going to walk you through kind of our overarching assessment at a high level when we were doing our analysis, and so starting at the top of the page, we did find that legal workload would increase due to the enacted legislation. You do have increased responsibilities there in the areas of housing and antitrust, for example, DOJ was able to make the case where the state could benefit from activities in those areas.

It would be reasonable to provide funding if under the assumption that all existing funding was being used efficiently and effectively. We would note that some of the other legislation authorizes but does not require DOJ action, and so the ongoing workload level for those is a bit unclear. Moving down the page, the Legislature currently lacks information on how DOJ prioritizes its workload, how it uses appropriated funding, as well as the extent to which LDF or other revenues are available to offset the workload.

And without that, it's really difficult for the Legislature to determine whether additional resources are truly necessary. And I'm going to walk you through a couple of those in a little bit more detail. So if you keep moving down the page, first, I want to focus on our finding that it was difficult for the Legislature to monitor how funding for legal workload is used over time. Since 2009 and 10 annual budgets, appropriate funding to the legal division as a whole.

And so this provides DOJ with flexibility on how those resources are used, how the office is organized, what cases are initiated, how they're pursued, and how they're resolved. So that flexibility can be a major benefit because it does allow DOJ to pivot quickly to address important issues and to make sure that resources are where they need to be, as well as to test kind of activities before coming to the Legislature for funding.

But if you turn to page six of your handout, this flexibility, however, can make it difficult to monitor how those resources are used over time. When requesting resources are usually provided for a particular purpose. And over time, it can be difficult to monitor whether it's still being used for that purpose or if it's been redirected to other needs. And so that makes it difficult for the Legislature to kind of keep monitoring that.

In terms of the LDF, it was unclear to us the extent to which LDF funds could be transferred to support DOJ workload. And this is generally because state law and DOJ practices limits legislative oversight over the LDF. And this is something that we identified and analyzed in more depth in a report that we did in 2021. So, for example, there is little meaningful information that's included in those statutorily required reports.

And DOJ has little incentive to transfer moneys from the LDF, where there's limited legislative oversight, to the DOJ special funds, where there's more legislative oversight. And based on our evaluation of some high level data, we estimate that approximately 60% of the Fund balance might be able to be transferred to the DOJ special funds. To the extent that you maximize use of those dollars, it means that the amount of General Fund needed potentially is necessary.

That would reduce cost pressures on the General Fund in both the budget and future years. Our final finding for you on this page is that it's unclear how DOJ is accounting for offsetting revenue for some of the recently enacted pieces of legislation. DOJ is authorized to seek civil penalties and or reasonable attorney fees and costs, but the request for funding is coming from the General Fund.

And so, in conversations with DOJ, it was unclear to us how such penalties or fees would be sought, how much might be attained, and how they would be used to offset the General Fund that was being requested to support that workload. So if you turn to page seven of your handout in light of all of those findings, we have two key recommendations for you.

So the first recommendation is for the Legislature to direct DOJ to report annually, beginning January 1 of 2025, on its planned legal workload, position count, and allocation of resources in detail for the upcoming fiscal year, as well as that information on an actual basis for the preceding fiscal year and how it compared to its plans. The type of information provided could vary.

It could include broad descriptions of workload, when cases were initiated, how much time was being spent, or could be available for new cases, and then finally, what potential remedies were being sought or achieved. So that could include things like injunctions, but it could also include litigation proceeds. Our second recommendation, if you move down the page is for the Legislature to provide the requested funding on a two year basis pending the receipt of that recommended report.

We would note that this recommended report, if you also do our LDF recommendations, could provide greater oversight. So our LDF recommendations that we made in our report included things like requiring DOJ to transfer moneys from the LDF to its special funds within a particular time window, or to report the amount that's available just to support DOJ workload.

And so in combination, that would provide the Legislature with a lot more information to monitor workload, how funds are being used, what outcomes are achieved, and what level of resources is appropriate, and from what Fund sources. Sort of moving forward. If you turn to the next page of your handout. So pages 8 and 9, we're almost there, provide key details on just two of the proposals. So the first one on page eight is the antitrust proposal.

In conversations with DOJ, we had good conversations, and they were able to identify both recent and potential workload in particular sectors that could benefit California. Interestingly enough, as an example, they redirected six unfunded attorney positions to then complete a major technology case. But it was unclear to us whether the antitrust account and the unfair competition law Fund, which receive litigation proceeds, would receive enough to support this workload on an ongoing basis from cases initiated by the antitrust law section.

And this is because antitrust cases are very resource intensive, complex, and technical, and they can take a lot of time to resolve. And specifically, underneath the governor's proposal, the section staff would permanently increase by 56%. And so that's a pretty sizable increase. And so we just wanted to flag that for the Legislature's consideration. Turning to the final page of your handout, page nine, we had some specific comments on the housing strike force proposal.

Similar to the prior proposal, DOJ was able to identify both recent and forthcoming workload in the housing arena. We would note that a portion of the request would be in partnership with and build back to the California Department of Housing and Community Development, HCD, and then the other portion would be under the AG's independent authority. Even with the increase in housing related laws, it was unclear whether the ongoing workload would remain high enough to justify the workload on an ongoing basis.

In addition to that, we wanted to note for the Legislature that activities by HCD's new accountability unit, which was created in 2021, '22 as well as the Civil Rights Department, formerly the Department of Fair Employment and Housing, could impact DOJ's workload in the future by increasing or decreasing, depending on what they do and so given that uncertainty, the Legislature could consider whether annual reporting to monitor DOJ work would be beneficial to conduct oversight of legal work in this area to make sure it's being pursued in the most efficient and effective manner possible.

So with that, we will conclude our comments. Happy to answer any questions at the appropriate time. Thank you.

Thank you, Ms. Lee. Mr. Clark, do you have any comments? Yeah.

Good afternoon. Kevin Clark, Department of Finance. So, responding to LAO's overarching comments, two of which we'd like to discuss, requiring DOJ to report on legal workload annually, we just want to note that there is significant amount of information about DOJ positions, as well as General Fund and special Fund expenditures by division that's accessible to both the Legislature and the public within published galleys.

And so we're open to having that conversation around what additional reporting requirements would look like, and happy to provide our assessment if specific reporting language is recommended. In terms of requiring the requested funding for the legal workload on a two year basis, our recommendation is really based on the fact that many of these resources address ongoing programs as well as legislative mandates that aren't limited term in nature.

And so the resources support state entities and DOJ and Administration and legislative priorities in prosecuting violations of state law, as well as being proactive in addressing policy issues that are arising in the state, such as housing and wage theft, that are growing concerns for California.

And then in regards to the two proposals where there are specific comments, the first being the antitrust proposal, we just want to note that the litigation deposit Fund has sufficient revenues to support this workload, and happy to answer any more questions about that. And then finally the housing strike force. So the recommendation or the note that ongoing workload and outcomes for the housing strike force are unclear.

So again, we're seeing an increase in action taken against violations of housing law across the state, and the Administration is committed to taking action against those violations. So, for example, LAO noted, the housing Accountability unit with an HCD, we believe that that may actually drive more work for DOJ, and so we're being proactive in our response. Happy to answer any questions you might have.

Great. Thank you very much. I have a few questions. I think because of the balance of the litigation deposit Fund, how can we more effectively use those funds? For example, given that balance, can the DOJ use even more of this Fund to be more aggressive in some of the other units, like the Workers' Rights, or how much of it is eligible to be transferred to the various special funds? What are the broad categories of cases that led to this balance.

Thank you, Madam Chair. Chris Ryan and I will do my best to answer all of your questions, but I have a group of attorneys here who can fill in some of the blanks there. So, speaking to the question about how much is there, we report quarterly that the litigation deposit Fund, and as reported by the LAO, it's approximately $1 billion right now. 60% of that is eligible for transfer to specified funds;

and those are the special funds that we call the unfair competition Law Fund, the antitrust Fund, the PRD law enforcement Fund, and the false claims. We have a schedule of cases and settlements and things that have generated this revenue. And so based on that listing, those items are identified and identified for transfer as needed to the special Fund to support these BCP's and operations that happen. So that's an annual process

and to increase the amount that we are able to use in those special funds, we go through the annual budget process. So we submit BCP's to Department of Finance. We come to the Legislature. We talk about why there's the need for the increased spending and what we will be using those resources for. So there's a couple of issues in regards to the LAO's comments. One, the quarterly report we provide is specified in the government code.

So we are meeting the requirements and complying with the requirements that are currently specified in the government code. We understand and we hear that there might be a desire for additional reporting, but I think some of that reporting as covered by Department of Finance or that information is available. How many positions are in the section is something that's in the salary and wages document, if that's what it's still called. And there are annual appropriation amounts that are covered in the Budget act.

In terms of specific litigation activities, I think we have many concerns about telling folks the plan relative to specific litigation and then potentially the outcome. And again, like I said, we have attorneys that can speak to that detail if needed. I think the last thing I would say is, in terms of maximizing the use over the years, we have been part of that conversation.

And what I mean by over the years in the great Recession, there was a proposal to reduce the amount of General Fund at the Department of Justice, and the legal service revolving Fund was created. And this model of doing a fee for service, legal service for state agencies happened. We have other areas where we've maximized, and we're willing to do that as well. Again, that's why we come forward every year with BCP's asking for antitrust and some of these other special Fund increases.

To the comment that unclear on whether or not it can be sustained. I would just echo what Department of Finance was saying as we go through the budget development process. We are sharing that information with Department of Finance, with the LAO, with the budget consultants as part of that conversation on each of these proposals. And so if there's any other questions I missed more than happy to circle back to those, Madam Chair.

Well, I was specifically looking to see on housing in terms of how, if there's a way of maximizing through the structure of the Fund, how can we use more for housing? And just as an example, there's such a crisis on the housing front, and especially crisis facing tenants, that the more we let that go on, without more legal attention to helping those tenants, we face an even bigger crisis on the homelessness front.

So that's a specific example of what can we do when issues like this arise to such a high level of importance to the state.

Absolutely. And I think we have some staff here that can speak more specifically to the housing initiative. But just to answer kind of the funding question, that proposal is built on legal service revolving Fund, which is the work we do for our client, HCD. So that is a special Fund. And then there is a small piece of General Fund associated with the BCP for the housing work that we're planning to do.

I think in determining whether or not a special Fund would work, we would look to see whether or not there is some consumer protection aspects. Is there an antitrust aspect? And to the extent there are consumer protection or antitrust issues that are part of that investigation or part of that workload, then we identify that as a Fund source.

If we put forward a proposal where we don't think that's a viable Fund source or nexus, then we typically would say this is more appropriate to be funded by the General Fund. That's some of the internal conversations that would happen. But if you have more specific questions on housing or want to know if there is a consumer protection, as I indicated earlier, we do have some staff here that could answer that.

Well, not really. Well, anyway, maybe we can pursue that outside offline, but that's an area of big concern, obviously, to everybody in the Legislature and to the leadership. We really need to address that more forcefully. And I'm, again, particularly concerned about people who are tenants before they become homeless. So any ideas of going in that direction would be really wonderful.

Absolutely. Thank you.

Okay. And then this is not something that you covered, but this is a report that was funded through and supported by this Department, and that is the interim report of the task force to study and develop reparations proposals for African Americans. I know that went through your Department. I'm just wondering if there are legal resources proposed to help support the efforts and the recommendations in that report.

So, at this point, my understanding is the report is still under development, hasn't been released yet. And so there was funding provided for the term of the task force.

The preliminary recommendations came out. I think it was a couple of weeks ago.

Okay.

Week or two weeks ago.

And so, at this point, to answer your question about additional resources or things like that, we would be working through the budget process to the extent that's needed, and the funding for that was two years limited term. And so we will work through the budget process if there's additional resources needed. But I don't have anything to report on that at this point.

Okay. And nobody has. Department of Finance.

I wasn't prepared to discuss this topic, but I'm happy to follow up if it's helpful.

Yeah, could you please. I mean, I know it's come up. It obviously is something of great importance to the state and to the Legislature. We got that passed, and we got the first step passed as far as forming the task force. Now we want to make sure that whatever is needed by the task force is provided. Okay. Thank you all very much. And I think we're moving on to. Oh, we have two more. Okay. Issue 12 is the firearms workload.

Thank you, Madam Chair. Chris Ryan with the Department of Justice. As I understand today, we're going to cover this in high level summary. In terms of these proposals, we have. The first proposal is the compliance support section, which is a workload proposal. The Department is requesting three permanent positions, General Fund augmentation of approximately $342,000 for ongoing. And this is really to work on maintenance. And I apologize, Madam Chair. I was going to the next proposal.

This is staffing relative to the workload that comes in for the transactions. So firearms dealers, armed ammunition dealers, and things like that. So this is a unit that processes much of the workload based on the requirements that are governed in statute. And so, given the sales and the transactions and the number of transactions they've been processing the last few years, we're asking for additional positions. So that's the first proposal.

And if you want, I can go on and cover the rest of the firearms items and then do questions at the end of that. Okay. The next proposal that we're looking at in this area is the micro stamping and law enforcement transfer. This proposal is for $1.5 million, General Fund and five positions. Basically, this proposal will help our sieges division, our technology division, make upgrades and do maintenance and operation on the nine firearm systems that are associated with this workload. But it also relates to,

it allows us to track and report the individual firearm identification numbers at the point in time in which a firearm is transferred or sold. So that's what this proposal is all about. And then the next item is implementation of various firearm related legislation. And I think there are quite a few items in this proposal. There are six items, and the total amount for implementing these bills is approximately 5.7 million and requires approximately 17 positions. And so with that, I'll open to questions.

Okay, Ms. Lee.

Thank you, Madam Chair, for your reference. Our comments are going to pertain to the summary of the proposals listed on page 60 of your agenda. And the reason why that matters is that one of the firearm proposals we actually consider as part of the legal proposals, and that's specifically related to AB 1594. And so I just want to be clear that when I give you my comments, it does not include that one.

So we do recommend that the Legislature approve the request for additional funding because they are needed to address the increased workload as well as to implement the enacted legislation. However, we do recommend the Legislature reject the governor's approach to funding them from the General Fund and instead support the proposals entirely from the Dros special account.

This is because the proposed workload seems to be an allowable use of the special Fund, and the Fund appears to have sufficient revenue and Fund balance in the near term to support that. And so specifically, Madam Chair and Members, if you look at page 59 of your agenda, there is a figure that shows the Fund balance. And so after a fee increase in 2019, you will see that revenues generally exceed expenditures, and the difference is currently about $5 million.

This has allowed that Fund balance to steadily increase, and you'll see that at the end of 202324 it is expected to reach 35.9 million. And so that would be sufficient to support the workload. Our recommendation to Fund these proposals entirely from the DROs account would also free up ongoing General Fund relative to the Governor's Budget, specifically 6.3 million in 2023, '24 declining to 3.3 million annually beginning in 2026,'27.

And so this is really helpful, as the Legislature might prefer a different package of budget solutions than currently proposed by the Governor. To balance the 2023, '24 budget, you might have increased revenue risks coming up in the year, and there are projected out year deficits under the governor's proposed budget.

One other comment that we would like to make is that in conversations with both the Department as well as the Department of Finance, there was an indication that General funds resources were being requested for this workload, in order to ensure that there were sufficient resources to pay for future proposals, most notably an IT project that is in the planning process now to replace 17 firearm and ammunition databases and systems. However, you do not have a proposal before you at this time.

And so if you don't have something in front of you to analyze and react, for us, that is a little bit of an issue because you can't have a discussion about what would be the appropriate Fund source, what that project looks like, et cetera. So I just wanted to add that to our comments. Thank you.

Thank you. Yes. Mr. Clark?

Yeah. Good afternoon. Kevin Clark, Department of Finance. So, just to respond to LAO's comments about these proposals being funded with DROS rather than General Fund, and Ms. Lee mentioned that there is a firearms IT system modernization project in the works right now that DA is working on. It's complex. It's rehauling antiquated firearms databases that have been around for a long time, and it's going to cost. There are proposals that are forthcoming and the Legislature will be receiving soon.

Just want to note that the DROS revenues have increased over the last few years due to a fee increase in 2019. So there are revenues, though, as mentioned, the fitsum project is forthcoming, and there will be fees or costs associated with that.

Thank you.

Madam Chair, just for a point of clarification on the IT project, there was a BCP that was approved for the planning phase. So I just want to make it clear that there is some money that's already been appropriated to the Department. So the larger proposal, which will be the lion's share of the cost that's going to come forward, is still in the planning phases as described by Department of Finance. But there was some planning dollars provided in the current or in last budget.

So it's not as if there hasn't been any talk about an upgrade to this system. So I just wanted to point that out.

Right. But I think. Ms. Lee, I don't want to speak for you. Is the actual cost of the system.

Absolutely.

And not been specifically outlined correct. And you want approval for that?

No, I think what was being indicated by the LAO was that there's a Fund balance available currently and that our conversation over the last few years has been along the lines that we did a planning BCP. There's going to be a project that comes and those revenues will be consumed at some point in the future.

The proposal or the recommendation, as I understand it from the LAO at this point, is that there's a Fund balance there that can pay for these BCP's, these legislative BCP's right now, and that any additional revenue needed to Fund that proposal in the future can be addressed at that future time. And so what we would say is that it's going to require a fee increase.

Don't know for certain what amount, but that would likely be something. Because these proposals were never considered at the point in time that the fee work was done. Hopefully, that makes sense.

We're speaking for you, and you're right here.

No, no. It's totally, you know, as Madam Chair, probably when you looked at these proposals, you would similarly know why the General Fund, and that is the question that we posed to both the Department and the Department of Finance. And so the indication was, effectively, we want to save it for this upcoming expense that we see coming down the line.

And we acknowledge that there is this it project in the works, but there could also be other expenses if the Legislature enacts more legislation, there would be more requirements there. The key thing for us is right now, you have these budget proposals in front of you. You have a budget situation, a budget General Fund situation that you're dealing with. And so this is what you have before you at this time. When that proposal comes forward, whenever it does, it will include.