Senate Standing Committee on Governmental Organization

Good morning. The Senate government organization will come to order. Before we begin, I need to announce that file item number one, SB 984, Wahab. And file item number seven, SB 1179, Durazzo, have both been pulled. With that, there is no quorum. We know that. And we are going to start as a Committee. Subcommitee. Excuse me. Thank you. And we are going to. What item number is that? Item number 19. The only author in the house is me, and so I'm going to do that. And Vice Chair Wilk will take over the Committee.

I adjourn this Committee. Can I go home? What's the recommendation on this Bill? No, no, no. But is it code? Any. Any amendments? I'll give it to you. Bear with me, Mister chair.

I didn't hand you all the tools.

No, you did not, but that's okay. Okay, this is file item 19, SB 896, by our illustrious Chairman, Mister Dodd. And the motion is do pass as amended, to the Judiciary Committee, which I will see that Bill again next week. With that, the floor is yours, sir.

Okay, Mister chair, I'd like to begin by accepting the amendments noted on page 14 of the analysis. The AI Accountability act ensures that state agencies advance safeguards around AI by incorporating and building upon recent Executive orders focused on the government use of these new technologies. By President Biden, Governor Newsom. When used ethically and transparently, generative AI has the potential to dramatically improve service delivery outcomes and increase access to government programs.

However, just as humans have explicit and implicit biases built into our society, AI has the capacity to reflect and amplify these biases. This Bill provides further guidance to state entities and establishes guardrails while creating a framework for states, the state's procurement and application of generative AI. Additionally, this Bill requires the creation and regular updating of benefits and risk of generative AI report and requires state agency coordination with and support for the government workforce in preparing for the next generation of AI skills needed. Respectfully asked for your aye vote.

Thank you. With that, do you have any primary witnesses?

We're doing this one on our own.

Seeing none. Anybody in the room that cares to weigh in on support? Okay, seeing none. We'll go to the negative side. Anybody here in opposition? Are you taunting me? Yeah, you're taunting me. Okay. All right. With that, we'll pull it back to the Committee.

Senator, ready to move the Bill when the time's right?

That sounds. I do have one question. Did you. Did you write those comments? Did your staff write those comments? Or did artificial intelligence write those comments.

Unlike last year with the first Bill that was written by AI, I was going to mention the company name, but nevertheless, this one was completely written by our team.

Okay, very good.

It's authentic.

With this Bill. Support Support. I have no questions myself. If you'd like to close,

Respectfully ask for your. aye vote when appropriate.

Thank you, sir. Staff, find your authors and get them down. zero, I see an author right over there. I'm no longer chair, so I'm not going to call you up. He's going to have to call you up, but I would go up there if I were you.

Senator Niello, welcome. You have item number five, SB 1104?

I do. Well, good morning. Thank you, Mister Chair and all of the members who are here right now. I'd like to begin by stating, as Senator Dodd did for his bill, that I accept the suggested Committee amendments to add a 10 year sunset clause.

SB 1104 establishes the Office of Regulatory Council to serve as a centralized entity that will draft regulations for the Executive branch agencies in a similar manner that the Office of Legislative Council drafts legislation for the Legislature. We're all aware of the work that the Legislative Council does for us in drafting bills. Over time, deputies develop expertise in their respective areas and provide the necessary guidance we rely on to pass statutes. However, there is no similar office for the drafting of regulations.

Drafting clear regulations is really no easy task for staff who are untrained to do so, especially considering that there are 600 to 700 proposed regulations annually. The number one reason why the Office of Administrative Law rejects proposed regulations is lack of clarity. This is largely because most of the staff of state agencies are not trained specifically in drafting regulations. Establishing a centralized entity to write proposed regulations for state departments will reduce misinterpretation and errors while providing easier compliance and streamlined enforcement.

We are attempting to help the Executive branch with this measure. I'd like to introduce Chris Micheli, who proposed such an idea in an article that I read about, which was the impetus for this bill, and Michael Miller, with the California Association of Wine Grape Growers here to testify. Good morning. Is it on?

Good morning, Mister chair. Chris Micheli, on behalf of the Los Angeles area Chamber of Commerce, in support of the measure, I think the author expressed the main reasons for having such an office of regulatory counsel. Two questions I know that have been raised include why in the governor's office? While we have a what we call a plural executive and a number of independent agencies, those 200 plus rulemaking entities in the State of California are primarily line agencies, meaning they are reportable to the governor's office.

So sort of like we have no biz in the office of tribal advisor. It's most appropriate, since most regulations are drafted by those line agencies, for this office to be housed in the governor's office. The second question is potential funding or impact of it. Candidly, it probably wouldn't take more than a handful of attorneys to draft those 500 to 600 regulations each and every year. And hopefully we would have that cadre of lawyers already in state government.

You could simply move those individuals over to that office of regulatory counsel. Thank you.

Thank you, speaker. Morning.

Good morning, Chair and Members. Michael Miller, California Association of Wine grape growers. I'll try to be brief. Senator Niello has made a good case for why we do this bill, and I echo the comments from Chris Micheli. In short, when we work with agencies on regulations, we always want regulations that are clear on their face, that are understandable, that don't conflict with other laws, and that are workable, something that we could actually work with and make it accomplish the goal of the regulation.

One of my most frustrating experiences is when a regulation is proposed and the agency says it does XYZ. And then we sit down with lawyers and we get the lawyers with them and they say, no, it actually does ABC because of these other provisions of law that it conflicts with and how it all fits together.

We believe that if you have this office created by this bill, that those kinds of legal issues can be resolved, because we're not actually talking about the policy proposed by regulation, but we're talking about how it's drafted, what it does in law, and how it works with other laws. Imagine if you didn't have the Office of Legislative Counsel. Someone comes to you with a bill idea and you don't have the lawyers to write it up.

So you write it up yourself, you put it in place of law that you think works best, and then you go to Committee and you find out, zero, actually it conflicts with other provisions of law. And you learn that in the committee process. The problem with the regulatory process right now is that they don't have the lawyers outside independent lawyers, and they don't have the independent Committee analysis that you have in the Legislature.

And that's why we have so many conflicting regulations that we think that this bill will help address and avoid. Thank you very much for your time.

Thank you. Any other witnesses and support, please state your name and your organization, please.

Mister Chair and Members. Contractors Association. We support this bill. Thank the author. We see this as the good governance bill of 2024. It's so needed. And we see cost savings at the end of the day, because if you can form interpretation of law and writing this, you're going to save all these attorneys and all these different agencies, you're going to actually have a cost saving. So thank you very much.

Dennis Albiani I'll be on behalf of the family business Association. We support.

You're a pro.

Okay, anybody else wishing to speak and support? Anybody wishing to speak in opposition? Seeing none, we'll turn it back to the Committee here. Senator Wilk.

Yeah, I'd love to make a couple comments. So in a previous life, I ran a trade association and we worked so hard to get legislation passed. And then when the regulations came out, that's not what the bill was supposed to do. So I think this is a great idea. I also, the chancellor of my local community college I used to be a board member of. She has a whole PowerPoint presentation on conflicting regulations for community college districts.

So they do all kinds of stuff that's in violation of other provisions. And it's just absolutely ridiculous. And I don't know why we haven't done this sooner. I guess it took a common sense CPA to come to the Legislature to clean our mess up. So.

As well as Professor Micheli.

And since I just found out, obviously Mister Walker didn't read all my bills. So I don't know if this is the top good governance Bill of the year, but I would love to be at it as a co author if it gets amended along the way.

Thank you.

Thank you.

Anybody else?

No, I thank you for the conversation and clarification. I guess my question is kind of following up on your point, Senator Wilk. Why wasn't this done sooner and what have we been doing?

Well, I'm just a freshman, right? So without history, I don't know. But when I read this in a newsletter that Mister Micheli had several months ago, my Chief of Staff and I were talking about it and wondering the very same thing. It really makes complete sense now. The Governor has shown a reticence to sign bills where the Legislature kind of is dictating to the Executive branch.

I'm hoping he doesn't view this this way because I think it's making the Executive branch more efficient and more effective. Both. But I would agree with the implication of the question and what Senator Wilk said. I have no idea why this hasn't been been done before, but we can fix it. Anybody else seeing none. Would you like to close when we'll vote? When we get a quorum, I ask for an aye vote. Thank you very much, Senator.

And Mr. Chair, I'm happy to move the bill when it's appropriate.

Okay, thank you. Oh, so we're going to move to item number 16. That's SB 1088. Good morning, Senator Alvarado-Gil.

Good morning.

Please proceed when you're ready.

Thank you so much, Mr. Chair. I'm here to present Senate Bill 1088. This bill would establish the Rural and Small Community Fish Resilience Program within the governor's Office of Emergency Services. This program will work in coordination with the Department of Water Resources, the State Water Resources Control Board, and the State Fire Marshal to develop a system for the distribution of state matching funds to communities within the Wildland Urban Interface, or the WUI.

The Wildland Urban Interface is the line area or zone where the structures and other human development meet or intermingle with underdeveloped wildland or vegetative fuels. California's rural communities have been ground zero for large scale environmental and economic devastation during the past decade due to these wildfires. Aging infrastructures combined with insufficient resources to prepare for adequate wildfire response has left many of the rural communities at risk for further unchecked fire activity. Communities in the Tahoe Basin in my district serve as a prime example.

Where most of the water systems were developed between 1930 to 1950 to serve only seasonal cabins, significant portions of the basin are still served by a patchwork of small and geographically isolated water systems that lack the capacity to combat wildfires. Senate Bill 1088 would provide more state matching funds for wildfire defense, improve our water infrastructure, and protect our rural communities. Here to testify and support is Justin Broglio with the North Tahoe Public Utility District.

Good morning.

Good morning. Thank you, Senator. Justin Broglio, on behalf of the Tahoe Water for Fire Suppression Partnership in the North Tahoe Public Utility District. I think the Senator said it well. This bill creates an avenue for California's rural water providers to seek matching funds for critical water system improvements to protect our communities. It's in these communities where our first responders, and often our friends and neighbors, take on the firefight with local knowledge and local resources. Those resources include small municipal water supplies.

It's in these communities where our water providers are also significantly challenged with outdated, undersized, and underbuilt water systems. In California, there are numerous programs helping WUI communities fund forced health projects and supporting homeowners with fenceable space. However, there are no such funding programs for projects that improve water infrastructure for fire suppression. Additionally, the small rate bases of our rural communities make it impossible to finance these projects with rates alone and additional resources.

And then Senate Bill 88 would also allow wounded communities designated in high and very high fire hazard severe zones to seek these funds specifically. Thank you very much.

Thank you. Anybody else wishing to testify in support of SB 1088?

Good morning. Steve Walk, on behalf of the California Tahoe Alliance here in support of the bill and urge you to vote aye. Thank you.

Thank you.

Good morning. Dylan Finley on behalf of the Sierra Consortium in support.

Thank you. Anybody wishing to testify in opposition to this bill? Seeing none, we'll bring it back to the Committee. Any questions? Comments? Seeing none. When we have a quorum, we will vote, but would you like to close?

Thank you. I just want to point out that because we are in a a deficit year, Senate Bill 1088 is contingent on funding being appropriated pursuant to a bond measure on the November ballot. The measure is Senate Bill 867, authored by our colleague in Santa Monica. In that bond, there is funding dedicated to this type of program. So my bill is codifying this program to distribute those state matching funds. When appropriate, I would ask for an aye vote.

Thank you, Senator. Okay, we're going to move to item number eight. That would be SB 1325. Senator Durazo, over here. Good morning. Please proceed when you're ready.

Great.

Get your breath.

Okay. Thank you, Mr. Chair and Members of the Committee. SB 1325 simplifies the public contracting process for state and local agencies by creating an authorizing statute for best value procurement. The Legislature has frequently authorized the use of best value procurement, but on an ad hoc basis for specific entities and contexts. This causes confusion and administrative burden. Some agencies have explicit permission to utilize best value procurement, while others do not, and some have authorization, but only under specific circumstances.

In our budget sub five hearing last month, Caltrans commented they really liked the best value method. It ensures quality of the product as well as quality of the jobs. The ad hoc contracting authority, which is often done in very different sections of state code, makes it difficult for agencies to understand if they have the authority to adopt best value procurement models. SB 1325 empowers cities, states, and public agencies to use our public dollars to create quality products and quality jobs while advancing equity in our communities. Thank you. And today I have Elmer Lizardi from the California Labor Federation here to testify.

Could you excuse me? We're going to establish a quorum right now, if that's okay.

Yeah.

Madam Secretary, please call the roll.

[Roll Call]

Perfect. We have a quorum. Please proceed. Thank you very much. We're speaking now in support of SB 1325.

Good morning, chair Members. Thank you for the opportunity to speak. My name is Elmer Lazardi. I'm here on behalf of the California Labor Federation. First, we want to thank Senator Durazzo for bringing forth SB 1325 and for catalyzing many of the conversations about labor standards that we are currently having in the Legislature, including this one. The California Labor Federation supports efforts to ensure that California is maximizing public dollars by making sure that we can create high quality, good paying jobs that benefit our communities.

By authorizing state and local agencies to utilize the best value procurement methods, we can allow agencies to additionally consider important factors such as community benefits, labor and workforce benefits, and environmental factors to assess the procurement impacts more accurately and to achieve more equitable outcomes in the bid process. The Federal Government will be investing billions of dollars in climate and infrastructure projects in California, and we want to make sure that the jobs that we are creating with these investments are high quality, well paying, and safe.

Without any intervention. We risk spending these public dollars on Low wage and dirty jobs with miniful, minimal benefits to communities. And when we only allow for other bidding options, like lowest responsible bidder, we often see that this is the status quo situations where companies are competing to offer the cheapest bids at the expense of workers and communities. We also know that without clear authority, like the Senator has mentioned, many agencies are unsure whether they can utilize this methodology.

And this confusion is limiting our agencies, especially when we know that best value procurement has already proven to to successfully benefit workers while producing high quality products. By simply giving agencies the authority to utilize best value procurement when awarding contracts, SB 1325 will help agencies advance equity across the board while maximizing public funds at a historic moment in climate and infrastructure investment. For those reasons, we are in strong support and we urge your aye vote today. Thank you.

Chris Rosa, on behalf of NRDC Action Fund in support.

Thank you. Anybody else in support? Anybody in the room in opposition? Okay, we're going to bring it back to the Committee. Anybody wishing to comment or have a question? Senator Ochoa Bogh?

Thank you very much, Senator. Or Mister chair, a couple of questions on this particular great that you folks want to include best practices and so forth on that end. Now is this Bill in lieu of having separate bills with project labor agreements Institute in this is just making this pretty much a standard in the state to have labor based companies be able to bid on jobs? The question I'll let you answer that and then I'll continue with my following question on that.

Well, first of all, this only allows state agencies to use the best value procurement model. It doesn't require. And by allowing it, then the agencies know that if it's brought before them as what they would like to do, then they have the authority to do that, but they're not required to do it. And what they do, the local agencies decide what are the different factors that they want to include in deciding who to award the contract to. And so they have that flexibility.

They don't have to do lowest bidder as the only way they have options. They have the ability to include many factors, quality of the product, quality of the company. There's many different things that they could include in making that decision. But right now we just want to give them the authority that allows them to use the best value procurement on a statewide basis.

Okay. And then I was kind of curious through the chair, if I may ask, a definition of what dirty jobs entail. It was a description that was given that if we don't pursue this particular model, we're subject to dirty jobs.

You want it.

Senator, I was saying that in opposition to the clean jobs that we have seen the Federal Government and the state wanting to put forward.

I'm sorry, one more time.

Yeah, I was saying that in contrast to the clean jobs that the state has been saying that they want to move forward and to advocate for.

Okay. Thank you, Senator. Any other questions or comments? Senator Rubio?

Thank you, Mister chair. I understand why you're bringing this forward. And I think that, you know, as a local Council Member for many years, you know, we were caught sometimes trying to figure out what was best for our community. For example, sometimes we've had companies that were from the community that lived in our community, the jobs were from our community, but we couldn't necessarily pick that particular company because it wasn't the lowest bid. But yet sometimes you want to hire within.

To me, it's about giving options, not necessarily mandating, but that should be up to that community to decide if they can bring more value like local hire and just other things that really help a community move forward. So I think it's important to give that flexibility and allow at least give clarity in terms of what they can do. And again, I know that there's ways of bringing so much local value in terms of good paying jobs, in terms of local hire provisions.

I mean, there's so much we can do. And I think that what you're doing is important because sometimes as local elected or state elected hands are tied in terms of what you can pick based on the value. So I do appreciate that and when appropriate, I'll move the Bill forward. Thank you. Thank you.

Thank you, Senator Smallwood-Cuevas.

I agree with my colleague Rubio, and thank you so much for bringing this Bill. I think in this moment too, of really tough finance and budgeting, both local, county and state agencies, we've got to have options to figure out how we can use dollars, particularly public dollars, as multipliers. This option allows a jurisdiction to really think about the needs and to be very specific. I remember working in community where we were redeveloping a hospital and thinking about the model for what that could look like.

And one of the, one of the community Members who have been part of developing a hospital maybe five or 10 years before that, talked about how when he drove through the parking lot of that construction site, they were all Nevada and Arizona license plates on those vehicles who were doing that work and what it felt like to be a construction worker in La County and not be able to build the hospital because out of state folks were actually building the hospital. So I thank you for bringing this forward and look forward to moving the Bill when the time is right. And it looks like the time is right, Mister chair.

Ms. Wright. Unfortunately for you, Senator Rubio has already requested that, so I'm going to recognize that, but appreciate you nevertheless. Close second, but I want to let the author close.

I appreciate all the comments, and I hope I answered your questions. And I respectfully ask when I vote for.

Okay, so, we have a motion. Please call the roll.

[Roll Call]

Six to three. We'll leave the roll open. And thank you very much, Senator.

Thank you, Mister Chairman and Members.

So we are going to move to Item Number Nine: SB 1220: Senator Limon.

Thank you, Chair and Senators. I want to--nope, not yet.

Before you start, we want to remind Members that the analysis you have in front of you reflects the amendments that the author has agreed to. You should all have a copy, but just in case, copies are being distributed. With that, Senator, feel free to begin.

Thank you, Chair, and I do want to start by accepting the Committee amendments. As amended, this bill would protect the quality of public services by requiring human workers to remain in call centers for government benefit programs instead of being outsourced by AI. These call centers serve our most vulnerable Californians, enrolling in programs like CalWORKs, Medi-Cal, Healthy Families, and Covered California.

When people enrolling in these programs run into barriers, they are less likely to sign up, which is why we believe that having individuals at call centers is essential to connecting residents in our community to critical services. This bill would ensure that there is no--that there is human assistance available when people call to receive help. Our intent is not to preclude AI from being used as a tool to assist.

Finding the perfect line between protecting workers and not stifling innovation takes some working conversations, and I commit to continue working with the Chair and and the Committee to find the right definition of core job function. With me today in support, I have Ivan Fernández with the Labor Federation, and Kimberly Rosenberger with SEIU.

Good morning.

Good morning. Thank you, Chair Dodd and Members of the Committee. Ivan Fernández with the California Labor Federation, co-sponsor of SB 1220, a bill that will protect call center workers and the public by putting guardrails on the use of artificial intelligence at public call centers. The exponential growth of AI will impact every industry and worker across California. AI can be a very productive tool when used to support workers, not when it's used to replace, control, or eliminate their jobs.

Without worker-centered guardrails put in place, AI can unfortunately be used to exploit, deskill, and replace workers, harming not only the workers of the state, but also residents overall. SB 1220 does not ban the use of artificial intelligence, but rather ensures workers are truly at the center of the procurement and deployment of AI in the workplace. As amended, as the Senator referenced, SB 1220 has two main provisions.

First, SB 1220 prohibits the state and local governments from outsourcing public benefit call center jobs to firms using AI to eliminate the essential core job function of public benefit workers. Under the bill, as referenced by the Senator, public benefit programs include those such as CalWORKs, CalFresh, EDD, Medi-Cal, and also 211 and 988 mental health services, essentially programs that serve our most vulnerable Californians who shouldn't only have to have the opportunity to speak to an AI system.

Second, SB 1220 requires an impact assessment report be produced by an agency that utilizes AI to support their call center workers. The report is intended to increase transparency for workers and would include information such as all the intended uses of the AI system, and it is closure of the data used to produce the outcomes from that system. SB 1220 creates guardrails for workers and ensure AI is used as a tool for call center workers to increase efficiency, productivity, and effectiveness when responding to callers in support. For these reasons, we respectfully ask for an aye vote when appropriate. Thank you.

Thank you. Good morning.

Thank you, Mr. Chair and Members. Kimberly Rosenberger with SEIU California, proud to co-sponsor SB 1220. Call centers are a resource for those that have already hit their breaking point, whether it's difficulty navigating online technology or those for like a myriad of reasons--age, language barriers--that cannot use online services, so they're looking for a human touch.

We believe these are the centers that we need to protect and make sure that there's a human available that has empathy that can navigate those nuances, which is why we're prioritizing those protections. Further, it's consistent with the heart of AB 2508, which was passed in 2012. It's just expanding it to take into consideration modern technology. There is a role for technology in AI, but without workers, we have seen firsthand that its rollout can be a disaster.

For instance, CalSAWS, when it was first rolled out, was a crisis in counties. We saw delays, people being dropped from services, caseloads that usually took a day, tripling, quadrupling, because there was little worker engagement. Through worker engagement and direct interaction, we have helped turn CalSAWS around, and now it's being expanded to every county in the state. So we do believe that there is a balance that can be met there, and we think this bill is consistent with that. We want to see technology help reduce caseloads while retaining the heart of our services and our centers, and for those reasons, we ask for your support. Thank you.

Thank you. Anybody else wishing to testify in support? Morning.

Good morning, Mr. Chair and Members. Ignacio Hernandez, on behalf of the Communication Workers of America, District Nine, which covers California, Nevada, and Hawaii, in support of the bill, and look forward to working with the author on the language going forward.

Thank you.

Good morning. Samantha Gordon with TechEquity Collaborative, also in support. Thank you.

Thank you. Anybody wishing to testify in opposition to this bill, please come forward. Seeing none, we'll turn to the Committee and see if there's any questions or comments. I am--Senator Wilk.

Yeah, I've got a comment. I know in the analysis it talks about this might add additional costs, but from my perspective, it's well worth it. I'm old, so I just recently filed for my federal pension--as you know, we don't get one here--and I was dreading it, right?

Federal government, I got a person right away, navigated me through the process, and was able to accomplish that. And I think it's one of our obligations to our citizens is to make it as easy as possible, so I will be supporting your bill today.

Thank you.

Senator Rubio.

Thank you. I was just going to share the same thing. I think it's important to have human beings behind the phone when you're making such important decisions, and especially, you know, people are calling distressed already. So I was just going to move the bill when appropriate. Thank you.

Thank you.

Anybody else? Senator Ochoa Bogh.

Thank you, Senator Limon. Thank you, Mr. Chair. So I have a couple of questions for clarity purposes. I was reading the bill, and though I understand the component of the human touch per se--I'm a people person, so I hate, you know, when I have these computer, you know, voice messages answering the phone--but how would this play out if this were to move forward?

How would this play out in instances such as--because I'm thinking of the fact that we went through the EDD scenario during the pandemic where it was completely overwhelmed. We did not have the human personnel of workforce to be able to meet the demands that were on EDD, and the system basically broke, and I'm thinking, if we had had the assistance of AI per se, to be able to answer and direct these calls somewhat, it would have been actually beneficial.

So how would this play for in case of emergencies or in case of a demand or in agencies that we just do not have the workforce in place, as we do in many spaces within the state departments?

And if appropriate with the Chair, I'm going to actually have one of our sponsors answer that.

Thank you.

Thank you so much for the question, Senator. So within this current--this is in the contract code--there are clauses within this code section that we are amending that allows for these exact scenarios for emergency disasters to preclude any instances where outsourcing may not be allowed or available. So if there is an emergency, this would be allowed.

So only during emergencies, not when we have shortfalls of workforce?

It's classified as emergencies, so that would kind of be dependent on what's classified as that.

Okay, thank you.

Anybody else? Senator, thank you. Would you like to close?

Members, I respectfully ask for an aye vote.

Okay, we have a motion on SB 1220. The bill has been moved by Senator Rubio. The motion is 'do pass as amended to Local Government Committee.' Secretary, please call the roll.

[Roll Call].

So we have seven votes, and we'll put that on call.

Thank you.

Thank you very much. Senator Padilla, you've got a couple bills, and I know that you have a witness that's ready to get on the road, so we're going to move whichever Bill that person is testifying on. It's fine with me. Which Bill was that?

Thank you. Mister Chairman, with your permission, I'd like to present SB 893. File item 14. Thank you. Thank you, sir. Mister Chairman and Members of the Committee, I'm happy to present SB 893, the California AI research hub.

I begin by thanking the staff for working with us on this bill. SB 893 would require GovOps and Go-Biz and the Department of Technology to collaborate with academic institutions across the state in establishing the California Artificial intelligence research hub. The AI research hub would further research, development, deployment, and the application of AI technology for the public good by facilitating access to computing resources and data for academic institutions. Public institutions and interests, as well as developing workforce development opportunities, as we've heard many times in this Committee.

And I'll emphasize here again the tremendous impact that AI will have as a tool, and it stands to change our world in ways we haven't seen since the beginning of the Internet age. At the same time, it's important that research and development around AI be guided by strong principles and guardrails, and protect privacy, advance security, and address risks and potential harms to society. Today, private entities and portfolios such as Google, Microsoft and Meta have led the research and development space in AI technology.

And this is in large part because this development of this technology requires vast amounts of resources and capital, not to mention capacity in a technological sense. By default, the innovative development and discussion in this space is dominated by for profit private sector entities that own the majority of this portfolio. And I do not insinuate here that that's a bad thing. I simply, as is reflected in this bill, propose that something is missing.

There is no way to match this financial might that these entities have on the frontier and dominating this space alone. Our state, California, has the world's premier institutions of higher learning, led by some of the greatest minds in this field. Their talent is formidable and can you imagine if it were properly harnessed and integrated into this space?

California, with our vast network of institutions generating research for the public good, can be at the forefront of development and research of AI technologies and ensure that we maximize benefits for the public good.

We also have a market advantage as the fourth largest economy in the world, and we can use this market position and power to influence this market to help lead in the development of ethical and responsible AI technology that centers the public interest by addressing the gap in computing resources, facilitating access to data, and harnessing the power of our world class network of research institutions. We can't afford to cede this space to other states, and we can't afford to let this space remain undemocratized.

This is an opportunity, with the establishment of the hub, to blend our economic talent, our best and brightest voices in the public interest, with some of the leading edge private sector pioneers in this space. And that is what the establishment of this research hub would do. With me today is Russell Wald, Deputy Director of the Stanford Institute for Human Centered Artificial Intelligence. Thank you.

Good morning. Thank you, Senators, I come before you today on behalf of Stanford University in support of SB 893, the California Intelligence Research Hub. Much of the foundational work that has led us to this moment in AI came from academia in fact, 82% of algorithms in use today originated from universities and nonprofit groups supported by government funding. Historically, academic research in partnership with government has anchored the American innovation ecosystem. Technological advancement often requires investment in long term research that may take decades to show any commercial potential.

However, with some government support, universities have been able to engage in high risk research that, in the long run, yields world changing results. Indeed, many technological advances that are now critical to life, such as GPS, MRIs, and even the Internet, can trace their origin stories back to research that was done under this model. University research is curiosity driven and pursued with the long term interest of society in mind, meaning that there's a strong return on investment that the government makes into academic research.

However, significant technological advances in AI has created a fundamental shift in where research into the frontier AI technology is occurring. Research into the latest AI models require significant investment in compute power and access to quality datasets, which, at the moment, only private companies possess these resources. While industry research is important, that is just one needed perspective. Addressing the resource gap is essential to ensuring we make holistic advancements in AI that benefit society at large.

In the case of AI, enormous amounts of data are necessary to properly train models, and government data can be enormously beneficial in that training, particularly in certain industries such as healthcare, that the government has outsized equities in. Currently, there is a strong bipartisan support in the Federal Government for a national AI research resource, which would provide both computational resources and access to government datasets for University research.

While we're excited by the efforts at the federal level, we also believe that AI research would greatly benefit from government at all levels taking steps to support these resources. There are few places better equipped to do this than California. California is uniquely positioned to spearhead the development of ethical and responsible AI technologies that prioritize the public's interest. As Governor Newsom's Executive order on AI last year articulated, California already has many pieces in place which will make it a leader in AI development.

In addition to having over 80% of the top AI companies based in the state, California's private and public research universities serve as key pillars to the powerful research and innovation ecosystem that exists here. California universities have always played an essential role in the development of new technologies, including in the fields of deep learning and other foundational principles that have made it possible for AI to develop to where it is today.

It is only fitting that California educational institutions play a leading role in creating the next chapter of AI development. For this reason, Stanford is supportive of SB 893. With the right investments from the state government, including providing compute power and greater access to state data. California is well positioned to leverage existing institutions and infrastructure to create a strong public research resource and cement its leadership in AI development.

Public investment into AI research in California will serve as a catalyst for the development of responsible AI around the globe. And I am hopeful that the Committee will move this proposal forward. Thank you. And I look forward to any questions you may have.

Thank you very much. Anybody else in support, please come forward. Affiliation and position only.

Chris McKayley, on behalf of the Los Angeles area Chamber of Commerce, in strong support of the bill. Thank you.

Good morning, chair and Members. Naomi Padron, on behalf of the computer and communications Industry Association, we thank the author for the recent amendments and we're proud to support the bill.

Thank you. Good morning, Chairman Dodd, Members of the Committee, Mario Guerrero, on behalf of the UC office of the President, in support. Thank you.

Thank you. Anybody wishing to testify in opposition? Seeing none. Is there anybody that wants to at the Committee? We're going to bring it back. What's that?

He wants to move the bill, but I have a couple of comments.

Senator Rubio?

Yeah, well, thank you. I really do want to thank the author. This is an area that clearly so society in the world we're struggling with. And it's, I believe, one of the most important things we can do right now in terms of making sure that, you know, we get ahead of the situation. I think that there's great opportunity for advancements. I mean, we've seen like with just technology in general how much it's helped us in so many different ways.

However, it really poses a risk if it goes unchecked and if we don't invest, which is really important. I just read an article from the New York Times this morning that discusses, and I think the title is teen girls confront an epidemic of decrease fake news on school campuses. And now that is the latest way that, you know, women and victims per se are being bullied on campus.

I mean, there's so much to learn and I think that this is the one area where we cannot afford to just let it be unchecked. And so I do believe that we need to centralize it. You know, in terms of creating an AI research hub. It's so important in terms of making sure that we don't let this get away from us. I know social media started many years ago and now we're kind of seeing how far it's gone in terms of impacting our lives.

Personally, I was talk. I had a senior scam stopper event in my district, and, I mean, the seniors are being called by their grandchildren, crying from jail, give me money. I mean, it's just really interesting how, you know, you don't even recognize it's not your family on the line, and they're just scamming these individuals and so many different ways. And our seniors and our most vulnerable are the ones that are going to suffer the consequence if we don't invest. So it is expensive.

It is something that I believe it's worth the investment. And so I really want to thank you for it. Not only do I want to move the bill, but I want to co author this bill. And I hope that we get to a point where we do have all the data we need in front of us so that we can make better policy decisions based on, on information that we've researched. So thank you.

And with that, I think the Senator moved the bill, but I'll add as a co author. Thank you.

Anybody else wishing to comment? Questions? Seeing none. Would you like to close, Senator?

Thank you, Mister Chairman. Thank you, Senator. And I respectfully ask for an aye vote.

Okay, the bill has been moved by Senator Bradford. The motion is do pass to Judiciary Committee. Secretary, please call the roll.

[Roll Call]

The bill has nine votes. We'll put that on call. We'll move back in the order and move to item number 13, SB 892. Where's that on? Yes.

Yes, sir. Thank you, Mr. Chairman and Members. I want to thank you and the staff for working with mine, and I accept the Committee amendments. SB 892 requires the Department of Technology to develop and adopt regulations to create an artificial intelligent risk management standard, and require AI risk management standard to include a detailed risk analysis assessment procedure, excuse me, for procuring automated decision systems, or ADS, analyze specific characteristics of the ADS methods for appropriate risk controls, and examine adverse incident monitoring procedures. Specifically, the bill requires that it does three things.

First, it would assess the risks associated with procuring high risk AIADS, particularly in areas that have a high impact on individuals rights, including, but not limited to, health, education, employment, insurance, utilities, critical infrastructure, public services, and justice or legal services. Second, it requires the development and adoption of a risk management standard that includes assessment, appropriate risk controls, and adverse incident monitoring when procuring such systems.

And third, it would require the engagement and consultation with the diversity of stakeholders, including those most affected by government use of these systems, such as public trust and safety experts, community based organizations, civil society groups, workers, and academic researchers. AI technology that is procured and deployed responsively has the opportunity to revolutionize not just how we administer government services, but our entire economy.

This technology can also pose, however, significant risks to safety, privacy, and civil rights of Californians, especially when it's used to assist or replace human decision making in critical sectors such as housing, employment, and healthcare. As these applications of these systems will be varied, the risk assessment and subsequent risk controls must be tailored and must be unique to the technology in question. This step is critical step as we determine what AI products are safe from government procurement and deployment.

Not only will this strict scrutiny protect the state from liability, but it will also help assure the public that the technology that we are acquiring on their behalf has been assessed with safety in mind. Indeed, we need to implement these risk assessment tests as soon as possible on issues with this technology, which have already occurred.

In 2022, the LAO found that California EDD, the Employment Development Department, procured an automated review of software that flagged 1.1 million claims as fraudulent, meaning workers stopped receiving their benefits at a critical time to them and their families. Ultimately, more than half of those claims, over 600,000, were confirmed as legitimate. The hardship these erroneous findings created could have been foreseen and avoided through proper risk assessment before it was granted access to control a lifeline that millions of families depended upon.

By enacting these safeguards proposed by SB 892, California can set a national standard that drives innovation of AI technology and services while protecting the public from risks posed by automated decision making systems. With me today is Samantha Gordon from the tech equity collaborative.

Good morning.

Good morning, Chairman Dodd and Members of the Committee. Thank you for the opportunity to speak to you about SB 892 and the importance of setting standards for public sector procurement of AI systems. As the Senator said, I'm Samantha Gordon. I'm the Chief Program Officer at Tech Equity Collaborative. Our mission is to raise public consciousness about economic equity issues in the tech industry's products and practices and ensure technology's growth benefits everyone.

We're proud to support SB 892 and this Committee to ensure that as California looks to adopt AI systems and emerging technology, we can build a clear set of standards that can benefit all Californians. In order to make the most of the opportunity that these technologies present and spur innovation in our state services, we must first ensure that we place common sense guardrails around the use of this technology. The public sector is rightly focused on reducing backlogs and improving services for our communities.

And I think in that regard, technology can be really appealing. But we also think it's important to learn from several examples where the rapid adoption of technology, often I'll mention, without serious input from workers and communities, drag the public sector in the opposite direction, creating massive delays, wrongful denials, and very costly problems that then the taxpayers are responsible for fixing. So the Senator just mentioned a key example that I think is worth underscoring and was brought up earlier about EDD.

We saw massive issues during the pandemic of people not being able to access their benefits. And the Department brought on a fraud detection algorithm that, as the Senator said, reviewed 10 million claims. Right. It replaced the work of a lot of humans to move quickly. It found 1.1 million of those were fraudulent. They cut off the workers payments, didn't provide notice to those workers, but 600,000 of those workers' claims were legitimate. And this is not unique to California.

That technology was marketed and sold to 42 states in this country. It's currently the subject of a complaint at the Federal Trade Commission. And we think that's important to say, because as the state of California, we have a massive, massive operation here. We're the fifth largest economy in the world, right?

So we are going to be receiving a lot of marketing of a lot of products that promise a lot of efficiencies, and we want to make sure we are putting really clear standards in place to assess for the risk and not putting that burden on the taxpayers. Another example is recent from New York City. They incorporated an AI powered chatbot meant to provide residents with information about starting and operating a business in the city.

Within five months, it was found that the chatbot repeatedly provided advice to the public to explicitly break the law. So questions like, can I take a cut of my workers tips? Would get an answer from the chatbot that said, yes, you can take a cut of your workers tips, and provided confusing but legal sounding justification for this illegal practice. Or questions about housing, like, do landlords have to accept tenants on rental assistance?

Chatbot would respond, no, landlords do not have to accept tenants on rental assistance, which is, for the most part, a direct violation of a law that said landlords cannot discriminate based on source of income. What distinguishes the public sector from the private actors who develop and sell this technology is that the public sector is responsible for providing services to everyone and ensuring that those services are safe and not going to further harm in our lives. I think all of you know well.

You hear from your constituents regularly. Our communities count on us in some of the most challenging and vulnerable moments of their lives, and they cannot be used as market research or experiments for these private companies who are selling an algorithm. SB 892 recognizes this reality and calls for clear standards for the use of automated decision making and AI systems in high risk environments. And we urge your support. Thank you.

Thank you. Anybody else wishing to testify in support? See none. Anybody wishing to speak against this bill? Seeing none. We'll move back to the Committee. Any questions? Comments? Seeing none. Senator Padilla, would you like to close?

Thank you, Mr. Chairman. Appreciate my witness and respectfully ask for an aye vote.

All right. Do we have a motion? A motion by Ochoa Bogh. Senator, thank you. The motion is do pass as amended to the Judiciary Committee. Secretary, please call the roll.

[Roll Call]

Bill has 10 votes. We'll leave that. We'll put that on call. We're going to move now to item number 11. That's SB 1402. Senator Min, welcome and good morning, and proceed when you're ready.

Thank you, Mister chair. Committee Members would like to start by noting that we'll be accepting the Committee amendments. SB 1402 would require all state agencies, departments, boards, offices, commissions and conservancies to consider the 30 by 30 goals when adopting, revising or establishing their plans, policies or regulations which directly affect land use, natural resource management, water use and quality, and biodiversity conservation. California is home to one of 25 global biodiversity hotspots, but this biodiversity is under threat from climate change, Habitat loss and fragmentation, invasive species, disease, pests and pollution.

Conservation is one of the best tools that we have to prevent further extinctions and protect our biodiversity and ecosystems in 2020. Governor Newsom issued Executive order number n 8220 to adopt a goal to conserve at least 30% of California's land and coastal waters by the year 2030. To ensure this goal remained a commitment for future administrations, last year, I authored SB 337 to codify this 30 by 30 goal into statute.

While California has made critical investments in conservation to further this 30 by 30 goal, it's important that this goal also be rooted in the plans, policies and regulations of our state agencies. Today, I have with me Aaron Woolley, senior policy strategist for Sierra Club to testify in support of SB 1402. Good morning.

Good morning. Chair Dodd, Members of the Committee. My name is Erin Woolley and I'm a senior policy strategist with Sierra Club California speaking today. On behalf of our half a million Members and supporters statewide, I'd like to thank Senator Min for sponsoring this legislation and for the continued support for 30 by 30 California has an ambitious vision of protecting 30% of our lands and waters by 2030 to combat the dual climate and biodiversity crisis impacting our state.

SB 337, which passed last year, codified 30 by 30 as a goal, and SB 1402 builds on that policy by ensuring that goal is also considered by key agencies and other state decision making bodies during processes to update or establish plans, policies and regulations. Acting in silos is not an effective policymaking strategies. State agencies, boards and commissions are already responsible for managing our public lands, ensuring our rivers, lakes and coasts are clean, and protecting imperiled wildlife.

These ongoing efforts can and should, at a minimum, consider 30 by 30 and align with them wherever possible. Some existing efforts naturally align with 30 by 30 goals and can provide important conservation co benefits. For example, as part of the State Water Board's regulatory process to set urban outdoor water efficiency targets, the board has considered how transforming urban landscapes to be more drought tolerant can also help support biodiversity like native plants and pollinators.

On the other hand, failing to consider nature based solution risks, minimizing or missing mutually beneficial opportunities, or setting policies that undermine our progress to achieve 30 by 30. The Legislature and the Administration have made great strides setting policy and providing funding in recent years to build momentum for 30 by 30 in California. But we also need accountability and coordination at the state level to guide strong implementation, and SB 1402 fills that gap.

Accounting for relevant state policies and planning process is a common sense step that will help facilitate transparency and alignment among California's decision makers. With that, we support SB 1402 and urge your aye vote on this Bill today.

Thank you. Any others in support please come forward.

Michael Jarred on behalf of the California Institute for Biodiversity in support of this Bill. Thank you.

Hi Samantha Samuelson on behalf of Mid Peninsula Open Space District December Vibrance Fund, California State Parks Foundation, Audubon California Defenders of Wildlife and California Native Plant Society in support.

Dylan Finley on behalf of the Sierra Consortium in support.

Natalie Brown with the Planning and Conservation League in support. Thank you.

Megan Shumway, a citizen of Sacramento in support.

Any opposition to this Bill? SB 1402. Seeing no opposition, I'll move back to the Committee. Any questions, comments? Move the Bill. We have a motion by Senator Archuleta. And, Senator, would you like to close? You respectfully asked for our aye vote, though. Okay, perfect. That's the way to go. So, we have a motion on SB 1402. The Bill has been moved by Senator Archuleta. The motion is do pass as amended. Natural Resources Committee secretary, please call the roll.

[Roll Call]

Bill has seven votes. We'll put that on call.

Thank you.

Yeah, we're gonna open the. Have we done the consent calendar?

Nope.

You have a motion. Wilk. Senator Wilk. Secretary, please. What's that? Okay, very good. So let's. That's file item number two, SB 1009, Dahle. Item number three, SB 1207, Dahle. Item number 10, SB 1246, Limon. Item number 12, SB 1461, Allen. Item number 15, SB 1044, Seyarto. Item number 17, SB 1214, Nguyen. Item number 18, SB 1407, Nguyen. Item number 20, SB 1215, as a G.O. as is SB 211519. So we do have a motion by Senator Wilk. Secretary, please call the roll.

[Roll Call]

Bill has 10 votes. We'll put that on call as well. We are looking for Senator Hurtado and Senator Skinner. Thank you very much. Which one's it now? Yeah, we'll open up. We'll open up file item number five, SB 1104. Do we have a motion?

Well, only you and I were here, but I said that I would make the motion when appropriate.

You did say that, and it's appropriate now, so it's got a motion by Wilk. Can we call the roll, please?

SB 1104. Motion is do pass as amended to Appropriations Committee. [Roll Call]

It's eleven votes. That bill's on call. Who? What's that? File item number 15, Alvarado-Gil, 16. Excuse me.

Wilk moves the bill.

Wilk moves. So that's a motion. Secretary, please call the roll.

SB 1088. Motion is do pass to Natural Resources and Water Committee. [Roll Call]

SB 1088, item number 16.

[Roll Call]

Bill has 12 votes. We'll put that on call.

[Roll Call]

Bill has 11 votes, so we'll keep that on call as well. And we have. Senator Skinner, good morning. Welcome. We have. Where are we? Item number four, SB 1073. Senator, good morning. And start when you're ready.

Thank you so much, Chair and Members, the purpose of SB 1073, which is before you today, is to accelerate the development of new processes and technologies that, that can result in market available and economically viable Low carbon cement and concrete. So cement and concrete represent about 8% of the emissions, greenhouse gas emissions, totally globally. And we obviously, with our housing crisis, with infrastructure needs, with lots of reasons, look at bridges falling down. We need concrete if we can.

If there is the way to produce concrete that is less lower in carbon, we need it. So what this Bill does, it's permissive, but it allows state agencies to enter into advanced procurement agreements for low-carbon cement. Now, what that does is it tells the market, and it tells those companies that are now producing, or rather developing this, that, hey, we're looking for this kind of product.

So then investors get, okay, there's a market for that product, and there's more involvement then in the research and the technology, and it's more likely that we will then receive products that are low carbon cement, that are economically viable. So if at the end of. So it's a 10-year advanced procurement, if at the end of that, there aren't good products and they don't meet the state's needs and they don't meet our technical specifications, the state does not have to purchase those products.

The Federal Government uses this advanced procurement methodology commonly to try to stimulate investment and to create a market for the next generation of decarbonization and new technologies. In effect, California did the same thing when we passed the Bill that said utilities, we want utility grade battery storage. We didn't really have available batteries at the point that we passed that. Now we're the world leader in long duration, or not quite long duration, but short duration utility grade battery storage, we are the world leader.

California has online the equivalent battery storage of four Diablo power plants. And yet, when we passed the Bill that sent that market signal back in 2010, we had none. So that's what I'm trying to do here. And let me have my witnesses. Simon Brandler from the Decarbonized Cement and Concrete Alliance and Kris Rosa from the Natural Resources Defense Council.

Good morning Chair Dodd and Members Chris Rosa, on behalf of NRDC Action Fund sponsor co-sponsor of the Bill SB 1073 is a permissive and clarifying Bill. It merely authorizes state agencies to enter forward contracts to purchase Low carbon cement and concrete products up to 10 years in advance. Clarifying such authority will remove a key barrier into unlocking decarbonization of California's cement sector. Here in California, cement production is the second largest industrial source of greenhouse gas emissions.

California has enacted legislation, including SB 596, requiring all cement used in California to be net zero emissions by 2045. Complementary policies, including ensuring the state can purchase low-emission cement and concrete, will be required to meet this goal. The US Department of Energy has identified advanced procurement models as a tool necessary to scale low, ultra-low emission cementing concrete ,again, SB 1073 clarifies.

This is a tool that California State agencies can deploy in alignment with the state's cement decarbonization efforts, and this will help bring our climate targets into reality. Thank you to Senator Skinner for authoring this Bill and to the Committee for its thoughtful consideration.

Thank you, Chair Dodd, Vice Chair Wilk, and Members of this Committee for the opportunity to speak today on behalf of DC Two, the Decarbonized Cement and Concrete Alliance, in strong support of Senate Bill 1073. My name is Simon Brandler and I serve as VP for Policy and Public Affairs at Brimstone, an Oakland, California company with a deeply decarbonized process for making industry standard cement.

We helped found DC two, which now consists of 11 innovative, us based, venture backed companies with solutions to tackle cement and concrete emissions. Four of those are based in California. Passage of SB 1073 would mark a significant milestone towards achieving California's climate goals and cleaning up a sector that, as Senator Skinner mentioned, accounts for about 8% of global carbon emissions. Hitting California's climate targets depends on procuring cemented concrete with much lower carbon levels than anything commercially available at scale today.

SB 1073 would clarify the discretion, not the obligation, but the discretionary, of California State agencies to secure sources of these essential materials years in advance. Similar to the power purchase agreements used to develop new sources of clean energy, state agencies could use forward contracts to establish a pipeline of the low carbon materials they need to achieve state climate targets.

And critically, these commitments would also unlock financing for emerging suppliers, allowing them, including brimstone, to scale processes sooner and bring transformational ultra low carbon cement and concrete solutions to the market. SB 1073 would put California at the forefront of a growing national and international effort that includes the US State Department, I'm sorry, the US Department of Energy, and the first movers coalition to use forward agreements, also called advanced market commitments, to catalyze the clean industrial transition for cement and concrete.

We greatly appreciate Senator Skinner for introducing this important legislation and the Committee for its consideration. We look forward to answering any questions from the Committee and collaborating with you on this in the weeks to come. Thank you very much.

Thank you very much. Anyone else here in support? Reminder to state your name, affiliation and position only. Good morning.

Good morning. I'm Megan Shumway and on behalf of Sacramento 350 and Climate Action California, we're in support.

Carolyn Bill Hunter, on behalf of Argent Materials, eco-friendly concrete and asphalt recycling company based in East Oakland, in support.

Aaron Woolley, on behalf of Sierra Club California in support.

Thank you. Anyone in opposition?

Mr. Chair and Members, Scott Govenar, on behalf of the Construction Employers Association, they're the largest union signatory building contractors in the state. They have no issues with green construction. As the analysis notes, many state agencies are specing green materials today. California has the bi-clean, which applies to other materials. That's all well and good. We have the same questions with this Bill that we had with last year's Bill, and it's really operational questions, even if it's permissive. The state doesn't procure concrete we do.

So if the state's going to get into the space of procuring concrete, then you have all these liability questions that have to be addressed. For example, what if the state supplier doesn't show up? Who's liable for liquidated damages? It shouldn't be the contractor. Since we're buying from the state, it's got to be the state. If that product fails again, the state's the procuring entity. They need to be liable for that.

If there's an insufficient supply of that material, the state should be obligated to change specifications and pay change orders. So again, this is not how procurement works today. And if we're going to create this permissive authority, then we need to address these underlying questions, particularly as they relate to liability, which is the number one issue in construction. It has been forever and will continue to be so. For these reasons, we are opposed.

Mr. Chair and Members, Brett Barrow with the United Contractors, the National Electrical Contractors Association, the California Legislative Conference of the Plumbing, Heating, Piping Industry, and The Western Line Constructions.

And while I want to echo a lot of what CEA has said, I want to add too that concrete is one of those complex areas of construction in that we have to meet bid specifications of the state, dealing with thousands of blends of concrete for structure, color, temperature, everything that could be variables on the job site at the time and plus, concrete doesn't travel well.

We have to get it from the source that's close to the site that we're working on, especially when we're pouring large highways where we have to have a continual chain of trucks coming in and keep that chain going as long as we're doing that particular section. So our concern is with the liability and the availability and of course the pricing of these long term purchase agreements. So for those reasons, we are opposed to the 1073. Thank you.

Thank you Mr. Chair and Members, Todd Bloomstein representing the Southern California Contractors Association. Just two brief points. One, the sources where concrete and cement are produced, those are stationary sources and they're regulated by the AQMDs across the state. So, and that's subject, of course, to cap and trade. Second question, or second issue is I would encourage the sponsors to work within Caltrans.

They have a Committee designed called the Caltrans Pavement and Materials Partnering Committee that looks at products that industry wants to present them so they can research them and test them before they get out onto our highways. So I'd encourage that approach rather than the Legislature saying we should use a particular type of concrete. Thank you, Mr. Chair. Thank you.

Thank you. Okay, so we've heard from the support and opposition. Turn back to the Committee. Anybody wishing to.

I would move the Bill.

Senator Archuleta. Yeah, Senator, I've got some questions probably to your experts, I guess. We're talking about concrete and we're talking about storage. And when I think of concrete, I know it's sand and gravel and rock and it's made together and all. Is all these elements going to be stored separately and prepared, purchased or. They mentioned about distribution. Different vendors are going to come and buy from the state. This authorized concrete. How is all that working together?

Thank you for your question. While the Bill references cement and concrete, because concrete, almost all concrete has cement, all cement isn't necessarily concrete. But the real focus of the Bill is on the production of the cement because it is the cementous mix or the process of producing cement that where all the greenhouse gases come in and where cement is unique is that, you know, even if we go to 100% renewable energy, so the kilns that produce cement are completely powered by, you know, non-emission power, there is still in the way that we produce cement now because of limestone, there is still a significant, what they call process emissions.

Limestone is broken down and carbon is emitted. What these different companies are now doing is trying to figure out ways to reduce the amount of limestone required to use other mixes, other ingredients, in effect, to make cement. And if they can pull that off in an economically viable way, then we'll have a cement product that is low carbon. You know, it's not real available right now, but in 10 years it's possible.

So I made the analogy to the battery storage because at the point that we sent that signal, it was not really available at that time, but it became available. So this Bill, compared to my previous attempt at this, my previous attempt was requirement. This one is permissive. This one gives the agencies the authority if they choose to, to engage in some advanced procurement, but it doesn't require them to. And this is where I would respond to the opposition.

It does not require the state agencies to make that purchase in the 10 years time because it's possible that we will not have the product available, it will not meet the specifications we need. And so of course we would never force the state to then purchase it. So this is more to send that signal like, yes, researchers, developers, investors, you know, we're looking for a product like this. We'd love to see it developed and we'll indicate our interests by these advanced procurements. But if it isn't met, we will not purchase.

I'm just going to follow up on that question because the opposition brought up, I think, some interesting points. While the state is not purchasing this, what you're talking about I'm thinking is that the state would negotiate with the contractors, the people that would buy it, to insist, if it's readily available to purchase these products is that.

Well, the state sends, the state does set specifications and such and the state actually does do a lot of purchasing. So I think there's a little error there. In fact, we are the largest purchaser of cement in the, within the state. The state is the largest purchaser and they may be doing that through subcontract, but they still are the purchaser. So we, what we really are trying to do is the same way that the Federal Government does.

And my witnesses talked about how the Department of Energy and other federal agencies use this kind of signal engaging in advanced procurement to say, yeah, we want to tell the market, yeah, we'd like products like this. But where this Bill, where I'm clear is that if those products do not meet our needs and they are not economically viable, then we know state you don't have to purchase them. But it is telling the industry, yeah, we'd like to see you develop this.

Great. Any other questions? Senator Alvarado-Gll, Senator Skinner, I am intrigued by your Bill. This is one of the areas that as I am learning more about meeting our 2030 goals, climate goals, and understanding some of the new green practices that I became familiar with the stats around cement being a major contributor to the problem that we're trying to face here.

And in that I actually found a business that is within Amador County and the district that I represent that had some innovative approaches to developing lower carbon cement mixes. So I'm excited about your Bill because it impacts my district directly. And I hope that as your Bill moves forward that you would allow me to connect you with Purebase, which is a company that has mastered this technology and the science and is currently procuring all over the world and not so much here in California. So I'm excited about the opportunity to look at this and hope that you will continue to work with the opposition to create that partnership.

Great. Anybody else? I have a question. Yes, just a question. Thank you. Do we have any. Do we have any estimates as to how many companies currently produce cement and concrete in our state and how many actually would fall within these parameters of able to provide clean, cleaner cement and concrete?

Well, we had the, one of my witnesses from an industry Association indicated and perhaps he could come back and say the exact number so that I don't make it inaccurate. He referenced the number of companies that are now engaged in trying to produce these kind of products and some of them are based in California. He mentioned that also. Will you reference that?

Sure. So our alliance has 11 companies. Four of them are based in California. But I would also note we are representing sort of vanguard climate tech companies. But the incumbent producers are actually making a priority around this as well. And they, for example, recently were awarded a Doe grant to make a carbon neutral cement plant in California.

So it's not just the sort of innovative companies that are part of DC two, but there's a broader cohort of low-carbon cement and concrete companies that would be catalyzed by legislation like this.

I'm sorry. So to be clear, the question was how many companies do we have currently in California and out of those numbers, we have currently four that.

Well, so there are four companies that are within his Association that are more very specialized and really focused solely and only on this very Low carbon production. Now, we have many other cement producers in California.

And how many are. That's the question.

And I apologize that I can't remember that exact number. But those cement producers, some of them just as he described, are actively also engaged in trying to revise their processes, change their technologies, not solely and only because of a Bill like this, but because, for example, California already has in statute that by a certain year, you've got a way reduce those emissions. The Federal Government is sending those signals.

So the signals are being sent to incentivize all of our producers, our specialty ones like d two represents and even our existing cement producers, to try to, you know, help support them in making these innovations in cement production to be able to achieve that low carbon.

I don't have that information. But the company that I'm representing, argent materials, is not part of the DC two. So it is another company based in California that produces carbon neutral. So it'd be a total of five that we are currently aware of. Yeah.

Mr. Chair, I was wondering, do you think maybe the other witnesses might have the information as far as how many, or do our consultants have that information?

The consultants do not. We might here-

So I don't think if there's nobody here that has any kind of awareness of approximately how many cement manufacturers there are in the State of California.

I used to know. I just don't want to put forward a number based on my memory. That could be very inaccurate.

Ryan McCarthy with Weidman group. I believe there are seven or eight cement facilities in the state. I don't know how many companies operate them. I think it's probably less than that. But then the overall concrete space is much broader. There's a lot. I think there's hundreds of concrete manufacturers, but there's others who probably have better answers to that.

Okay. Anybody else seeing? None. Senator, would you like to close?

Yes. Thank you, Chair. So different than my previous Bill, this does not, it does not have the mandate or the requirement. It is permissive. It allows the agencies, if they choose to, and then, and if they do so, and they send that signal and say, yes, we're interested in this, we're going to send you out some interest in this advanced procurement.

But if at the point that they are procuring those products do not meet the specifications or don't, can't compete with the bid, they will not have to procure. So with that, I ask for your aye vote.

Thank you very much. Senator Rubio, did you have the motion on this? Yes, aye did ask. So the motion is by route. Senator Rubio, on SB 1073, the bills been. The motion is do pass to Environmental Quality Committee. Secretary, please call the roll.

[Roll Call] 11.

Bill has 11 votes. We're gonna keep that. We'll put that on call now. We're gonna move now to our last item number six. It's SB 1157. Senator Glazer, if you or your staff is listening, it's high time you came to the Committee hearing. Please. And we also have a couple other Senators that may be in other committees. Please make your way down here so we can close out. Senator Hurtado, you have item number six, SB 1157. Good morning.

Thank you Mr. Chair and Members of the Committee, I'm here to present SB 1157, a Bill that clarifies human trafficking and forced labor definitions, sets rules for government contracts, requires compliance plans for California contractors, and outlines procedures to address labor issues and supply chains.

I will also be accepting the amendments noted in the analysis. Public procurement is a significant part of global GDP, highlighting California's potential to influence working conditions worldwide through its policies. And for far too long, the ugly truth of forced labor has lurked behind the scenes of countless industries.

Forced labor is found in virtually all industries, and for many decades has plagued supply chains and tainted the products they helped create. Reports from the Bureau of International Labor affairs and the US Department of Labor reveals the staggering array of goods, spanning 159 categories, from 78 countries, found their way into American markets tainted by the stain of forced labor, violating basic human rights and international standards.

California as the. I believe it's. I'm not sure if it's the fifth or the fourth, but somewhere around the largest economy in the world has done little to follow the recommendation to better respond to and prevent labor trafficking. SB 1157 would revise existing law by requiring that any business that wishes to contract with the State of California complies with updated provisions currently in federal regulations in 2016 to better identify and prevent human trafficking and other forms of labor.

Annually, the California government procures about 20 billion in goods and services. In passing SB 1157, the State of California will be ensuring our procurement system has the same explicit protection standard as the Federal Government has for the last eight years to prevent human trafficking. This Bill is a major overdue step in creating true preventative measures to address forced labor and exploitation in our progressive state. And here to testify and support, I have Stephanie Richard and I have Flor Molina.

Good morning. My name is Professor Richard. I'm the Director of the Sunita Jain Anti-Trafficking Initiative at Loyola Law School. Thank you for letting me speak here with you today on this important piece of legislation to prevent trafficking in California and globally. There's no easy solutions to preventing human trafficking. However, from a policy's perspective, national and international experts agree that taking steps to combat trafficking and government procurement contracts can prevent trafficking before it starts.

Based on over 10 years of learning how to better prevent trafficking before it starts and supply chains, SB 1157 provides specific and detailed guidance to California contractors on concrete actions they must take to ensure goods made for California are produced ethically. This proposed legislation also supports businesses as it's modeled on existing federal standards created eight years ago that companies have already had to comply with to receive federal contracts.

The bottom line is that California companies who contract with the Federal Government already have to meet federal procurement standards on trafficking, and California's state law would reinforce these best practices to prevent trafficking. Since California is the fifth largest economy in the world, this measure can have state and global impact.

Further, a lot of California companies, tech, construction, automobiles, solar food processing, are already facing these regulations, and as they seek to meet them, they shouldn't be undercut by the California State government giving contracts to those who aren't meeting these minimum standards or trying to meet them. The minimum floor standards in SB 1157 help all companies know what they need to do to prevent trafficking and reinforce ethical practices.

This includes such things as having protocols and practices in place that ensure no recruitment fees are paid by workers, a way that workers are commonly entrapped in debt, bondage, or modern slavery. Having a policy that says that companies cannot hold the ideas of workers.

Also explicitly in California criminal law that says hold holding the idea of a worker is per se trafficking if it causes someone to perform work and guaranteed repatriation if they want to leave a bad work environment, they can, they are not going to be held against their will. SB 1157 is also easy to implement as its statutory language, although it looks complex, is something you can cut and paste into existing language in California contracts.

So SB 1157 is just the tool our state procurement process needs to stop underlying illegal workplace and hiring practices that are already illegal in California and nationally and consistently reinforce ethical standards and business practices. For these reasons, I ask for your aye vote on SB 1157. And I'd like to introduce Flor Molina, a survivor of labor trafficking who will testify more about her personal experience.

Good morning, everyone. Thank you so much for listening to me today. My name is Flor Molina, and I am a survivor of labor trafficking in California. I am a testimony of trafficking in California. I was recruited in my hometown by my sewing teacher telling me that there was a great opportunity to come to the United States. Everything was going to be paid for when I arrived to the United States. They will provide me a place where to live, and I didn't have to worry about anything.

When I arrived to the United States, everything was different. I was in a factory with 50 or 60 sewing machines. I wasn't allowed to put one step outside of the factory. I was not allowed to talk to my coworkers or other people. I didn't know where I was. When I was drop off at Los Angeles. It was dark, it was raining. I didn't know any person in the United States. I had only 10 minutes to eat whatever they provided me during my long shifts.

And I was told that if I didn't do what they told me to do, they will hurt my family, specifically my children back home. I was afraid, hungry, tired, and I wasn't allowed to talk to anybody. Nobody was there for help. I thank to Senator Hurtado for introducing SB 1157 because bills like 1157 will provide a contract for persons who want to come to the United States.

It also mandates that the contract will be in the native language of the person who's coming to the United States. I will just say it will be great if also they provide a number to call in case anything goes wrong. I appreciate the efforts lawmakers like you all do to fight human trafficking. I don't want any other human being to go to what I went through because human trafficking still exists. And it's shame that it happens in California.

I am so blessed to be in California because California is taken as an example for other states and nationwide and around the globe as an example to fight human trafficking. That's the only thing I can say about California. But also I want to urge the Committee here today, and I ask for your aye vote on 1157. Thank you so much.

Thank you very much for your personal testimony. I'm terribly sorry that you had to go through that ordeal. Unbelievable. Any other witnesses in support? Any witnesses in opposition? Seeing none. Turn it back to the Committee. Senator Archuleta.

Well, I'd like to acknowledge your witness, Senator. What a statement. What a hero you are. Congratulations. God bless you. To come forward for all the women and men and children who are facing this terrible, terrible crime of human trafficking.

And I'm glad you're here so we can all hear, so it can be broadcast that we, the fifth largest economy in the world, have to resort to such treatment of a. To human being. And I think that any company that is involved in that should be taken away. The contracts, the ability to do business in California, and all those who are apprehended to be incarcerated to the full extent of the law. And your articulation is amazing. Amazing. Gracias por hablar español, hablar en ingles pero yo se hablen en español.

And thank you, del corazon. So I'm so proud of you. That is amazing. And, Senator, bringing this forward really opens a lot of doors to a lot of us. And I think that we not only have to look to California, but the sources where it comes from. And I'm hoping that there are agencies within our Federal Government that can cross these borders and find and participate with law enforcement in other countries that prevented them from coming here. So when appropriate, I will acknowledge the Bill and move it forward. Thank you. Anybody else? Senator Rubio?

Yeah. First of all, thank you to the Senator for bringing this forward. I mean, this continues to be a really big issue in our country, not just in California, and it really breaks my heart. And I want to thank Flor for coming forward. I just want to highlight what she said is she was in a sewing class, and she was recruited by her sewing teachers. So it's not someone that just chose to come over and see how they break the law, but this is happening.

She was offered an opportunity with some great conditions, and they come to this country, and then they find themselves in these types of situations. And I'm, you know, I'm really glad that you're bringing this, because it's important that, you know, this is already an existing federal procurement policy that exists and that we do everything we can as Californians to safeguard these individuals. Like I said, she didn't choose to come. Someone recruited her, which is what's happening often.

And I know I want to just also thank the supporters and the advocates. I know that I'm working with them on another Bill that focuses specifically on children. That happened in my district as well, where not only adults, but children are being brought over and they're working in these types of conditions. So I hope that not only my Bill passes, but yours as well, because we need to tackle this issue not just for the adults, but like I said, my Bill specifically for children.

They had children working late hours of the night where all the workers in the daytime had gone home and they were working for long hours. I mean, I can't imagine a human being not being able to speak to their coworkers, given 10 minutes to eat. None of us would survive in these types of conditions. So I want to just say, flor, thank you so much for your testimony to the great Senator of Sanger for bringing this forward.

I think it's so important, and I'm taking my time because I want to highlight it happens every single day to vulnerable individuals who can't defend themselves. And the very least we can do is to ensure that. And, you know, we allow people to ticket contracts and businesses that we're doing everything we can to hold them accountable if something like this happens. So thank you for your story and your advocacy. And I also like to. I'm not a co-author be a co-author to this Bill and move a Bill forward. Thank you.

Okay. The Bill has been moved, enthusiastically, aye might add, by Senator Archuleta. Aye appreciate that. The motion is do pass is amended to Labor Committee. Secretary, please call the roll.

[Roll Call]

Is that 12. 12 votes that will put that Bill on call? Okay, thank you, Senator Hurtado. We'll now move to bills on call. Secretary, can you. What's that? Do we have an idea if Senator Smallwood-Cuevas is on her way? All right, let's go through so the Members can move on to their day. So, secretary, please open the roll and consent calendar absent Members.

[Roll Call]

That Bill is out. This concludes the business for the day. The Senate Committee on Governmental Organization is adjourned.