Senate Standing Committee on Judiciary

I ask that all Members of the Committee be present. Room 2100 so we can establish a quorum. Let me just announce that we have three bills on the consent calendar today. So if you're here for one of these bills, it is likely to pass on the consent calendar. File number three, SB 1333 by Senator Eggman. File item number five, SB 1168 by Senator Limon. And finally, file number seven, SB 1108 by Senator Ochoa Bogue, with amendments. All right, let me just go over the ground rules.

They are as follows. For each Bill, we'll have two primary witnesses in support and two primary witnesses in opposition. Each primary witness will have two minutes to speak, and our Committee secretary, Miss Erica, will be timing you.

And then as for opposition, opposition will have two primary witnesses, each in opposition with two minutes each after we take support, those of you who wish to provide your me, too testimony, meaning your name, your affiliation, your position on the Bill, you approach the microphone and give us your name, your affiliation, and your position on the Bill. We'll do that for support, and we'll also do that for opposition. Then we'll turn to the Committee for questions from the Committee and comments from the Committee.

If you wish to provide further information on any Bill, please go to our website and that provides you information as to how you might submit comments on pending legislation. All right, so I see we have. Senator Blakespear, you've been here patiently waiting. You must have run from caucus over here. So let us take up your Bill. File item number one, SB 1038. Senator Blakespear. Floor is yours.

Thank you, Chair. Thank you, Chair. And Committee Members and Committee staff. I very much appreciate your work on the Committee amendment, which I am happy to accept. Despite California having the best gun safety laws in the nation, we still have areas where we need to improve. Specifically, we need to address places where existing laws aren't working quite as well as they should. Unfortunately, we have several indicators that gun trafficking and gun involved crimes are growing problems in California.

Since there are so many guns in our country, it's not surprising that many firearms end up lost, stolen and trafficked. According to the ATF, there were over 1 million missing guns reported between 2017 and 2021. As alarming as that sounds, these numbers significantly underrepresent the actual total of missing guns because many people don't report lost or stolen firearms. Lost or stolen firearms are a danger to society because they are prone to being trafficked and used in crimes.

In addition, the number of crime guns recovered in the state per capita has grown by close to 70% over the last decade. According to a UC Davis study, nearly 80,000 traceable guns used in criminality came from just 82 dealers in California. But the strongest indicator that we have a gun trafficking problem, one that is partially fueled by retailers, is that the amount of guns recovered shortly after purchase is growing. The percentage of handguns recovered in a violent crime within one year of purchase has tripled.

So what can we do about this? SB 1038 does four things that will help reduce the amount of guns trafficked within our state. One, it reduces the amount of time that an individual has to report missing firearms from five days to 48 hours. This brings us in alignment with the 11 other states that have Shorter reporting times than we do. Number two, it better equips the Department of Justice to track firearms as they come into our state, not just as they are sold.

Three, it increases scrutiny on the dealers most associated with crime guns. And four, it requires dealers to annually certify their inventories, giving the Department of Justice and Local Government something to hold them accountable to. SB 1038 will help modernize our handling of firearms in California and take advantage of technological advancements over the last decade. With me today, I am happy to have Theresa Heimer, President of the San Diegans for gun violence Prevention, as my lead witness.

Good afternoon. I am Therese Hymer, the President of San Diegans for Gun Violence Prevention. We are a coalition of 18 local and national groups and are proud co sponsors of this Bill together with the San Diego City Attorney's office. Senator Blakespear covered the changes this Bill makes. I will address a few of the points that have been raised in opposition. First, a claim was made that there is no evidence this Bill will reduce gun violence.

And in fact, in addition to the many studies and statistics cited in the Committee's legislative analysis. Last week, the ATF released an in depth report on gun trafficking in the US. It found that nearly one quarter of trafficked firearms are used in further crimes, including homicide and aggravated assault. And nearly a quarter of the cases involve guns stolen from federal firearm licensees or private people. Second, opponents claim that requiring gun stores to conduct an annual inventory is onerous.

I worked almost a decade for a national distributor, and annual inventory is the bare minimum for a responsible business. A dealer that doesn't take inventory is one that is ripe for its guns to be stolen. Even the LAPD Academy gun store learned this lesson back in 2021, when its inadequate inventory practices allowed theft of dozens of law enforcement weapons. In 2022, the ATF only inspected 9% of licensed firearm dealers, and the Cal DOJ now will do so every three years.

Annual inventories between those inspections are needed. Third, opponents claim that a 48 hours report is unrealistic. 48 hours is already the standard required of dealers. This change makes the timeframe consistent for all. Reporting theft quickly means law enforcement can enter stolen firearms into the data systems, which are connected and dispersed throughout the country. See something, say something is a bedrock concept to keep us all safe. I ask for your aye vote. Thank you.

Thank you very much. Next witness.

Jaime Minor. On behalf of Giffords, as well as extending our support on behalf of our colleagues over at Brady. Pleased to support and appreciate the Senator's ongoing leadership on this issue.

Thank you. All right, other witnesses in support, please approach.

Danny Offer with Everytown for Gun Safety in support of the Bill. Thanks.

Thank you.

Good afternoon, Mister Chair and Senators, Rosanna Carvacho Elliott here, on behalf of the City of Alameda, in support.

Thank you. Others in support. Seeing no one else approaching the microphone now, let's call for the opposition. If you're opposed to SB 1038, please approach the microphone. Seeing no one approach the microphone. All right, let's now turn to Committee Members. Questions by Committee Members. Seeing no questions or comments at the appropriate time, Senator Durazo will move the Bill. We now are short two Members, so what we'll do, Senator Blakespear, is when we have a quorum. I understand.

Senator Durazo will make the motion, and then we'll then take it up for a vote. So thank you very much.

I respectfully ask for your vote.

I'm sorry, I forgot. Yes. Go ahead and close. There you go. That was it. All right. Fantastic. All right, Senator Bradford. I see Senator Bradford here. After Senator Bradford, then Senator Limon, and then Senator Menjivar. Senator Bradford, floor is yours.

Thank you, Mister Chair. And Members, I'm here to present SB 1403. This would establish the California American Freedmen Affairs Agency for the purpose of implementation, oversight, and monitoring of policies and laws enacted relating to reparations similar that was stood up in this country in 1863.

It would also require the agency to oversee and monitor existing state agencies and departments tasked with engaging in direct implementation of reparations policies, similar to what we stood up in 2018 for the tribal affairs dealing with Native Americans here in the State of California. This Bill is a recommendation from the California Reparations Task Force, which I spent two years of my life on, and the final report clearly speaks to importance of this measure. It is also among the most essential of the report's 115 recommendations.

This agency will be necessary, be the necessary foundation for the implementation and success of reparations. The most important responsibility of this agency we'll have is determining which individual are eligible for reparation programs and services this Legislature will enact. These individuals being descendants of African American enslaved persons in the United States, or chattel slavery, or descendants of black person living in the United States prior to the end of the 19th century.

SB 1403 will create a genealogical office to provide access to expert genealogical research to confirm reparations eligibility and expedite assistance with the reparations claims process. Many people ask, why California? They said California was a free state, a free state in name only. We did everything a slave state did. If you were brought here as a slave, you were treated as such. If you were pregnant and gave birth here as a slave, your child was born a slave. We had a fugitive slave law.

So if you ran away and came to California, there was a bounty to take you back to the plantation or state that you escaped from. So we were a free state and name only, and the first Governor of the State of California owns slaves. Peter Barnett and so why should we be responsible for reparations at all?

As I stated, while there's no way, and should I say, while in no way does this Bill excuse the Federal Government or local governments from taking action, California still bears some responsibility. State government permitted and committed grave injustices against African Americans. These injustices included enslavement, legal, public and private segregation, discrimination and state funding and programming and stigmatization. Stigmatization. And if you don't believe me, I challenge you to read the 1100 page report. And if not the 1100 page report at least.

Executive Summary this agency is the first step for California to take actions to right these wrongs that have existed for so long here in California and across the United States. SB 1403 is about demonstrating our state's commitment to not only recognizing its past, but also taking meaningful actions toward equitable future. With me today to provide expert testimony is Camilla Moore, attorney and a scholar and chair of the reparations task force. And I thank you, and I respectfully ask for an aye vote.

Thank you for Senator Bradford. Miss Moore.

Esteemed Members of the Senate Judiciary Committee, my name is Camila Moore, and I am privileged to have served as the Chair of the California Reparations Task Force. Today, I advocate with a sense of urgency and purpose for the passage of SB 1403, a groundbreaking Bill poised to establish the California American Freedmen Affairs Agency. This agency symbolizes a crucial stride towards repertory justice, particularly for those who lineage traces back to enslaved ancestors.

Like Senator Bradford said, through rigorous research, the California task force has unveiled harrowing disparities that descendants of slaves still face in California, painting a stark picture in inequality across multiple sectors. For example, descendants of slaves families, their median net worth of wealth languishes at less than one 10th of percent of white families, exposing economic barriers. In terms of businesses, entrepreneurs who are descendants of slaves are three times more likely to be denied bank loans than their peers, crippling potential for growth and innovation.

In terms of health, infants who are descendants of slaves are more likely to die at double the rate of their first birthday than their counterparts, highlighting glaring inequities in health across health aspects and outcomes. These statistics are not mere numbers, but reflect real lives diminished by systemic injustices, a legacy of slavery and systemic discrimination perpetuated by the State of California. And so this agency seeks to dismantle these barriers, advocating for and implementing reparation measures that address these deep rooted disparities. The agency also.

I would note that the Berkeley intergovernmental studies polled indicates that, yes, 59% of Californians oppose direct cash payments. But that same exact survey reveals a broader consensus for action. A majority believe that the state has not done enough for descendants of slaves in this state, and 60% of those posed acknowledge that the enduring impact of slavery still impacts the lives of today. Yes, I respectfully ask for your aye vote thank you.

Thank you very much. Other witnesses in support seeing no one else approach the microphone. If you're in support, please approach the microphone and provide us your name, your affiliation, your position on the Bill.

Good afternoon. Chris Lauderson, Coalition for a Just and Equitable California on behalf of the American Redress Coalition of California, Sacramento, American Redress Coalition of California, Bay Area, the California Black Lineage Society, the Lineage Equity and Advancement Project, all in strong support. Thank you.

Kelsey Lyles with the Bay Area Regional Health Inequities Initiative in strong support.

Thank you.

Good afternoon. Kim Mims with Coalition for a Just and Equitable California, American Redress Coalition of California, Sacramento and Amend the Mass Media in strong support. I urge and aye vote. Thank you.

Thank you.

Yes, good afternoon. Darlene Crummity, Member of the Coalition for a Just and Equitable California, a Member of the American Redress Coalition of California, Bay Area, and I am strongly in support of SB 1403. Thank you.

Thank you very much. I'm sorry to interrupt your presentation, Senator Bradford, but let us establish a quorum here. All right, Madam Secretary, if you would call the roll for purpose of establishing a quorum.

[Roll Call]. You have a quorum.

All right. Thank you very much. All right, now, excuse me, we'll turn to opposition to SB 1403. If you're opposed SB 1403, please approach the microphone. Seeing no one approaches the microphone, let us now turn to Committee Members. Questions by Committee Members. Senator Laird.

I actually have a comment. I think this is a good direction and an important direction. And I wanted to point out, since the author struggled with the word genealogical, but we all knew what you meant.

And the Ancestry.com has actually posted the Freedman's records, and there was a special workshop in the basement of the Capitol with them to work on descendants that might work in the capital community, and they made great progress, and it was really of assistance. And so citing that means that those records really exist in a way that's meaningful.

And, in fact, I know there were stations established at the African American Museum in Los Angeles to try to allow for people to access these records to determine exactly what the author and the witnesses were saying. I think this is a good step forward, and at the appropriate time, I will move the Bill.

All right, thank you very much. Other questions or comments? Seeing none. Senator Bradford, we're operating as a Subcommitee at the quorum. zero, no, I'm sorry. You're right.

Thank you very much, Madam Secretary, we have established a quorum, and it's been moved by Senator Laird. So would you like to close?

Thank you, Mister Chair. And Members, this is a common sense measure, again, something that's long overdue for California and this nation to come to a reckoning of a debt that is owed to people that helped build this country. This is straightforward, it's common sense. Again. It's not charity. It's not a promise. It's 160 years overdue.

And this will help us implement the agency, to help move forward in determining what reparations should look like here in the State of California. And I respectfully ask for an aye vote.

Thank you very much. All right, Madam Secretary, please call the roll. Did you accept the Committee amendments?

Yes.

Yes. Okay, great. All right.

All right, this is file item number two, SB 1403. The motion is due pass as amended, to governmental organization. [Roll Call]. Three to zero.

We'll put that on call. Thank you, Senator Bradford. I see Senator Limon. Senator Limon.

Mister Chair, if you would like, I would move the Blakespear Bill and then the consent agenda, if you want to catch up.

Why don't we do that? All right.

Then I would move item number one, SB 1038, by Senator.

I think Senator Durazo already requested that she be the moving Member on SB 1038.

I'll happily defer. Whatever gets us to the vote.

Senator Durazo's moved SB 1038. Madam Secretary, would you please call the roll?

This is file item number one, SB 1038. The motion is do pass as amended to Senate Appropriations. [Roll call] Three to one.

3-1. We're going to put that on call. All right, Senator Limon, and then.

You want me to?

Oh, consent.

I would move the consent agenda, which is items 3, 5, and 7.

Thank you. All right. Thank you, Senator Laird. On the consent calendar, please call the roll.

[Roll call]

Four/zero. Put that on call. All right. Senator Limon, you've been patient. After Senator Limon, we're gonna have Senator Menjivar, then Senator Skinner. Senator Limon, Item Number Four: SB 1036.

Thank you. I present to you SB 1036, which would establish clear protections for purchasers of carbon offsets. This bill builds on California's long-standing false advertising law by specifying our expectations for business activities related to carbon offsets. Carbon offsets are tradable financial instruments that claim to represent a reduction of greenhouse gases in the atmosphere. Unfortunately, academic researchers and investigative reporters have uncovered many examples of offset projects that simply fail to deliver the claimed carbon benefit. This bill focuses on voluntary offsets, as implied by their name.

These offsets are purchased on a voluntary basis and are not related to legal requirements or regulatory programs like compliance offsets in our Cap-and-Trade Program. There are two general problems with allowing low-quality offsets to remain unaddressed. First, consumers are harmed when they did not get what they pay for. A consumer who purchases an offset to mitigate the emissions associated with an international flight, for example, expects that offset to actually deliver an environmental benefit.

And even more commonly, businesses make green claims such as their products being net-zero or carbon neutral. If that business relies on low-quality offsets to support such claim, the consumer may be misled to believe that their consumption has no negative environmental impacts. The second general problem with low-quality offsets is their potential to undermine our climate goals. Corporations who purchase low-quality offsets may ignore changes in their own operations that could reduce their emissions directly.

SB 1036 provides legally enforceable standards for voluntary carbon offsets, a policy that is long overdue in California and for our climate. Testifying in support today is Melissa Romero from the California Environmental Voters.

Thank you, Chair and Committee Members. Melissa Romero with California Environmental Voters, here in support of SB 1036. This bill is a critical step towards ensuring the integrity of voluntary carbon offset markets and holding corporations accountable for their environmental commitments.

The philosophy behind carbon offsets is to incentivize GHG reductions that are most cost-effective or more cost-effective than direct emissions reductions. However, the current lack of regulation in these markets have led to significant issues, particularly with low-quality offsets, and this bill really aims to address the rampant problem of junk offsets, which often fail to deliver the promised carbon reductions.

There are examples of offsets backed by projects with dubious claims of carbon benefits from falsely labeled forest lands that were clear cut to renewable energy projects that were already in motion. These offsets do not live up to their promises. Not only do they deceive consumers, but they also undermine our climate goals and divert funding from more effective projects.

Relying on offsets that later proved to be ineffective only perpetuates rising emissions, and SB 1036 is a common sense measure to protect consumers and our environment, ensuring that offsets truly deliver on the promised climate benefits. Corporate accountability is essential in this context. Companies that purchase offsets to meet their net-zero goals must be able to rely on the accuracy and effectiveness of these offsets. Otherwise, their environmental commitments become meaningless, and rather than genuine efforts to combat climate change.

SB 1036 will establish these enforceable prohibitions on the issuance and sale of offsets that fail to deliver real, quantifiable, and additional climate benefits. And by defining clear expectations and standards, this bill will restore confidence in voluntary offset markets and prevent Californians from falling victim to false promises while ensuring that corporations are held accountable for their environmental commitments. And for those reasons, we urge your support for SB 1036. Thanks.

Thank you very much. Others in support of SB 1036? Ms. Stone.

Good afternoon, Chair and Members. Kim Stone of Stone Advocacy, on behalf of Consumer Watchdog, in support, and I've also been asked to relay the support of NextGen who couldn't make it here.

Thank you.

Good afternoon. Paul Mason with Pacific Forest Trust, also in support. Offsets can work when they are reliable.

Thank you very much.

Also for Defenders of Wildlife.

All right.

Thank you.

Thank you.

Kendra Harris of the Climate Center, in strong support.

Thank you. Others in support? Tweener. Okay, tweeners. We'll have one tweener.

Support if amended, please. Isabella González Potter with the Nature Conservancy. We have a support if amended position and submitted a letter to the Committee to reflect that. Thank you.

All right. Thank you very much. All right, let's turn to opposition. Those opposed.

Good afternoon. Jessica Bede with ACR, carbon crediting program and registry serving California's Compliance Offset Program as well as the voluntary market. We strongly oppose SB 1036 and urge this Committee to do the same. ACR deeply values integrity within the carbon markets, and my team works every day to ensure the accuracy and legitimacy of carbon credits issued to project developers who are doing the work here in California and elsewhere to reduce greenhouse gas emissions.

Carbon offsets are key to achieving significant reductions beyond what is mandated and otherwise feasible. In recent years, we've seen a significant uptick in corporate climate pledges, reporting, and disclosure rules, as well as global frameworks to ensure credit quality, all efforts that we support. Unfortunately, SB 1036 will crater the carbon markets by introducing unworkable provisions and unnecessarily increasing liability for good actors.

If this bill passes, opponents of offsets will rush to file lawsuits. That will inevitably lead to conflicting rulings because courts can cannot reasonably be expected to adjudicate the intricacies of the underlying science of greenhouse gas accounting, let alone the vague, misguided, and ill-defined provisions of SB 1036. The language cannot be fixed. Intentional or not, the uncertainty and ambiguity will eliminate carbon markets as an incentive structure for both desperately needed investments in nature-based solutions as well as highly effective reductions in potent super pollutants.

The nuisance lawsuits will come. They will bog down the courts. They will shut down small, nonprofit organizations like the one I represent, and will, in turn, cost the state millions of dollars in the absence of the offset project registries, the services that we provide in terms of technical expertise and infrastructure to the California Air Resources Board, which I will note was not reflected in the Committee's analysis. This bill, on its face, sounds like a good idea, but it will only hinder real progress on urgent public issue of climate change. Thank you.

Thank you very much. Others in opposition?

Good afternoon. My name is Jodi Manning. I am the CEO of Cool Effect. Cool Effect is a nonprofit, women-led, 501c3 based in Marin County. We were established in 2015 to find and vet the highest quality carbon projects around the globe. Since then, we have significant concerns about SB 1036. The bill will damage all sales of carbon offsets, including those of very high-quality because of the threat of litigation caused by the ambiguity in the language that's in the bill.

They will choke millions of dollars of climate finance coming from the private sector that is currently going to the global south, particularly among women. The bill will also cost California taxpayers on a number of different fronts. California will have to engage subject matter experts from CARB or outside evaluation on highly technical terms, such as durability, leakage, or is the carbon offset actually real?

I can only imagine because I've seen bills, the number of billable hours consultants to train staff and understand key aspects, such as, quote, 'atmospheric lifetime of a greenhouse gas removal versus atmospheric lifetime of carbon dioxide emissions.' Unquote. There are a number of leading scientific experts around the globe working to define credit quality, including the ICVCM and the VCMI. Does the State of California really want to spend precious tax dollars to actually reinvent this level of expertise, even though they're two years ahead of us?

We have an urgent climate crisis, and instead of supporting and cutting support for natural systems, this bill--we should be doing whatever we can to boost them all. Please oppose SB 1036 and instead--

Thank you very much. All right.

Support AB 1305.

Thank you.

Got it.

Okay, thank you. All right, others in opposition?

Bart Kortum, Terra Global Capital. We oppose to SB 1036.

Thank you.

Mr. Chair and Members, Paul Deiro, representing Western States Petroleum Association, in opposition.

Hello. My name is Teresa Lang, and I represent Anew Climate, and we also oppose 1036.

Thank you.

Good afternoon. Ashley Hoffman, on behalf of the California Chamber of Commerce, in opposition.

Thank you.

Katie Little with the California League of Food Producers, in opposition.

Courtney Jenson, on behalf of CJAC, in opposition.

Melanie Cuevas with the California Bankers Association, also in respectful opposition. Thank you.

Good afternoon. Joanne Bettencourt, on behalf of SIFMA, the Securities Industry and Financial Markets Association, in opposition.

Thank you. All right, seeing no one else approaching the microphone, let's bring it back to Committee for questions by Committee Members. Seeing no questions, Senator Durazo has moved the bill. Senator Limon, would you like to close?

The only thing I will say is that you're seeing this bill as you did a year ago, and it's the same language, but I do want to point out that the definitions used in this bill are taken from CARB. So the vast majority of things are already--so if there is confusion, that means that there is already confusion with agencies. So we'll also, you know, we've definitely will continue to work with the opposition to understand what areas.

But so far, most of what opposition has brought us forward would undermine not just this law, but also current laws in place. So that is a real big concern to us, that they just want to be exempted altogether from existing law, independent of this, and this as well. So with that, I respectfully ask for an aye vote.

Thank you, Senator Limon. All right. Madam Secretary, has been moved by Senator Durazo. Please call the roll.

This is File Item Number Four: SB 1036. The motion is 'do pass to Senate Appropriations.' [Roll Call].

Three to one. We'll put that on call. Thank you very much, Senator Limon. All right, next up would be Senator Menjivar and then Senator Skinner, then Senator Smallwood-Cuevas. I see none of those authors here, so first come, first serve.

All right, why don't we take up and the last shall be next. Senator Laird, item number 12, SB 1272.

Thank you, Mister Chair. Senate Bill 1272 will raise the redeemable dollar amount on a gift certificate from the current $9.99 maximum to $25, with an annual adjustment for inflation rounded to the nearest whole dollar. In 2008, Senate Bill 250, authored by then-Senator Ellen Corbett, established a consumer's right to redeem certain gift certificates for its cash value if the value is less than $10.

This ensures consumers can utilize the full gifted value of a certificate and they're not left with small, unusable amounts after making a purchase. 16 years have passed since the Legislature enacted this law, and the cost of living has grown significantly in that time. But this has proven itself. It's proven itself convenient for the consumers, and it has worked for businesses.

The National Retail Foundation found that the second most popular gift of the holiday season was gift cards, and the analysis references a 2023 CNN report that states almost two-thirds of American consumers have at least one unspent gift card tucked away in a drawer, pocket, wallet, or purse. At least half of these consumers lose a gift card before they use it. And the report said that there's as much as $21 billion of unspent money that is tied up and used.

Allowing consumers to redeem a greater amount of money can actually circulate it through the economy and use it on goods and services as it was originally intended. Now, I have met with the opponents and did it this week. I know they've been engaging with the Committee. I really want to thank the Committee for a thoughtful and detailed analysis.

And while I should wait for the testimony, let me just do two or three things, because there was an article that was distributed to some offices that I think in my rush, I just left at my desk, but it's an article about a case, but it has nothing to do with redeemable gift certificates. There's concern that businesses will be gamed on this because for any of a number of reasons, but the worries of stolen goods being returned to gift cards, that's just not been the practice.

I don't think that's going to happen here. There's been opposition, concern that there's going to have to be lots of cash on hand to do this. Well, it just says redeem. You can do it with store credit. Many mail it to people. There's no requirement that there be cash on hand. I think that is not a good argument. And there were claims that there had been fraudsters since this was enacted in 2007.

We have asked clearly for cases of fraud, and none have been presented to us. And so I think, and there's some other concerns. We'll see if they come up. But I would commit to continue to work with the opponents if there are any realistic concerns that are documented that come up, and I promise to work with the Committee if there are any ongoing concerns. But I believe that this is overdue.

It has been 16 years, and it's the consumers that have lost by the fact that there's been a considerable amount of inflation since it was $9.99 to do this. So I would respectfully ask for an aye vote. I don't think I have a lead witness here, but.

We'll count you as lead witness.

All right. Thank you. Those in support of SB 1272, please approach the microphone.

Perfect.

Sabina Tacker with the Consumer Attorneys of California in support.

Thank you. Others in support, please approach. Seeing no one else approaching the microphone, let's turn now to the opposition. If you're opposed to SB 1272, please approach the microphone.

Mister Chair and Members, Margaret Gladstein with Capital FC here. On behalf of the California Retailers Association, we are strongly opposed to SB 1272, which would increase the amount cashback from $10 to $25. We already have the highest cashback amount in the country at $10. In fact, New York just raised theirs, and it only went to $5.

Based on the latest data available, the average gift card amount for these type of closed-loop cards is loaded with $26 across the country with a $25 cashback requirement. These will essentially become cash equivalents. CRA is deeply appreciative of the Senate taking a hard look at laws that need to be changed in order to prevent organized retail theft. We're supportive of many efforts of the Senate that is putting forward.

In that light, it makes no sense to pass a law like SB 1272 that would require retailers of all sizes and all types, nail salons, spas, restaurants, and others, to keep cash back. I realize the Senator referenced that there are other ways that people could offer to send checks. The reality is business is large and small don't necessarily have the resources to set up a system where they can provide cashback other than doing it directly at the till.

Imagine how mad a consumer would be if they had to wait for a check and go through that whole process. On days like December 26, businesses will have to keep a tremendous amount of cash on hand. If we know that, the bad guys will know it, too. And so we think that this has a tremendous opportunity to increase retail theft. Further, gift cards are not given with the intention of being cash equivalent.

They are given with the intention of either helping a local business or perhaps even for something like food or nutrition. Many nonprofits and other food insecurity organizations focused on food insecurity will purchase grocery store gift cards with.

Thank you very much.

Okay.

You urge an aye. Excuse me. A no vote.

I urge a no vote. Lots of other reasons. Thanks.

Okay. All right. Thank you.

Thank you, Mister Chair and Members, Matt Sutton with the Restaurant Association. Do I have some time, or where are we in the?

Two minutes.

Two minutes. Great, thanks. We're here in opposition to the Bill. We met with Senator Laird. Appreciate the meeting. Appreciate the intent.

When the original cash out Bill for gift cards was done under SB 250 by Senator Corbett, the idea then was to try to come up with something that didn't leave a small dollar amount stranded that you couldn't use at that location, or at most locations, frankly. So that's where the $10 came from. It was not intended to basically be a cash-out system. And our concern is that restaurants use gift cards all the time.

And what we're providing when someone buys a gift card is an experience. It's not so much a product that you see with a lot of gift cards. It's an experience. And so the intention of the giver, I think, should matter here, and that most people give restaurant gift cards to give that experience. The logistical issues and financial issues on the restaurant side are difficult because most of our members are those mom-and-pop community restaurants, 85% of our membership.

So to cut to the chase, we offer gift cards. We do that as a way to support local businesses. Often there's campaigns to support restaurants through gift cards. We did this coming out of COVID. These gift cards won't have much value to restaurants if we have to cash them out at $25 and less, because if you think about most restaurants, our gift card price points are 5, 10, 15, 20, $25. So these are the entire gift card, and it costs us money to be administering those.

And then, of course, our concern, just about the amount of cash. There's no way to determine whether we're going to have one person come cash it out today or 12. And so that's. These are all logistical challenges that we have. But I think, fundamentally, the giver had a certain intent when they buy our gift cards, and we'd like to preserve that as much as possible. And for that reason, we are opposed to the Bill.

Thank you. All right, others in opposition, please approach.

Good afternoon. Devon Anderson, on behalf of Target in opposition, thank you.

Thank you.

Ashley Hoffman. On behalf of the California Chamber of Commerce in opposition.

Thank you.

Jack Yanos on behalf of the California Fuels and Convenience Alliance, respectfully opposed.

Thank you. Others in opposition. Seeing no one else approaching the microphone, let's turn it to the Committee. Questions by Committee Members. I have some comments, but if there are no questions. Yes. Senator Durazo.

I unfortunately am one of the two thirds. Right, two-thirds who have not cashed in. I could carry my little plastic bag around, and I have lots and lots of these cards, and I can't remember when and how much is left in all of them. So I appreciate, I'm not quite sure why there is such opposition. Because the money has already been put out to buy the card by somebody, right? So there's no loss there.

The merchants will be able to get the money that was paid for by the buyer of the card. So I'm not sure what it is. And frankly, I just don't see a whole swarm of people just rushing to go, I'm going to get a cashback, so I'm going to turn my card in. I just think, I don't think that's very practical. And I do a lot of shopping, so I just can't imagine the kinds of problems that have been raised here.

So I support the Bill. Thank you.

Thank you. So a couple of thoughts. First thought is Senator De Rosso, my birthday, September 25, just, you may want to note that. Secondly is that I met with the opponents and they've raised some points, and I've raised them with you, Senator Laird, and I know that you're amenable to hearing more. And I also recognize that there's not been perhaps adequate time to be able to respond to the questions that I had. There were three or four basic issues.

One basic issue was the cash issue, which was raised today. The second, though, was money laundering, how this somehow facilitates money laundering. And I am interested in receiving information from law enforcement sources or other sources as to how this may further facilitate money laundering.

The third is that this may be, if we raise it $25, it's in violation of certain federal regulations or maybe even statutes that require that when you redeem something at a certain amount, that you have to collect personal data, which would be very concerning to me if you had to collect people's Social Security number, address any personal data, which would require, I think even a, would require an onerous burden on the retailer as well as a potential sacrifice on the part of the person who actually acquired the gift card.

So I welcome that. And the third or fourth point was the length of time, whether there was something magical about 25 years. I don't know if there's anything magical about 25 years, whether it's 15 years or 20 years, if there's some other date that may work.

We've discussed all those issues, and I know, Senator Laird, you've told me that to the extent that, for example, one has to collect personal data or to the extent that this somehow significantly increases the ability and the vulnerability of the public with respect to money laundering, that you will continue to look at those two issues. Is that accurate?

That's correct. And everything you said I appreciate in, you know, I think it's hard because I keep feeling like I have rebutted every issue and it keeps coming back. And Massachusetts, for example, they do theirs a different way. They do it as a percentage of the gift card. So there's actually a level in Massachusetts that's higher than what, if you have $100 gift charge in a certain percentage, that's higher than what we're proposing in this Bill.

It hasn't kicked in this federal thing, and we're looking for specifics. If this exists, produce it. That was raised to the Committee and my staff after I had the meeting in the middle of last week, when it didn't come up at all with the opponents, continue to work on anything that would be an issue.

And I recognize I asked for this information relatively recently. So to the extent you are opposed, you may not have had an opportunity to actually collect, gather, or inquire as to these issues. So I know, as this travels through the Legislature, I've mentioned to you that I may continue to raise these concerns such that if there's significant concern, we may even ask for the Bill be brought back. So with that, Senator Laird, you agree to that, correct?

I do.

All right. With that, Senator Laird, would you like to close?

Just that I can sympathize with Senator Durazo. As I mentioned to the people that visited, I have a major gift certificate that was given to me by my Assembly staff for my marriage, and we had our 15th anniversary. We have not redeemed the gift certificate at the kitchen. And I'm going to get in trouble if we don't. It's going to inflate down to this after, if we're married long enough that maybe I can cash it in.

But the thing is, is that I honestly believe that these concerns have been met by the intent to the Bill and that if you really look at this, these concerns have not come up with the existing Bill, and we have had 16 years since that initial amount was set, and it is time for the consumers to get to a point that it moves with where it is. So I would continue to work, but I respectfully request an aye.

Thank you. And direct you to my comments is Senator Durazo, too, with respect to your certificates. So. All right.

I don't know if my spouse wants to have dinner with you on your birthday.

All right, so, Madam Secretary, if you would. Let's see. Senator Durazo, did you move the Bill?

Yes, sir.

Senator Durazo moved the Bill. All right, if you would, Madam Secretary, call the roll.

This is file item number 12, SB 1272. The motion is do pass. [Roll call] You have five to one.

5-1. We'll put that on call. Thank you, Senator Laird, I do not see Senator Menjivar, Senator Skinner, or Senator Smallwood-Cuevas, so. Oh, I do see Senator Smallwood.

Front row.

Thank you. There. Okay, I've got to, right, I got to be more attentive. Thank you, Senator Smallwood-Cuevas. SB 1137, item number nine.

Thank you, Mister chair. And I wore my yellow jacket just so I could stand out.

I'm getting older, so. All right, thanks.

So, thank you so much, Members, and good afternoon. I am pleased to present SB 1137, which would make California the first state in the nation to recognize intersectionality in our civil rights laws by clarifying that discrimination is prohibited not only because of one's protected one trait, but any combination of two or more protected traits. I'd like to remind folks as I stand here, I am a woman, I am Black, and I'm a worker. And all parts of me deserve to be protected.

And sometimes these things intersect. And where the intersection happens, we need to make sure that Californians have the fullest protection of the law. But under current law, all individuals are protected from discrimination. Of course, but these cases are exacerbated when an individual has experienced discrimination based on a combination of intersections of protected classes. For example, when a Black woman brings forward a discrimination case, she may be forced to address her race and her gender claims separately.

The separation of identities, as we know, is not how discrimination operates in practice, it has real effects on outcomes. And in cases where intersectional discrimination occurs, the defense may attempt to use the separation of characteristics to defeat the claim entirely. In Lam versus the University of Hawaii, an Asian American female professor alleged that she encountered discrimination based on race, sex, and national origin.

The lower court ruled against Professor Lamb because the defendants had supported an Asian man defeating her race claim and a White woman defeating her gender claim, but that did not deny the fact that Professor Lamb had faced discrimination as an Asian American woman. The 9th Circuit ultimately reversed the ruling because they recognized that where two bases of discrimination exist, they cannot be neatly reduced to distinct components.

The court went on to clarify that Asian women are subjected to a unique form of discrimination that is legitimate even in the absence of discrimination against Asian men or white women. They are, in fact, needing protection of both aspects of their identity as a woman, as an Asian person. Despite the 9th Circuit acknowledgement, civil rights laws here in California fail to explicitly recognize the intersectionality, leaving courts to address these kinds of cases inconsistently.

Intersectional discrimination is not limited to race, and gender discrimination can be expressed based on one's age, based on national origin. And all of this is about how do we address the combination of these classes and the complexity of identity in our courts. Those of us who have lived at the intersections of multiple protected classes know that these experiences cannot be separated, but they are inextricably linked, and we carry all of our identities with us at all times.

And it is necessary that our laws reflect that, and that when we are able to bring these cases, that we are made whole as people. I myself have seen this firsthand in cases where we had been addressing discrimination against a worker, for example, and the worker is being paid less than what men are being paid less, but also being paid less as a Black woman than what women are being paid on the job.

And so it becomes complex, and there's a need for the court to recognize this. I have two witnesses with me today. And first, we will hear from Jasmine Edwards, who will share her own experience of going through the legal system after facing discrimination on the basis of race and gender and her challenge of being protected. And then we will hear from Professor Chaya Crowder from Loyola Marymount University, who can discuss the unique nature of intersectional discrimination.

We have Minooka Fernando, who represented Jasmine Edwards, and she will be here to answer any technical question that Members may have. And so we will start with our first witness.

Alrighty. Thank you. Is it Miss Edwards? Whomever. Please approach the microphone.

Hello. My name is Jasmine Edwards. Thank you for this opportunity to share my experience with you. In 2017, I was hired as a manager of a retail store in San Leandro of a large retail clothing company. When I was hired, I was promised the opportunity to become store manager.

Soon after, however, a new district manager transferred a mill manager to be my co-manager at the store and then gave the store manager position to him, even though I was fully qualified, if not more qualified, and had longer tenure in the store. I was continuously harassed by this male manager because of my race and gender.

While my manager frequently made sexually explicit remarks about women's bodies, told all the female employees to dress sexier, and often made racist remarks about Black people, and even racially profiled customers in the store, I felt like he received, I felt like he reserved the worst treatment for me and other black female employees.

For example, he frequently blamed me when anything went wrong at the store, even when it was outside of my control, raised his voice when speaking to me, made disrespectful comments towards me, and continuously humiliated me in front of my colleagues. He often commented that he didn't think I would be an effective leader as a manager because I was too much drama, even though I was a stronger performer, and other sales associates repeatedly told me that I should have been the store manager.

He did not treat men nor Black, mostly Latina females, as poorly as he treated me. Not only did his sexist and racist comments and conduct increase in frequency around me and other Black female employees, like groping mannequins in front of Black female coworkers, he also falsely accused me from stealing money from the store without justification, in the same way he accused Black customers from stealing without any proof.

After my repeated complaints to my district manager and HR fell on deaf ears, and my manager started to retaliate against me, my health took a toll, and I resigned. When I found an attorney and filed my lawsuit, my case was litigated as separate claims of gender and race discrimination. Though I believe that the treatment I endured was based on a combination of these identities and the harm I suffered cannot be.

Thank you, Miss Edwards. If you'd wrap it up.

Okay. In two distinct parts, it is critical that the law be clarified so it reflects the realities of the very real harms that workers like me suffer when we fall victim to a combination of biases. Thank you.

Thank you. All right, next witness.

Mister Chairman, Members of the Senate Judiciary Committee, my name is Doctor Chaya Crowder. I'm a professor of political science and international relations at Loyola Marymount University, specializing in research that examines the intersection of race, gender, and political behavior. My book project examines how awareness of intersectional discrimination influences policy preferences. The term intersectionality refers to the unique form of discrimination that people experience at the intersection of multiple marginalized identities.

It was coined by legal scholar Kimberly Crenshaw, who uses the analogy of an intersection at a traffic signal to visualize the ways in which black women experience both racial and gendered forms of discrimination that place them at an intersection where they experience the simultaneous impact of gendered and racial oppression. The theory was developed due to employment discrimination experienced by Black women.

Crenshaw explained that in the case of Degraffenreid v. General Motors, five Black women from Missouri brought a suit against GM alleging that the company's system of seniority perpetuated discrimination against Black women. During a recession, General Motors implemented a last hired, first fired policy in which people who were last hired would be laid off. This policy disproportionately affected Black women because no Black women had been hired prior to the passage of the 1964 Civil Rights Act.

With this in mind, Black women are often the prototypical intersectional subjects. However, there are numerous identities that intersect to create unique forms of marginalization. People of color who are undocumented, disabled, identified as LGBTQIA, and women often experience multiple forms of discrimination simultaneously. When policies fail to acknowledge the intersectional nature of discrimination, practitioners are unable to adequately address the unique experiences that these marginalized groups face based upon the discrimination on individuals who possess two or more protected classifications. I urge this Committee.

Could you wrap it up, please?

Yep.

I urge this Committee to support SB 1137 by Senator Smallwood-Cuevas. Thank you.

Thank you.

Thank you very much. Others in support, please approach the microphone. Give us your name, your affiliation, and your position.

Mariko Yoshihara, on behalf of the California Employment Lawyers Association, proud co-sponsor in support.

Jessica Stender on behalf of Equal Rights Advocates, proud co-sponsor in support. Also on behalf of Voices for Progress, Childcare Law Center, GRACE End Child Poverty, and Legal Aid at Work, all in support. Thank you.

Thank you.

Eric Harris with Disability Rights California in strong support.

Thank you.

Annie Chow with the California Teachers Association in support.

Thank you.

Jackie Serna, on behalf of the Consumer Attorneys of California, in support.

Thank you.

Michelle Taran Wolfwork with the California Commission on the Status of Women and Girls in strong support.

Thank you.

Craig Pulsipher, Quality California, in support.

Thank you.

George Parampathu with the California Labor Federation in support.

Thank you. Others in support.

Hello, my name is Sabina Crocette. I am with Legal Aid Work, proud co-sponsors and support. Thank you.

Thank you. Others in support, please approach microphone. Seeing no one approaching the microphone. Let's turn now to the opposition. If you're opposed to SB 1137, please approach the microphone. Seeing no one approach the microphone. Let's bring it back to Committee. Senator Laird.

I want to thank the author and the co-author for bringing the Bill. And when I was in the Assembly, there was this long, there were 144 code sections for nondiscrimination in state law, and they had all been put together piecemeal, even though fair employment and housing or the under Civil Rights Act guided it. And so in our code at that time, there were times when it said handicap rather than disability. Overwhelming majority did not have sexual orientation.

Many had gender with all these different words. And there had been this piecemeal edition of the nondiscrimination code without this clear statement that referenced all the way through the code. And I did bills that indexed it to the fair employment and housing so that if we ever changed fair employment and housing by reference, we changed most of the non-discrimination code sections. And it seems to me this is the next step because it's the recognition that there are the intersections between so many different things.

And when I was working for county government in human resources and was the person that worked on employment complaints, grievances, and assisted on discrimination complaints, we would see it. But there was no format for it because there wasn't that recognition that these crossed over. And so I think this is the right direction and a good Bill. And for many people, this will be a change. It'll be a change that also probably educates them about different pieces of this that they don't understand.

And I suspect you may have a few more fun times when this Bill moves along. But at the appropriate time, I will be ready to move the Bill.

All right. Other comments or questions? Senator Laird moves the Bill. All right. Seeing no other comments or questions. Senator Smallwood-Cuevas, you care to close?

Thank you so much. And I want to thank this Committee for its comments and working with my team on this. And thank you for so many of you who are on this dais that have been fighting and standing up for civil rights and the protections of our communities, for all of our communities. You're absolutely right.

The struggle continues, and this is a continuation of modernizing and updating our fair employment and housing laws so that we are recognizing the fullness and the wholeness of people and making sure our laws take that into account when it's time to protect them and to provide the remedies necessary to do so. I am grateful again for the Committee's help on this, and I want to thank the speakers for sharing their stories and coming before you with their courage.

It's long overdue, and I respectfully ask for your aye vote.

All right. Thank you very much. Madam Secretary, if you'd call the roll.

This is file item number nine, SB 1137. The motion is do pass to Senate Appropriations. [Roll call]. Five to zero.

5-0. We'll put that on call. Thank you, Senator Smallwood-Cuevas. All right. I see a number of people with distinctive headgear. That have probably been waiting for Senator Menjivar. So the lineup is Senator Menjivar, then Senator Skinner, then Senator Ashby.

Senator Menjivar, item number six, SB-1124.

Thank you, Mr. Chair. Committee Members, good afternoon. Okay, so imagine you spend a minimum of four years in the military where you may break a bone, you may have behavioral needs that need to be met, your back pain is constant and untreated because you're told constantly to just take ibuprofen and change your socks and keep on trucking. Now imagine you leave the military and those symptoms still persist, and you're now seeking to get treatment or disability for what.

Some of the things happen to you in the military. It is difficult to provide proof of that because, well, for the past four years in the military, you were told that you're okay, you're fine. Push forward. Attempting to file for a VA disability rating can be daunting and time-consuming.

It's hard sometimes to prove what happened to you, did happen to you there, and it can be a very vulnerable situation when your pain and symptoms are not validated by the VA through their denial of your claims. Finally, imagine feeling everything I just described and connecting with a company that rolls out the red carpet for you and promises you a high rate, but instead steals your money without any change to your rating, charges you an exorbitant amount, or uses your personal information to access private information.

This is what is happening to a lot of veterans who are going to unaccredited agents to process their veteran benefits. Now, I don't want to group every single agent or unaccredited agent in the same umbrella because I myself utilized an unaccredited agent to help with my VA disability and I did have a positive experience. But my story is not the same as other veterans who did not have positive experiences and had a complete opposite experience through fraud and so forth.

Because when the Federal Trade Commission testified last year in Congress that they received a 50% increase in complaints amounting to more than 150,000 complaints of fraud and illegal businesses practiced in 2022, it resulted in more than $414 million in damages. We know we have an issue. Stories like Grant Gallagher, an Air Force veteran who signed a contract with the Claims Consulting Firm that offered him very little help and communication, was charged $7,500 once his claim was approved.

After he did majority of the work on his own and his rating was increased, the industry, the company came back and said, we're going to charge you, even though he did the work. Our Christian Hamel, who turned to an unaccredited agent for help after leaving the Marine Corps only for them to abandon him. He eventually sought the help by a county veteran service officer to get assistance for his claim for free. This is why California needs regulatory oversight of the system.

We need to ensure that veterans disability claims are handled in a manner that is most beneficial to them and protects them from wrongdoing. Now, perhaps we don't all agree with the way the VA handles ratings, their denial percentage, and so forth, but we're working with what is federal law right now. Current federal law requires accreditation of agents who want to help veterans obtain their veteran benefits. So SB-1124 is only seeking to match the federal law.

The federal law is a key principle this Bill is seeking to uphold in California. The lack of institutional oversight over these undercredited actors is the crux of the problem that I am seeking to address. Specifically, SB-1124 would do a couple things. It will prohibit any person from soliciting, charging, contracting for receiving any fear compensation with respect to the preparation, presentation, or prosecution of any claim under the VA for VA benefits unless they are accredited.

There is currently an accreditation process that exists right now, and anybody who wish to work on this can apply for the accreditation. It will strengthen protections to prevent unauthorized access to veterans personal information through secure VA websites like eBenefits or VA.gov. Websites that you need your own personal information to access.

And it will reinforce existing fee caps on services by clarifying that a fee charge with respect to a veteran benefits is unreasonable if it exceeds the amount that a VA-accredited attorney or claims agent could charge for these same services. It's about oversight and making sure that those who participate in the industry are in adherence to what's already established in federal law. Mr. Chair, I'd like to now turn over to my witnesses who will further speak on this matter. We have Anthony Lew, Deputy Attorney General.

We have VFW State Quartermaster, Rodger Meier, and we have Scott Howell from King County, County of Veteran Services Office, and Legislative Chair of the California Association of County Veteran Service Officers.

All right, thank you. Before we begin, at the request of the author and the opponents that we're going to deviate slightly from our normal procedure. There will be four minutes for the support side and four minutes for the opposition side. I'm told there are three witnesses, so those four minutes may be divided among those three witnesses, but we're going to limit it to four minutes for each side. So go ahead. Those in support, please approach the microphone.

Hi, good morning, Chair and Committee. My name is Anthony Liw. I'm a Deputy AG in the office of Ledge Affairs. AG Bonta is the proud co-sponsor of this legislation. We thank Senator Menjivar for her leadership in authoring this Bill and our co-sponsors, The Veterans of Foreign Wars, for their partnership.

You know, this Bill stems from discussions between the Attorney General and the military and veterans community about the importance of ensuring that those who provide assistance to veterans in filing a claim for VA benefits are accredited by the VA.

The Committee analysis on pages 4 and 5 does an excellent job of describing the current system of VA accreditation, the public policy, purpose of accreditation, and highlighting the federal law that generally requires someone to be VA accredited in order to assist a veteran with initiating a claim for VA benefits.

As the author highlighted, this federal law requiring accreditation is the underpinning of SB-1124, the key principle that the AG, the VFW, and the many military and veteran groups that support this Bill seek to uphold in California law. Simply, if someone wants to charge veterans for help with their benefits claims, they need to follow the rules and become VA-accredited. The Chair of the Oversight and Investigation Subcommittee of the US House Committee on Veteran Affairs, Representative Chris Pappas, explained this way in a recent congressional hearing.

Quote, "Some veterans may be willing to pay a fee if the services they receive are worthwhile and a company's business practices are above board. But without adequate oversight through the accreditation process, we cannot be assured that this is the case." In short, because unaccredited claims representatives are not subject to the VA's rules and oversights, we feel they pose an unacceptable risk, consumer risk to vets.

In conclusion, SB-1124 stands for the principle that any business operating in the arena of providing assistance to veterans and filing a claim for VA benefits should have to play by the same set of rules. They should be required to adhere to the professional and ethical standards set by the VA, and they should be accountable to not exist outside of the protections provided by VA accreditation and oversight, including fee caps.

That being said, the AG's office is very committed, and we're working with the author to continuing discussions with opponents as the Bill moves forward. And should the Bill pass today, it's referred to the Senate Military and Vets Committee, and we really welcome the opportunity to further engage on these issues there. Thank you.

Thank you, Mister Lew.

Good afternoon, Chairman, Committee Members. My name is Rodger Meier and I'm here representing the tens of thousands of members of the VFW in California. Unaccredited claims consultants continue to operate outside the law because they do not want to become accredited. To be clear, there is nothing stopping them from having their employees accredited today. These companies make excuses that it's too hard to get every individual accredited. Don't believe that. Attorneys are admitted to the bar, not law firms. Doctors have medical licenses, not the hospital.

The VFW is not accredited, but our service officers are. These unaccredited claims companies should be held to the same standard and not allowed a free pass simply because they believe it's too hard or it does not fit their business model. It should not matter whether their clients willingly choose to use these services. It should not matter that some of their clients are satisfied with the results of the unaccredited companies. We do not legislate based on Yelp reviews. Companies operating outside the law must be reined in.

It should be our responsibility to require anyone who handles a veteran's claim.

If you could wrap it up.

We represent 70,000 veterans in the State of California and we have brought in $370 million in compensation since October 1. All for free.

I see. All right, thank you. You urge an aye vote. All right, let's now turn to the opposition. Excuse me, strike that. I apologize. No. If you're in support, please approach the mic and give us your name, your affiliation, and your position.

Saveena Takhar with the Consumer Attorneys of California. In support.

Good afternoon. Don Harper with American Legion. We have 100,000 Members in California. We recommend aye vote on this Bill. Thank you.

Thank you.

Good afternoon, Mr. Chair and Members of the board. Mr. Chair, thank you for your service. Scott Holwell, California Association of County Veteran Service Officers. Thirty-year Navy veteran. We are in strong support of SB-1124. Thank you.

Thank you.

Mr. Chair and Members. Randy Perry with Aaron Read & Associates, on behalf of the San Diego Military Advisors and the CalVet foundation. In support.

Thank you.

Good afternoon, Chair and Members. Stanicia Boatner, on behalf of the California State Association of Counties. In support. Thank you.

Thank you.

Danita Strongren. Volunteer with California AARP, representing 3.2 million members in California in support of 1124.

Thank you.

Jessica Stender, on behalf of Equal Rights Advocates. In support.

Thank you

Charles Wright, on behalf of the California Association of Veteran Service Agencies. In support. Thank you.

Chris Archuleta with Military Order of the Purple Heart. In strong support.

Thank you.

Steve Reeves. Veterans of Foreign Wars. In strong support.

Thank you.

Kenneth Hawthorne. Veteran of Foreign Wars. In strong support.

Thank you.

Andrew Miller. Veteran of Foreign Wars. In strong support.

Thank you.

Marcus Sedra, on behalf of the County of Los Angeles. In support. Thanks.

Thank you.

Thank you very much, Mr. Chair and Members. Dylan Elliott, on behalf of the Counties of Kern and Nevada. In support.

Thank you.

Chair and Members. My name is Seth Reeb with Reeb Government Relations. Representing about half a million veterans, representing American Legion or, excuse me, AMVETS Department of California, Military Officers Association of America, and the Vietnam Veterans of America. Thank you.

Thank you.

Chuck Jamison. Scottish-American Military Society, and we support this.

Thank you.

Mark Orlando. Sonoma County Veterans Service Office. In support.

Thank you.

Steve Spriggs. AUSA Northern California. We support.

Thank you.

David Kuta with the VFW of California. In strong support.

Thank you.

David West. President of the California Association of County Veterans Services officers, and we support this Bill.

Thank you.

Mack Adams. Retired Command Sergeant Major, 41 years, eight months, 11 days. Representing Military Family Support for El Dorado County. Strong support.

Thank you, Sergeant Major. I spent 33 years in the military, 33 of them afraid of Sergeant Major.

My name is Alfred Sims. Director of Veteran Services for Solano County. Representing 33,000 veterans in Solano County. In strong support.

Thank you. All right, others in support seeing no one approaching the microphone. Now let's turn to the opposition. Same deal with the opposition. Four minutes in total.

Before I begin, we'll have two members today doing two minutes each.

Alrighty.

Chairman Umberg, Committee Members, thank you for the opportunity to speak today in opposition of SB-1124. My name is Lieutenant Colonel retired Bill Taylor, and I'm the Founder of Veterans Guardian VA Claim Consulting. We are veteran owned with over 200 employees, all of which are veterans, spouses of veterans, or spouses of active duty. We are a transparent and ethical company, helping ensure veterans receive the benefits they are entitled to based on their honorable service to our nation.

I'd like to address two areas that we're spoken about today that we believe are not accurate. The first is contrary to previous testimony. We are not operating illegally, and we are in compliance with federal law as it is currently written, not as the people who oppose our industry wish that it was written. We are not acting as an agent or attorney. We never represent, we never present, and we never prosecute a claim.

We merely act as consultants to help the veterans navigate the process on their own behalf. And under current law, if you dont take that step into agency, you are not in violation of federal law. The federal law doesnt say you cant do this unless youre accredited. The second is that we are accused of not wanting to become accredited.

I have been fighting for four years at the national level to try and become accredited and change the accreditation rules that create a path for companies like ours to become accredited and allow us to operate and assist veterans with initial claims. In the absence of that, we share the concerns about predatory actors and the practices, that have been identified by many of the stakeholders here. However, we believe this is the wrong approach to addressing these concerns.

We believe that a better approach is the legislation that we have proposed that identifies all the negative practices that we do not like, legislate against them, but allow veterans to make the choice on how they want to pursue their claim. Given the environment that we're working in right now, we should be striving to give veterans a greater number of choices, not reducing those choices. We believe that we can address the predatory concerns while still maintaining a veteran's right to choose. Thank you.

Thank you. Next witness.

Perfect. Dear Members of the Committee, my name is Donato Clay, and I'm the COO of Veteran Benefits Guide, or VBG, which was founded in San Diego. I'm also a California National Guard veteran. I'm here today to express my opposition to SB 1124 unless amended. We support the Bill if amended because we agree that there should be protections for veterans in attaining their VA disability. But those protections shouldn't force our veterans to rely on a legacy system that the VA admits is prejudicial and inequitable.

There is an active lawsuit against the VA that calls out the racial and ethnic disparities in VA disability claims based on FOIA data from 2001 to 2020. The VA's own data shows that Black veterans like me are 22% more likely to have our claims denied than our White counterparts, and that is by using the legacy systems.

Removing access to good actors with high operating standards and innovative and efficient solutions creates a disservice to California's veterans by forcing them to accept a broken system that doesn't look out for everyone equally. The status quo being argued for by the legacy systems would force many veterans to continue to be denied, to receive lower disability ratings than they deserve, or to simply wait years by suffering through lengthy appeals.

Justice delayed is justice denied, and VBG helps veterans navigate a confusing bureaucracy to get what they are owed by doing more than the free services. To date, VBG has successfully guided over 11,000 California veterans through the claims process, and over 70% of our clients have used the free services before coming to us. These veterans have received an average increase in lifetime monthly benefits of $1,300 for every veteran that uses VBG, no less than six individual departments assist in determining what claims or increase they may be entitled to, and most importantly, network support. Coordination of trained independent provider network to complete disability exams.

We heavily invest in our data analytics and cybersecurity to remain up to date with VA regulations and practices and focus on a strategy of innovation and continuous improvement. Representation also matters in this space. A recent Yale University.

If you could wrap it up, please.

Yes, sir. So private companies in this space can't go through the VA's accreditation process and charge for services, which is why we're currently seeking accreditation reform in Congress.

Alrighty. Thank you.

So, ultimately, we request that we support the Bill if amended.

Thank you. All right, others in opposition, please approach the microphone. Seeing no one else approaches the microphone, let's now turn it to the Committee. Questions by Committee Members? Yes, Senator Durazo.

Thank you. If I can Mister chair. I would ask a question of the first supporting witness.

Sure.

I think it's Mister Meier.

Mister Lew, I think was the first witness in supporting.

No, Mister Meier, the VFW.

Oh, okay.

Thank you.

Ma'am.

Good afternoon.

Good afternoon.

I was wondering if you could explain about how, besides helping a veteran initiate a claim, how does an accredited representative assist veterans with other issues? What kind of other issues? How is that assistance?

So when a veteran comes into one of our service offices, they meet with an accredited service officer to initiate their claim. During that time, we take other things into consideration also concerning their mental health, their current home or homeless status, any medical conditions that they need. We're able to do that because we actually meet one-on-one with the veteran.

And so we provide, if you want to call it, a whole health for that veteran, having somebody submit information or talk to them over the phone, you're not able to do that type of triage of that veteran to understand what they may need besides just a VA claim.

Other questions, comments? I have some. Yes, Senator Caballero?

Well, I have a question, and I guess the question should be put to the AG's office or to the author of the Bill, which is you've heard some of the concerns raised by the opposition, and I'm wondering if there is an interest to sit down and have a conversation about how to make sure that. Well, to see whether the Bill needs to be amended. I guess the first question is, do you think the Bill needs to be amended? I am focusing on the racial disparities.

There are government processes that don't work very well. And having said that, know that I ran the immigration Bill to get rid of immigration consultants in much the same situation, because there are predatory people who take advantage of immigrants, take lots of money, and give legal advice when they're not lawyers. And so I'm really sensitive to trying to clean up a system that's not working very well.

But I am also concerned about the racial disparities and the potential for people who have spent, who made some sacrifices to be able to defend our country, and who are entitled to benefits and the ability to be able to get those benefits. Yeah.

Thank you so much for that question, Senator. I think that's a really important question because I'm concerned about that. But whether you're accredited or unaccredited, the submissions of the applications go through the same queue. So the problem that we're seeing, and they don't work, neither accredited or unaccredited work for the VA as a whole or the U.S. Department of Veterans Affairs.

So the problem we're seeing is that the backend on the VA side, the ones who then look at every single thing coming in through the same queue and then deciding who gets 10% versus the 80%. So it'd be difficult to address that in this end because no one is getting turned away from an accredited agent or an unaccredited agent who is seeking help to turn it into an application. And Mister Andrew, if there's anything else you'd like to add to that, Mister Chair, if that's okay.

That's fine. Sure. Mister Lew?

Sure. Yes. So there's two points here, I think. One is we will follow our author, of course, we at the AG's office, of course, very open to continuing to work with the opposition to see if there's a creative solution about amendments that can be taken that accomplish some of these goals, but are also acceptable to our military and vets groups. And we are a little bit boxed in, obviously, by the federal law. So this is not just dropping it into, you know, a blank slate.

I would say the racial disparities issue. I do. I do want to highlight again what the author has just pointed out, which is people talk about the system, the VA system is broken, and there's inequalities in this system, but, and maybe Roger or other folks can speak to this, but this system does not.

There's a difference between the VSOs and the county VSOs and the other fine people in California who work to help veterans and the Department of U.S. Veterans Affairs, the U.S. Department of Veterans Affairs, where there may or may not be inequality, you know, institutional inequality, sort of baked into, you know, 100 years of working. I think it's important to keep that distinction. The veterans in California have a lot of options.

So they can go to a county VSO, they can go to a non profit VSO, they can hire somebody else. It doesn't mean. I guess what I'm trying to say is that even if there is a history of racial disparities here, even if that's true, I don't think that the solution is that unaccredited for profit companies, the solution is that they come in and start, you know, charging people and hiring people to do that kind of work. Let's use, like, a judiciary kind of example.

You know, I think we would all agree that the justice system, over time has some, you know, suffers from some racial inequality, and it's not perfect, and we should really seek to change that. But at the same time, I don't think the solution to that is to allow people who are not regulated by the State Bar to come in and start working as, you know, a defense counsel or something like that. That's not alphas and oranges there.

All right. Thank you, Senator Caballero.

Well, I mean, the bottom line is my immigration Bill argued just exactly that, which is to allow people that are unlicensed to come in and give legal advice on complicated immigration issues didn't make a whole lot of sense. But I guess what I'm concerned about is that there are two interpretations of the law. And on the one hand, the opposition says, look, we don't fall under the federal regulations that require us to be accredited.

And so what you're doing is driving them out of business even though it doesn't violate federal law. In other words, the argument is, well, you should be accredited because federal law requires it. But if the interpretation is correct that they don't need to be accredited, then the question becomes, is there another way to regulate other than to run them out of business? Which is to say you can't do more than, you can't charge more than this amount, or you can't do this and regulate it somehow.

So I'm just struggling with it because I am sensitive to the fact that people of color join the military in large numbers. And it's become, frankly, these are the people that are that, and I know you agree with this, that are the more committed to defending our country, and so they ought to receive the benefits that they're entitled to. And so, however, the racial disparity happens, I don't want to see it happen.

I mean, you hit some really good points, Senator. And, I mean, I agree with a lot of what you've mentioned and to what Andrew mentioned, just a little boxed in. Unfortunately, the interpretation of the law, both on the Congress level, on the national level, on the state level, the AG's level has the same interpretation of the law that is in. That is. That is not what the lieutenant colonel has. You know, he mentioned his interpretation.

It's not what the majority in our country has interpreted the law. Under the law right now, they are looking at him as an uncredited agent going against federal law. So with this Bill, it was very difficult for me to find other avenues that wouldn't go contrary to federal law. I mean, you can. The Chair could attest, committees, staff could attest that we looked for ways that we could add some further amends, but a lot of them just went against federal law.

Thank you, Senator Wahab. I'm sorry, Senator. Whoa. I didn't see your hand. Are you raising your hand? Oh, yes, Mister Lew.

Oh, I think I neglected to address that part of your earlier question. So the Senator is right. I think what we're talking about are interpretations of the federal law. So the federal law, 58, I'm sorry, Chapter 58, Title 58, there's words there, and they say that you cannot act as an attorney or agent to assist in the preparation, prosecution, and presentation of an initial benefits claim. So in our view, this is actually very clear.

And what unaccredited companies doing now fit into the box of preparing, and they are acting as an agent. In our view, this is the interpretation of federal law that we very much believe in. And I think is really, if you look at the intent of the statute, that is the proper interpretation. Our friends on the unaccredited side, I think, take a more narrow view of how that law is to be interpreted, particularly with respect to the word agent and also the word preparation.

And so in their view, I think, I don't want to put words in their mouth, but an agent is only someone, if there is an agent of record or someone who has, like, an agent agreement. And I think if we were to subscribe to that very narrow definition of agent, it would kind of swallow the intent of the whole statute of that particular provision. And so we're not quite ready to accept that particular interpretation.

And also with the word preparation. Do unaccredited folks help prepare the application? I think they would say they don't. They assist or some other verb, but that they don't. That actually the veteran is the one who prepares it with their own hand, for example. That is kind of a narrow interpretation. So it is a battle of interpretations, in a sense.

All righty. Thank you very much. Okay.

Let me turn to Senator Wahab, then, Senator Wilk.

Thank you.

Thank you. So I just wanna say, just having the conversation, hearing the questions, I think obviously this Bill needs a little bit more work, which I trust that you will talk to opposition and see if, as well as the Attorney General's Office and basically all the stakeholders to find some type of agreement or some common ground moving forward.

You know, I think Senator Caballero's commentary regarding military service and so forth, you know, we, I struggle a little bit on this just because I wish that there were more opportunities from the get go for every average resident in the State of California, the United States, to better their lives and so forth. But many people sign up for the military, especially in Black and brown communities, because of a lack of opportunity in general.

And how are they going to pay for school, how are they going to pay for their livelihoods, and much more. And with that service obviously comes a great deal of potential trauma, whether that's injury, whether that's mental health, whether that's service abroad, and some of the problems that obviously occur during war. And we have a responsibility to take care of our servicemen and women. And I will move the Bill when appropriate.

Thank you, Senator Wahab. Senator Wilk.

Thank you, Mister chair. I guess I'm kind of echoing the same comments. No doubt you're passionate about this issue. These are your people. But one of the things that really struck me, and I can't remember which one of the opponents they talked about that 70% of their clients had already gone through the existing process and didn't receive satisfaction. And again, these people deserve the benefits that they deserve.

And for me, if I had to pay somebody to get what I deserve because they couldn't get it somewhere else, I personally want to do that. So I would encourage you again to work with the opposition and see if there's some path forward that benefits all.

Thank you, Senator Wilk. Senator Laird.

I would like to just very briefly pick up on Senator Caballero's comments, because I think that a lot of the testimony and the motivation for your Bill is to protect veterans, make sure they get the services they deserve, and get them in a legal, appropriate manner. And yet because of the structure of this Bill, and it may be because of federal law, the structure of this Bill, in order to make sure there's good actors and pushes away the bad actors, it also pushes away some good actors.

And the real issue here is, can you find a way within the structure of the law and your Bill to protect all the good actors and push away the bad actors. And I think thats the conundrum youre hung up on. And I just would say that sometimes it takes a little creativity to figure out how to do it. But I think that's where the solution of the Bill is here.

And it's like I stretch for other Members and I will vote to move this along, but that's what I will look for over time, is whether or not you can bridge that to try to protect all the good actors in the struggle to make sure the bad actors are out of the picture.

Well, I mean, the Chair and I became best friends on this topic to try to find creative ways to address that.

You weren't here earlier when he was telling everybody what his birthday is. So that's when we'll find out whether you're really his best friend.

You know, we. We huddled on this issue a long time because we were trying to find that path. And you'll know that there's no Committee amendments for this Bill because it was. It was difficult to work outside of the federal box, and I will continue to find a way that within that box, there could be something I can change. Because you're right. That is essentially what could happen. Right. We're addressing the bad apples and then the good apples go away.

Because I was one of those people, the 70% that I used the free service, and then I turned to a paid service because just like Senator Wilk, I myself wanted to pay for it, and I did get a good result. But just one veteran having fraud committed against them is one too many, because while I didn't pay an exorbitant amount, we have other veterans that paid an exorbitant amount of money just to get their God-given right of entitlement for disability. And it's not fair.

So I will continue. I mean, I will. If there's. I will turn to anybody under the sun to help me find a way that we can work within this box that doesn't go against Federal Government law to make sure that we are addressing the bad apples and also a path for the good apples.

All right, thank you. Other questions? Comments? Let me direct some questions to Mister Meier and Mister Taylor. Just in terms of trying to assess our points of agreement, let me ask Mister Meier to start with. The system of disability assessment by the VA is, in my view, analogous to the workers' compensation system. In other words, when you get hurt on the job site or in the performance of your job, you're entitled to some sort of, if you're disabled, some sort of compensation.

And the VA system is an adversarial, or at least a quasi-adversarial system. In other words, you apply and you may not get what you think you're entitled to, and then it becomes somewhat adversarial. Do you agree with that?

I do.

All right. Let's ask Mister Taylor, if he agrees with that.

But can I expand on that a little bit? A veteran who goes in to file a claim automatically thinks they should be 100%. Not everybody is 100% disabled. And so this is where some of the appeals come from, when they get rated lower than what they think they should be. But yes, I do believe that it's new math, Voodoo Math, with how they figure out the ratings.

Okay, but there's never in the history of the VA system has a veteran said, you've given me too much disability. Correct?

Never.

Our veterans are not stupid.

I'd like to return some money. Has that ever happened in your experience?

No, sir.

And in fact, in your experience, sometimes the VA rates people lower than what the veteran thinks. You just gave an example of every veteran thinking they're 100% disabled. Some don't. Some think that maybe they got a rating at 10%. They should be at 30%. Is that accurate?

Yes, sir.

Yes. All right, let me ask Mister Taylor, do you think it's either adversary or quasi adversarial process?

Absolutely. Any process that requires evidentiary evidence to prove service connection and to prove that you currently have that condition is inherently adversarial. If it was not a? adversarial system, my services would not be needed.

All right, so in the system you've got one side, the VA, that has experienced representatives, lawyers and others who have great experience in this area. Is that right? Mister Taylor, you can answer that question.

I'm sorry.

Yes. On one side, on the VA side, you have lawyers and experienced representatives who are assessing and handling one side of the equation in trying to arrive at what's just. Is that your understanding too, Mister Meier?

Yes, they have.

So we've got an adversarial system, we've got one side with experience, and we've got the other side, the veteran. Right? And do we agree that everyone who represents, we may not all agree, I think everyone who represents a veteran should have some basic level of accreditation. Mister Meyer, do you agree with that?

Yes, because it creates accountability and it also creates a system where if you don't do what you're supposed to do, you are penalized for it.

You lose your accreditation. Much like if you're representing someone workers' comp.

Lose your accreditation and a $15,000 fine.

Okay, got it. Mister Taylor, do you believe that everybody who represents a veteran should be accredited?

I believe in the concept of accreditation if it's an equal playing field that allows all players to become accredited.

So it is at least my belief that if you're representing a veteran, you should be accredited, right? That's my belief. So, yeah. All right, next question is, so in the workers' compensation system, you can hire anyone you want, you can pay them, or you can get pro-bono legal service, but you need someone who is accredited, a member of the Bar. In the VA system, right? Right now, you may not pay someone to actually provide basically assistance in submitting your application, isn't that right?

Or let me ask Mister Taylor, is that correct?

Yes.

Under the federal law.

Under federal law, you currently have free options through the veteran service officers.

And same thing with you, Mister Meier?

Yes. Any service officer who is filing an initial claim, it's free to the veteran.

And in fact, it's required to be free, right? So we've got this system that, in my view, is entirely inequitable, where you have a veteran, unlike someone who's injured in the work site, who may not pay someone to help them put their initial claim together. Is that the current system? I see heads shaking yes.

That is correct under the current system.

Fundamentally, in my view, inequitable. Fundamentally inequitable. And it made me ask, Mister Meier, why is it that we don't think that veterans should be able to choose someone who's accredited to be paid for their service, their expertise, their experience?

We're basing it off of the fact that the VA says, or the federal regulations say, that you can't charge, and that's why the VA, for some of these unaccredited companies, has ordered, has given cease and desist letters to these companies. If the federal law changes, we agree.

Do you think the federal law is wrong? The federal law should be that if you're accredited, you should be able to represent a veteran in the initial application so that the veteran gets his or her fair share of what they deserve.

Can I take this off and speak just as Rodger?

Go ahead.

I believe that there is room for that federal law to change, but until it changes, we're stuck working within the confines.

Let me ask Mister Lew. Mister Lew, do you think it should be that California's position that veterans should have the opportunity to be able to hire someone with expertise and experience in prosecuting their claim? Do you think that should be California's position?

If are you asking me to speak for the Attorney General? I can't answer that.

What's your point of view?

My point of view is that we have, in California, we're different from other states, and we have many high-quality options to veterans who are trained and exist under oversight and provide. And this is important. This is a policy of the Federal Government they should not be paying for, for the filing of an initial benefit application. And so that's how I feel. I mean, I think there is.

Let me interrupt you on my own behalf. I get it. And I think that the VA says you shouldn't be able to pay because the VA is in a position where it is basically on the other side of the veteran. In other words, it is in their interest to keep that disability rating as low as is possible.

And if a veteran can hire someone who's accredited to be able to get their just due that California should take the position that the Federal Government is wrong and put the Federal Government to their proof to come in and say, you know what, we think veterans should be in a special category for whatever reason, that they may not, unlike every other Californian, hire someone to be able to assist them to get the fullest basically disability. And I see Mister Meier has a question.

Not a question. Sorry Chairman, not a question. But the way it's being stated, it's as if the paid person is a higher caliber than my non-paid veteran service officers. And I'll put my veteran service officers up against any of the paid folks at these other companies because I see them daily working with the veterans, their families.

I agree 100%. We have some of the best veteran service officers anywhere in the country. We have excellent federal veterans service officers. My sister-in-law was one for many years. And we have some great veteran services officers, but we also have some that are not so great. We also have some that don't provide, as was illustrated by Senator Menjivar, that don't provide the kind of service that a veteran deserves. And so what we say is we're saying, no, you may not hire somebody.

But anyway, I'm going to basically stop. I am going to support the Bill, but I'm going to support the Bill with the caveat that I do think we should take on the Federal Government. I do think we should create a system where veterans have the option of choosing someone who is accredited to be able to pay them to help in this adversarial process that we all agree is an adversarial process.

And so rather than keeping veterans at a disadvantage, not allowing them to pay for the best expertise, that we should put the Federal Government to their proof. So I'm going to support the Bill. And Senator Menjavar and I have talked about this till I think both of us are blue in the face.

And I think that I'm not going to ask you to opine as to whether you agree or not agree with me, but I think before this thing gets to the governor's desk that we ought to make a point that California stands with veterans and would permit veterans actually to pay for expertise. So having said that, I'll shut up. All right. Senator Menjavar, would you like to. Is there a motion?

Senator Wahab has moved the Bill. Senator Menjivar, would you like to close?

You know, colleagues? Mister Chair, I, you know, I completely commit to finding, going back to the drawing board, if there's a way for us to do that 100%. You've heard my story, and you've heard that, you know, I agree with some, a lot of the points, that were said today. I want to make sure that we're protecting veterans' right to their benefits. I want to also make sure we're protecting veterans against fraud.

I want to make sure that if there are, that there is an ability for a veteran to choose should they want to choose to pay or go through the free services. The free services or CVSOs are amazing, and not everyone has the ability to pay out of pocket thousands of dollars. So I want to make sure we're protecting that option as well. There are many, many veterans, especially female veterans, that don't even seek their benefits because they're still struggling to even be claimed.

They're still struggling to even find themselves being titled a veteran. And the VSOs play a big part in creating safe space for them to come forward and ask for those benefits. So, Senator Laird, to your point, Senator Caballero, and a lot of the Members who brought up the point, I am committed to work alongside the opposition which is made up of veterans, and the support which is also made up of veterans, to find a common ground that elevates and supports all veterans.

So with that respect, we're asking for an argument.

Thank you. Thank you, Senator Menjivar. Thank you for your passion. You're new to this institution, but you've already taken the lead on veterans' issues. You're forming the Veterans Caucus, and I know you do that. And all the veterans that are here that have come to Sacramento to testify, you've come here because you feel an affinity, a bond with your comrades in arms. And you're doing this not for yourselves. You're doing this for others, and I, and you inspire all of us. So thank you, Senator Menjivar.

Thank you. Madam Secretary, there's been a motion. Please call the roll.

This is file item number six, SB 1124. The motion is do pass to Senate Military and Veterans' Affairs. [Roll call] Eight to zero.

8-0. We'll put that on call. Thank you, Senator Skinner. You've been very passionate. Excuse me, patient. I'm sure you're gonna be passionate as well, but you've been very patient. Thank you. You might know that this hits a sweet spot. Notice that?

Yeah.

Thank you, Mr. Chair.

Thank you, Senator Skinner. Item number eight, SB 1022.

Thank you. So, first, I'll start with I'm accepting the committee's amendment that would reduce the timeframe that the bill provides the Civil Rights Department to file a lawsuit based on what is known as a director's complaint. So this is the director's complaint. Terminology is specific to the Civil Rights Department. And director's complaints involve complex, systemic discrimination. They do not respond to a single individual's complaint against, say, a housing or a workplace or other. So I want to be clear that I'm accepting that amendment. I also.

When the bill first was introduced, the bill had a retroactive aspect. I had already done authors amendments before the bill was presented to the committee, and the committee did its analysis. So that retrospective was already removed. So the bill is prospective. So I want to make those clarifications. Well, then I describe what it does. So what SB 1022 does is provide our California Civil Rights Department time, additional time, and the time needed to effectively investigate and respond to systemic discrimination in workplace or housing.

And discrimination complaints that they investigate are used based on race, gender, gender identity, sexuality, and disability. So thus, they mostly impact our residents of color, LGBTQ individuals, women, and those who are disabled. The Civil Rights Department investigates thousands of civil rights violations annually, and in many cases, they, or situations, rather, they mediate and settle right away. But some complaints may come from multiple parties against the same entity over a period of years, which initiates to the department to look at. Huh.

Maybe this is something we need to look at in terms of this entity having really systemic discrimination. And SB 1022 addresses these circumstances by enabling, as I opened the department, to effectively address those systemic discriminatory practices. Sorry. By allowing this longer time period for a director's complaint. But let me also make clear, and some of you know, all this. You're lawyers. I'm not. But this does not impact an individual's complaint. So if I submit a complaint, I feel I was discriminated against.

This gives me no more time to act or to initiate a lawsuit. If I feel like I feel, you know, should initiate a lawsuit, it does not give me any more time. It only gives the department an additional time on those cases they have decided need that systemic look and are systemic cases.

So one might, you know, not always great to do this when you're presenting a bill, but, for example, there's a case right now, it's much in the media where the department has initiated what is considered a systemic complaint against Tesla for racially discriminatory practices within the workplace, and that's proceeding. So they initiated lawsuits. So anytime the department initiates a lawsuit, they couldn't come to a settlement. Now, this bill does not prevent the department from coming to settlements.

Of course, we always prefer that they work out whatever the problem is with the affected party and not have to pursue a lawsuit. They only pursue the lawsuits when they feel that they've had no other court. You know, they can't get remedy otherwise. So the last point I want to make is that in federal cases through the Equal Employment Opportunity Commission, courts have ruled that there is no time limit on the EEOC to investigate and thus to initiate such cases.

So I'd like to allow for my witnesses to present. And I have Sela Steiger, who is the staff attorney from Legal Aid at work, and Jessica Stender, who is the policy director and deputy legal director at Equal Rights Advocates.

Thank you, ma'am. The floor is yours.

Thank you. Good afternoon, chair and members. And I want to start by thanking Senator Skinner for bringing this important legislation. My name is Sela Steiger. I'm a staff attorney at Legal Aid at Work. We are a legal nonprofit supporting low wage workers in employment actions and have been doing so for over 100 years. Through our work, we have represented workers in settlements in numerous individual cases with CRD, but also in group and class complaints.

For example, we were recently involved in cases with employers who implement maximum leave policies which are unlawful for employees with disabilities, as their accommodations need to be determined on a case by case basis. We've also been involved with numerous sexual harassment and sexual assault cases that often go back years. As you may know, it takes time for employees to have the courage to bring these cases forward, and extensions of time have been recognized in these particular cases in different contexts through recent look back window laws.

Realistically, the CRD provides the only remedy for many low age workers who do not have the ability to seek independent counsel to litigate their claims. This is particularly true for workers who face systemic discrimination, where rapport of unlawful practices often go ignored.

Employees are singled out, harassed, unlawfully terminated, targeted, and made to feel like complaining at all would be futile in some cases, it may even take years for the individual to realize that there were laws protecting them from discrimination, or what they did experience was discrimination. These claimants are often facing severe economic hardship as a result of discriminatory practices, making individual litigation unfeasible again, and also making settlement through the CRD that much more meaningful.

As the Senator mentioned, increasing the period will also bring California law into better alignment with the federal counterpart of the CRD, the Equal Employment Opportunity Commission. While there is supportive precedent to support that, the EEOC does not have to adhere to the same investigation and filing deadlines for pattern in practice or systemic discrimination cases, including EEOC versus Mitsubishi and others, and many times they cite the legislative intent.

Thank you. Can you wrap it up, please?

Yes. Just two years ago, this legislature passed a bill again affirming the CRD's role and the ability to bring these type of cases and investigate group complaints.

So you're urging an aye vote?

I urge an aye vote.

All right. Thank you very much.

Good afternoon, Mr. Chairman and members. Jessica Stender, on behalf of Eagle Rights Advocates, co sponsor of the bill, you've heard about the importance of having an adequate time period for the department to enforce systemic, broad violations of the law. So I'll focus briefly on two other important provisions of the bill which are beneficial to all parties.

First, the bill would allow the department to pause investigations of administrative complaints alleging claims that are already the subject of and could potentially be resolved by pending investigations, class investigations or litigation. This ensures the department can more efficiently use its limited resources to effectively enforce our civil rights law in the case of broad systemic violations.

This is also beneficial to employer respondents because they don't have to then respond to complaints that are filed during this time when they're already responding to ongoing class or collective litigation or investigations. Second, the bill would clarify that the deadlines for the department to complete its investigation of a complaint and potentially file a civil action are tolled by voluntary agreement of the parties.

This type of mutually agreed upon tolling is a well recognized tool of trying to help parties settle, gives them time to share information and hopefully arrive at a settlement. The legislature has recognized the importance of allowing tolling agreements by enabling the department to toll complaints during dependency of mediation at the department. So this would follow in the footsteps of past acts of this legislature and also reduce the workload of courts if we can prevent litigation from being filed in the first place.

So for Californians, the department is often the only meaningful avenue to address discriminatory housing and employment practices. This will ensure the department can adequately and meaningfully enforce our laws, and for that reason, we urge your aye vote. Thank you.

Thank you. All right, others in support, please approach the microphone.

Mariko Yoshihara, registering support on behalf of The California Employment Lawyers Association, Voices for Progress Childcare Law Center, Grace and Child Poverty, California Work and Family Coalition, Inequality California. Thank you.

Jackie Serna on behalf of the Consumer Attorneys of California, in support.

Thank you. All right, others in support, saying no one else approached the microphone. Opposition.

Good afternoon, chair and members. Ashley Hoffman, on behalf of the California Chamber of Commerce, in opposition to the provision extending the statute of limitations to seven years in a CRD class claim. The statute of limitations attaches once they file their administrative complaint. Once they do so, they then have two years to investigate the complaint, and that can be told and has been in previous cases by the parties. From then, they can decide to file civil litigation.

So under this bill, by the time that you would actually be even starting the civil litigation case, the conduct would stretch back to actually nine years. Because of that two year investigatory period, we feel that the seven year statute limitations is far out of line with other statutes of limitations that this legislature has created. The typical class or sorry statute of limitations in civil litigation ranges generally from about two to four years.

The default statute of limitations, if a statute does not specify, is only three years. We have statute limitations for a reason. They're exceptionally important. If you practice Lyme, I'm sure you've encountered that the purpose is right to encourage claims to be brought quickly and to ensure that evidence is fresh. And I did want to address the note about the federal case. CRD has argued in prior cases that they should not fall under statute limitations based on the case mentioned, the Mitsuishi case.

That case has actually been rejected repeatedly by other courts across different circuits, and the EOC itself actually issued a comment letter specifying that those pattern and practice claims do follow the same procedures as Section 706, which is subject to, I believe, a 300 day statute limitations. So we strongly disagree as well that this would be matching federal law in that respect. Thank you.

Thank you.

Good afternoon, Mr. Chair and members. Chris McKayley, on behalf of the LA Area Chamber. Two points. One is we definitely share the concerns that Miss Hoffman specified. I would also note that it was just a few years ago that we increased the general statute of limitations under the Fair Employment and Housing Act from one three Years. Secondly, I know a lot has been talked about that this only applies to group or class complaints.

I would draw your attention in section two of the bill to the language that you're amending the 10 to seven years. It is at best ambiguous. On the point of the rules of statutory construction is the rule of the last antecedent, which seems to apply to the complaint treated by the director or director's representative as a group or class complaint.

If it is definitely intended that it only applies in that instance, then the language is pretty ambiguous and would gladly offer some amendments to the author and staff to clarify that, but I think that it could apply to individual claims as well. If you take a look at that language in section 12960, subdivision e six, that this bill adds. Thank you.

Thank you, Mr. McKayley. Others in opposition.

Courtney Jensen, on behalf of CJack. In opposition.

Thank you. Good afternoon. Bryan Little, California Farm Bureau. In opposition. For the reasons stated by Cal Chamber. Thank you.

Thank you. Others in opposition. Seeing no one else, let me just direct a question to Senator Skinner. In terms of the private right of action, are you amenable to making sure that it's clear that this only applies to, in essence, governmental action versus the private right of action?

Yes. Though I think what he raised was not so much whether this would apply to the private right, but rather whether a director's complaint could be based on a single individual complaint. If I understood that right. Well, maybe I understand.

Maybe we do need to clarify it, because it is my understanding that this is. These are. This applies only to claims that are being prosecuted by a governmental entity, by.

The Civil Rights Department, correct? That's absolutely the case.

Right. And while they may prosecute it on behalf of one or more plaintiffs, it doesn't provide individual controls litigation, in essence.

Right. It does not extend the time period for an individual to initiate a lawsuit.

Another clarification question, original. I believe you accepted the amendment. Also, there was one version of the bill that said a court may extend statute of limitations.

Apologies. I did not state that I should have. Yes, I am also, the court is not. Cannot extend. So in other words, if the. If you initiate the lawsuit, court takes, as we know, delays, they can't extend it. It still has to be resolved within that time period.

All right. All right. Thank you. Okay. Questions by committee members. No questions by committee members. Comments? All right. Is there a motion? Oh, you have a question.

I'm going to support the bill today, but I want to read it carefully because there have been some changes made, and I had a lot of the concerns that the opposition raised, which is that the statute of limitations is way longer than those that we have supported or that I have supported, put it that way, in the past. And. But from what I understand of what you've said is that this has been narrowed to situations where the acronym is CRD is looking at the situation.

And so I may feel a little bit more comfortable with that. So I'll support it today, but I'm reserving the right.

Yes.

Review it much more carefully.

Thank you.

Appreciate that.

Thank you. Senator Ashby?

Yeah. Be brief. I just wanted to thank the author for taking the amendments. It made it a lot easier for me to support the bill, too, with the amendments that you made and the clarification that it doesn't apply to individuals. And also the clarification on the court wanted to thank you, and we'll make the motion.

Thank you. I believe the motion's been made by Senator Ashby, seeing no other questions. All right. Madam Secretary. Oh, excuse me, Senator Skinner, would you like to close?

Thank you. While I. In putting this forward, I was thinking about how to help the Civil Rights Department be more effective. But now, thinking in the context of the deficit we're in by restricting the Civil Rights Department to a very short period of time, then if they have. I mean, in other words, if we. And we want them to adequately deal with complaints, there might be an argument to increase staff.

What this potentially allows by giving them a little more time, is that we may not have the pressures to increase staff loads in order for them to be able to do their work. So. And while I was not, you know, when I initiated it, I wasn't thinking of it in terms of the budget context, but certainly there is a budget context in that respect. But with that, I appreciate the discussion and request your. aye vote.

Alrighty. Madam Secretary, please call the roll.

This is file item number eight, SB 1022. The motion is do pass, is amended to Senate appropriations. [Roll Call] Seven to one.

7:1. We're gonna put that on call. Thank you.

Thank you, Senator Skinner. Next, Senator Ashby, then Senator Caballero. And then. Then we'll go through the roll. So for members who are not present, we're going to hear from Senator Ashby, then we're going to hear from Senator Caballero, and then we are going to close down the committee. Senator Ashby, thank you. Floor is yours. Filing number 10, SB 970.

Great.

Thank you, Chairman. Today I am here to present SB 970, which establishes a legal framework for regulating artificial intelligence, voice, image and video cloning technology. Let me start by saying that I am accepting the committee's proposed amendments, and I thank the committee for their Help in that regard. The rise of artificial intelligence presents an opportunity for continued innovation in various industries, and these technologies are a powerful tool for major advancements. However, the lack of comprehensive legal framework for addressing the challenges posed by AI is troubling.

This leaves individuals vulnerable to various forms of exploitation, including identity, theft, scams, and misinformation, especially with deep fakes on the rise. Altered videos and images create doubt and uncertainty around current events and undermine the public trust in digital media. Efforts to regulate AI technology should focus on enhancing public awareness about deepfakes, empowering individuals to identify and mitigate potential threats or misinformation.

SB 970 aims to do just that by using the establishing the penal code violation for the misuse of AI voice or video cloning technology, granting legal recourse for victims harmed by misuse of AI, preventing AI generated evidence tampering in the courts, and creating mandatory consumer warnings on AI cloning software. This Bill provides a balanced legislative framework that weighs both innovation and individual privacy to prevent abuse and disinformation. Chairman, I have a witness with me who came up from Southern California today. His name is Josh Bocanegra. He is an AI developer and the co founder of Persona, an AI company.

Thank you.

Good afternoon, chair and Committee Members. My name is Josh Bocanegra. I'm an AI developer and I run an AI company named Persona with my co founder, Christina Milian. Quick background on me. I taught myself how to code when I was 16, and I've been professionally building artificial intelligence for over a decade. My work includes developing award winning AI for major artists like Katy Perry and Rihanna and many others.

I built voice assistants that help students learn how to read, a chatbot that helps consumers identify toxic chemicals in their beauty products, and an AI that uses the principles of cognitive behavioral therapy to help users improve their mental health. So my extensive work in AI has shown me its potential to make a positive impact on our society, but it's also showing me its potential costs for harm. AI can now clone your voice with less than 30 seconds of audio.

It can generate photos of you doing anything, anywhere, with anyone, and soon it will generate videos of you that are indistinguishable from reality. Recently, a mother received a call from her teenage daughter saying she was being held hostage. Sounded like she was crying, and she said that she would only be released if the mother paid a ransom. Scary. Turns out that the caller was actually a scammer using a clone of her daughter's voice.

This is one of many stories that show how this technology won't just affect public figures and those in the music industry or the film industry, but also how it will affect everyday people. This is why I stand firmly behind SB 970 not only confronts these critical issues head on, but it also positions California at the forefront of AI regulation. Thank you.

Thank you very much. Next witness other witnesses in support, please approach the microphone.

Brena Sheehy, representing PERK Advocacy, in support.

Thank you. Others in support saying no one else approached the microphone. Let's now turn the opposition. If you're opposed to SB 970, please approach the microphone. Seeing no one approaching the microphone, let's now turn to the committee members. Members of the nommittee, questions, comments? Seeing none, is there a motion? Senator Wahab moves the Bill. All right. Senator Ashby, would you like to close?

Yeah, I just normally would just urge an I vote, but I'd like to take 1 second to say that Mr. Bocanegra understates how incredible he is in this space. He helped me put together this language. And by the way, the first time he came to visit me in a matter of about 10 minutes, took one of my floor speeches and turned it into AI that I could not tell was not me. A speech I had never given, which convinced me that we needed this bill.

And I want to thank him very deeply for his encouragement of the bill and I urge an aye vote. Thank you.

Alrighty. Thank you very much. I assume you'll have your business cards here, so.

All right. Thank you very much. Madam Secretary, please call the roll.

Yeah.

This is file item number 10, SB 970. The motion is do pass as amended, to Senate Public Safety. [Roll Call] Eight to zero.

8-0. We'll put that Bill on call. All right, Senator Caballero. Senator Caballero. This is the last Bill of the day. SB 1386, filing number 11.

Thank you, Mister Chair and Members. SB 1386 seeks to clarify the civil rape law, a law that protects the privacy of survivors of sexual assault, rape, and sexual battery, by prohibiting at trial inquiries regarding their sexual histories. This Bill is based on the experience of a Jane Doe, a fourth grader, eight year old, a fourth grade, eight year old girl, who was sexually abused over a one year period from 2009 to 2010 by one of her teachers.

Subsequently, in 2013, the same victim was sexually abused by a family friend in the home. Thereafter, she received counseling for her trauma, and she reported her prior sexual abuse as well. At trial, the trial court ruled that evidence of the subsequent sexual assault suffered by Jane Doe could be admitted as evidence to undermine her credibility.

In reviewing the trial court's decision, the California Court of Appeals and the California Supreme Court ruled that the defendant school district may seek to admit evidence of a survivor's other sexual conduct to impeach the survivor's credibility. SB 1386 would protect survivors of sexual assault, rape, and sexual battery from further victimization by explicitly stating that the civil rape shield law, a law that protects the privacy of the survivors, prohibits inquiries into their sexual histories to impeach their testimony as to consent or damages.

Rape shield laws are specifically designed to protect survivors from unnecessary and intrusive inquiries into their personal lives and sexual histories. Forcing survivors to disclose details about their intimate life or to relive traumatic incidents unrelated to the case in order to undermine their credibility can be as traumatizing as the assault itself. SB 1386 would clarify that evidence of a victim's sexual conduct unrelated to the case is not admissible to impeach their testimony as to consent or damages.

This Bill will preserve the integrity of the civil rape shield law and foster a supportive environment for survivors to come forward and seek justice that they desperately deserve. With me to testify today is civil rights attorney Michael Carrillo and Jessica Stender with Equal Rights Advocates.

Thank you very much. Floor is yours.

Hello again, Mister Chair and Members Jessica Sender on behalf of Equal Rights Advocates since 1974, we've advocated for the rights of women and girls and people across genders who experience harassment and assault at work and at school. We're acutely aware of how survivors can be re traumatized by even just stepping forward to bring a claim, especially when details about their intimate past life sexual history, either consensual or non consensual or thrust into the spotlight.

This deters reporting, and it opens the door to harassing conduct when survivors do come forward. For this reason, the Legislature passed the rape shield laws, putting a categorical ban on the use of evidence of sexual history to prove consent or lack of harm because they found it is more often harassing and intimidating than genuinely probative.

As the Legislature noted at that time, without this protection, survivors will face a catch 22 of coming forward, but only at the risk of enduring invasive intrusions into details of their personal lives in discovery or in judicial proceedings. And they further found that the potential for prejudice outweighs whatever probative value that evidence may have.

So to allow evidence that the Legislature categorically barred in subsection A under the guise of impeaching credibility, would undermine the intent of the Legislature in passing the civil rape shield laws and undermine the very protections that were intended to be conveyed with these laws. For those reasons, we urge your aye vote. Thank you.

Thank you. Good afternoon, Mister Chair, Co-Chair, Committee Members, my name is Michael Carrillo. I'm an attorney. I'm a partner at The Carrillo Law Firm in South Pasadena, and I'm here on behalf of the co sponsors, the consumer advocates, consumer attorneys of California. I've spent my entire professional career in civil rights representing victims of sexual violence, sexual assault and sexual battery.

And the California Legislature recognized that the importance of limiting the admissibility of a survivor's sexual history or past conduct in civil court proceedings related to sexual assault, sexual harassment, and sexual battery cases, and that's why they passed the rape shield laws in 1985. However, clarity of the statute is needed in order to protect survivors of sexual violence from being further victimized when seeking justice.

Here we're talking about Little Suzy, who was a fourth grader when she suffered horrific sexual abuse by her teacher during that fall semester. Among the abuse, her teacher forced her to perform oral sex multiple times when she was just eight years old.

Sadly, Suzy was not his only victim, as he had many, and she brought an action against her abuser and the school district for the negligent hiring of the teacher, negligent supervision of him, negligent failure to warn, train, educate against his abuse and negligence per se in the others for not reporting his abuse.

In her case, the district attempted to introduce evidence related to subsequent sexual assault she suffered years afterwards in an unrelated incident in order to, quote, impeach her credibility as to the source of her claimed harm. The trial court permitted this evidence without considering the ramifications of what this might do to someone trying to seek out, speak out and find their voice.

Ultimately, the Supreme Court held that Section 1106 E may permit admission of evidence for impeachment purposes that would otherwise be excluded under Section 1106 and remanded for further proceedings. The Supreme Court's holding in Mountain View is inconsistent with the original legislative intent, and the impact of allowing such evidence will cause a chilling effect on survivors such as little Suzy, who wish to come forward to seek accountability, but who will now fear having other sexual history exposed if they do.

Thank you. All right, others in support, please approach the microphone.

This is why SB 1386 is before you today. Thank you very much. We'd wrap up. We urge you an aye vote. Thank you very much.

Good afternoon. Whoops. Good afternoon, Chair and Members. Tracy Rosenberg, on behalf of Oakland privacy in support.

Thank you.

Good afternoon. Jackie Stern, on behalf of Voices for Progress, The California Women's Law Center, The Child Care Law Center, and the Employment. Lawyers Association in support.

Thank you. Others in support. Seeing no one else approached the microphone opposition. If you're opposed to SB 1386, please approach. Seeing no one approaches the microphone, questions by Committee Members. Yes, Senator Wahab.

Obviously this is an interest area of my own. I'll move the Bill when appropriate. Thank you.

Alrighty. Thank you. Other questions? Comments? Thank you, Senator Caballero. I want to make sure that we create the legislative history here in terms of your intent. I understand your intent in terms of admissibility, but this evidence is also. It is the evidence or the questions that one might ask in deposition or an independent medical evaluation that this history or the interrogation questions in this area are not likely to lead to discoverable evidence.

And the reason I say that I'm going to ask, if you agree, is because, based on my own limited experience in this area, representing someone who was traumatized, that the whole defense effort was to re-traumatize the woman into, in other words, by asking incredibly invasive, incredibly traumatic questions during the independent medical evaluation as well as in deposition, the purpose was to intimidate her into settling.

So I want to make sure that it's clear that since this is not relevant, questions in this area are not reasonably related to or not reasonably related to any potential admissible evidence. Is that your understanding as well?

Well, I would say that I agree with your analysis that the intent is to force some kind of a settlement by making the threat that this is going to be an inquiry in front of the jury. The bottom line is that they wanted to use it in court as a way to undermine her credibility as to what the damages were and as to whether there was consent or not. She's underage. It doesn't matter whether she consented or not. A child cannot consent.

And so the challenge here was that we had at least arguably different statutes that one that said, you're shielded and another that said, but you can ask questions, a judge can inquire and then make a balanced determination. We just think it's important to, to take away that option from a judge and to say this is just not admissible evidence in a trial, and I'm not clear.

I don't think what I'm trying to do is take away the option for attorneys asking questions in deposition about past sexual behavior, because since that behavior, since those activities, since that whatever that event was, is not admissible, correct. The questions in deposition are not relevant and inappropriate. I just want to make sure your point.

Yes, yes.

That is, if that's also your intent.

That is my intent.

All right. Same thing with independent medical evaluations.

Yes.

Okay, great. Thank you. All right. Any other questions or comments? There's a motion I believe Senator Wahab. Oh, I'm sorry. My only comment is the first time ever that the Transportation Committee has gone longer than judiciary on a Tuesday. So I just want to mark this historic moment. Well, this is. We'll take a. Yes, we'll all again pose under the clock in a second. Okay? All right. All right. So there's a motion by Senator Wahab. Would you like to close?

Respectfully ask for your aye vote.

Okay. Thank you. Madam Secretary, please call the roll.

Roll Call

All right, that Bill is on call. We're going to go through the roll here one more time, and then we're going to shut down. Transit's going strong. Okay, well, why don't we do this? We'll go through it once, and then we'll go through it one more time after we go through it once in hopes that Senator Stern will be. You go through it twice. I'm sorry? You're going to go through it twice. That's very good. Thank you. Thank you, Senator Allen, for that assistance.

Yes, we're going to go through it twice. Yes. All right, here we go.

Roll Call

We'll put that back on call. All right.

[Roll Call]

11- 0 Bill is out. And with that, I believe we are adjourned. Amen.