Senate Standing Committee on Natural Resources and Water

File item number six, SB 1176 by Niello. File item number 10, SB 1324, by Senator Limón. And file item number 13, SB 1520, by the committee. So with that, we'll begin as a subcommitee and establish a quorum when we have the requisite votes. We'll hear from our first author, Senator Blakespear, whenever you're ready. And are you presenting first SB 1077?

I am, actually. I'm sorry, I'm not. Oh, yes, I am. SB 1077? Yes. Ready to begin? Okay.

You may proceed when ready.

Okay. Thank you. Thank you, chair and colleagues. As you know, California is in a housing crisis of unprecedented magnitude. Since 2010, homelessness has skyrocketed 50%, and last year, 180,000 Californians did not live inside of a home. HCD estimates that the state needs to be building close to 200,000 units a year for the next decade to close our housing shortage. But on average, over the last five years, we have only built about 100,000 units a year.

The silver lining is that our housing production is increasing, and that is in part thanks to the myriad of housing laws that the Legislature has passed to allow property owners to add more housing units to their properties. One of the most notable successes has been the state's loosening of the restrictions around accessory dwelling units, or ADUs. Simply put, the state has made it easier for property owners to add ADUs and JADUs to their homes.

These housing units provide flexibility for homeowners and their households to live in the property, to rent it, to provide it to a needy family member, and to have that use change over time as family circumstances change. Outside of the coastal zone, state law makes the process for adding these types of units remarkably simple. These homeowners are able to go to their jurisdictions' planning office and file an application for a permit themselves.

State law has limited how many barriers local governments can erect in front of homeowners attempting to build ADUs. Outside of the coastal zone, residents largely don't need to hire a lawyer. They don't need to hire a highly sophisticated development expert, and they don't have the uncertainty of an unknown time horizon. They generally can do these things themselves. On the other hand, inside the coastal zone, where homeowners also have to go through the coastal development permit or CDP process, it's not that easy.

While state law does set some constraints on the CDP permitting process for adus, in most coastal zone jurisdictions, homeowners end up having to pay more money to hire highly trained development experts and lawyers to navigate the Coastal Commission process. These barriers can reduce the number of ADUs being built in the coastal zone and in some circumstances make them cost prohibitive for all but the wealthiest and most determined homeowners. For ADU projects and properties close to sensitive natural resources, such as coastal bluffs or wetlands.

Of course, this deserves to have greater scrutiny, but there are large swathes of the coastal zone, like in densely populated areas that are east of the first public road from the coast and where the property is not near sensitive habitats at all. And adding an ADU here in the backyard has negligible environmental risk and arguably, the longer, more intense regulatory review process is not warranted.

My goal with SB 1077 is to simplify the permitting process for ADU projects in areas of the coastal zone with low environmental impact. Unfortunately, after several conversations with the Coastal Commission, which I very much appreciate their willingness to meet with me and my staff and discuss things, they remained opposed to the proposed streamlining that I had in my bill, and therefore I have agreed to reorient my bill's approach and submit to the committee's suggestions on this bill.

The Bill will now require the commission simply to provide better guidance for locals on how to harmonize their local coastal programs with state ADU law. Now I would like to introduce my witnesses. We have Moira Topp, who is here on behalf of the City of San Diego, and Jordan Grimes, who is the resilience manager at the Greenbelt alliance, to say a few words.

Thank you. You have two witnesses. They each have two minutes each, and I'll be keeping time, and you can begin whenever you are ready.

Good morning, chair and members. Jordan Grimes here on behalf of Greenbelt Alliance. We are an environmental organization serving the nine county Bay Area and have for the last 66 years worked to advance the protection of open space, climate resilience and critically sustainable land use policy. We speak today in strong support of SB 1077. State data has revealed a stark reality.

Municipalities within the coastal zone have significantly lagged behind their inland counterparts in producing new homes across all income levels during the fifth arena cycle, as well these jurisdictions are disproportionately white and affluent, exacerbating housing inequities in the State of California. This not only perpetuates socioeconomic disparities but also impedes access to the coast, a fundamental tenet of the Coastal Act. Barriers to infill housing development in the coastal zone inadvertently supercharged environmentally harmful sprawl in areas susceptible to climate hazards like wildfires, flooding, and pollution.

While there are indeed areas along the coast where development should be prohibited, infill parcels present viable opportunities for sustainable growth. SB 1077 builds upon the success of previous bills exempting adus from bureaucratic restrictions elsewhere in the state, which have proven to be extraordinarily effective tools to produce exactly the kind of sustainable housing growth we need. Greenbelt ALliance holds immense respect and admiration for the Coastal Commission and its unwavering dedication to preserving our coastal resources.

But we want to emphasize that environmental and ecological protection that the Commission have been such valiant stewards of are not at odds with the objectives of 1077. On the contrary, enabling the construction of adus in the coastal zone promotes smart, compact development that minimizes habitat disruption and reduces reliance on cars, aligning with the principles of environmental conservation. 1077 is a modest measure with significant and impactful potential, addressing not only extreme housing shortages and soaring prices but also fostering more inclusive and resilient coastal communities.

Thank you very much. Appreciate it.

Thank you Mister Chairman and Members, Moira Topp here on behalf of the City of San Diego. San Diego has been a leader in promoting housing development. They've provided a number of reforms in recent years to really promote housing development at all levels in myriad ways, including using ADUs and JADUs as an important tool to promote certain. It's not the panacea for everything, but it is an important tool that San Diego has found useful. And of course, San Diego does lie within the coastal zone.

A very tiny map. Sorry. We have a significant portion of our city within the coastal overlay zone, and in fact, some streets are bifurcated by the coastal zone, so that one portion of the street is within the zone and another portion of the street is outside of the zone. And so that provides a particularly complicated construct for residents and for the city to deal with.

As the Senator mentioned, there is a very complicated process to go through to exercise a right for EDU or an ADU within a coastal zone. To get a CDP. Just in 2023, the city authorized almost 1500 ADUs, and only 146 of those were within the coastal zone. So I think that is very clear, clearly demonstrating the fact that there is a very different and hampering process that's occurring in the coastal zone with respect to ADUs. So we do see 1077 as an important first step.

It's a good first step to ensure that there is some review and some guidance provided to local communities who want to promote ADUs as an alternative for their residents. And we think this is an important measure to pass today. So we respectfully ask for your aye vote.

Thank you very much. Any other witnesses and support here wishing to speak, please to limit your comments, your name, affiliation and position on the measure.

Good morning, Mister chair. Jonathan Clay, on behalf of the City of Encinitas in support, and we'll also be reviewing the committee's amendments.

Thank you.

Good morning Chair, Members, Brady Guertin, on behalf of the League of California Cities, we do not have a position on the current language for SB 1077. Given the committee amendments and us representing 61 cities in the coastal zone, we would like to continue working with the author's office as the bill moves through the process. Thank you.

Thank you.

Catherine Charles on behalf of Housing Coalition in support.

You didn't make any up in there, did you?

Good morning. Rafa Sonnenfeld, on behalf of YIMBY Action, East Bay YIMBY, Mountain View YIMBY, Northern Neighbors, Peninsula for Everyone, San Francisco YIMBY, Santa Cruz YIMBY, Santa Rosa YIMBY, San Luis Obispo County YIMBY, Urban Environmentalists, Grow the Richmond, Ventura County YIMBY, Streets for People, South Side Forward, How to ADU, People for Housing Orange County, Progress Noe Valley, South Bay YIMBY and Napa Solano for Everyone, in support. Thank you.

Seamus Garrity with lighthouse public affairs. I'm here on behalf of SPUR, Habitat for Humanity of California, San Diego Housing Commission, Eden Housing and Fieldstead.

Thank you.

Lauren De Valencia, just here for one today. The American Planning Association, in support. Thank you.

Thank you. All right, seeing no other witnesses in support, do we have any lead witnesses in opposition? Just one or. We have two. Okay, so you each have two minutes each. Thanks. You can begin when ready.

Good morning, Mr. Chair and members. Sean Drake, legislative manager for the California Coastal Commission. The Commission has been opposed to SB 1077 on the basis that a Coastal Act exemption for ADUs is unnecessary and that there are alternative ways that this bill could promote adus in the coastal zone while also maintaining the coastal protection policies of the coastal act.

The proposed committee amendments do just that by requiring the Commission to provide guidance to local governments on how to quickly and easily incorporate policies to facilitate ADU development into their local coastal programs. We have already seen in dozens of coastal jurisdictions that local coastal programs are an effective tool for promoting ADUs consistent with California's other coastal policy priorities.

When they are amended to include ADU provisions. And in fact, based on data provided to us by the author's office in their district, you can get a permit for an ADU faster in the coastal zone than you can inland. With the amendments taken today, the Commission removes its opposition to the bill. We do appreciate the author and her staff for their collaboration in reaching this point, and we look forward to continuing to work with them as the bill moves forward. Thank you.

Thank you. That was well under two minutes. Good job.

Good morning. I'm Laura, California policy manager for the Surfrider Foundation. I'm here representing Surfrider and many other nonprofit organizations who collectively represent hundreds of thousands of members who care about our coastline and protecting access to it. I have the pleasure of having previously lived in a couple different neighborhoods in the Senator's district while working for Surfrider's San Diego chapter. And Surfrider has really appreciated that the Senator has been a strong leader for the coast and for housing in district and here at the state level.

We're also really glad that the author has accepted Committee amendments and we support the amended Bill based on suggested Committee amendments. ADUs that are compliant with the Coastal Act can absolutely be used for densification and smart housing reform in the coastal zone.

The Committee amendment, however, reinforces the idea that it is local governments that should be updating their local coastal programs for modern times and for sea level rise, rather than seeking exemptions from the Coastal Act. Our reason for opposing earlier versions of the bill was that it previously exempted certain ADUs from the coastal development permit process, which was right for being abused by wealthy coastal homeowners who could then potentially expand their development footprints at the expense of coastal access or sensitive coastal resources.

We trust this was not the intention of the bill, but Surfrider sees these kind of coastal act loopholes get taken advantage of all the time, and we are very scrutinizing in these bills which are seeking exemptions for development from coastal act review. Again, we're thankful for the leadership and the Committee amendments, and we'll move to neutral with those amendments. Thank you.

Thank you very much. Do we have any opposition witnesses who want to express their views on the bill? Again, please limit your comments to your name, affiliation and position on the measure.

Thank you very much, Mr. Chair, my name is Dan Jacobson with Environment California, and with the suggested amendments being taken, we remove our opposition and move to neutral. Thank you very much.

Susan Jordan, Executive Director of the California Coastal Protection Network, and with the acceptance of the Committee's amendments, we move from opposition to neutral. Thank you very much.

Good morning. Cody Phillips with California Coastkeeper alliance, also here on behalf of Orange County Coastkeeper and San Diego Coastkeeper. And with the amendments we move to neutral. Thank you.

Good morning. My name is Christopher Mouawad and I'm here with the Environmental Action Committee and we are moving to neutral pending the amendments. Thank you.

Good morning. Emely Garcia with NRDC. With the amendments, we move to neutral. Thank you.

Thank you.

Good morning. Linda Krop, Environmental Defense Center. With the amendments we move to neutral. Thank you.

Good morning. Jakob Evans with Sierra Club California. We appreciate the amendments and are withdrawing opposition. Thank you.

Hi, I'm Scott Webb, Director of advocacy with the Resource Renewal Institute. With the amendments, we move to neutral.

Thank you very much. Seeing no other witnesses in opposition, I will bring it back to the dais. Do we have any comments, questions? Senator Grove?

Thank you, Mr. chair. I want to thank the author for your bold commitment to allow housing and affordable housing built in your communities, especially ADUs with people that retire in that area and maybe want to put their kids or move to the ADU and let their kids have the big house. I know we have a colleague in our Senate that is doing the same thing. I really do. I appreciate the language.

I am disappointed that you were forced to take these amendments and because I do believe that it watered down the bill so much that the local government won't have the control to issue these permits and be able to get something done. They still are under that heavy hand of the Coastal Commission, which I believe its total goal is to make sure that there is no housing built. And I don't agree with the comment that was made that you can get an ADU permit before.

I'd like to see that documentation, because the research weve done on it is that this is a back and forth and back and forth that continues to go on, and it restricts an individual from private property rights that should be able to expand what they want on their own property if it is an ADU. And the cost of those ADUs are continually going up, which are almost unaffordable unless you are a wealthy homeowner in the coast.

And so I appreciate that you at least are starting the conversation. I believe there are six or seven bills that deal with this monster that has been created with the Coastal Commission.

I believe it has a purpose, but I think it has well exceeded its purpose and gone inland to restrict us from housing where we need housing and specifically in your own backyard, if you're going to add a mother in law's quarters or, you know, children's college quarters while they go to college but want their own independence. And so I applaud you for that. I'm going to support the bill.

I wish you wouldn't have taken amendments, but at least the conversation is starting even though the bill is severely watered down.

Senator Laird?

I appreciate being recognized by Senator Grove. First, as somebody that, that built an ADU the year before last. I'm glad my spouse isn't here because the comment about how much easier it is would be something that he would have run to the podium and disputed in a vehement fashion. So I'm not even telling him about this hearing. So I'm saving us a lot of time. Secondly, there's a lot of narrative about this that I don't think is accurate.

And I think the analysis drilled down in a clear way and talked about comparisons of apples to apples and not apples to oranges. And I think the facts are the facts. And it is, and this is true with other bills. When we start to legislatively make exemptions, whether it's in territory or in process, we start to weaken the level of coastal protection. And our obligation is to make it work better if it needs to work better. And I think that's where I applaud the author's intent.

And I think I want to thank the author for taking the amendments because I think it helps focus that discussion in a very good way. And I think it really sends the message that we want to pressure for results, but at the same time, we want to respect what the voters adopted with the Coastal Act and not do exemptions from many different processes or many different locations.

And so I just appreciate what you did, and whenever we have a quorum, I will be happy to move the bill.

Thank you, Senator Laird. And I will just add a few comments of my own. First, I've never heard the Coastal Commission referred to as a monster, but appreciate the vernacular here. Yes. And I just want to confirm, Senator, that you are taking the amendments.

I am.

Okay. And I appreciate that. Look, these are two issues that are near and dear to my heart. We do have a housing crisis. It's the number one reason we have homelessness in the state. It's the number one reason people are leaving the state. And we know, we hear about it from all quarters. At the same time, we also have a climate crisis that I know you care deeply about. And finding the right balance here, I think, is important.

And so the amendments, I think, clarify and expediate the processes by which the Coastal Commission can try to work with stakeholders to try to allow for ADU adoption. But finding that right balance of protecting our natural resources, particularly around the coastline, is, I think, an important one. So this is an important outcome. And I want to just thank you for your thoughtfulness in taking this. And just also will clarify you were not forced to take any amendments, just you agreed to take them. Thank you.

All right. Appreciate that with that. Thank you. And I think we can move on to your next bill unless you want to close.

I do want to close. Thank you. So I appreciate the comments from the Senators who are here and also from the testimony. And there are just a couple things I want to say. So the first is I'm absolutely not forced to take these amendments, and I'm doing it willingly, but I did not want to.

And I think the reason I'm doing it is because I think it is important we continue the conversation, which is what Senator Grove said about how is it that we can better align the Coastal Commission's responses to all housing types, but particularly ADUs, in the coastal zone?

So over the last several years, in the rest of the state, we have a number of laws that have really dealt with how do local governments permit adus, how do special districts permit housing to eliminate the barriers that we see.

And so what I was trying to do with the original version was to apply with a scalpel those same laws and exempting the areas that were environmentally sensitive or within the first road of the coast, various different standards, and even allowing the Coastal Commission to weigh in on some areas that they thought there might be more impact. The reality of the coastal zone is that many sections of it are just like the inland sections. They're denser, they're not actually very close to the coast.

And they have, when you have it in the same city as the City of San Diego said, you really see the difference between what's happening on one side of a street and what's happening on the other side based on whether it's in the coastal zone or not.

So, and the last point I want to make is that I read in a Committee analysis about a suggestion that housing that's provided by ADUs, if it's not for on the market, if it's not put on the market, it's somehow lesser housing. There was that underlying assumption, and I just want to clarify that if somebody builds an ADU and they have their adult daughter, who gets divorced, moved back in.

They have their grandchildren, they have their mother in law, they have themselves live in it, and they rent out the other unit. Whatever the vast majority of things are that people are deciding to do with their own property that's providing housing is housing. So I don't see that putting it out onto the market is somehow of better and more value than providing housing for those other people who all need to live somewhere.

Because if that daughter in law is living in that ADu, then she's not renting an apartment in some other place that's free for somebody else. So allowing for housing of all types and the social safety net of the family to provide for itself, I think, is a public good. So making it easier for ADUs to be built in the coastal zone is the goal of this bill.

It's still moving forward and needs more specificity because it basically is asking the Coastal Commission to provide better guidance on harmonizing local coastal programs. So what exactly is better guidance and what not all cities have local coastal programs. So there's still more work to do in the next committee to make that more specific, but it's still moving forward, and there's a focus from the Coastal Commission on making it easier for ADUs to be built. And I think that it's still better to do than not do.

But I'd just like to say all those words in conclusion, and I appreciate all the many back and forth and all the feedback I've had on this bill. So with that, I respectfully ask for your aye vote.

Thank you, Senator. We'll hold that Bill till we have a quorum with that, if you want to move on to your next Bill, SB 1092, you can proceed whenever you're ready.

Okay, great. Thank you. So I won't repeat the problems with homelessness and housing that we have in this state, and I'll just jump right in. Thank you, chair and colleagues. This is SB 1092. So one of the biggest problems that we have with quickly building housing in California is a conflict between different Executive branch agencies.

For example, HCD, which has requirements for cities to zone for and build housing, and then the Coastal Commission, that has other regulatory hurdles that can make actually building the housing difficult to accomplish. So what we see is a lack of consistency between our stated housing goals and our regulatory approach, particularly when it comes to the coastal zone. And I know this from having been a coastal mayor in Southern California and having an out of compliance housing element that we were urgently trying to remedy.

Housing projects in the coastal zone have to pass successfully through a city process and then go through the coastal development permit or CDP process. Oftentimes housing projects are controversial and residents appeal them to the Coastal Commission after the project receives city approval. This CDP appeal process for much needed multifamily housing projects is what my Bill is aiming to address, because Coastal Commission appeals have no required timeline for resolution and the Commission can request an unlimited number of additional studies be created.

There is an uncertainty around doing these types of projects in the coastal zone that has a chilling effect on whether projects are even proposed in the coastal zone. Simply stated, builders report that they do not pursue projects in the coastal zone because of this. This is obviously a problem given that the cities in the coastal zone need to meet their RHNA requirements, and when coastal cities don't do their part, inland cities end up shouldering more of the housing construction with SB 1092.

I hope to establish a timeline for the CDP appeals process for high density housing projects, but the Coastal Commission expressed concerns regarding the adverse precedent this would have set. Therefore, I agreed to amend this Bill to instead require the Commission to investigate the problem and suggest potential remedies. The last point I want to make is that the CDP appeals process and its impact of discouraging housing projects creates major challenges for coastal local governments.

HCD and the Attorney General's Office require local governments to build their fair share of housing in ways that affirmatively reverse segregation. Since many affordable housing developers avoid building in the coastal zone, the CDP appeals process makes it extremely difficult for local governments to meet the state housing mandates. So this lack of consistency between HCD and the Coastal Commission, which are two parts of the Executive branch, is a real problem that we need to fix.

So with that, I'd like to introduce a witness today who will speak in more depth to this problem. Her name is Erin Autry Montgomery, and she is an Affordable Housing Finance Expert that works for the Chelsea Corporation, which is an affordable housing developer in my district. Thank you.

You just have one witness, Senator.

I do.

All right. You have up to four minutes. Proceed with.

I'm just going to take my two. I'm good. I'm prepared.

You're good.

Good morning.

My name is Erin Autry Montgomery, and I'm here today in support of SB 1092. I have worked in the Affordable Housing Finance field for about 20 years, and I serve as a Senior Finance Executive at Chelsea Investment Corporation. Chelsea is based in Carlsbad in San Diego. county. We've built over 100 projects totaling 15,000 homes for 40,000 people at a total development cost over $3 billion, so we know what we're doing.

As you all know, the State of California has an affordable housing crisis in every county, especially in our coastal communities. Affordable housing is difficult to build for a couple of reasons. First, we have to compete with the market rate developers for the limited supply of land that's suitable. Second, our developments restrict rents and therefore always have a funding gap. Finding this financing to fill the funding gap is highly competitive in nature, takes years and multiple sources.

In order to apply for these multiple sources, including the low income housing tax credit, the projects must be fully entitled with no further discretionary approvals. Therefore, the evaluation of potential sites is a complex process that primarily weighs the risk of spending hundreds of thousands of dollars on entitlements for a project that does not receive the gap financing necessary to build the development.

I am here to testify that Chelsea Investment does not pursue projects that would require a coastal development permit due to the uncertainty of the entitlement process. In order to efficiently build affordable housing, Chelsea must dedicate resources to projects that have certainty in the entitlement process. Uncertainty in entitlement typically leads to a longer timeline to secure them, which increases the development cost, which leads to an increased number of sources we must seek in order to fill the funding gap.

Each gap funding source added increases the amount of time until the project breaks ground. SB 1092, as it's currently planned, is a much needed study Bill that will hopefully lead to reforms to limit uncertainty in the entitlement process for projects in the coastal communities. With more certainty, affordable housing can be planned, financed and built to create greater equitable access to our coast and the high opportunity neighborhoods. Thank you.

Thank you. Do we have any witnesses in support? Please just give your name, affiliation and position on the Bill.

Kathryn Charles on behalf of Housing Action Coalition in Support

Thank you.

Thank you Mister Chairman and Chairman and Members Moira Topp on behalf of the City of San Diego in support

Hello, Seamus Garrity with Lighthouse Public Affairs on behalf of Spur Habitat for Humanity of California, San Diego Housing Commission and Eden housing thank you.

Good morning. Rafa Sonnenfeld on behalf of YIMBY Action, East Bay YIMBY, Mountain View YIMBY, Northern Neighbors Peninsula for Everyone, San Francisco YIMBY Santa Cruz YIMBY Santa Rosa YIMBY San Luis Obispo YIMBY, Urban Environmentalists, Grow the Richmond, Ventura County YIMBY, streets for people Southside forward, How to ADU, people for housing Orange County Progress Inouye Valley, South Bay YIMBY, and Napa Solano. For everyone in support

Good morning, Mister chair. Luis Morante, on behalf of the Bay Area Council and strong support. Thank you.

All right, seeing no other witnesses in support, do we have any witnesses here in opposition? Two witnesses. You each have two minutes.

Good morning again, Mister chair and Members Sean Drake for the Coastal Commission. We appreciate the author's recent amendments to the Bill. The Commission has removed its original opposition based on those amendments. We're looking forward to continuing to work with the author's office to refine the details of the study required by the Bill. And we appreciate the potential for the study to allow for an informed understanding of the Coastal act appeals process that is driven by data. I want to thank the author's office.

We look forward to working together. Thank you.

Thank you.

Hi, Laura Walsh, California policy manager for the Surf Rider Foundation, again representing many other organizations who collectively represent hundreds of thousands of Members who care about protecting our coasts and access to it. We also originally opposed the Bill because we thought it lacked data justification given in particular the lack of denial of multifamily appeals from the Coastal Commission over the last few years.

We support the current idea to investigate multifamily housing appeals and their impact on housing availability in the coastal zone because data analysis and transparency is key in this conversation, particularly given the complexity and seriousness of the problem and the seriousness of approaching the coastal act with exemption based reform. But we're looking forward to working more with the author on this Bill. Thank you.

Thank you. Do we have any other witnesses in support? Again, limit your testimony, your name, affiliation, position on the measure?

Thank you very much, Mister Chairman. Opposition. Sorry. My name is Dan Jacobson with environment California and with the amendments removing our opposition. Thank you. Thank you.

Susan Jordan, executive director of the California Coastal Protection Network. And with the amendments, we drop our opposition and we'll be keeping an eye on the bill. Thank you.

Thank you.

Emily Garcia with NRDC, dropping our opposition with the amendments. Thank you.

Good morning. Jacob Evans with California, also dropping our opposition due to amendments. Thank you.

Thank you.

Cody Phillips with California Coast Keeper Alliance, Orange County Coast Keeper, and San Diego Coast Keeper, dropping our opposition because of the amendments. Thank you.

Thank you.

Good morning. Tomas Valadez with Azul, removing our opposition with amendments. Thank you.

Christopher Mouawad, legislative fellow with the Environmental Action Committee, and we're removing our opposition.

Thank you.

Linda Krop, Environmental Defense Center, with the amendments, removing our opposition. Thank you.

Thank you.

Hi, Scott Webb, with the Resource Renewal Institute. We're dropping opposition with the amendments. Thanks.

Thank you. All right, seeing no other witnesses in opposition, we'll bring it back to the dais. Anybody have any comments or questions? Senator Grove.

Thank you, Mr. Chair. Again, thank you for your courage to bring forth a bill that would allow people to have rental properties and housing, to be able to place people in housing. Again, I'm sorry that you're taking the amendments because I think it circumvents what you're really trying to do and provide housing in your area and along the coast. Again, the Coastal Commission has a purpose.

It's to protect the coast, but it shouldn't be inland where we're trying to build housing to do a study just like your last bill. I wish there was a way we could keep them accountable and get a data analysis to show when they issued permits for ADUs and how long it took before your bill and where it is now. With this one, I still think they have the heavy hand of controlling what data is released and what's there. They're going to have the input on that.

You can tell by the power of the room with, you know, making you take those amendments is significant. I wish you the best. And again, I supported your bill without the amendments. At least we took a baby step forward. Supporting your bill again today.

Thank you. Any other comments or questions? I'll just briefly say again, I think that balance is important here, and there's a lot of rhetoric around the Coastal Commission that I've heard today, but I just want to emphasize the importance of their mission. It was something that Senator Laird referred to as the voters approved it, you know, finding that right balance of development.

I'm sure there are people in this room who would like to see unrestrained development in the coastal areas, but I think finding that right balance is appropriate. I think a study bill here is appropriate. So I appreciate you taking the amendments. And with that, would you like to close?

Yes. Thank you. I appreciate the comments from Senator Grove. This is the second bill that's been substantially neutered, and I think it's better to move forward than it is to let it die. So having the Coastal Commission investigate timeline uncertainty with home that the home builders experience in the CDP appeals process is better than not investigating that. So we're happy to have that be something that we can work on.

I have a sheet here of just the appeal timelines of specific projects, and I'll just mention the one in my district that is quite recent. So in the City of Del Mar, which is a city that has 4000 people, it's very small and it has very few housing projects. This multi-family project is for 50 dwelling units, including 10 affordable units, and it was approved by the city.

Appeal was filed to the Coastal Commission, and it took a year and a half for the Coastal Commission to come back with no substantial issue found. So I think the reality of what my witness was saying from Chelsea about not being willing to take on the uncertainty, how long do we have to carry this carrying cost of this project and not be able to know if we'll be able to build or not?

I think that that is a substantial and real problem that needs us to fix it. So the Coastal Commission, like all other agencies in the state, should have to follow timelines. They can be reasonable. There can be a whole analysis of what it should be, but there should be clear timelines for projects in the coastal zone so that developers and individual homeowners can have better certainty that will produce more housing. So with that, I respectfully ask for your aye vote.

We'll take a brief pause then and establish quorum since we now have it. Assistant, please call the roll.

[Roll Call]

So a quorum has been established. With that, we can vote on this bill if anyone moves it. All right, we have a motion from Senator Laird. The motion is do pass to Housing Committee. Assistant, please call the roll.

[Roll Call]

Thank you.

The vote count is six, zero. We'll leave that on call.

Mr. Chair, I would move the first Bill that Senator Blakespear presented.

All right, we'll move that. Let's let Senator Wiener present first, and then we'll move that bill after that. I'm sorry, what? And we'll do consent after that, too. But since Senator Wiener has been waiting patiently, let's have him present his bill. Senator Wiener presenting SB 951. You can proceed whenever you're ready.

Thank you very much, Mister Chair colleagues. And I'm glad that all these coastal housing bills are in the Committee today. I just want to sort of, I want to say for the record that I don't think there's an inconsistency with building housing in the coastal zone and climate action and protection of natural resources.

And if we're not building housing in the coastal zone, in the urbanized areas like San Francisco or Santa Cruz or San Diego, if we're not building it there, then we're building it inland, and people are driving more, and it's increasing carbon emissions and fueling climate change, which then causes more sea level rise, which then destroys coastal natural resources.

And so I think it's really important to view all of this in context and to move past the era of viewing housing as somehow being a threat to natural resources. It is no such thing, and so that, I think for the past bills and also for our Bill, and I just wanted to sort of lay that out as context. So I'm here today to present SB 951. I want to really thank the Coastal Commission for working with us on this Bill.

We had some challenges in San Francisco, and over the last number of months since we introduced the Bill, the Coastal Commission, San Francisco planning Department, in my office, we worked very, very collaboratively and very hard to chart a path forward. And I feel very good about where the Commission and San Francisco are right now. And so as a result of that process, I made an amendment on my own to remove a boundary redrawing from the Bill because I thought it was no longer necessary.

So I want to again thank the Commission for working collaboratively and very hard with us. The Bill now does two things. First, it aligns the local coastal plan amendment process with the required zoning process required after a housing element is approved. Of course, a city, once it has an approved housing element, has a certain set period of time, usually either one year or three years, to engage in a rezoning to conform to that housing element. And there are penalties if a city fails to do that.

Of course, when a city does that rezoning, it needs to make an LCP amendment. It needs Coastal Commission sign off. And we want to make sure that a city is not placed between a rock and a hard place where they're required to rezone within a certain amount of time. But the LCP amendment takes longer to approve, so the Bill aligns those timetables. The second thing the Bill does is it, I think, resolves what I view as sort of a quirk in the law.

And that has to do with when a local, the local zoning, allows for more than one use on a parcel. There's a primary use and say primary use is residential, but with a conditional use, you can do commercial, a secondary use. The way the law is now for coastal counties, if the city allows the secondary use, you can appeal to the Commission. For a city, you can't.

And the rationale, and the Coastal Commission educated me on the history here, is that the coastal county and unincorporated areas tend to, tend to be more likely to be rural and have more environmentally sensitive areas. Cities tend to be more urbanized. San Francisco, because it is a city and the county was classified as a county, and San Francisco is many things, but rural is not one of them.

And so we are clarifying in the law that if you are a city and the county, you qualify under the coastline as a city. And so again, I appreciate the Coastal Commission for working constructively with us to find the solution to that issue. So those are the two pieces of the Bill. I respectfully ask for your aye vote, and with me today to testify is Catherine Charles. On behalf of the Housing Action Coalition.

You just have one witness. Senator. Senator, one witness?

All right. You have up to four minutes.

Yes.

I promise I won't take that long. Good morning, Mister Chair and Members. My name is Kathryn Charles. I'm here on behalf of the Housing Action Coalition of SB 951. I'd like to start by thanking the Commission for their work in moving the Bill forward. As amended, SB 951 introduces two common sense reforms that the Senator mentioned. First, existing law allows projects within the coastal zone and coastal counties to be appealed to the Commission if a project does not conform with the main permitted use.

This has allowed the Commission to have a hand in conserving agricultural and open lands across the coast. However, this provision is intended to deploy to rural counties, not urban San Francisco, which is both a city and a county. SB 951 refines this appeal, maintaining its application in rural California while treating San Francisco like the city it is. Second, when local governments are required to upzone by HCD, they're typically given one to three years to comply.

These required actions, however, often result in updates to LCPs, which require Coastal Commission review, which takes time. Local governments often end up stuck between two state agencies working on two different schedules. SB 951 aligns these processes, giving one to three years to both the required upzoning and its associated LCP update. This Bill simply provides clarity for local governments while maintaining coastal resource protection to help California achieve its goals. And with that, I respectfully ask for your aye vote.

Seamus Garrity from Lighthouse Public Affairs on behalf of SPUR

Thank you. Do we have any witnesses here in support? Me too. Testimony state your name, affiliation, position on the measure

Thank you.

Good morning, Chair Members of the Committee Jordan Parana Carbajal, legislative advocate for California YIMBY in support thank you so much.

Good morning, Mister Chair. Luis Morante on behalf of the Bay Area Council and support thank you, thank you.

I'm sorry, I missed that. Could you say that? Never mind. All right, do we have any opposition witnesses here today? Two witnesses. You have two minutes each. Proceed when ready.

Good morning. Ralph Hassennfeld on behalf of EMB Action East Bay, EMB Mountain View, EMB Northern Neighbors, Peninsula for Everyone, San Francisco EMB, Santa Cruz EMB, Santa Rosa EMB, San Luis Obispo County EMB, Urban Environmentalists, Grow the Richmond, Ventura County EMB, Streets for People, South Side Forward, How to ADU, People for Housing Orange County, Progress No Way Valley, South Bay EMB, and Napa Solano for Everyone in support.

Good morning again, Mister Chair and Members, Sean Drake with the Coastal Commission. With the recent two sets of amendments to SB 951, the Commission has removed its opposition from the Bill.

We certainly appreciate and agree with the center's sentiment that coastal protection and housing production are not mutually exclusive and as is evidenced by the mentioned collaboration between the Commission and the city and County of San Francisco, we want to emphasize that local coastal programs are the most effective tool for marrying coastal policies and housing policies at the local level. We want to thank the author and a staff for their collaboration in reaching language that addressed the Commission's concerns. Thank you so much.

Good morning again, Committee Chair Members Brady Guertin on behalf of the League of California Cities, we respectfully have an opposed, unless amended, position on the Bill Cal Cities and representing the 61 cities in the coastal zone, we believe that requiring local governments to update their LCPs and housing elements at the same time won't solve the ultimate challenge of increasing more affordable housing and meeting housing goals in the coastal zone.

As we know, LCPs and ECD takes a lot of time and costs a lot of money to our local governments. We are concerned that this is doubling down on planning and our proposed amendments would be to shift the burden of doubling down on local planning in the LCP and housing element and rather provide incentives to local governments to identify where there are challenges in local coastal planning and in meeting housing goals.

We are committed to continuing to work with the author's office moving forward and look forward to those future conversations. Thank you.

Thank you. Do we have any witnesses in opposition? Other witnesses? Me too. Testimony? zero, I'm sorry. I think we have two witnesses. So if you could just limit your testimony at this point to your name, affiliation and position on the measure.

Sure. Laura Walsh, Surfrider and 40 other environmental orgs and we've moved to neutral.

You could list them out if you wanted, but never mind. So, thank you.

I didn't hear the position.

Mister Chair Members, I respectfully, the Coastal Commission, they're not in opposition when they testified as the lead opposition witness. But in any event, I'm Paul Yoder on behalf of the City and County of San Francisco. Today, on February 6, the board, in a supermajority vote of the board, voted to oppose unless amended SB 951. Last night the chair of the board reaffirmed that that is still their position unless the appellate authority for the city is removed from the Bill.

It was neutral. Okay. Thank you.

Thank you. Appreciate it.

Good morning. Jacob Evans of Sierra Club, California. We appreciate the amendments and are removing our position. Thank you. Neutral. Neutral. Thank you.

Susan Jordan, Executive Director of the California Coastal Protection Network. With the amendments and the collaboration, we are removing our opposition and going to neutral. Thank you.

Thank you.

Good morning. Linda Krop, Environmental Defense Center, with the amendments, moving to neutral.

Thank you. Emily Garcia with NRDC. Moving to neutral. With many, thank you.

Thank you.

With amendments, move to neutral. Thank you.

Scott Webb with the Resource Renewal Institute, moving to neutral. Thank you.

Christopher Mowad, legislative fellow with EAC and thank you for your amendments. And we're moving to neutral.

Thank you, Mister Chairman, my name is Dan Jacobson, Environment California, moving to neutral. Thank you.

Cody Phillips with California Coast Keeper Lions, Orange County Coast Keeper, and San Diego Coast Keeper with the amendments, moving to neutral.

Thank you so much. And seeing no other witnesses in opposition or in neutral, let's bring it back to the Committee. Any questions or comments from the Committee?Senator Grove.

Again, I applaud all the authors, especially on my colleagues on the other side of the aisle that are bringing these bills forward because there really is a problem that needs to be addressed and to have the courage to do that in the face of all the opposition is truly courageous.

I know that you and I, Senator, had talked about the Bill about inland housing in San Francisco and the comments that you made about the city and the county, you know, facing different regulatory processes for appeal. I get it. I do. With the amendments that you have taken, you said on your own, which is admirable as well, and now you have the City of San Francisco, which you represent, is now opposed to it. Are you going to continue to help to rectify that problem?

You don't see a problem there at all?

No.

Okay.

No. First of all, I was elected by all the same people that elected the Board of Supervisors. Yes. With many more votes. And, you know, respectfully to the Board of Supervisors, we now have a Bill that the Coastal Commission has withdrawn its opposition and a massive environmentalist coalition has withdrawn its opposition. But the Board of Supervisors is reiterating its opposition, and that speaks volumes about the deep housing crisis that we have in San Francisco and why we have it.

So, no, this is a very tightly crafted and good Bill now, and the Board of Supervisors is entitled to its opinion. I respectfully disagree.

Okay. That makes sense. I wasn't trying to make an election or a campaign thing out of it. I was just like. It was, I just said admirable. Right, because you have brought this attention, just like Senator Blakespear has brought the attention of the problems that we have with building housing, and we do. And we don't have a Coastal Commission in the Central Valley. Thank God for that. But we do have still the same problems that you face, like it's hard to get a permit.

It costs $12,000 to even start the process. It's all of these things that we have to deal with when we're trying to build affordable housing. So again, because you're in a different area than we are, where we have land mass, you guys are more tightly surrounded by housing or buildings and stuff and more urban area. But I thank you all for just bringing this Bill forward, because we do need housing, and we need housing in San Francisco.

We need in Central Valley in, and we need it not to obstruct the coast in any way, shape or form. It's a public coast. And I get the Coastal Commission's issue on that. But I think that, again, restating that, I feel like they really are overstepping their boundaries in order to restrict housing being developed. And I thank you for championing a Bill like this.

Any other comments? Senator Laird.

Actually, thank you for being brief about the State of San Francisco City politics. I think that could have taken the rest of the hearing right away, and maybe we will have a conversation at a sidebar and inform as to everything that's going on. The one thing I wanted to say is I really appreciate the discussion and the amendments that were taken and your comment that you did it.

And after those lengthy discussions, because I think you focused on what some of the real issues were, the consideration of a city rather than a county, and other things that are really processed that I think this Bill has done. The one statement I wanted to make is the original version of the Bill that set the precedent of us legislating what the coastal zone was, was the thing that made me more nervous than anything else in the Bill.

And the minute it was introduced, anybody I heard from people in my own district like, oh, we had to provide coastal access. We don't like having done that, could we be added to the Wiener Bill? And so if we start legislating what goes in the coastal zone, then the coastal zone itself will have no meaning. And so the fact that you, because anytime anybody wants a project, they would just say, could you go to the Legislature and exempt this from the coastal zone?

That was the one thing that was most troubling that I would have strongly opposed if it had moved with it in. But that's not where we are. We're where we are where you had genuine discussions and you worked it out. And I hope that this is the beginning of a longer term discussion and a longer term relationship where, because this one worked out, that that will be the first stop, is trying to have those discussions and see if there's ways to work to through it.

So I salute you for doing that. And Mister chair, I would move the Bill as amended.

Thank you. any other questions or comments from the Committee? Okay, I'm supporting this Bill today, and I just want to thank you for taking the amendments. Obviously, there are some issues in San Francisco that are problematic, and I appreciate the fact that you amended this Bill multiple times to try to narrow the impact following productive discussions with the Coastal Commission, with my staff and others.

And I would just echo the comments of Senator Laird. I think the first Bill that was introduced was very sweeping in scope, and I think in the views of a lot of us, would have set dangerous precedents undermining the Coastal Act. But, you know, and I think we just need to be cautious about wholesale changes that we're seeking to make because there are balancing interests here. But with that, would you like to close?

Thank you, Mister Chairman. And I really appreciate the, the conversation. And yes, the current Bill is really about aligning housing element and LCP timetables and clarifying that if you are both a city and a county, you're treated as a city under the Coastal Act, which is not any kind of exemption for anyone. It is simply a clarification for an urbanized versus a non urbanized area. I also want to say I've had a few disagreements with the Coastal Commission the last couple of years.

I do just want to say publicly that I actually, in terms of the work that the Coastal Commission does to protect natural resources, I am a supporter of the Commission. I think the Commission does nation leading, innovative work to protect and shore up our natural resources, to plan for sea level rise. And so I really admire the Commission's work on that.

I think where we have a discrete, sometimes disagreement, and you saw that with Senator Blakespears bills before, is that the coastal zone, of course, is not limited to natural resources. It is also sometimes very intensely urbanized areas and downtown type areas. And that's where I think the healthy tension that's happening now. It's tension, but it's healthy tension because we know we have a housing crisis.

And I think it's helpful to have that hard conversation about what does it mean to make sure that we are, that we have housing everywhere we need it, particularly near transit and jobs. What does it mean to ensure that working class people who work in the coastal zone have at least a shot of being able to live there? And that's an important conversation that I know will be ongoing, and I look forward to it. And with that, I respectfully ask for an aye vote.

Okay. With that, we will go ahead and take our vote. Assistant, please call the roll. I'm sorry. We need a motion first, don't we? oh, yeah. I'm sorry. Senator Laird moves the Bill. The motion is do pass to housing Committee. Assistant, please call the roll.

Roll Call

The vote right now is 7-0. We'll leave that Bill on call. With that, I want to go back to--

I move item number two.

You did already. Do we have a motion first on the consent calendar? All right. We have a motion from Senator Stern on the consent calendar, which includes five items: file item number four, SB 1139; file item number four, SB 1156; file item number six, SB 1176; file item number 10, SB 1324; and file item number 13, SB 1320. Assistant, please call the roll.

[Roll Call].

The vote count on that right now is 7-0. We'll leave that on call and then we'll go back to file item number two, SB 1077 by Senator Blakespear. We have a motion from Senator Laird; due pass as amended to Housing. Assistant, please call the roll.

[Roll Call]

Six to zero. Do you want to move the consent calendar?

We just did it. You just voted on it a minute ago.

Okay, all right, sorry. All right, he's here right now. So basically, we're just waiting for--

And there's only two authors left, Limon and Allen, in case Allen wants to present his Bill.

I'll present, I'll present, that makes sense. Let me hand it to you.

Now, we'll be hearing Senator Allen's SB 1234 file item 12.

Absolve myself of at least half a demerit right now. Okay, so this is a specially numbered bill, SB 1234. It seeks to sense. So we've been talking quite a bit about the Coastal Commission and some of the challenges there. This bill seeks to sensibly streamline the process for local governments to finalize amendments to their LCPs, the local coastal programs. So, as you all know, cities and counties that represent coastal lands have to.

They're required under the Coastal Act to coordinate with the Coastal Commission to protect coastal resources and guarantee public access and ensure that all development is done sustainably. Our Commission, the Coastal Commission, achieves this oversight role by certifying local government's local coastal program, which is the collection of approved planning documents that lay out the framework for land use and development and coastal resource protection, along with the necessary implementation ordinances.

So prior to the certification of all the components of the LCP, any decisions by the local government that impacts the coastal zone has to go. They have to go to the Coastal Commission for review. Having a complete and certified LCP allows a coastal jurisdiction to efficiently approve permits and move forward with projects within the terms of their plan without needing to consult the Coastal Commission every time.

Now, just as the Coastal Commission initially reviews an LCP to ensure that it meets the standard standards of the Coastal Act, any proposed amendment to an existing LCP must also be submitted for review. If the Commission then identifies any issues or discrepancies, they can then conditionally certify the amendment with clarifying modifications that, if accepted by the local government, will deem the amendment certified.

The modifications recommended by the Coastal Commission are usually minor technical or clarifying modifications that don't substantively change the proposed amendment as compared to when it was last heard and passed by the local government. So this bill will allow the local governments to empower their Planning Director to accept these minor changes ministerially, if they so choose, thereby avoiding the time and resource costs of a duplicative hearing at the local level and then sending it back.

This is a permissive approach that grants local jurisdictions some more flexibility to be efficient and incentivizes completion of the LCP process by smoothing one of the few remaining really onerous redundancies that are faced post-certification in this process. And I just want to thank the Committee staff for their work on this bill. I want to recognize, as noted in the analysis, that we're still working to refine some of the language to address concerns about scope of change that may be accepted ministerially.

But this is something that came out of an incident involving the Coastal Commission. And I really do hope that this will help to at least smooth some of the challenges that exist with the acceptance of projects that everybody agrees ought to move forward. And it's going to help coastal cities and counties. And I respectfully ask for your aye vote.

Okay, we'll see witnesses in support. Do we have any lead witnesses? Seeing none. Any general witnesses wish to testify? Seeing none. Looking at any opposition? Testify? Seeing none. I will bring it back to the dais. Comments, questions? Senator Laird?

I would move the bill.

Motion from Senator Laird. The motion is do pass to Local Government. Seeing no other further comments, questions. Would you like to close?

I appreciate your support for this and your understanding what we're trying to do and I ask for an aye vote.

Thank you for keeping it narrow and focused and appreciate what you're doing here. With that, let's call the roll.

[Roll Call]

Okay, that's 7-0. We'll leave that measure on call. Now, we're going to hear from Senator Limon, who has, I believe, four items before the Committee, five items before, but one is on consent. So if you'd wish file item order. Or I guess we can leave to your discretion if you want to.

Chair, can you remind me what the file item is?

Okay, so 1101.

We'll start there. Perfect. Okay. Thank you Chair and Senators. This bill will help California reach our goals in using beneficial fire. It has three main components which will help California actively use fire in areas where it's ecologically appropriate. One, it will streamline the contracting and procurement process for beneficial fire through Cal Fire. Two, it will expand pre-fire planning, requiring the identification of important cultural and ecological resources. And three, it will require additional post-fire mapping to better understand the impacts of wildfire.

Here to support our bill is Paul Mason from the Pacific Forest Trust and Catherine Freeman from the California State Association of Counties.

Okay. Two minutes each.

Thank you. Good morning, Chair Stern, Members of the Committee, Paul Mason, Vice President of the Pacific Forest Trust. First, I want to thank the Committee for really thorough analysis and background that really laid out the context for why we are where we are today with fire in California, which is really fundamentally that California is a fire-adapted landscape. This area evolved with fire. We're going to have fire. There's really no other alternative there.

There are parts of California where we already have fire too frequently, like in some of the south coast. But in most of California, we have a fire deficit, and we frankly need to see more fire than we're seeing right now. What we have inadvertently done by going so heavily towards suppression for the last number of decades is actively chosen the worst fire outcomes because the only fires that get really large are the ones burning under extreme weather conditions.

But we can choose the timing of fires and the conditions when we're going to get the best outcomes and the least adverse health impact. And that's what this bill really does. This bill is an outgrowth of some work going on over the last couple of years with a broad group of stakeholders ranging from the California State Association of Counties, the Lung Association, and various other parties. And it really charts a path.

Like Senator Limon was just saying, where we plan better in advance of fire, we really scale up how quickly Cal Fire can come to the table and really help implement prescribed fire at a greater scale. So we start getting fire back on the landscape, and then we start looking at the outcomes of fires with more nuance.

So rather than just talking about a million acres burned this year with the implication that it was all bad, that we start understanding that a lot of that fire is having good ecological outcomes, and we can understand that fire nuance in order to plan better for the coming year.

So the breadth of support for this bill has been really gratifying from large landowners like the Forestry Association and the cattlemen, the American Lung Association, and other public health interests who recognize that the way we have approached fire to date recently has just gotten us into a really untenable position with really extreme impacts from smoke, and that we just have to accept that we're going to have some smoke, but we can control the timing.

So this sort of path to getting to more good fire on the landscape in ways to minimize the health impacts and maximize the safety, it really gives me hope for the path forward, and I encourage your support.

Thank you. Second lead witness.

Hi, I'm Catherine Freeman on behalf of the California State Association of Counties, and we represent 58 California counties, we want to thank the author for carrying this bill. It's important to us. Counties are on the front line of wildfire disasters. We need every tool in the toolbox to protect our communities. We don't generally own the land, but we need to protect our communities. And as you've heard today, we cannot lose any more housing.

SB 1101 provides necessary streamlining, proactive planning, and it improves the state-to-local relationship in a way that I think is going to really improve our welfare outcomes. Counties support SB 1101, and I'll be brief. We urge your support today. Thank you very much.

Thank you. General witnesses in support. Name and affiliation.

Good morning, Mr. Chairman. Chris Micheli, on behalf of Humboldt Redwood Company and Mendocino Redwood Company, in support of the bill. Thank you.

Good morning. Staci Heaton, Rural County Representatives of California, representing 40 rural counties statewide, in support.

Thanks.

Steve Wallach on behalf of the California Tahoe Alliance, in support.

Thank you.

Good morning. Alex Loomer on behalf of the Sierra Forest Legacy, Sierra Fund, Sierra Institute, Audubon, California Defenders of Wildlife, California Plant Society in support.

Good morning. Josh Gauger on behalf of the Santa Barbara County Board of Supervisors, in support.

Okay. Thank you very much. Seeing no other witnesses in support, we'll see if there's any witnesses in opposition. Any wish to testify in opposition SB 1101? Seeing none. We'll bring it back to the dais. Questions? Senator Laird.

This is a very good policy and this is the right direction and we should be doing this. And I think the only question of the bill is the funding of it. And thank God that's why it's referred to another Committee and it's not our jurisdiction.

And so based on that good policy and appreciate the testimony and support, I would move the bill.

I'll acknowledge the quiet effort and a motion here, but we'll acknowledge the on-the-record motion here. Senator Laird, any other comments? Yes, Senator Grove.

Thank you, Mr. Chair. I just again, echo my colleague's comments about the protect the good policy. It is good policy. And, you know, I just want to say that on the record because I don't say that very much about your bills.

Thanks. You're probably not going to say that about the next ones. She's getting ready for the next one.

It is. It's good policy.

And I specifically, in your bill that streamlines the contract stuff because these burns have to be done at a certain time, at a certain, you know, time in the year, and it has to happen really fast in order to have all these subcontracts go out to competitive bid. Waiting 30 days for the public to comment and then 90 days for something else, and the review then that we've missed that prescribed burn place. So addressing just that, I think you really will be.

I don't want to call you a champion. I'm not there yet, but somebody who is very well placing circumstances on a piece of legislation that will allow us to address and mitigate wildfires that are uncontrolled versus controlled. And so I did want to say thank you, and say something nice about a bill that I never, rarely, I don't get to comment very much on your bills other than it's negative. But I wanted to make sure you knew I supported this bill.

Well, thank you, I think.

Senator Dahle.

Thank you, Mr. Chair. I'd just like to say that I worked in this space a lot over the years and I just want to say to the proponents, it's really nice to see environmental groups, counties, and people. There was a time when we didn't want to cut a tree down. We didn't want to do anything in the forest and just leave it alone. And it's alive, it's growing. You can't just leave alone. And we interrupted nature.

I was great to hear Paul's testimony about how we've put out. We've stopped fire, which naturally thinned our force. So good job on the bill. I'll obviously be supporting it, but I just wanted to make that comment that it's really nice to see people come together and actually address the issues that need to be addressed out there. We have millions of acres that need to be treated and fire is a tool to do that, but it's just the timing to get it done. So thank you.

Thank you.

Yes, Senator Eggman,

Just so I can jump on the Limon bandwagon, but just to concur with my colleague from Bieber, and we've been on, served on natural resources, I think, for the last 12 years. So we're wrapping up and have really seen, I think, in some key policy areas, this being one of them, I think housing being another, and maybe mental health, that we've actually turned corners in a very significant way during the last decade. And so I think that just bears recognizing. I think we are swinging back to the middle where we need to be, to be effective policymakers. So I thank you for this.

Thank you. And Members, I will recognize that if it's okay with the Chair, that it is an evolution. I mean, this topic is an evolution. I've been here eight years and this is not where this conversation happened. And so just the list of who is coming on board to support this really speaks to the progress and the changes that have made, but also the really deep and severe impacts that our communities have felt on this issue and needing to understand that we have to come together.

So I want to recognize many of you, especially my colleague from Bieber, that there's been a lot of work done in this particular space. It's not alone. So this is building upon previous work and the Committee did a great job, too. Thank you. Committee.

Everyone's done debating?

I closed. We have a motion.

Is that your close, Senator? Do we have a motion? Okay. Motion is do pass to Governmental Organizations. Assistant, please call the roll.

[Roll Call]

The count is 8-0. We'll leave that bill open on call, and with that, we'll move on to your next bill. Senator Limon, SB 1135, whenever you're ready to proceed.

Thank you. Thank you, Chair and Members. First, I'd like to thank the Committee for their, the Committee staff for their work on this bill, and I would like to accept the suggested amendments. I'd also like to commit to continue to work with the Committee and staff on the spill. Compost application on agriculture and rangelands is a beneficial practice as it repairs soil health, conserves water, increases carbon sequestration in soil, and reduces overall carbon in the atmosphere.

The 2022 CARB AB 32 scoping plan further identified compost as a strategy to reduce greenhouse gas emissions, aiding in the fight against climate change. The challenge is that compost is expensive to produce, transport, and apply to land. SB 1135 establishes a tax credit for California farmers, ranchers, and landowners who employ farming and ranching practices that maximize carbon sequestration through the utilization of compost on natural and working lands.

This bill continuously appropriates 1% of the DGRF funds to a new Fund, the California Compost Tax Credit Fund, not to exceed 120 million annually for 10 years to fully pay for the tax credit. I have with me today Jennifer Gailhouse, on behalf of the People, Food and Land Foundation, and Michael Miiller from the California Association of Winegrape Growers to speak in support of the bill.

Good morning, chair Members. My name is Michael Miiller with California Association of Winegrape Growers. I'm going to thank the Committee for their analysis and detailed review of the bill. I also want to thank the author for her leadership on the issue. For the California Winegrape growers, we're a co-sponsor of this bill because we have a huge investment in sustainability. We have partnered with the Wine Institute and the California Sustainable Wine Growing Alliance, and we encourage growers all over California to engage in sustainable practices.

A large part of that is including healthy soils work, composting, that kind of thing in the vineyards. What we're finding today is that many of our growers are facing a lot of economic uncertainty. You've looked at potentially articles of the LA Times, media accounts all over the state and frankly, around the world have reported on the glut of the marketplace of grapes right now and the instability in the wine industry.

So what we're looking at is growers who are basically, basically a situation where they can't sell their grapes and they're trying to get through the year. They're trying to make ends meet, and we're asking them to invest in things like composting. We go with a straight face, say to them, this is good for your vineyard, it's good for the climate, it's good for carbon sequestration. It's a win win for everybody.

But if they can't afford it in the short term, there's not much that they can do about it with a long-term investment. So we look around the world, too, of what other countries are doing relative to helping the industry weather this storm. France wrote a check for $250 million to winemakers in France to dump wine to help stabilize the market there. In Canada, they're investing a few $100 million in climate change, in vineyards in that effort as well.

We're not asking for anything other than a tax credit here. Very focused on helping growers to weather this storm and to make the investment in climate change practices that benefit not only just a vineyard, but it benefits the state, the country, the entire world. Climate change is everyone's problem, and it's something that we're happy to work to help fight. And we think that there's an opportunity to invest through this kind of a tax credit practices that will help get it done. Thank you.

Thank you. Next.

Hello, Chair and Members. Nicholas Mazzotti on behalf of People, Food and Land Foundation, an organization that promotes the social and economic development of rural communities, as well as the development of small and community farms. I would like to thank the author for introducing this important measure, which will not only help improve the soil for farmers and ranchers, but also impact the health of food and climate.

I will be giving written testimony from Doctor Wendy Silver, a distinguished Professor of ecosystem ecology and biochemistry at UC Berkeley, who unfortunately could not make it here today. Professor Silver is the lead scientist of the Marin Carbon Project, which is determining the potential for land-based climate change mitigation, particularly by composting high-emission organic waste for soil amendments to sequester atmospheric carbon dioxide. Recognizing time constraints, I'll skip the part about the mechanics of composting and go directly into the specifics of the bill.

I'd like to point out from Doctor Silva's testimony that research in California and elsewhere has shown that compost amendments to soils can increase crop and forage yields. The additional plant growth storage via enhanced soil organic carbon matter content. This increased organic matter and associated soil carbon is a means to help slow climate change. It also often increases soil water retention, which may protect against drought and floods.

Compost in the soil organic matter it produces contribute to soil stability and thus may limit erosion during large storm and snowmelt events. There are decades of research on the soil health benefits of compost, but only recently have researchers begun to realize the climate change mitigation benefits. Recent published research from California has shown that composting and soil application results in net carbon dioxide removal from the atmosphere while lowering methane emissions.

If you could please wrap up.

Yeah. With that, I'm here to answer any questions that you all may have.

Thank you so much. Appreciate it. Do we have any witnesses who want to register their support for the bill? Please limit your testimony to your name, affiliation, position on the measure.

Good morning. Melissa Werner on behalf of the Family Winemakers of California in support. Thank you.

Thank you.

Priscilla Quiroz here on behalf of Stop Waste in support.

Thank you.

Good morning. Noelle Cremers with Wine Institute in support.

Thank you.

Josh Gauger on behalf of the Santa Barbara County Board of Supervisors in support.

Thank you.

Thank you. Preston Young from the California Chamber of Commerce here today in support.

Thank you. Seeing no one, are you in support? Okay.

Californians Against Waste in support. Krystal Raynes.

Hello again. Nicholas Mazati on behalf of Compost Coalition in support of the bill.

Thank you. Seeing no other witnesses in support of the bill. Do we have any opposition witnesses at all? Okay. No opposition. All right. Well, then we'll bring it back to the dais. Senator Eggman.

Thank you. I would just like to say I really like this bill. I think it's a win, win, win. We're increasing our infrastructure for composting, going back to farmers. Good for the environment. I will move the bill, but if you could just talk a little bit about, because you tend to support more strict environmental programs than I do, the transfer of the GGRF funds to here. How do you justify that? I think it's a great idea, but how do you justify that to others?

So, look, I think that this is something that we need. I think that this is something if we. I think that as we're going through the budget process, we see that if GGRF is open for all, then it's challenging because it's used for a lot of different but really, really good things. And I think we're also seeing just what's happening in the budget conversations. So the idea is that this would be dedicated, this 1% would be very dedicated for this.

And it would be something that would go, you know, we have a lot of folks here, you know, from the wine and grape growers who are in support, but it would go towards farmers who are interested in doing this. I think you see an eagerness and enthusiasm from one, you know, of our crops, but there are others. And the other reason is really thinking about a tax credit as opposed to a grant.

It is our understanding and belief, and I think experience that a tax credit gets applied much faster than a grant process, because a lot of folks in Ags don't have grant writers. And so this is something that we feel would be very direct. It would have a clear, fast way to getting implemented as opposed to others. So it is hard, even for those of you, like myself, that really protect UGRF, to do this. But I think it's needed.

And I think what sold me was the ability to get it applied much faster.

Right. And the healthy soils program is always over prescribed.

Right.

So it's. People want it, let's give it, let's let them do it. Thank you.

Thank you, Senator Stern.

Thank you, Mr. Chair. I appreciate the legislation and the, again, unlikely coalition here. It's a nice merger of interests that aren't always on the same page. My main question is that the tax credit lasts for 10 years, I believe, and the cap and trade program is only authorized through 2030. I don't want to. Yeah, just your comment on that.

I guess more broadly, maybe my comment's less at you and just more sort of to stakeholders in general, which is that we're going to be facing a crossroads on how, whether, when to reauthorize this cap and trade program. So we're counting on money that's not necessarily authorized to even be there. We're in 2024, so we get six years of this.

So there's another four years in this tax credit that we'll need the certainty in order to bank on if you're, you know, own a vineyard or want to do this kind of long-term financing. So I actually think that certainty would be a good thing, provided that we've got the right coalition and the right compromises met in that bigger deal. So I guess I'm flagging that for the future and saying that this is a really good piece of all that and belongs to the table.

And I hope everyone there is also at the table for the bigger conversation.

We will cross that bridge when we get there.

Thank you, Senator Stern. Senator Laird.

I would associate myself with the comments of Senator Eggman and just add that, that I have a bill that would do a programmatic EIR for jurisdictions, for organic compost to try to expedite that process. And I think all these things work hand in hand together because we're trying to make this work and remove the obstacles. So I salute you for doing that, and I look forward to supporting the bill.

Thank you, Senator Allen.

I just wanted to get a sense of building on some of the comments made by Senator Stern. I mean, what are the, is there a vision for long-term oversight over this program? And, you know, because I'm thinking about this in terms of tax benefit rather than a grant program, like healthy soils, for example, which is so oversubscribed, what was the thinking behind doing, taking this approach versus a grant program?

So the thinking was really about getting it applied much faster. Grant programs, if you look at folks in AG are, it's not often that folks have grant writers and so they cannot seek grant programs in the same capacity that they can apply a tax credit.

And then is there a plan? I guess. I'm sure that's true, yeah. 120. So if the applicants go beyond 120 million, what then happens under the bill?

If the applicants go over 120 million, I'm going to have to defer to. Yeah, I think the tax credit ends, but I don't.

Would you like your witness to answer?

So I think the question is, what happens if this is over 120 million? If the tax. If the tax credit. I think the question is if the tax. You want to ask questions?

Yeah. If it's oversubscribed effectively.

Well, it is capped in the legislation at 120 million.

So it becomes kind of first come, first serve type model, or is it pro rata?

It would be priority. It would be set up through CDFA's review of what are the best expenses, and they'll be approved, the programs as they're presented to them. So that way you'll have some bit of getting the biggest bang for the buck, if you will. Yeah.

Thank you.

Would it be great if it was over-prescribed.

Say, one time?

It would be great if it were over.

Yeah.

Senator Allen, are you.

Well, I mean, healthy soils has been.

Senator Allen, are you. Do you have more questions?

No, it's okay. Okay. Sorry.

Okay. Thank you, Senator Allen. Anyone else? Okay, thank you, Senator Limon, for working with Committee staff on this bill. And I just want to associate myself with the comments made before, I mean, this is a win win win. We're encountering significant challenges in meeting our organic waste diversion goals. At the same time, of course, as was alluded to, this is not an unlimited set of resources. So it is a bit of a zero-sum game.

When we take money from the GGRF, the Greenhouse Gas Reduction Fund, and apply it to composting, that takes away money for other ways to reduce carbon emissions. So I do have some reservations about an ongoing appropriation, as I think my Committee staff expressed. I'm supporting the bill today because I think it's important to have this conversation to begin the prioritization of something that I think has been proven to both reduce carbon emissions and provide significant economic benefits for the state.

So I appreciate you taking the amendments, including to move the income tax credit program to the Department of Food and Agriculture, which is obviously the agency with the appropriate experience and expertise to administer this type of program. I think it was also important to amend the bill to not give any Department authority to essentially appropriate funding to other departments, as the current version of the bill proposes. Instead, the Committee amendments nail down the funding structure by specifying exactly which programs would get funding.

I think we leave open the question of how much funding should be appropriated for the bill's purposes to the Appropriations Committee. But with that, thank you and would you like to close?

I respect the ask for an aye vote.

Thank you. Assistant we have a motion from Senator Eggman. Do pass as amended to Budget and Taxation. Please call the roll.

And this is for SB 1135. [Roll Call]

The vote count on that is 7-0. We'll leave it on call. Senator Limon. You have two more bills left. You want to go in order?

Yes, it 1304 next?

1304. File item number nine. You can proceed when ready.

All right, thank you. First, I'd like to thank the Committee staff for their work on this bill, and I accept the suggested amendments. Once oil reaches the surface in some oil production wells, waters containing toxic pollutants used in the process are injected back on the ground and may contaminate aquifers used for drinking, agriculture, or other beneficial purpose. Through the current aquifer exemption approval process, Cal GEM and State Water Resource Control Board staff submit proposed exemptions to the US EPA.

SB 1304 establishes a requirement for state approval of an aquafire exemption by requiring the state, the Water Resources Board, to conduct an environmental review, including holding at least one decision-making public hearing, allowing the public an opportunity to speak on the proposal from Cal GEM. The Water Resources Board is then required to make findings pursuant to CEQA and consistent with the state aquifer exemption law before approving an exemption to be submitted to the US EPA.

This bill also requires that a proposed aquafire exemption be outside an area identified by Cal Enviroscreen as at risk for drinking water or groundwater threats, aiding in protecting of our frontline vulnerable communities. Requiring a higher level of state review, including an environmental analysis pursuant to CEQA, along with determination by the State Water Board following a public hearing for proposed aquifer exemption, ensures the public has the opportunity to speak on how their potential drinking water is affected by oil and gas production.

With me today, I have Linda Kropp, representing the Environmental Defense Center, Sierra Club California, and Santa Barbara County Action Network to speak in support of the bill.

Sorry, you have two witnesses?

I have one, Linda.

One witness. All right. You have up to four minutes if you'd like. Thank you.

Thank you, Chairman, Members of the Committee, my name is Linda Kropp. I'm Chief Counsel of the Environmental Defense Center. Speaking today on behalf of Sierra Club California, the Environmental Defense Center, and Santa Barbara County Action Network, I would like to thank Senator Limon for introducing this important bill and urge the Committee to vote in support. Our organizations have direct experience with proposed aquifer exemptions.

Through our work related to the proposed Cat Canyon Aquifer exemption, we have learned that the existing process is inadequate to protect public health from threats of vital drinking and agricultural water supplies. First, the process does not allow for adequate public participation, including for communities that rely on aquifers that may become contaminated by underground injections. Second, the process does not include a thorough analysis of potential impacts before the state submits a proposal to EPA.

And third, the process does not consider risks to communities that already have drinking or groundwater pollution. SB 1304 will remedy these concerns by one, requiring a formal environmental and administrative review process before the State Water Resources Control Board, the agency responsible for ensuring safe drinking water, and two, protecting vulnerable and impacted communities that already face threats to their drinking water. Cat Canyon provides a clear example of why this legislation is needed.

Cal GEM proposed an aquifer exemption expansion that would allow 700 new oil wells and the injection of wastewater below an aquifer that provides drinking water for 150,000 people. And for many of these people, this is their sole source of drinking water. When we raised concerns about potential contamination, we were told that there was no threat. However, we obtained well data from the United States Geologic Survey that confirmed leaks that could impact water quality in the area.

In addition, faults may serve as conduits for vertical migration of injected fluids into drinking water aquifers. The state's recent conduit analysis confirms this threat. Of the 488 wells analyzed, 291, almost 300 of the wells, over 60%, of the wells were identified as potential conduits that can impact drinking water, and that doesn't even include the abandoned wells where there's no known owner. None of this information has been subject to environment or public review. SB 1304 will provide a robust public review process.

It will protect water sources that are critical to local communities that have no other choice. Once an aquifer becomes contaminated, it is too late. In its opposition, WISPA asserts that SB 1304 is not necessary because CEQA review already occurs for injection projects. However, WISPA has also argued that injection wells are exempt from CEQA review. And in any event, the issues presented by aquifer exemptions are much broader than looking at a well-by-well basis. For example, Cat Canyon, 700 wells.

So it's really important that the aquifer exemption be evaluated on a broader CEQA scale. Thank you for your consideration. We urge you to support 1304, and I am available to answer any questions.

Thank you so much for your testimony. Do we have any other witnesses in support of the bill? Please limit your testimony to your name, affiliation, and position on the measure. You're in support, right? Okay, cool.

Cody Phillips with California Coast Keeper alliance in support. Thank you.

Fantastic. Seeing no other support witnesses, let's move to the opposition. Do we have just one opposition witness today? Oh, we have two. Okay, you each have two minutes.

Mr. Chair and Members, thank you. Paul Deiro, representing Western States Petroleum Association. I also want to thank the Committee staff for drafting a very comprehensive analysis on an important issue. We do believe this bill adds unnecessary and duplicative criterion that must be met for an aquifer exemption proposal and requires that the State Water Board to take additional steps for aquifer exemption to be approved. This bill does expand on the CEQA review of an aquifer exemption application that would not otherwise trigger such a review.

An aquifer exemption application is not a physical change. It is more analogous to a lot line adjustment. CEQA review for the class two injection projects and associated wells is already applied as warranted by Cal GEM as one of the proponents just mentioned. CEQA, basically the bill, we believe there is adequate protection with the waterboard, Cal GEM, and the state.

There were problems 15 to 20 years ago when the Federal Government did an audit of Cal GEM, and the outcome of that audit was to re-review all of the aquifer exemptions. Cal GEM was very deliberate in its process, established an MOA with the State Water Board. State Water Board plays a major role in whether that's approved or not. We believe this is somewhat of an overreach. We believe the existing process works.

We believe that this Bill would effectively stop aquifer exemptions from going forward using existing, existing CEQA processes. For those reasons, we oppose the Bill.

Thank you very much. Go ahead.

Mr. Chairman, Members Theo Pahos represent the California Independent Petroleum Association. Not much to add here other than to give maybe a little bit of context. The type of oil fields that we're typically talking about, where these aquifer exemptions exist, where we pull oil out. We're pulling out nine parts water, one part oil. Then that dirty water is essentially injected into the ground from which it came. I'm a little bit confused by some of the support testimony.

Maybe that's because we just don't know every individual instance. But there's not drinking water here. Right.

This is typically very dirty stuff. You don't go camping here. You don't go hiking here. These are places over 95% are deep. And I say this respectfully within the district boundaries of Senator Grove. So just wanted to give that little context. And for those reasons, we're opposed. Thank you.

Thank you. Do we have any other witnesses in opposition to this bill? Seeing none. We'll bring it back to the Committee. Any comments or questions from the Committee? Senator Stern?

Yeah. I just want to thank the author for bringing this along. And, you know, it's, since I was Chair. And even before then, since Senator Pavle was Chair of this Committee, we've been dealing with these. I mean, that was what brought dogger down and forced us to.

I mean, one of many things, but one of huge gaps in oversight, a lack of transparency, and a sort of left behind communities that are still stuck with these exemptions like yours. I'm very supportive of the bill.

I'm a little confused at the testimony because I thought the way I read this is that it essentially codifies the settlement that we're already under, that the Water Board already has a direct role, but that it's none of it's done by law, that it's done sort of pursuant to court order or through the settlement agreement that was acknowledged. But I don't see how this would really add extra burden. It just seems like it would add public process to what's a little bit opaque right now.

And so, especially when it's affecting people's drinking water, I think that's a good thing. So I'm happy to move the bill at the appropriate time. I appreciate you bringing this forward.

Thank you.

Thank you, Senator Stern. Senator Daly,

Thank you. Question to the author. So I sit on Sub two with Senator Allen and Stern used to sit on it, but we've funded up Cal GEM. They haven't filled their position. So I'm confused on. And also in the testimony, potential. Your witness said 60% was potential. So how many are actually failing? Like, do we have a number of wells that are failed under the process that we have available to us now?

Not potential, because everything potentially could be a problem maybe at some point, but actually failed wells that we know of.

So I'm going to have our witness come forward. I'm going to have her come forward. But I just want to be clear, of those that were tested, over 60% had the problem. So they were not all tested, just to be clear. So the data that our witness gave was about taking data from the US geological entity and testing those. So just to be clear, not everyone in California was tested.

Thank you. Linda Kropp, Environmental Defense Center. So there's been two different studies conducted. One was based on the USGS well data, which took a sample. Again, we're talking about the Cat Canyon as an example.

May I ask, were those wells that were abandoned wells or are those wells that were in production?

I do have the report that I can submit to the Committee. I believe that these were production wells they looked at. But I'll submit the report. It can speak for itself. They were based on the temperature and pressure log data that showed that there are leaks. So it's not a potential there are leaks. And the location of some of those leaks was in an area that could likely impact drinking water.

The second study based on this was conducted by Cal GEM and then reviewed by the State Water Resources Control Board. And Cal GEM looked at as many of the wells in the Cat Canyon proposed aquifer exemption area that they had known owners and that's where they came up with the 488 and they identified potential conduits. So this is where there are leaks or pathways. And the question is, can it get to the drinking water aquifer? State Water Board reviewed that, found more that Cal GEM had missed.

We're asking our expert to review that as well. But as the State Water Board pointed out in its analysis, this does not include abandoned wells where they don't have data from owners. So it's not even all of them. And those could potentially propose threats. And the reason that's important that distinction is because if you have a known owner now, the owners of those 291 wells have to submit remedial plans. So the state agencies do think there's a threat.

They have to come in and show how they're going to remediate those pathways, those leaks, for the ones that they don't have, owners. There is no remedial plan. So there continues to be a.

No, there is. Cal GEM is supposed to be out decommissioning those and shutting them down. We funded that through our Sub two and we haven't been able to get the actual people to actually go do it, has been the problem. And there's a, the companies have funded the program and so that's one of my. That's a different subject. But it's frustrating to know that the actual oil production and refinery folks have funded the process, but Cal GEM hasn't been able to get it done.

And we've been dogging them, at least I have for the last four years. I sit on Sub two SB trying to get the people to actually go do their job, which has been funded by the oil refineries and production people in California. So I know that's a separate issue, but it's still the groundwater we're talking about. And I was the only Republican that voted for SB 4. I think it was a Pavle bill because I'm concerned about the groundwater. But I'm also. There's a process here.

That's what I'm trying to figure out is the process. I want to make sure that we protect the groundwater. But at the same time, I still want to be able to go use. I want to know where the actual problem is. Because this bill looks redundant to me. I think we have a process in place that allows us to figure it out. And that's what I'm trying to figure out. What this bill, what's the difference between what we have now and where we're going?

So just to be clear, so the process that's in place omits public, you know, input. And this is what we're adding to it, given that we believe that there is enough of an issue. And just to be clear, Cat Canyon is in the district I represent, which is why it's being referred to continuously. So that's what it does. The process that exists does not have this public input piece that we are putting back into it through this bill.

This is a statewide law. So does it not just be done doing in your area or is it not being done throughout the state?

It's statewide.

Okay. I would like to see that report. If you could submit that to us. I'd like to go through it.

Thank you, Senator Dahle.

Yes.

Good, Senator Grove.

Thank you. Thank you, Mr. Chair. I thank my colleague from Bieber's comments, I do believe it's redundant, specifically when it comes to my district. You have the, you know, you have the east Kern oil fields, thousands of wells on the same aquifer, some are different, that are exempted already. You would require them to go through a process.

And if you read report after report after report after report, whether it comes from the State Water Resources Control Board or it came from all the other hurdles that we've had jumped through to be the factory floor for the oil industry in the State of California, 70%. I'm not talking about a little well-decorated like a palm tree in your district or someplace like that. I'm talking about a field. As much as almond grows is a field of oil wells or pumping units or production units.

And to go through that process when we know, like I said, after report and after report, that the data says that there is no beneficial use for this water because it's the same water, the same dirty water, not because the oil, but they extract all of this. It's like one in 10, right? So for every barrel or every gallon of oil that you get out of the ground, you have nine gallons of water.

That water comes out of the ground, and we put it back in the same ground which it came from. So that's why it makes no sense to me that we have all of these. I don't want to say restrictions and all this stuff that takes place, it's because we extract it from the ground.

It's coming from the ground, and then we put it back in the ground after we extract the oil that we all use every single day, 1.8 million barrels of oil every single day the state uses. And I just got a report that we bought 660 million barrels from Iraq. Iraq. They hang gay people, LGBTQ people, and they still do open-air flaming. So will that causes cancer, which we abandoned decades ago.

So I don't get why we continue to restrict the production here, where we do it under the most safe and environmental processes ever, and then we import the oil that we need from countries that have no voice when it comes to women or LGBTQ communities, when there's a voice in this building for women in that population, and that we have no control over the environmental processes that they have.

And when you look at this exemption for the aquifer that you're looking at or eliminating that, it actually doubles down on an aquifer. Several aquifers in my district that already have gone through the CEQA process, already have an aquifer exemption, already are operating under the strictest environmental policy ever. And then you want them to re-go through it to shut down that those.

It basically shuts down facilities until they can produce these class two certain wells that are defined under existing federal law, and they've already gone through the most stringent process ever. Again, I'm not talking about the one well next to your school district or decorated like a palm tree down in Orange County. I'm talking about the factory floor and every piece of legislation that you introduce for your community over on the coast.

It makes me wish the oil industry never even drilled on the coast because it affects the Central Valley, where we produce the majority of the oil that is used by your constituents and everybody's constituents on this dais. And it affects my district with a huge negative impact when it comes to employment, economic security, and all the stuff that we do to produce the energy that you guys use every single day. It just throws one more hurdle into our ability once it's already done.

And so I strongly oppose the bill.

Thank you, Senator Grove. Senator Dahle.

Thank you for your report, but I just quickly, I want to ask. The word potential is, I think, significant in this conversation because. But has there been one. Has there been an instance where we actually had contamination by the oil industry to groundwater, to a water source for communities?

I don't have that information. That would be a question for the agencies involved. But I guess what I would like to emphasize is similar to what CEQA is all about. We want to have this analysis and information and public input before decisions are made. If there is an aquifer exemption that's already been approved, it will not be affected by this legislation. If there is a pending aquifer exemption, we want the analysis to be done. We want the public to have it.

The information I'm giving you has not come through a public process. That's just because I work for a law firm and we did Public Records Act requests. So if there's a proposed aquifer exemption and it goes through the environmental review and there's no impact expected, then the proposal can be approved. But we want to make sure that that analysis is done before there's a problem. Because once there's a problem, it's too late.

And it looks like the opposition witness may want to say a few words. Would you like that?

Yeah, that'd be great.

Thank you, Mr. Chair Paul Deiro, representing Western States Petroleum Association. I'm unaware of any aquifer exemption that has resulted in drinking water groundwater contamination. If that has occurred or had occurred, that well would be shut down. A couple of things, one of which is aquifer exemptions. Oftentimes we will drill through an aquifer that is potentially drinking water. We have existing mechanical standards to drill through those aquifers.

The aquifer exemption is down at the bottom where we lift up hydrocarbons, water, natural gas, separate out, and then re-inject what we brought up back down into the reservoir. Other than that's the process.

I'm sorry but I just wanted to set the record a little straighter than that, because there have been instances. I mean, this is why we have an entire EPA process and an overlay from the state now and the settlement. I'm going to cite a 2019 waterboard study that looked at the elevated levels of arsenic, barium, and boron in water supply wells in Kern County. So that's one example. And I would just know there are many others.

There are several adjudicated groundwater monitoring plans from other areas that were from unregulated fracking after we stepped in. 2015 report on CCST also has information on that. So just for the record,

I wasn't done yet.

Senator Dahle, my mistake. Senator Dahle, you can proceed.

I just want to say I'm not going to be supporting the bill day. I'm going to dig in. I got a lot of blowback for supporting Pavle's SB 4 because I was concerned about drinking water and groundwater that is palatable.

I'm not so much concerned about what we take out of contaminated water way deep, lower than our aquifers and putting it back in there if we're extracting a resource we need. But there is a lot of area here and I am not aware because I sit on the committees where we talk about Cal GEM and I am really frustrated with that whole process.

And I know that we need to do something about getting them out there and actually doing the abandoned wells I think are more important than the wells that somebody is responsible for. So I just want the record to be straight. To my knowledge, no drinking water by oil production has been impaired in California. To my knowledge. If it has now the arsenic and the boron, which naturally occurs in some of these drinking water sources. So we're splitting hairs here.

But at the end of the day, somebody's being blamed for something they're not doing. And if there is a problem, I want to be able to address that. And that's something we've been trying to do at Cal GEM, which we haven't been able to get done. So thank you for this report. I will read it and I'll get another opportunity at this bill coming soon. The details matter on what we're going to do.

I think you're in the record. Senator Grove.

Just for the record, to address the comment that my colleague made from I believe, Malibu, Simi Valley, Senator Stern made a comment just now that says there is evidence, there is no evidence that arsenic was, that all of that was attributed to the oil industry or none of it? None of it was. And so to make a comment that says the oil industry attributed arsenic and all these other things to the water in Kern is completely false and an outright lie.

Again, defending an industry that provides second-chancers jobs and you guys just trample on it. And it's something you use every single day. And I agree with my colleague in Bieber somewhat. I don't believe it's Cal GEM that's having that problem. I'm not trying to defend Cal GEM. I'm just saying that they are charged and it was funded by industry to be able to address the aboriginal and abandoned wells.

But the restrictions that this body that passes to regulate the Cal GEM and the way they do things take shall it witness for a purpose. So you used to be able to go out and do an order for an abandoned well, you would do the plus site plan, ou would plug it, you would fill it with cement, you'd top it off, and then you would get a permit that said it was done correctly once you submitted all the information.

Now people go out, they dig a hole, then they wait five days for Cal GEM to show up in order to shall witness the hole that was dug. Then Cal GEM drives home because they don't work overtime or spend the night, and they come back to Sacramento and then they fill it with cement. Then Cal GEM comes back out five days later while the crew is sitting at home and says, oh, yeah, they filled it with cement.

I mean, it's just absurd to think that we have to go through that process. But that is not at Cal GEM's, you know, action. It's the action that was passed by this body.

But going back to your this and addressing the comments that my colleague made, there is not one, not one example that you can point to in that report or from anybody's, even the own Committee consultant, not to throw her under the bus, but there's not one time that you can say that this, that the oil companies in this state have violated or contaminated drinking water. It's just not true. And to say that is just an outright lie.

Yes, I would like to close. There's a lot said. I don't know how much of it was a question, but I want to be clear that the bill requires our state water resources board to make a determination, aquifer exemption in public and require CEQA. That is what we're adding to this.

And I think that it's coming to you because we believe that the potential in leaks is, is significant enough to contaminate drinking water, which we don't have enough of in this state, particularly in certain communities, that we believe that we're bringing this to you because that is needed and that is an extra protection. So I also want to just say something about how we view the lens. The comment was made multiple times that in certain districts we don't understand the issue. We're not talking about one well.

Cat Canyon is not one well, it's 700. And while I appreciate that we all have a different lens based on where we live, that lens does not actually determine the full scope of the issue. And I think actually is a demonstration that there's a lack of understanding of what oil production, extraction, and transport looks like in different parts of the state. So I've been to the Central Valley multiple times to see different aspects of the oil production.

And certainly I just want to make sure that folks are not, you know, that the work that we bring and the fact that we believe that drinking water is really important and we don't want it contaminated, that where we live and where we bring, the perspective we bring is not used as an issue to try to determine that we don't understand the issue in a particular way. So with that, I respectfully ask for an aye vote.

Thank you. Do we have a motion on this? We have a motion from Senator Stern. The motion is do pass as amended to Environmental Quality. Assistant, please call the roll.

And this is for SB 1304. [Roll Call]

The count on that bill is 6-2. We'll put it on call. And you are last on deck.

The last one.

Senator Limon. SB 1433. You can proceed when ready. And also, just want to make a note to the Members who are not here. This is our last Bill, so if you could please show up so we can vote on this, that would be great.

Thank you. And I want to thank again the Committee for their work on the spill. The California Energy Commission has projected that we will need 52,000 energy storage capacity by 2045 to meet electricity demands. To reach this goal, we will need a variety of types of energy storage, large and small, across the state. The state has nearly 39,000 idle wells.

This Bill would create a pilot program, particularly to study the use of gravity wells and how this technology may be able to take advantage of idle wells to create more energy storage. It will allow the permitting of gravity wells, with appropriate testing and reporting afterwards, to determine the impacts of this new technology. I have with me today Kemp Gregory, co founder and CEO of Renewel Energy, to testify in support of the Bill.

Happy to be here. Thank you, Senator Limon. Like she said. Good morning. My name is Kemp Gregory. I'm the co founder and CEO of Renewal Energy. Three years ago, I moved my family here from Texas because California is the most innovative and forward thinking state in the country when it comes to addressing climate change, and I'm here today to support SB 1433. This Bill could facilitate a new technology capable of helping the state with two intractable and local environmental issues.

First, California's ambitious renewable energy goals necessitate a dramatic increase in energy storage. Second, at the same time, the state has one of the highest numbers of idle wells in the country. That 39,000, all of which need to be remediated in order to prevent additional negative impacts on the environment. When you increase that number by the count of orphan wells, it goes to 44,000 wells.

Unfortunately, without significant change to the current idle well management code, today's idle wells could become tomorrow's orphan wells, which is a significantly worse scenario for the sake of semantics. Idle and abandoned, same thing. So this Bill provides a two in one solution by repurposing idle wells into gravity based energy storage systems, or gravity wells, as Senator Lemong called them, sealing off the hydrocarbon reservoir and cleaning up wells in the process. In short, fewer idle orphan wells, more energy storage.

When we transform an idle well into an energy storage system, it does so with unparalleled environmental protections. Every well we convert will feature our best in class environmental monitoring, providing the transparency sought by many constituents. With continuous methane sensors and mechanical integrity monitoring, our technology is able to detect system issues that might impact air or water in real time and long before a scheduled pressure test.

By repurposing oil and gas infrastructure, California is building upon the progress of the last century to create create the clean energy storage of the future. And we can do this using the same hard hat wearing workforce that the oil and gas industry that maintain the oil and gas industry today, inviting them into the clean energy transition with zero retraining. The pilot program established in SB 1433 gives companies like renewal a clear regulatory framework in which to operate.

Without it, the regulatory barriers to innovate are simply too difficult to overcome. This pilot program also allows the opportunity to prove the technology commercially, get feedback from stakeholders in the process, and establish proper channels for reporting operations. It's worth noting that our first large scale commercial device installed on a single well is in Senator Grove's district as well. Where I live. I live in Bakersfield. In summary, let's deliver the future. Californians deserve more jobs, more renewable energy, and one more powerful solution to protect our environment.

We appreciate Senator Limon's willingness to work with us on this concept and for her longstanding leadership on the idle well issue. On behalf of renewal, I ask the Committee to support this legislation so that California can continue to lead the nation on energy storage, innovation, and climate change mitigation. I'm going to take a seat right here just in case there's any questions.

Thank you so much. Others in support? Sorry, lead witness or. Yeah, please, just support.

Hello. Emely Garcia with NRDC and on behalf of CRPE, as well. In support.

Great. Thank you so much. Any others in support? Seeing none, we'll turn to opposition. Two minutes. Thank you.

Thank you, Mister chair and Members Paul Deiro, representing the Western States Petroleum Association. We don't have a problem with a gravity well energy storage program or the regulatory structure created by this Bill. However, there are two provisions that we believe are unrelated to the establishing the regulatory structure for gravity well energy storage program, Section 3106.1 and Section 3200.5, which would effectively limit what we can do with idle wells. Oftentimes we will use idle wells for other purposes, even water wells.

We will use the idle well for water wells, air compression wells and other uses. We believe these two provisions specifically limit us from doing that, and it's unnecessary for the inclusion in the Bill and unrelated to the content of the regulatory structure created by the Bill. We have reached out to the author's office about this and hopefully there will be some reconciliation. But today we have a strong opposed, unless amended on the Bill itself. We need these two fixes for us to remove our opposition. They're very limiting. Thank you.

Thank you. Do we have any other opposition witnesses in the room? Seeing none. We'll bring it back to the Committee. Do we have any comments or questions from the Committee? Senator Grove?

Thank you. Thank you, Mister chair. The Bill on gravity based energy storage, the pilot program, that's a great piece of legislation. You look at it. I don't have an issue with that at all. It's only going to operate during the daytime because of solar and when the sun goes down. But it's a way to effectively use some of these idle and orphan wells. I think that is good policy. I share the same concerns as the. The opposition.

Under 31.06, it says the supervisor, which is Calgem, shall not authorize or allow the use of a well or hydrocarbon reservoir for any purpose other than explicitly provided in this subdivision. So that eliminates turning orphan wells into water wells, it eliminates carbon capture, it eliminates energy storage and all these things that we are trying to innovate and work with. Lorelei Oveat, one of the greatest plans planning directors in the entire nation probably, but it eliminates everything that we're trying to do.

Convert these welds into something productive. Because again, under 3200.5, it says, except provided in this division, the owner operator of the well shall not operate or allow the operation of a well for any other purpose than the production of oil and gas and directly related activities. That has nothing to do with what Greenwell is doing. That is totally separate from any gravity based energy storage pilot program.

So although the gravity based storage energy pilot program is good legislation throwing these two provisions in there to stop any other operational use of those wells is. And it's not even connected to energy based storage. I have a huge concern with. So stating my concern, is it your intent with this legislation to. To instruct Calgem, again, under the authority of this Legislature, to not allow any hydrocarbon reservoir whatsoever for any other purpose except for what Greenwell is doing in the state?

What is currently in there is what is currently in definition, and we're willing to work with the opposition because we took what was in current definition. So that's what's happening.

That's not in current definition. It is.

Sorry, my consultant just whispered that it isn't current.

So we took current definition. We are not adding anything new. We took current definition and we put current definition in this spill. And we are willing to continue the conversation with opposition because this is the current definition. So it's a change.

Okay, so I see what you're saying. It's the current. It's like splitting hairs. It's the current definition on underground storage. Storage. But you're saying you inputted this current definition into the Bill. Into the Bill, which it was. But then you're saying on the next. On the next sentence that it's only going to be used for gravity based energy storage, like green, because that's what the bill's about.

I mean, so we weren't on a. This Bill was not designed to give, authorize other things. So we just took existing law and built off existing law for purposes of this particular pilot program. And so I think there has to be additional conversations about other aspects of existing law that the opposition needs to look at. But just to be clear, the reason that it is written in the way it is is one that we extracted and we're building off existing law. And we only intended this to be for this, I cannot speak to other purposes because we just took existing law.

But what you did when you took existing law and you said that existing law, the supervisor, again, caljam shall not authorize or allow any other use of well. Of hydrocarbon reservoir for any other purpose except gravity based energy storage well pilot program. So that's where the rub lies. Do I think that the gravity based energy program is great? I do.

I think it's a way that we can use and turn something that's not good in the state, like an orphan idler, abandoned well, or a well that's not being used into something good. But to say that that's going to be the only thing that we're going to use it for is not right.

The law currently says it's the only thing. And so we're trying to.

It doesn't.

We took existing law and we're happy to continue the conversation working with opposition.

And if I might just interject in talking with staff, I mean, I think the intent is not to do your interpretation. So if that is, and the staff has worked closely on this, and I'm assured that right now CAlGeM does have significant authority. But if it is not the case, I would just. I was going to say this in my close, but this is clearly a work in progress and it's probably going to have additional refinements as it moves forward.

And we will Reserve the right to rehear the Bill if it does change significantly. But if that concern, as expressed by you and WISPA, is one that is manifest and not, and our staff is incorrect, I think we'll have to continue amending and considering that issue.

I appreciate the chair's comments because the way, like I said, I realize that you've used existing law. Right. But existing law doesn't. Existing law used two paragraphs of existing law and then you inserted gravity based energy storage. And the way it reads in the legislation is that the only thing that's going to be used for. And so I appreciate staff's comments.

I appreciate the chair's comments that you'll address this and hopefully that if this gets to the governor's desk the way it is, that Calgem will not determine it or see it as well. We're just following legislation that says you can only use these wells for green gravity based energy storage. And that's it. Because that's the way the Bill reads right now. So thank you.

Thank you, Senator Grove. Any other comments, Senator Stern?

Okay. Yeah. Just to add some further correction or clarification of the record, I think we're conflating well types here, and I'd be curious to even follow up with industry here. But the class two wells are the oil and gas wells under UIC that we're touching here. If you want to convert that well to capture carbon or sequester carbon, you have to go get a separate permit from EPA under class six.

So this does not restrict an oil and gas company from pursuing a class six permit. It does, however, prevent an oil and gas company from getting around that EPA permitting process and wedging that into a class two process. So what I don't want to see from this Committee is some backdoor way to undercut the existing EPA permitting process. So I just want to be clear that refinements should only be pursued here if necessary. I'm not willing to go off the cuff with my good colleague.

Here's quick reading of the statute, which is not actually accurate. So, just for the record, we're talking about class two oil and gas wells, not class six wells being restricted, and I think that's pretty clear in the Bill. I would move the Bill also at the appropriate time.

Thank you. Any comments, other comments or questions from the Committee? Okay, yeah. And I just want to emphasize in my close or my comments here that this is clearly a work in progress. It ambitious Bill. It has the potential, as the analysis notes, to be a win win win. But there's a lot of details to work at. So I appreciate the author working closely with staff, and I know and hope you'll continue working with stakeholders to address some of the concerns that were raised as it moves forward with that. Would you like to close?

I respectfully ask for an aye vote.

Thank you. All right, we have a motion from Senator Stern. Do press to environmental quality. Assistant, please call the roll.

[Roll Call]

The vote count on that is 8-0 and the vote. The Bill is out, and we will now open up the roll on bills that are on call. So we'll start with the consent calendar. Assistant, please call the roll for the consent calendar.

[Roll Call]

The vote on that is 110. The consent calendar is approved. We'll move on to file item number one, SB 951. Assistant, please call the roll.

[Roll Call]

And with that, we are concluding. Thank you, everyone, for your patience and cooperation. We concluded the agenda. The Senate Natural Resources and Water Committee is adjourned.