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

Senate Budget Subcommittee Number Two on Resources, Environmental Protection, and Energy will come to order. I ask all members of the subcommittee to be present in room 2200 so we can establish a quorum and begin the hearing. We do have an update to today's agenda. Issue number six for the State Water Resources Control Board's BCP on the establishment and implementation of instream flow objectives in Scott River and Shasta River watersheds is pulled off of today's calendar and will be heard at a later date. Before we begin, let's establish a quorum. Consultant, please call the roll.

[Roll Call]

Quorum has been established. We will begin with discussion of all the issues listed in the discussion section of the agenda. Before presenting the proposals, each department will provide us with a brief overview of their organization, and then we'll comments from finance and LAO. And we are going to begin with issue number 16. Thank you. Please start when.

All right, thank you. Good morning. Good morning, Chair Becker and members of the committee. I'm Arima Kozina. I'm deputy secretary at the California Department of Food and Agriculture, and I'm pretty excited to be here to provide an overview for you this morning of what we do. We love what we do for the State of California. So, as you likely know, California produces a remarkable abundance of fruits and nuts, vegetables, grains, livestock, poultry, leafy greens, flowers, fibers, nursery.

Basically, if you can grow it, you can grow it in California. And this bounty of more than 400 commodities was valued at nearly $60 billion in 2022. And it represents over a third of the country's vegetables and nearly three-quarters of the fruits and nuts grown in the United States. So since 1919, the California Department of Food and Agriculture, or CDFA's, mission has been to serve the citizens of California.

Excuse me, and work with this vital industry by promoting and protecting a safe, healthy food supply and enhancing local and global agricultural trade. We do this through efficient management, innovation, and sound science with a commitment to environmental stewardship. One of our main goals is to work to promote and protect the California agricultural brand. And that's a lot more than just what we grow. All of those different types of commodities that I listed, it's really about how we grow it in the State of California.

So the California brand really represents superior quality, value, and safety, all of which are supported by the activities that we do at the department. California's farmers and ranchers meet and consistently exceed some of the highest measures of resource efficiency, environmental stewardship, innovation, and product quality in the world. And at CDFA we work to support those producers and we also work to do the same. So our goal is to optimize our fiscal resources through collaboration, innovation, and process improvements.

And we also work to improve regulatory efficiency through proactive coordination with our stakeholders. Now, even if you're not directly related to producing products and production agriculture in the State of California or the supply chain, I guarantee you that you like to eat what we grow, and that's the food part of the Department of Food and Ag.

So to that end, our final goal at CDFA is really to connect rural and urban communities by supporting and participating in programs that emphasize a mutual appreciation of the value of diverse food and agricultural production systems in our state. The governor's budget proposes approximately $682,000,000 to support CDFA and the goals that I laid out. Our major funding sources include $203.7 million from the agriculture fund. These are largely fees and assessments collected to support industry programs.

There's $154.5 million from the general fund, 126.2 million of federal funds, $99.1 million proposed in bond funds for infrastructure improvements to our border protection stations, and $98 million in other funds like the Greenhouse Gas Reduction Fund. This budget supports 2063 positions embedded in over 50 sites throughout the state and across CDFA's nine divisions. So these divisions include some of the functions that you might think of when you think of promoting and protecting California agriculture.

Divisions like our Animal Health and Food Safety Services Division, Plant Health and Pest Prevention Services Division, and Inspection Services Division. Those are the functions that one thinks of that help to safeguard our state from plant pests, from animal diseases, and to make sure that our products meet quality and food safety standards. There's also a few functions that you might not think of. So there's our division of marketing services, which our division director likes to say does everything but marketing.

So really they provide oversight for all of the boards and commissions that are agricultural marketing programs. And then this division also provides oversight and leadership to the network of California fairs. There's also our Office of Environmental Farming and Innovation, which promotes and supports climate-smart agriculture in our state. And then our Division of Measurement Standards, which is responsible for the enforcement of California weights and measures laws to promote fair competition in the marketplace.

Or, as my colleague likes to say, the backbone of civilization as we know it. That's our division of measurement standards. They're small but mighty. And then all of those functions are supported by our administrative services division, our office of information technology services, our farmer equity office, and the executive office. And I could talk about CDFA all day, so I'll just welcome your questions and comments at this time.

Thank you. Thank you for that overview. Very appreciative with the questions. I just had a very specific question on the Blythe border protection station replacement. We've seen that they're requesting funding for construction phase and doing this important screening site for invasive species, which will be a theme this year. But the original station was built 1958, designed to come at about 600,000 vehicles annually, but even first built, not really able to handle the traffic. So has CFA ensured that the new station will meet the expected traffic volumes at the time of completion, and is there a buffer in capacity if there's increased volume in the future?

Absolutely. Great question. We like to think that we got a little bit better since 1958 and our ability to kind of project these things out. As you mentioned, in 1958, the building, as it stands now was originally designed to accommodate 600,000 vehicles annually. That first year that it was open, it accommodated 747,000 vehicles, and in 2021, the traffic measured more than 4 million vehicles.

So we know we might have been a little bit off in our projections in 58, but the design that we currently have was based on forecasted traffic volumes through 2040. So we worked with the Federal Highway Administration growth rates, and those were used to calculate the future traffic volumes on Interstate 10 at a general rate of, like, 1.6 per year was used to estimate the growth and the future traffic volumes at the intersections and on the ramps. And so the traffic forecasting was then used to determine the number of passenger vehicles and truck lanes required staffing and to inform the overall station design for the traffic volumes at 2040.

Okay. Sorry for 2040. And what is the anticipated traffic in 2040?

That's a great question. We estimated a growth of 1.6% per year through 2040.

Got it.

I can't do that math. Sorry.

All right. Okay. That is fine. Any follow up questions?

Thank you. Mr. Chair. Good to see you. So, I have a little different perspective. I'm in the seed business, and I'm regulated, and I pay for that regulation to come through. So in the North, we have inspection stations coming out of Nevada and out of Oregon into California. My question is that most of the agriculture producers are in the loop and have their bill of lading with what commodities they're bringing in, but it's the general public that does not have the same.

They may buy some fruit or something in another state that can't come into California because of the fruit fly or whatever it may. Sharpshooter. You name it. So how do you go about identifying those? I mean, I know that I go through them all the time, and typically when I'm carrying seed, they know I'm carrying seed. And I had a heck of a time with the cereal leaf beetle, which was in Oregon and wasn't allowed to come to California.

Anyway, the story I could go on for a long time. Apparently, the cereal leaf beetle does not live in a 50-pound sack but will live in a 2000-pound sack. Even though it was processed. I had to re-bag the material to bring it into California. Had nothing to do with cereal leaf beetle. It was just a packaging issue. But to my question is, what's the policy to try to get the general public?

That I think is where we get most of our invasive things coming into California. What is the policy there? How do you find them? Because when you go through there, they wave at you. You go from Truckee to Sacramento, nobody asks you anything, you just drive through. So for me, why we have do?

That's a great question. For some of our higher volume stations, it's really difficult, particularly in places that have a high cost of living, where there might be high turnover and staffing is an issue. We have a hard time accommodating both the commercial lanes and the other lanes, the kind of regular traffic lanes. And so we have to prioritize the commercial lanes where we know that product is entering the state.

We do have rotations and we try to make sure that we have people in those lanes checking other vehicles at all times. That's part of our operational plans. And I know that I've personally stood on some of those lanes and checked as traffic comes into the state. And a lot of those staff members, they know the folks that are coming through regularly, and they're really on the lookout for people that are coming through with coolers, people that are coming through with firewood.

We have large outreach campaigns to try and inform California visitors and people in passenger vehicles of what we're looking for to help speed up the process and make sure they understand the importance of this. There's a lot of visibility at these stations, and so we like to leverage that to make sure that we have outreach going out to these folks as they're coming into our state. We do our best to check every vehicle as it comes through and to look in the back during high-traffic times. It's difficult, I'll admit.

So for the record, for the other members that probably don't drive through these things that I'm aware of very often, because I border other states, my district, and I will tell you, I have never been stopped, and I'm not a local. I go through there when I'm doing my legislative business, and 99% of the time, there's not even a person there. It's just a lane and you drive through.

Now, if I'm in my commercial truck with a load of ag commodities, they're going to check my bill of lading, and they're going to want to know what I got. Now, if you're coming from Oregon on 139, they'll ask you what you have in your back of your truck. And they're looking for if I bought a washer or a dryer and paid sales tax in California. So I'm concerned about what we're really doing. Are we really concerned about what we're getting?

Because at the end of the day, I will tell you that the biggest majority of invasive species coming into California is not from agriculture producers. It's from the general public that really doesn't even know what the check station does. If you look, there's a maybe. Yeah, it says fruit fly every once in a while, but they don't really know what's going on. So I think there's an opportunity for us to do a lot better job. If we're going to do it, let's do it.

If we're not, then let's just shut them down and quit wasting the money. Because I know that they do get some stop some stuff, but for the 99% of the time I've been going through them, they're not checking to see if I have anything in there, and that's just a fact. If you want to come and ride around with me, I can show you, because I drive through them all the time. The one on I-80 in Truckee, the one on 139.

The one out of 395 out of Reno, Nevada, in Susanville, they wave at you every time. I don't see anybody asking anybody, do you have any fresh fruit, or do you have something that's on the list? We're going to spend a lot of money here to update a facility in Blythe because there's a lot of cars that go through it. But are we actually stopping stuff from coming into California? We have an outbreak of, what is it right now for the oranges?

Yeah, there's a bug for the oranges, and 99% of that's coming from somebody's backyard, not a commercial producer. Yeah, I'm not getting on you. I'm just saying if we're going to do it. Let's do it. If I'm not going to do it, then let's quit wasting money and open the gates.

Yeah, and I appreciate your comments. I think to your point about what we're checking for at different stations. We do try to do kind of risk analyses, and we have different protocols for folks coming in from different states about the likelihood of what might be coming in from those states and which types of vehicles to look out for. There's definitely a lot that we love to do with these stations in terms of outreach and education. We do do a lot of other checks for not commercial vehicles, but for other ways that pests enter the state. So with packaging facilities and trying to do checks as other material comes into the state as well.

What about the seeing if they paid sales tax from into California? I've personally been stopped and asked where the two by four came from and my receipt. I happen to own a farm in California on the other side, and I buy stuff at the hardware store to take to my other ranch, and they're asking me to show my receipt because they want to know if I paid sales tax. Is that part of the mission for the Department of Agriculture?

We work with our agencies across the Administration to make sure that all of the laws across the Administration are enforced as efficiently as possible. And so if folks are stopping in for one reason, we try to make sure that we're covering all of the possible. So are they going to be checking the registration on my car next?

There are other stops for that. We'll defer to our partners at CHP and the DMV for that.

Well, it's very hard for me to want to pass a budget that I'm getting stopped about a sales tax when I'm watching fruit flies come in. I mean, we need to get our priorities straight. I'm not beating you up personally, but it's mean the general public's not getting what we're paying for, and it's a risk to our state to have these invasive species come in.

If you want to see a really good program and how it's ran, go to Lake Tahoe and see what they do to every single vessel that goes on the lake is checked so that we don't get the mussels in there. That's a program that works because they're making sure that every single person that puts a boat on Lake Tahoe is not having a muscle in there. So I just want to let the rest of the members know what's really happening. Out there. We're going to spend a lot of money in Blythe. What are we going to stop coming? You have Imperial Canyon, you have Arizona, which is bringing a lot of materials into California, agriculture materials through that port.

Thank you, Senator Dahle, for raising that. I'm appreciative. I didn't have any other questions. Specifically, I realized you didn't have the chance to Department of Finance or LAO, see if you had any follow on comments to the issue generally.

Frankie Mendez with the Legislative Analyst Office. The proposal raised no concerns for us.

No comment from finance.

Okay, great. Well, thank you, Deputy Secretary Kozina. I appreciate your presentation. And we will move on now to our next issue, 17.

They're going to get back to us about the questions raised by Senator Dahle. Is that the plan?

Yeah. I'll make sure we follow up.

Okay. I think they're some good questions. I thought that myself, actually.

Yeah, we'll follow up with the department. Thank you. Great. General Manager Ambriz, thank you. We have time for a bit of an overview of Exposition Park and then we can talk about the positions. Thanks.

Thank you, Senator. And it's great to see you again, as well as the other members. I really appreciate the opportunity to talk about Exposition Park, located in Los Angeles. Really appreciated your visit recently to see the developments underway at the park. A bit of history about Exposition Park, and it's timely that we're talking about other departments across the state. CDFA in particular. Exposition Park began as an agricultural district, and in fact still is the 6th agricultural district for the State of California.

It is now, however, better and expanded more than ever. We are home to world-class museums. We are home to institutions, sports, and entertainment venues. We are home to recreation centers for the community. We receive approximately about four to six million visitors a year. And that really was an estimate prior to COVID. Since we've been opening our doors to various additional opportunities and events and activities across the park, we've been seeing a really incredible increase in visitors to the park. Those institutions include two state institutions.

The California African American Museum, the California Science Center, Home to the Space Shuttle endeavor, which we're proud to host. Also the new Lucas Museum, which is coming in, the Lucas Museum of Narrative Art. We're also excited to host the Natural History Museum for LA County. We also host the LA Memorial Coliseum, where the historic USC football team plays. And where we've had two Olympics previously. We also have a recreation center. We have the Rose Garden.

And we also have the BMO Stadium, where LAFC and Angel City play. Their championship teams. So, as you can imagine, it's a busy place at Exposition Park every day. We're excited to welcome all Californians, and particularly the local residents. That community in particular is one of the most disadvantaged communities in the state. It actually is one of the most park-poor communities. Unfortunately, the surrounding area experiences less than one acre of green space. So Exposition Park really is an urban oasis for the community.

They have some of the highest rates of poor air quality, the highest rates of PM2.5, the highest low-income rates. It's a predominantly Latino community closely followed by the African American community. So when we think about serving exposition park visitors, we think about the local residents and the patrons that we serve, and we also think about the tourists that we will welcome. We're very excited that we're going to be hosting the 2028 Olympics and Paralympic Games just in a few years.

We have a lot of work to do and part of our budget proposal is to prepare for those opportunities. Lastly, I'll mention that while we are excited that the 2026 World Cup is coming to Los Angeles, we're also hopeful to host on state property some of those engagements. So with all of those events, with all of those institutions, we certainly are seeing an influx again of residents visiting, of visitors and tourists. So all of the infrastructure improvements we need to make at the park are timely and we're confident we can do that by the 2028 Olympics.

Excellent. Thank you. Would you give Department of Finance or LAO opportunity to comment on any pieces of. Sorry. Anything from Department Finance or LAO?

Department of Finance. Nothing to add.

Are we going to walk through the budget proposals specifically, or would you like me to comment on those? We didn't have any comment on the overview.

Yeah, I guess on the. Senator Blakespear also has a question, so it was really comment on that. But Senator, please.

Got it. Okay, so why don't we talk to Issue 17 specifically, and then I thought maybe that covered sort of some of the capacity, but I understand there's a further presentation, so maybe you can speak more specifically to that and then we'll.

Sure. Thank you, Chair Becker. So, with Exposition Park's increased needs to meet the demands of the public, we have two proposals upon you. First is to expand our capacity on our staff. We are small but mighty staff, but in order to meet the millions of additional visitors, we do need some support on staff, for communications to the public, for outreach and engagement, to make sure that we're well informing the community about some of the developments and engagements at the park. We also see a need for facility improvements.

As you can imagine, infrastructure is a high need for us to focus on, so we are looking for a position in that sense. We're also focused on new events and revenue generation to the park to ensure that all of the operational needs that we have are met through our in-house fund, which I can speak to shortly. And then lastly, our engagement with our public board, as well as other stakeholders on campus would be supported through the proposed position.

Exposition Park is funded and resourced through our own internal revenue collection. So we have predominantly a majority of resourced funds through our parking revenue, as well as our lease agreements and payments that we receive, as well as our rental of our event spaces. Largely, nearly about 70% of our revenue is collected through our parking. So the second proposal, which I can speak about in a second, would help support that.

But with these additional positions, it would really aid our ability to accommodate a safe environment for the visitors that are coming to the park.

Got it. Thank you. So on that now, we'll have any additional comments from Department of Finance?

Nothing to add, happy to answer questions.

Sure.

Good morning. Rachel Ehlers with the Legislative Analyst Office. We didn't have any concerns about Issue 17. We thought the positions were justified.

Okay, great. We'll now open that up for questions. Senator Blakespear.

Yes. Thank you. My question is about what would be the impact of delaying funding for the headquarters, the facility's headquarter construction.

Thank you. That's related to the underground parking structure project that we're also seeking. As part of Exposition Park's effort to ensure that we have enough resources to meet the increase in infrastructure that we need to have at the park, we're looking for generating as much revenue as possible through our parking. Currently, we only have about 5000 parking spaces on campus to meet the demands of hundreds of thousands of visitors that we receive actually on a daily basis.

With the underground parking structure proposal, we're looking for that opportunity to generate that additional revenue to meet all of those infrastructure improvements. So I offer that in that we are hopeful that this will be a source for us to prepare ourselves not only for the increase in traffic, but the increase in visitors, alleviating a burden on the General Fund in the long term for all of the operational improvements.

With regard to the positions, one of those positions specifically would support, in this first phase, the creation of the underground parking structure, and the delay in not allowing us to kind of meet those infrastructure needs would be a loss of revenue to the state.

And how many parking spaces are added to 5000 with this?

We have an estimate, at minimum, we're seeking to accommodate 1300. We're aiming to kind of be as judicious as possible and maximize that opportunity. We're aiming for at minimum of a 30% increase.

Okay. And how much are you charging for parking per hour?

Currently, our daily rates are $15 an hour for the entire day. You can visit two free institutions, California African American Museum, the California Science Center, as well as all of those others that I mentioned. And our special event rate is $18.

And is there any effort to improve transit access?

Yes. We are the only site in the city that has two Metro stops. We also have one right across the street. We're in conversations with Metro to not only promote and amplify the access to the park through more accessible options, including Metro and other buses, but we're also thinking about expansions of other alternate vehicles. The part of the underground parking structure project has a component related to EV charging infrastructure that we're excited to bring in.

The way I see it, when we have the global spotlight with the 2028 Olympics and Paralympic Games on us, let's put our best foot forward and demonstrate to the world what alternative strategies and technologies are available.

Yes. Especially because the Olympics are supposed to be car-free.

That's right.

That's an ambitious goal.

Yes. We have a bus parking area and bus parking stations, or bus EV charging stations are something that we're also considering with the Olympics. We are in close conversations with them. We plan to be able to afford space for all of the shuttles and all of the buses that are going to be trafficking a lot of the visitors to the park.

And also the other kind of key attendees will utilize the underground parking spaces. And we will, on the kind of surface of the underground parking structure, will also use that space as a rental area. So we will be generating revenue for the state in that way, too.

Okay. Thank you. And thank you, Chair.

Sure. What percent of people come right now would you estimate on public transit versus driving?

It's a great question, Senator. I'm not familiar with the exact statistic. I would estimate probably about a quarter of visitors. The Metro system has been engaging in additional outreach campaigns to the community to encourage more public access usability, and we want to work really closely with them to provide that information share to the public so they can get to Exposition Park in different ways.

Okay, good. Well, we've kind of gotten into 18 as well. But first, let me just, on 17, well, we'll skip that question for now. On Issue 18, are there additional comments, maybe from Department of Finance?

Mike McGinnis, Department of Finance. No additional comments from Finance at this time.

Okay. How about Ms. Ehlers from the LAO?

Yeah. Thank you. As noted in your agenda, you all and the Legislature funded the initial performance criteria phase of this project last year, but now it's coming before you again for kind of the big decision, do you want to authorize the design build phase? The project is estimated to cost over $350,000,000.

While there's a hope that there will be revenue generation to help pay off the debt service on that lease revenue bond, at least the estimates we've seen suggest it won't be sufficient, and so there will be likely a need for some General Fund. The debt service cost estimates we have are $25 million per year for 25 years. So there's certainly merits to the project. But we just want to flag for you that there are also costs, and is this among your highest priorities?

Because this is the decision point at this point. Additionally, there's a component of the project that wasn't really specifically called out last year to build a headquarters building and a community center as part of the project. When you approved the performance criteria last year, that wasn't clear that now is included. So that's another option you have if you wanted to think about proceeding with the parking, but maybe scaling down the project again, this is your decision time to decide whether you want to proceed, is this your highest priority, and what components do you want to include in it?

Well, thank you. And I know we won't be voting on this today, so this are good things to keep in mind. Yeah, along those lines. Would appreciate your thoughts. Given the significant budget issues with the state, what is Administration's plan to minimize reliance on the General Fund for these debt service payments, and will the Park Improvement Fund be able to kind of bear the lion's share of these payments?

Good morning. David Jensen, Department of Finance. The Administration will closely monitor both the Exposition Park Improvement Fund and the General Fund states going forward. The use of revenue bonds to finance this project does allow for a degree of flexibility in utilizing both of the funds as appropriations are reconsidered annually as part of the budget cycle. In times, excuse me, of limited General Fund availability, the Exposition Park Improvement Fund may provide for a greater share of the debt service to reduce reliance on the General Fund.

And furthermore, as Andrea has mentioned, funding from the parking structure itself will support and grow the Exposition Park Improvement Fund to fund the project.

What's the condition of the Fund right now?

I will defer to the Department.

Thank you. Pardon. We have an ongoing effort to increase our revenues above kind of our additional targets. My colleague at Department of Finance will be joining us as well. We are a strong and sound Fund. Regularly we exceed our revenue share and return to the state. So I am confident that the resources that we will yield from not only increased parking revenue generation, but also the additional events and engagements World Cup Olympics are going to support our Fund.

Lizzie Urie, Department of Finance, would just add that the Governor's Budget projects the Fund will have an ending Fund balance of about $8.3 million at the end of budget year. This is inclusive of the Expo Park Capacity Building Proposal. And while we do show that the Fund is structurally imbalanced with expenditures exceeding revenues, as Andrea has spoken to, there are many opportunities for additional revenue generation to sustain the Fund on an ongoing basis.

Okay, well, I appreciate it. Obviously, it was good to be there with some of our colleagues and to really see what it looks like right now and some of the continued expansion and understand how this is an important part of it. But it is a big decision for us because it's a big commitment, but certainly a worthy effort. Any other from Senator Blakespear?

Yeah, I just wanted to refocus on the specifics of my question, which was actually about delaying funding for the headquarters. Not talking about the parking delaying, but the headquarters. So can you just speak to that specifically?

Thank you very much for allowing me to clarify that. The headquarters, it was named something different as a part of the original master plan, which is the project proposal upon you. That has always been a component into this project. It was named differently and by an oversight, that name was that the change in name was omitted, but it was always a part of the package.

In fact, we were able to decrease the total amount of the cost that we originally anticipated, still maintaining this headquarters and community center structure, plus the underground parking structure, and also increasing the number of spaces that we were anticipating. So it's always been a part of the original vision of the park.

What we've found is that there is a really big disconnect and misunderstanding that this is a state property and it's an incredible value add for this community, but also for the state, to have this specific property and be able to showcase that it is working on behalf of the state and for the residents in the area.

So that community center is going to be not only a gathering place, but then also a space where we can share the history of the park and then also kind of share resources to the community, like public safety, water stations, bathrooms, things that currently don't exist to the public.

Okay, I'm just going to summarize what you've said, because basically, I still don't feel like you're really answering my question, which is, specifically, given the size of the budget deficit, if we were looking at phasing things here and the headquarters was not built at the same time as some of these other things, I recognize they all have tremendous value and they will be a great asset for the community, and it will be something the state is very proud of.

So I guess, I don't want to badger you about this, but if you wanted to address what would be actually the impact of delaying funding specifically for the headquarters, if we were to want to phase it and reduce costs for this immediate budget year, which we're all tasked with managing?

So the project is currently in the performance criteria phase, which means that there's already work underway that assumes that this portion of the project is included in the scope. There'd likely be some lost productivity, a little bit of previously spent funds that would effectively be no longer useful for the current iteration of the project if that portion of it was to be separated out.

Additionally, by including the headquarters in the project, there is a degree of efficiency which will be achieved by having a single contractor that's able to do the whole thing. It will reduce some of the overhead associated with the project, and by delaying the project, we will likely see cost increases, as unfortunately, the construction market does tend to just increase over time.

Additionally, I would note that the project is going to be bond funded, and as a result, the payments on the debt service will not start until the facility is occupiable. So likely in 2027. So it will be a few years out before we start to see these deferred payments, which will ultimately be spread over a period of approximately 25 years, depending on the terms of the bond.

Okay, thank you. That's all important context. I appreciate you sharing it. Thank you.

Senator Allen.

Well, first of all, thank you for all your work. I mean, this is a facility that's certainly not in my district, but I can certainly speak to the importance that it has for the entire Southland as a convener of people coming to learn about so many different things from science to natural history, African American issues. Of course, the Lucas Museum is going to be wonderful, and I think we're all very excited about that.

And then, of course, obviously, all the sports facilities, it's also just a wonderful place of respite and very family friendly. I wanted to, and as mentioned, directly connected to transit, and now you can hop on a train from Catherine's district, and now you can take a direct train straight from Union Station right to the park now, which is really exciting. A couple of questions. Where is this headquarters? Where is it going to be situated in the park? Is that the operations center that's on the south side of the Coliseum?

That's right, yeah. This entire project is at the south side of the park and it's immediately adjacent to the residential community, which is why we're so excited for it to be exactly, as you mentioned, the respite for the local community to access the park. The center is immediately adjacent to the underground parking structure, and there will be, we're envisioning a connection from the underground parking structure to that building so individuals are able to access some of those public services that we're going to provide.

Got you. Okay. Yeah. And I do value all of the emphasis on green space. I mean, it is a very park-poor area. And so much of the park, unfortunately, is handed over to concrete right now because of all the parking. Now you mentioned the World Cup. Now it's my understanding that the World Cup is all over at SoFi. What's the vision for the Expo Park with regards to the World Cup?

Thank you for the question. We're really interested in either supporting the World Cup through fan activations, through either a fan festival on campus, and/or any other kind of public engagements that the FIFA Association or other teams are interested in hosting. So given that we are a public facility, we're a public space, we think it's a wonderful opportunity to invite individuals to attend the park in a public setting, in a public forum.

Specifically those that aren't able to secure a ticket to the game, they can come to the park for free.

Gotcha. Okay. But that's still being figured out, is that?.

It is, we're in ongoing conversations with FIFA and other partners.

And then the Olympics vision. Could you sort of give us a rundown of what all of that looks like? And are these projects, you're seeking to have these done by '26, or by '28, or?

With the underground parking structure, we're seeking and confident that we can meet the deadline of the end of 2027. So immediately then, we'll be able to begin collecting revenue and engage the LA28 Planning Committee to use those spaces.

So none of these projects are being done with the World Cup in mind, it's all Olympics?

Right. For the underground parking structure that would be created by the Olympics. However, the revenue generation that we see coming from some of the other facilities that we have on campus will help us make all of those infrastructure improvements to meet the World Cup increased demand. As an example, the Lucas Museum is slated to open up in 2025-2026. We have a parking structure there that will be open then to accommodate those visitors and also the additional visitors.

So every single opportunity that we can to engage more visitors to the park is an opportunity for us to collect more resources and then put them directly back, dollar for dollar, into the park.

Okay. So give us a sense of, I think it'd be good for Members to just get a sense of exactly what the plan is for '28. I mean, Expos Park was absolutely the center of both the 32 and the 84 Olympics. And so much of the infrastructure comes from those two experiences. All that being said, of course, SoFi is now taking, I think they're taking in a lot of the action, and then there's going to be sites all over the city, of course.

So I'd love to get an overview of what the vision for the park is for the Olympics.

Yeah, we're really excited about the opportunity to host the Olympics. We will be, as a state site, the only place in the world in history to host the Olympiads for the third time. It's an incredible opportunity, a historic moment for us, the site and the perimeter of the entire park, and the discussions about the usage is still underway in discussion with LA28, our partners with whom we work closely.

The idea now is for the Olympics, the opening games to be held likely at SoFi, which is able to accommodate a bit more ticket holders inside. But because we are the LA Memorial Coliseum kind of host site, which has a historic torch, we do anticipate playing a role in not only the opening, but very strongly, and if not hosting the closing ceremonies at Exposition Park.

Additionally, we're looking forward to using the LA Memorial Coliseum for some of the notable games, track and field and a few others. And then we're also thinking about how we can use the bank of Montreal Stadium as well as EXPO Center, which is the home of the historic 32 and 84 pool that was used for those Olympics, again, for these games. So we're going to be using existing structures.

A challenge that we have to meet is ensuring that our roadways are prepared, ensuring we have bathrooms available, ensuring that we have lighting, ensuring we have public safety ready to go for the increase in visitors. And that increase is already occurring now. It's only going to kind of triple, quadruple, even more so when we have the Olympics.

So the plan is for track and field to be at the Coliseum?

There's a discussion and a plan to propose the games being held there. All of those final agreements and venue assignments are still in discussion, and it's up to LA28, but we are proposing that they could be at LA Memorial Coliseum.

Do you know, is there a timeline as to when they're going to make that decision, do you know?

In my recent conversations with them, they are looking forward to making that announcement in the forthcoming months by the time, hopefully, the Paris Games occur.

Speaking of Paris, I understand the Mayor was just there with the whole team. Are you part of that conversation? Apparently they've had a lot of lessons learned, including some things they're nervous about. Any thoughts coming out of that trip? Was Expo Park part of that conversation? Because one of the things I do get concerned about our state entity, which is our responsibility, and yet so much of this is being driven by locals.

Thank you for that question. Yes, we are in close conversations with Mayor Bass' office and team. We weren't able to join their delegation visit during this meeting, but we have talked about future engagements, not only to create either a state delegation, but potentially to partner with the Mayor's team for one of her future delegations. As I understand it, there are conversations to potentially visit sites, pre and during, potentially even post, the Olympics to understand, again, infrastructure improvements needs, public safety, which is of utmost importance.

Our engagement with them has been really, I think, productive. We've been really closely tied to thinking about the impact it's going to have, the Olympics will have, in their surrounding community, as well as throughout the entire Southland. I'll mention something that we've already kind of stepped into. We've commissioned the Department of Homeland Security, Cybersecurity and Infrastructure Security Agency, which is the entity that partners with the Secret Service and also a couple of other public safety agencies, to kind of create security assessments of the area.

We've already done that at Exposition Park, and we're looking forward to that report to give us additional feedback on the improvements that are needed, particularly around public safety at the park. But to your question, our engagements with not only Mayor Bass' office, but LA28, in addition to the county, in addition to our federal partners, are ongoing and consistent, and we're looking forward to making sure that this park is capable and prepared to accommodate all of the visitors.

Okay. All right. I appreciate all that. There's obviously, the whole business model of both the Olympics and the FIFA World Cup have changed in ways that I think are really disadvantageous to local folks. I mean, the truth is the 84 Olympics is still paying dividends. We have this LA84 Foundation because they call it "the games that saved the games," because I think Montreal just finished paying off its debt from 1976.

But some of these folks--one of my questions, I guess, is how confident are you about being able to get some resources to help with some of the necessary Olympics-related upgrades from LA28, given their funding constraints, and how does that play into your planning?

It plays really closely into our planning. Last year, with the Legislature's support, we received the statutory language that allowed us to create an Exposition Park Foundation, which will now become a nonprofit arm that will allow us to fundraise for additional improvements at the park. I'm looking forward to that being another resource to support these developments at the park, not only the park on top of the underground parking structure, but other park-wide infrastructure improvements.

In our conversations with LA28, we recognize that they have their own objectives and fundraising goals. We are seeking to ensure that any of the improvements that are necessary for the Olympic Games are provided in a sustainable, long-term manner so that it will actually benefit the park and the community residents that will be activated. We want to ensure that the local community that is bearing the burden of the visitors for the duration of the Olympics and the Paralympic Games, so that will be all throughout July as well as August of 2028, really have an opportunity to use those spaces, pre and post, but particularly for the long-term future. So we have ongoing conversations with them. LA28 will, at this point, not be providing any major infrastructure improvements to the park.

And this is why, really, it's incumbent upon us using our funds, our resources, to make sure we're meeting the needs, and we're trying to leverage this opportunity for the Olympics, the World Cup, the attention that it's bringing to kind of the area with all of the increased traffic to make those kind of revenue collections so we can again put a dollar for dollar back into the park.

Yeah, okay. I appreciate all that. And I mean, look, it's a wonderful place. It's an important place, and every time I bring my family there, I'm always struck by how family friendly it is and how many people from so many different walks of life, including all over the world, come to enjoy the amenities there. It really is a special place, and it's going to be all the more special because of these great international events that will be taking place there.

That being said, I do want to make sure that we're all aware and taking those kinds of constraints into consideration as we both support you, but also put pressure on some of the powers that be to ensure that they're paying their fair share. Given all that you're being expected to do, we know you're going to step up and provide a really top-notch, visitor-serving experience for people coming from all over the world for both of those events. The folks responsible ought to be chipping in.

Certainly count me in on pressure associated with that effort, but also let's use these events as an opportunity to really upgrade the park and take it to the next level. I think there's so much momentum there right now. And you mentioned the Lucas Museum, of course, is the latest good news. There's so much opportunity to really turn this existing gem into an even brighter diamond. Thank you.

Thank you, gentlemen. Senator Dahle.

I'm still here. First off, I want to just say as somebody from the north. I've actually visited the park. Assemblymember Jones-Sawyer took me on a tour there. It was awesome. I really like the idea of open space in an area where there's not a lot of open space. I have a ton of it in my district, but if you live in that neighborhood, that's a great place to go. So I'm supportive of what you're trying to do.

But I do have a couple of questions because the Governor's 3030 by 3030 plan is trying to get us away from parking. Did you say $15 an hour is the rate? What'd you say?

$15 a day.

Day. Okay.

Yeah. It is about one of the lowest in the local area.

And so right now, what are you generating off? Is it maxed out? Is it full? What's your revenue coming off of it right now?

Yeah, for this past year, well, I should say for the 22-23 year that was completed, we generated about, I believe, $6 million more than what we had initially anticipated because of all of the increased events. So whenever we have, and it actually really did help us when LAFC won and when Angel City won, because that meant that we had more games to host at the park, which meant more visitors, more traffic, more cars parked, and again, all of those dollars went straight back into the park.

So it was a good opportunity for us, which is also why we wear their colors as well. We know that with those increased events, and part of what the proposal is is to support a position that would encourage more business development at the park to yield more revenue. So we are expecting that there will be an increase in return.

So you had a spike this last year, but previous to that, that's not a good business model, because the business model would be, anybody in business would look at, like, 10 years of revenue and then average that out. And then obviously you're saying, we're going to get the Olympics, we're going to do more things, but those have to come to fruition first, and you have to look at the back, which I'm concerned about.

It's a lot of money, it's $350,000,000 plus, by the time you pay it back, it's double that. Right? So that means you have to get $625,000,000 in revenues to offset that. And if you don't, we're on the hook for it. And I think that's what needs to be discussed here, is that and it's future generations that are going to pay, 25 years is a long time to be paying those debts off on a business model that has one year blip in it.

And so that's why I ask if your parking lot was completely full every day, and you know that, that, hey, if we expand it, we're going to generate another 40% of revenue, that's a different model. But the model that I'm seeing is kind of sketchy.

If I can add to that. So in 2018-2019, we built the new BMO Stadium, which is what brought Angel City and LAFC to the park. That's really what facilitated increased traffic to the park. In 2018-2019, we averaged about 363,000 vehicles parked. In 2022-23 we had 1.07 million cars parked. And that was with the kind of limitations that we had in being able to manage the multiple events requested that we actually weren't able to meet.

We have received nearly double requests for events, for activations, for spaces and rentals, which is why we know we have to meet the increased demands of visitors wanting to come to the park, wanting to host games. It's a really good problem for us to have, I suppose, in that we have kind of endless events at the park every single day, and it means that we just need to accommodate for that.

So we are confident that we are not only going to see increased traffic, but then increased visitorship as well, from here on out. And why I took the 22-23 years is because, prior, we were impacted by COVID, kind of with the limitations of engagements and the closures of many of our museums and facilities.

Thank you for that information. I just want to say that we hear a lot in this building about how we're moving away from transportation and people in cars, but we're funding our future on people parking cars. And so I believe we'll still be using a lot of cars in the future. And I don't think the transit thing, it hasn't proved out yet to work very well. Obviously, you said a third of your people or about a third is coming on transit.

But anyway, thank you for that information. I want to see this succeed. I really think this is a gem for the neighborhood, and I think it's great for people that have not the ability to just walk out into the forest. It's a place to go and get some open space, and it's beautiful, and there's a lot of good history there.

Well, thank you. Yeah. Believe a third would still be 1-2 million people taking transit, which according to your numbers, which would be quite good, but hopefully we'll increase that. Thank you, General Manager Ambriz. I appreciate it. We're going to hold that open and move on to the next item.

Thank you, Senators.

Great. We'll now move to an overview of the Department of Pesticide Regulation, DPR. And I understand that you'll do an overview and then probably move right into our next issue, Issue 19, which is Sustainable Funding for Pest Management at DPR. So this is a very important topic right now, given some things that have been going on in the state. So I appreciate you all being here. And, is it Director Henderson? Yeah. Thank you.

Thank you. Good morning. I'm Julie Henderson, Director of the Department of Pesticide Regulation, and Karen Morrison, who's to my left, is our Chief Deputy Director. And as you mentioned, I'll be providing a general overview of the department's responsibilities, and then we'll move into the budget presentation. So pest management plays an absolutely critical role in the state, both to support agriculture and our healthy food supply, as well as protecting people and the environment and our infrastructure.

We at the Department support access to safe, effective pest management tools and practices that protect our food supply and also our infrastructure and Californians and the environment. This role has become increasingly critical as climate change and extreme weather conditions have introduced new and increasing pest pressures, as particularly low risk pest management tools are declining in efficacy, and also as science is showing new risks associated with pesticides that lead to increasing restrictions on their use.

And so I'll start just by running through quickly what we do at the Department. Evaluation and registration is sort of at the core of what we do. USEPA is responsible for first evaluating and registering pesticides at the federal level before they're used, and also includes restrictions on their use as necessary. And then that moves - registrations move to the Department where we evaluate pesticides for California specific conditions before they can be used in California.

Our scientific evaluation that precedes registration and continues after registration is driven by emerging science and is really at the core of the work that we do and our strict regulatory oversight in California. Before making a registration decision, our scientists evaluate and assess the pesticides potential human health and environmental risks and determine whether those risks can be mitigated. And if they can't, then we will not register the pesticide.

As I mentioned, even after pesticides are registered, we continue to evaluate pesticide use for potential risks, and that is done both through our pesticide use monitoring, as well as investigations of reported adverse effects, as well as pesticide illnesses. We also monitor the air, groundwater, and surface water and produce for the presence of pesticides. Reevaluation is one form of our way of evaluating risks. It's designed to collect new information about specific scientific questions and can lead to and inform additional mitigation measures.

This type of assessment can take several years to complete, and that is dependent in large part upon the complexity of data requirements, as well as the sites where pesticides are used, as well as any data gaps and the development of mitigation measures and regulatory efforts that are required. We also use additional mechanisms to evaluate risks that are less time intensive and that includes more focused risk assessments, potential changes to labels, and also just additional mitigation measures.

We also will place additional restrictions on pesticides as needed to ensure that they protect - their use is protecting people and the environment. Our Environmental Monitoring Branch monitors the environment to determine the potential for pesticide exposure in air, surface, water, and groundwater. Our Worker Health and Safety branch promotes worker health and safety through pesticide safety outreach, education, and training for workers and employers, and they also continuously evaluate workplace safety and develop mitigation measures to address workplace risks.

Our enforcement branch oversees statewide enforcement that is largely carried out at the local level by county agricultural commissioners. The agricultural commissioners also review and issue restricted material permits. Those are higher risk pesticides. They conduct on site inspections, worker health and safety inspections, and also investigate pesticide incidents. DPR staff conduct oversight inspections and provide training, coordination, technical and legal support for the counties.

We also oversee compliance and pesticide use requirements, have overall responsibility for pesticide incident investigations as well as imported produce pesticide residues, and ensure compliance with product registrations and labeling requirements. Our Integrated Pest Management branch advances effective, sustainable and safe pest management use by offering grants both for research and education and outreach. They also provide technical assistance for the use of integrated pest management practices at schools and also provide compliance assistance for the Healthy Schools Act and track pesticide use statewide.

As you may have heard, we have been developing The Sustainable Pest Management Roadmap, and that really builds on decades long practice of integrated pest management across the state by incorporating broader considerations of human health and social equity, as well as broader considerations of environmental protection and considering economic viability. So I'll now shift to our proposal.

Over the last several decades, the Department has experienced an expansion in our statutory requirements and also in our essential programs, and those include the scientific evaluation and registration of pesticides and mitigation of their risks support for the development of safe and sustainable pest management alternatives, the enforcement of pesticide laws and regulations in partnership with our AG Commissioner partners, as well as increased collaborative engagement with our stakeholders and communities. To holistically address the dynamic pest management needs today in the state.

We need sustainable funding to continue our foundational functions to protect people in the environment and also to support the development and adoption of safer, more sustainable pest management alternatives and to bring those to market faster and to encourage collaborations that broadly expand technical assistance for pest managers. Our primary funding source, the mill assessment, comes from the first sale of pesticides into California and has been fixed statutorily for the last 20 years and doesn't adequately support the department's functions and programmatic responsibilities.

As a result, we are operating with a structural imbalance. Pesticide registration fees account for approximately - and I should mention that the mill accounts for about 80% of our funding and that fee is paid primarily by pesticide retailers, manufacturers, and wholesalers. When the pesticide is first sold into California. Pesticide registration fees account for about 15% of our overall funding and licensing fees account for about 3%.

Revenue that's generated from the mill supports our core functions, including pesticide evaluation and grants that support the development and implementation of safer alternatives. It also supports pesticide use enforcement and compliance, engagement with stakeholders, and other activities associated with our pesticide regulatory program. The mill revenue also supports our local partners, the AG Commissioners, as well as CDFA's Office of Pesticide Consultation and Analysis.

To support a comprehensive approach to identifying our current needs and programmatic gaps, the 2021 Budget Act allocated funding for an independent stakeholder engaged mill assessment study. We released the results of that study last fall that found that the Department is critically underfunded. To provide the Department with stable long term funding, the study recommended a flat fee, phased in, increase of the mill assessment over three years from the current 2.1 cents for every dollar of pesticides sold in California up 3.39 cents per dollar of pesticide sales.

The Governor's proposed budget is a more conservative approach that includes legislation to phase in the mill assessment at DPR and at CDFA. For the Department of Pesticide Regulation, the legislation proposes that over three years that would go from 2.64 cents on the dollar in 24/25 to 2.75 cents on the dollar in 25/26 and then 2.86 cents on the dollar in fiscal year 26/27. And for the Department of Food and Agriculture, the legislation proposes to increase the mill assessment from the current cap of three quarters of a mill to 1.04 mills.

DPR is also requesting 117.4 positions and 33.3 million in the DPR Fund and the Greenhouse Gas Reduction Fund that would phase in over three years to support our essential work. More specifically, the budget would provide 17.9 million from the DPR Fund to streamline processes that would support alternatives, including accelerating our pesticide registration and evaluation project timelines, bring effective pesticides and safer pesticides to market faster. We would also signal earlier risks to pesticides and also the need for alternatives and support innovative alternatives and research.

The proposal also includes $8.6 million and 33.2 positions from the DPR Fund and 592,000 from the GGRF to strengthen statewide services that support statewide and cross jurisdictional pesticide use enforcement and compliance, as well as pesticide monitoring and data evaluation and risk evaluation and regulation development.

Finally, the proposal includes 6.1 million from the DPR Fund and 125,000 from GGRF to provide critical support for local partners and communities, including pesticide use enforcement and training and compliance support for County Agricultural Commissioners and local engagement with all stakeholders, as well as increased transparency. The inclusion of both the DPR Fund and GGRF reflects a consistent approach to funding for AB 617 related activities across state government and also reflects the importance of diversified funding sources.

In summary, the proposed budget provides DPR with the essential long term stable funding we need to support statewide pest management system that is safe, effective and sustainable for everyone. I'll now turn it over to my colleague at the Department of Finance.

Thank you, Director Henderson, and good morning, Mr. Chair and Members. Christian Beltran with the Department of Finance. I'd just like to add just a few brief points to help provide some additional context for the Committee Members. As mentioned in the presentation from Director Henderson, DPR is faced with a significant challenge without any action to increase the mill assessment cap that has stayed stagnant for the last couple of decades. The Administration is projecting that the DPR Fund will fall into a structural deficit beginning in the budget year of 24/25.

Additionally, it is critical to note that the requested increases that is currently included in the Trailer Bill Language will not only help address the projected deficit, but it will also allow DPR to invest in critical program activities to more efficiently deliver on its mission of regulating pesticides in a health protective and environmentally sustainable manner, while also prioritizing the urgency of delivering new pest management approaches given increasing pressures due to climate change. With that, happy to answer any questions from the Committee.

Thank you. LAO.

Frank Jimenez with the Legislative Analyst Office. When it comes to this proposal, we recommend that the Legislature approve a flat increase to the mill assessment that addresses the structural deficit within the DPR Fund and supports high priority programs. We find that a flat increase to the mill assessment, as the Governor has proposed, is a reasonable approach that provides several benefits, such as providing a more stable revenue stream and being easier to administer.

This approach also aligns with the recommendations provided by the independent contractor that DPR hired to assess the appropriate rate and structure of the mill assessment. Along with the flat increase, we recommend that the Legislature incorporate statutory caps to the mill assessment. This will provide a mechanism to ensure that revenues align with expenditures approved by the Legislature in the Annual Budget Act.

The statutory caps that are proposed by the Governor appear to be reasonable, but higher or lower caps identified by the Legislature could also be just as reasonable as well. When it comes to the programmatic expansions under the proposal, we recommend that the Legislature ensure that its spending priorities are reflected in the scope of work and the approved funding levels. This could include modifying the Governor's proposal or adding to the governor's proposal.

In our report, we identify three areas in which the Legislature could explore further during the Spring budget process. This includes funding to support activities to implement the Department's Sustainable Pest Management Roadmap. These activities include the acceleration of registering safer pesticides and also identifying priority pesticides, which the Department aims to eliminate the use of by 2050. While there could be some benefits to these activities, we note that the Sustainable Pest Management Roadmap is an Administration led initiative.

We would recommend that the Legislature ensure that these activities are among its highest priorities and, if any, statutory guidance is needed to align these activities with the Legislature's overall priorities for pesticides. We also note that the proposal does not provide additional funding for County Agricultural Commissioners and their pesticide use enforcement activities.

We note that the independent contractors report found there to be about a $10 million need across the state, and we also note that the last time the Legislature increased the mill assessment, additional funding was provided to County Agricultural Commissioners. While current allotments could be sufficient, the opportunity that adjusting the mill assessment provides - it provides an opportunity for the Legislature to determine whether County Agricultural Commissioners are sufficiently resourced to carry out their statutorily required activities.

We note that the proposal also doesn't provide funding to support recently chaptered legislation. We feel that it's important for the Legislature to ensure that funding for chaptered legislation is ultimately included in the final budget package, particularly given that these conversations around this proposal are identifying funding for DPR to carry out its statutory required requirements. Nearly all of the funding provided under this proposal would come from the DPR Fund, with a small amount coming from the Greenhouse Gas Reduction Fund to support air monitoring and community outreach.

We recommend that the Legislature instead support these activities with the DPR Fund. These activities seem to be core Department functions, and we find it reasonable to support it with the DPR Fund, which is the department's primary funding source. And overall within the Greenhouse Gas Reduction Fund, we recommend that the Legislature reduce out your commitments from the Fund to ensure that it has flexibility in future budget years to offset any deficits which our office and the Administration recommend the state will be facing in the coming years.

Given the significant increase in the overall programmatic spending for the Department, the Legislature may want to consider adding accountability measures to ensure that the funding is having its intended outcomes across all of the spending within this proposal, it represents a 25% increase in the Department spending, so quite a significant increase. And then finally, we recommend that the Legislature approve the various policy changes included in the Trailer Bill Language. We find that the policy changes align with the intent of the proposal and can improve state processes. But happy to answer any questions.

Okay, well, along those lines, I'll start out with questions on the overview and then I'm sure I know my colleagues will have a lot of questions as well. We talked about the mission and we know the mission to protect human health and the environment by regulating pesticide sales and use and by also fostering reduced risk pest management. So what does the Department do to research or encourage the use of non synthetic organic methods to manage pests, weeds and disease?

Thank you for the question, Chair. In general, as background, we conduct a number of outreach activities that promote lower risk pest management use, and that's through our website, social media. We also engage regularly through presentations and participation at events at communities and industry events. We offer both research and outreach and engagement grants that support the development of new lower risk pest management tools and practices, as well as outreach and engagement grants that support the adoption of those practices.

We just had our 30th year celebration of recognizing leadership in integrated pest management and so are really celebrating those who are actively engaging in this practice. We are in the midst of conducting a study of fumigant alternatives, so understanding the risks that fumigants propose and the need to develop alternatives to them.

We are in the midst of a study that you at the Legislature funded last year to look at fumigant use in California and beyond, as well as laws and regulations that are in place to mitigate risks for fumigants here and beyond, and also look at what alternatives are currently available and where additional research and development may provide additional alternatives.

So I think activities like that, that really focus on where we need alternatives to develop are ways in which we're looking to promote the use of low risk pesticides. And then, of course, the work that we did in convening the sustainable pest management workgroup brought together a real diversity of stakeholders focused both on agricultural and urban pest management use to really identify the challenges that the state has faced and widescale adoption of integrated pest management practices.

And that roadmap was then developed by the group to identify the two key goals of by 2050, moving beyond high risk pesticides and transitioning to safe alternatives, and identified keystone actions, including pest prevention, as well as research and development and education. And streamlining our registration and evaluation processes to get safer alternatives on the market faster to be able to support the use of those low risk products, which include non synthetic alternatives as well as organic practices.

And what we really wanted to focus on was having a very broad range of alternatives so that pest management needs can be met by a wide variety of pests for a wide variety of crops in California.

Okay, good. May have a couple of ... So, Senator Dahle, first.

Thank you, Mr. Chairman. So, I had a lot in this area.

I know.

First, I just want to say that you look back at the history of the Department, and I've been on the EQ or the environment toxics in this both houses as the Vice Chair for many years. And this is an area that I'm very engaged in. I'm a farmer, and agriculture is going to pay the lying share of this mill assessment tax. Let's just be honest. And I'm an organic farmer, by the way.

But I will tell you that there are sometimes that I have to have non organic type in some of my circumstances that I will not be able to produce. At the same time, California is pushing me out of business by regulating me. And most of my neighbors are going to Mexico and using all the fumigants and all the things they need down there and shipping the products in here that have those pesticides. So what are we doing here?

Are we really keeping California farmers and the public safe, or are we just pushing it to somewhere else and we're still using those products? So that's just the overall of kind of where I come from, because this is going to drive up the cost of food. And at the same time, we're allowing you to, in perpetuity, be able to raise the mill assessment by five mills in the future without this Legislature looking at it. I think that's a key thing we need to look at here.

And at the same time, I'm hearing from the people that produce pesticides that they can't get through the process. So if we're going to up the rate and we're going to give you the positions you need, they need some guarantee that in a time frame they're going to actually get these new pesticides or less invasive pesticides permitted so that we can save the environment. And I don't see anywhere in here that there's something that says, hey, if by 15 months, if we don't have something that says we're at some stage that they're putting up money to do this.

So I would like to see the Legislature put some benchmarks in there that say if I'm going to try to get something certified in California that I'm going to get it done or going to get a yes or no by a certain date because they're sitting out there waiting with all these products that are actually supposedly going to help the environment, but they can't get through the process.

And I know you're going to tell me that you don't have the people to do it, but there needs to be some guarantee. Government doesn't work very fast, and we need to be able to work faster so we can bring these products online. So I want to say that, and we need safe alternatives. So do you have some comments about what you think would alleviate some of these problems? Because at the end of the day, food costs are going to go up in California.

Senator Dahle, thank you very much for the question. And the issues that you've identified were ones that we grappled with intensely as part of the work group process, which took place over about two years. And so very much appreciate the concerns that you're identifying. They're absolutely critical. And the question of how do we manage having available alternatives.

And I think one of the central discussions that we had as part of the work group process and as I went to meet with stakeholders across the state to talk about how do we get to this place of using safer practices without having alternatives? And so having something to transition to and having alternatives in place as we transition away from higher risk products was definitely a focus, and that's built into this budget change proposal. Your point about the economic viability of that is also really critical.

And that was also a key point of discussion in the work group. And part of what we're envisioning that sustainable pest management means is having alternatives that are affordable. And that's both in terms of having tools and practices that are affordable to farmers as well as food that's affordable to people across California. So that concept of affordability is really one that we have to keep top of mind. So I recognize that that is not an easy task.

And I think one of the things that we realize is that this is not something that's going to happen overnight. This transition from higher risk practices and tools to safer products is something that's going to take time. It's also going to take a lot of collaboration across stakeholder groups, and that's also a key part of this BCP to ensure that we're able to engage actively and meaningfully with stakeholders across the board as part of this process. And so the intent is really to avoid the outcome.

I think that you're very concerned about, as we are, of shifting to safer alternatives and having a budget proposal that provides resources to get us there. We want to avoid that ending up costing farmers more and costing people in California more when they're paying for their food.

So what kind of a guarantee, if I was a company that was developing a less invasive pesticide to humans and to the environment of going through the process. I mean three to five years is not - in some cases, it takes that long to get something permitted in California. We have a federal law, and other states are pretty much on that. California always has to be ahead of the curve. And I'm concerned that we're letting the perfect get in the way of the good.

And what happens when you have to have perfect, you drive up the cost for Californians. And across the board, we pay more in California for everything, food, energy, fuel, housing. And I'm getting a lot of calls from my constituents who are making decisions whether they can put food on the table, get their prescriptions, or pay their electric Bill, or get insurance for their home. And so we as legislators, have to balance this all out.

At the same time, I'm hearing from the agricultural community that says, hey, I just can't afford to do it here anymore because the competitors outside of California are shipping the products in here either from Mexico or from Chile or from Nevada or wherever. And so how do we balance that out? Give the folks some security in the fact that, hey, if you come to the DPR in two years, you're going to get a yes or no on your product.

So, very good question. And so a large part of our focus in really providing access to safer alternatives faster through the registration process is dedicating resources that we've requested for that exact purpose and building in the kind of accountability measures that you're asking for as well as our stakeholders. And so one of the measures that we're looking at is, number one, getting rid of the backlog that currently exists. And so that's a key accountability point.

The second point is being able to commit to evaluating an application for registration within 30 days of receiving an application, so that we're establishing timelines that are both predictable and also can move products through more quickly. We can focus on accountability measures for things that we control. Some of what lags the process and bogs down the process is litigation. And so we recognize that that's something that we're not ever going to be able to control.

But hopefully by focusing on tools that are safer and more sustainable, the litigation that challenges registrations because they're risky will be less intense than it is today. And so that's the goal of really trying to focus our investments on developing safer alternatives that can then move through the registration process more quickly and have timelines that we will hold ourselves accountable to.

Well, I would suggest that the Legislature has some sort of guardrails in this area that say to the Department, hey, in one year we want an evaluation of where we're at with our pesticide that's coming through. And then have the applicants be able to ask questions, because at the end of the day, from what I'm hearing, is that they're frustrated with the process of not being able to get a yes or no at the end.

And there's a lot of money they're spending developing these more environment friendly tools that we need in the toolbox. And so I just want to point that out. And I definitely want to make sure that the Legislature knows that I am not in favor of giving authority to you to continue to raise your rate or your mill tax without it coming back to the Legislature. I think that's we need to be able to have checks and balances here.

And so I want to make sure that the Committee knows that. And thank you for coming. Every year I talk about this, but I will tell you as somebody who is in the business, Californians food cost is going to rise. It's rising and people can't afford, and I'm hearing about it. And it's also because we have a heck of a big regulatory environment here that's very difficult to get through.

And we need these products too. When you have a pest problem, you have to have a herbicide or you wipe lose your whole crop. And that's just life. And the fumigants produce three times as much product if you don't use that fumigant. So we have to have those tools to compete at the same time. So thank you for your time. I appreciate seeing you. And hopefully - this has been a long time coming.

We've been talking about the Department and the lack of being able to get things done, and that's why we had the study so we could figure out where we're at. So definitely want to support the AG Commissioners out there who are doing the work on the ground. I work with them all the time. I actually hold the applicators permit. I think I'm the only Legislator that has a permit to use it, and I don't want to use it because it's expensive. But sometimes we have to.

Senator, if I can maybe just quickly address two of the points that you raised, and I think they're very important. So our staff does meet and has an open door to meet with pesticide applicants who are trying to register their products. Your point about being able to see where things are in the process is also really important.

And the Legislature's funding of our CalPEST system development is going to make significant improvements on that so that registrants and applicants will be able to see where things stand as part of the process. It will also eliminate a lot of the errors that have cropped up late in the process that have held up applications. So I think that technological advance of having the whole process be online and electronic both provides additional transparency and visibility. It also allows products to be evaluated simultaneously in the Department.

Previously, they had to move from one evaluation to another, which also took a significant amount of time. So I think the combination of the investments that the Legislature has made in CalPEST over the last number of years, together with the additional capacity that we're seeking as part of this budget change proposal and the Governor's Budget, is to add the people resources to avoid having things bogged down into backlogs that we're seeing today. So really appreciate all the points that you're making. We really are seeking.

Registration is a huge focus for us in being able to move things through more quickly and efficiently in a way that's affordable. And I guess the one other point. On the reason that we have requested increased authority to be able to raise the mill up to the amount that was recommended in the crow study is to be able to have the flexibility to adapt to additional responsibilities that we undertake without having to go through this process.

And so we would, of course, come to the Legislature for appropriation authority, and we would conduct a public process before implementing any or providing any increase in the mill. So it's not as if we, as the Department, would just simply raise it. It would go through the budget process here, as well as through a public regulatory process where there would be public comment.

Well, I would just let you know that the number one thing I hear from my constituents every day, it is not climate change. It's the cost of living in California, and it's their electricity rate, it's their insurance rate, it's their cost of a gallon of gas. It's the cost of food. This is going to drive up the cost of food. And do we want to be good to the environment? Absolutely. Do we want to be safe?

But we have to be accountable, too, to make sure that we are competitive as Californians and we can compete because in the market where we import stuff that we have no control over. I think the biggest frustration as a farmer in California is that I'm regulated, but the products that are unregulated flow into my state, even the ones I grow. And so I'm out of business. And we're just going to bring them in. There's no stopping them at the border.

If they've used some pesticide that's not available in California. That's unfortunate because the playing field is not level and it's punishing Californians and the cost of food's going up. So just keep those things in mind. It's a delicate balance to take care of the environment, but at the same time allow Californians to be able to live in California and afford to live in California.

Thank you, Senator.

Well, thank you for your response to Senator Dahle's questions. I certainly be very supportive of - and we'll follow up and discuss - but some kind of reporting on the timelines. How long is it taking? What's the average time, what's the longest time, shortest time. But I do think that we need some more clarity on those timelines and just what is it now and then some real plans to speed them up just for all the reasons what were mentioned, which I won't go repeat. Thank you.

I do want to talk about GGRF. GGRF Funds are intended for climate mitigation. Really should be focused on bang for the buck for actually removing carbon from the atmosphere, carbon that we put into the atmosphere. So how are DPR's activities related to these intended uses?

Thanks for that question, Chair. So when the AB 617 Community Air Protection Program was first put in place, a number of those communities were very concerned about impacts on air generated by pesticide use. And so there were a number of those communities that specifically asked for support from the Department to reducing impacts of pesticide use in their communities. So our staff support as part of that program really focused on locally driven requests for reductions of pesticide impacts in those communities.

And so our staff has probably attended, on average about 80 meetings a year across multiple different communities. We've conducted specific air monitoring studies in those local communities and have also done pilots for different application methods that would reduce exposures in air in those communities. And so this for us has been very locally driven support as opposed to more traditionally what for us is focused at the statewide level.

I think it's also consistent with other boards and departments and offices at CalEPA that have supported this program through GGRF Funds. So it's really looking for consistency for how the work at CalEPA has been funded and then also just really driven by the local need and the local interest in reducing error impacts and health impacts associated with pesticide use.

Okay, well, I appreciate that kind of explanation with regards to 6.7, but I do think we do need to really evaluate the uses versus other potential uses of the GGRF. So it's something we will look at. I'm just kind of curious. Dahle's question, what do we do to have transparency or any knowledge of what pesticides may be being used in other countries for food that's importing here? Is there anything done to do we have any sense of what those pesticides they might be using?

I think that the program that we operate that probably gets most directly at that is our inspection of residues on food products. And we really focus our monitoring in areas that have a lot of imports and particularly where we've seen issues in the past of pesticide residues. And that is really about, I think 98% of the residues that we detect that are over tolerances are coming in from out of state or either out of state or out of the country.

And then when we detect those, then we either pull the product from the market or it's remediated. So it's probably not totally getting at Senator Dahle's point, but we do conduct residue testing that does stop those products from entering the stream of trade when those residues are present.

Do you know how many products were pulled last year? Or is there a.

We collect samples on, I'm going to say 3000 produce samples a year.

But how many products have been pulled? Do we have a record of products have been pulled because they had excess residue?

I'd have to confirm the report. We can follow up with that number.

That'd be good to know.

I think the other thing that we talked about during the sustainable pest management workgroup process, which is not something that we require, but something that I think is culturally happening, is that consumers really want, there's an increasing move to have food produced in more sustainable, safe ways. I think large retailers are looking to food producers to be producing their food in that more sustainable way.

So I think hopefully California is going to be well ahead of the curve on that with the environment that we have in place in terms of our regulatory structure that really is focused on the production of safer and more sustainable practices to produce our food in California.

Yeah, I think that's positive. But it feels like in the supermarket it's more like organic or not organic, as opposed to organic versus, like, degrees of pesticide use or something you know it's sort of a.

It's very true. And that was also a really significant point of discussion during the work group, and that is why we talked about whether we should really be trying to focus on all organic. And we think, recognizing that that's expensive. And a number of the conventional growers who were part of the work group talked about having a variety of different practices. So many of them that produce conventionally also use some organic practices.

And it was important for us to really focus on safety and sustainability, as opposed to sort of having an organic certification to be the focus of our efforts. More important to really focus on reducing risk overall and to have really a big tent, so to speak, for the way in which we manage pests. That's really focusing not so much on organic seal, but really more on the use of safe practices to produce food.

Yeah. Okay. Well, I do have to move on, but I would love to follow up on the reporting, how many products coming in from other countries have been pulled, and we'd love to follow up on that. Oh, Senator Allen.

Yeah, I know we're tight and crunch, but I did want to associate myself with some of the concerns raised about the use of the GGRF. I get the nexus to AB 617, but this is a Fund that is not supposed to be just kind of tapped into every time there's a budgetary need from some cause that has an environmental nexus. This is supposed to be about specifically about mitigation and improvement of our greenhouse gas emissions.

And one of the big challenges, and I'm going to bring this up when people try to use it as an additional funding source for things that don't have as direct to connection. I think one of the problems that we have compared to Washington or elsewhere was that our fund has become this sort of easy grab bag for vaguely environmental causes.

I understand that you're going to fund some important work coming out of AB 617, but the flip side is it really is core departmental responsibility, and we shouldn't be funding core departmental responsibility from GGRF, even if there's an environmental benefit associated with it. That's what the DPR Fund is supposed to be about. And I worry this is going to be too easy a thing to do, not just by you, but by agencies across the board, especially during a moment of downturn.

And we're going to saddle this fund. I mean already we've got wild things in the continuous appropriation. I have a kind of conceptual concern that I want to state on the record, and I'm going to be bird dogging this. I think I know my colleague feels the same way.

Senator Blakespear.

Yes. Thank you. Chair. I'm just going to associate my comments with the same thing that he said and what the Chair said, because I think that those are a broad, overarching themes that are really important that we look more closely at. Thank you.

Thank you for my colleagues for raising those, and I think heard the concerns. I certainly share exactly what was just said. So the staff recommendation is hold open on this issue. So we will do that. But thank you very much for coming here.

Thank you very much.

Yeah. All right. Now we're going to move on to the Department overview for the State Water Resources Control Board.

All right, good. Thank you for your patience, and we still do have a lot more to get through, so we'll maybe try to speed up a little bit, but we'd appreciate starting with Department of Overview.

Yes, really appreciate it. Good afternoon, Chair, Members of the Committee. Glad to be here. My name is Joaquin Esquivel. I'm Chair of the State Water Resources Control Board. I think you may all know, but the State Water Board is a five-member board. We, along with our nine Regional Water Quality Control Boards, oversee and protect water quality within the State of California. The nine Regional Boards are the direct permitting entities on water quality. Additionally, the State Water Resources Control Board administers water rights within the state.

And as of 2014, we oversee the 3,000 community water systems, and if you add the state smalls, nearly 7,000 water systems that provide drinking water in the State of California, we set maximum contaminant limits. We enforce the federal and state statues on drinking water. We have our Division of Water Rights, obviously, that handles water rights administration.

Certainly, as we've gone through successive drought here in the state, the need to be able to administer water rights in times of curtailment but also have discussions here in times of plenty, in times of flood, when we need to be better managing that water resource, getting it underground, the Division of Water Rights has done incredible work these last years, and we're proud for what they've been able to accomplish under as we all continue to experience incredible extremes in our climate.

Additionally, we have our, obviously, Division of Water Quality. Actually our largest staffing by staffing, though, is our Division of Financial Assistance. There I'd proudly note that since 2014, the State Water Resources Control Board has been able to invest actually 17.5 billion dollars in drinking water systems, wastewater systems, water recycling, stormwater capture, and really continuing to ensure that the affordability of water, but also the availability, its quality, is protected with here in the state.

I'll just note a big focus, obviously, of the State Water Board has been--and here I'm coming off of a hearing just yesterday at the Assembly--on access to safe and clean drinking water. As you all, I think, well know, in 2019, the Safe and Affordable Fund was passed, which provided the State Board and the state itself, for the first time, a real consistent source of funding here to address small failing systems.

The reality is about 90 percent of our maximum contaminant level violations come from systems serving fewer than 500 connections. So there is a real direct nexus between the ability to provide water and also having the economies of scale, the capital to be able to maintain that access. One of our key strategies when it comes to maintaining access to safe water is consolidations there.

I'm proud that over, since 2019, the beginning of the Safe and Affordable Fund in the program, we've been able to consolidate over 120 systems here in the State of California. In fact, our investments, the 200 systems that have returned to compliance since 2019, have allowed to benefit about two million, rather, Californians here in the state. So certainly between, as I said, drought, the pressures of climate change, and the threats to water quality, glad and proud of the work that the State Board has been able to do.

Moving then into the item before us here, I think many of you know the Supreme Court last year, last summer, made a decision known as the Sackett Decision that really narrowed the jurisdiction of the federal Clean Water Act.

Important to note, the State Water Resources Control Board was created over 50 years ago by Porter-Cologne. That law here in the State of California united pollution control boards that were created in the 1940s, a water rights office created in 1914, and said we had to get a handle on the degradation of our water resources. And you can't manage quality and quantity in different discussions. We needed an institution that could do both.

Porter-Cologne was actually the model for the Clean Water Act, which was passed four years later and had direct influence from the legislation here in the state. It was exported out, if you will, and ultimately, again, I know we are proud here in the State of the leadership that we exhibit, but especially around water management and water resources. We have a lot to be proud of.

That Sackett Decision, though, and importantly, the Clean Water Act, we as a state depended on all these years, for decades, the certainty in its jurisdiction, the development of its programs, the streamlining of general orders, in order to be able to conduct, yes, all the activities that we know we need to do for housing, construction, agriculture, all the important activities out there, but in a way that didn't harm our interests when it comes to managing the quality of our waters into the future.

And so that narrowing of the federal jurisdiction really hinged on the definition of wetlands and the interconnectivity of navigable waters between wetlands and ephemeral streams, which in the west we have a lot of. And so the unfortunate decision from the federal government or the Supreme Court, rather--apologies at this point--has meant that we've had to here propose what are 38 positions phased over two years. It's six million dollars in the first year, ten million--seven million, rather--thereafter that would support what is work that the federal government was doing already.

I think we all well know wetlands are some of the most important features in our watersheds and since we paved over 95 percent of them here in the state through development, we really need to protect those remaining wetlands we have. We need to expand those as well. It's a huge strategy of the state, and these regulatory programs provide a floor that, again, we had all come to depend upon.

And so this ask is one to be able to fill the federal resources that we're conducting those activities and make sure that we don't actually regress on our here really critical targets for wetlands expansion and continuing to invest in our watersheds in ways that continue to improve water quality. So the importance of the BCP is for us, I hope somewhat obvious, but I know there will be questions and discussion as to how that's funded. So maybe we'll leave it there and we can get to discussion.

Okay, thank you. Did have a couple questions that I just really did want to get to on the overview, and then we can talk about Sackett specifically. Just on safer--I know this has had a lot of success. You said almost two million people touched, I believe, you just said. It does get back to our previous conversation about the GGRF Fund and intended use, and we've been appropriating about 130 million a year from GGRF. How much more work is to do?

How much longer do you expect this to go? How far along are we in terms of--and I appreciate what you said about the consolidation--that sounds very positive--and about 200 systems into compliance. How far along are we in the process and how much more needs to go?

I appreciate that question. I think it's important to note that the Safe and Affordable Fund, it was for a ten-year period, so that the 130 million is 1.3 billion over the span of ten years. And when you look at--and when we started in 2019, we had 1.6 million Californians that were being served by systems that were failing. Now we're at about 900,000, and importantly, we're about halfway into that ten-year period of that program. There is still a lot of need.

I think it's important to note that when the Safe and Affordable Fund was being negotiated and that amount was agreed to, we still didn't actually know what the full need was if we were going to fulfill the human right to water, what the cost was going to be in order to bring failing systems into compliance, but also to address at-risk systems so that we weren't on this treadmill of small failing systems. And what we now have is greater clarity and it's in the billions of dollars.

And so the 130 million that we're receiving a year isn't actually mainly going to construction costs. Construction costs are really high. What it has been going to there are construction, but it's a lot of technical assistance to actually create the pipeline of projects ready for construction. And so when we talk about what are our timelines, when will we have 100 percent access to clean and safe water within the state, right now we're at about 97 percent, but that three percent, it is going to be costly.

It is still billions of dollars that we're looking at for the need for investment in what has been generationally a lack of investment in a lot of these systems. And so the needs assessment is being refined here still yet. It's a yearly process for us to really understand what the full scope of being able to meet the human right to water is.

And I know now it's, again, somewhere around ten billion, I believe. So it's billions of dollars that we're still needing to see. Importantly, that 130 million, as I said, is a lot of technical assistance money because it's drawing in dollars like the Bipartisan Infrastructure Law and existing programs like the State Revolving Fund and other loan forgiveness. So the funds we're using to address this are not solely unto the Safe and Affordable Fund and the funding that coming from the GGRF. It is actually being magnified because of these other sources. So there are other sources, but ultimately the need is great.

So you said ten billion. Is that your estimate--so haw many--and of the federal funds, how much are you expecting? Did I say--did I see 1.1 billion? Is that right?

We have three years of what is a five-year bill on the federal side for the Bipartisan Infrastructure Law, and we have seen so far of those three years--and there was a recent announcement--about 1.6 billion that has come through. That is capitalizing the State Revolving Fund, and those are also dollars for loan forgiveness.

I think it's important to note when you talk about the State Revolving Fund, both for clean water and drinking water, these are federal programs that were created in the 80s and 90s after the feds stopped really providing direct subsidy and grant for our drinking water systems. The revolving loan programs were thought of as a way to at least keep some federal investment without the real direct grants that actually built out many of our systems. And the programs are not easy to often qualify--to apply for.

There are federal cross cutters. The Bipartisan Infrastructure Law also has Build America Buy America provisions, and for some of our larger systems, they have challenges sometimes meeting some of those requirements. For smaller systems, they definitely have. So what we have been doing is prioritizing funds like the Safe and Affordable Fund, like General Fund dollars as well that don't come with all of those federal requirements in order to get dollars and funding to systems that need it most.

Okay.

So all that to say, it's about 1.6 billion, and that's three years so far of the five from the Bipartisan Infrastructure Law, but it still dwarfs in the need and yeah.

Okay. Could you comment quickly on efforts to digitize water rights records? Where are we, because I know we propagated money for that.

Yes. We're moving along. We're working with a vendor. There's a pilot that we'll have internally out for the data system generally. It's not just the digitization of paper records, which is a really important component of the project, it's actually establishing a new water rights data system writ large. The old system that we were working on, eWRIMS, was actually created just to be able to quickly adjust to becoming a fee-based organization over a decade ago now. So this new system, we're moving along.

There should be a public pilot next year. I'm looking to our Head of the Division of Water Rights just to make sure I don't get that timeline wrong. I know we are right now actively going through our scanning process down in our records room, so the digitization is actively happening. And importantly, the system itself is going to be able to be piloted sometime next year. But Eric, please fill in if I'm wrong. I think one more hit.

Right. Is on. Thank you. No, thank you for the question. I'll fill in some quick follow-ups. We have been actively digitizing now since about August of last year. We have over 60,000 pages so far, digitized in kind of a continuous build up, and then two specific pilot projects, the most recent of which was just completed about a week ago. With the most recent pilot project, we've gotten to the point where we can scan about 7,000 pages per week, using the equivalent of 1.5 personnel.

That's maybe in the weeds a little bit, but it shows that we're making really good progress, and we're kind of teeing up to make even faster progress once the full system is scoped and built out and ready to kind of go full steam.

Thank you, Eric.

That's a lot of pages. I'm curious what's in all those pages, but I do know--having my wife's family has had a lot of farming in Colorado in the past, and they have a very comprehensive system and I know we're working towards improving ours. So I appreciate--Senator Blakespear. Thank you for the question.

Yeah, thank you. I appreciate the comments about moving toward providing water for all in the state, the human right to water. So you said that we're at 97 percent, and so I was curious about when you think we'll be able to get to 100 percent of all of our communities.

It's a hard thing to really be able to predict, and I wouldn't want to give a date here and then not be able to live up to it. What I think we should definitely be able to do here soon is really show, at least for our existing failed systems, what are the timelines and beginning to really actually have better metrics on within what we call a return to compliance date for a system that falls out of compliance.

So again, what I have now are numbers around the fact that, again, there were 1.6 million Californians in 2019 that weren't out without access or being served by a failed system, I should say, and now at that 900,000 number, we're getting to systems that it's going to be very costly to address. But what we do have is a pipeline, and it is my personal goal to make sure that--I feel this is solvable within a decade.

But I think it's going to take some consistent and sustained investment in order to do so because this isn't a problem that just started five years ago or ten years ago. In many cases, these are generational challenges we see in access to communities, but I'm committed to make sure it's not another generation before we can fulfill it.

Okay, thank you. And then when you say failed systems, are people accessing water using these failed systems or are they having to have bottled water and big, huge vats of water and all of the things I've seen in a movie? That was very impactful.

The Safe and Affordable Fund, part of its mission here is to ensure interim drinking water even as long-term solutions are brought because we know that solutions are often years in the making for many of the systems. And in the interim, to your point, we can't have people being served unsafe water in particular. So, yes, there's bottled water and hauled water that is going on in the program in order to provide interim relief for folks, even as we get them to their long-term solutions.

And is the state paying for that?

Yes. The State Water Resources Control Board right now is paying for hauled water for nearly 2,000 dry wells. I think we have to remember the continuum of our challenge here with access to safe and affordable drinking water, again, large majority of the state has access to clean and safe drinking water and are actually served by somewhere around 400 of the largest urban water agencies.

So when you start to kind of go down the scale of size from those systems, you quickly find a lot of smaller systems. What we have is about 3,000 that the State Water Board overseas directly. Those are known as community water systems. It means they have more than 15 permanent connections. If you have fewer than 15 permanent connections, the counties actually oversee you by and large. We have less direct oversight of those systems. And then even further down that scale are domestic wells.

So single homes on a well. That's the whole continuum of access to water in the state, and all through there we have challenges, and especially as we get to domestic wells in our state smalls. And so again, right now the State Board is providing--because of the last turn of the drought and because of the need to support both counties and communities--about 2,000 homes that are being provided hauled water currently. And again, that number grew because of the drought and because of a lack of access in many communities and nowhere else to turn for some of these programs.

Okay. Thanks very much.

Senator Dahle.

Thanks. Good to see you again. First of all, you talked about--I want to focus on small districts. So in many of my communities we have water systems that are 75 hookups or some smaller, and through Covid, they didn't have to pay some people--there were some waivers that didn't have to pay, so we're seeing now--and then we're on top of that, we get regulatory environment coming through. They have certain things, goals they have to meet from past legislation. So I'm just going to give you an example.

There's a community. It's called Little Valley Water Community Service District. People aren't paying and so they can't shut the water off, but they can't even hardly run the pump. And then nobody runs for the Board because it's such a dysfunctional system. There's no infrastructure there to do anything, and so my father-in-law runs a community service district in Fall River, and so he's been trying to help this other district, but there's no ability to be able to combine the districts.

They're 50 miles apart or 40 miles apart. So it's a community, and they're all over out throughout my district who have the same situations where you are regulated to do something, but you have no means to be able to do it. And there's nobody there even to write the grant if there was a grant available. So I know that that is--and quite frankly, if you can't shut the water off, people will continue to take water without paying the bill.

And these are the poor of the poorest people to start with. So that's out there. I just want you to be aware of it. I don't know what the solution is. We dug in, tried to figure out how to fix that situation because it's difficult, but at the same time, it doesn't matter what laws you pass at some point; you just can't get there. So I just want you to be aware of that it's happening.

I get the calls, and I don't know what the solution is because under Prop 218, you can't raise the rate unless everybody votes for it. So you're still stuck. So that's just out there. I'm sure you've heard about it, and I'm sure my district isn't the only district that has had those issues. I'm glad the Chairman brought up the fact of the digitizing of the water rights. That's something that we've been working for for a long time. So I have a follow up question to that.

So I know you're putting the data in, but is there going to be ability? I tried to figure out on the Pit River, which goes through my ranch, who has water rights on that. It's very difficult to do. First of all, some of it is done at the county with the judges, have adjudication rights. Some of it's done at the State Water Resource Control Board. Trying to figure out who does what.

And as you know, there's plenty of conflicts in water and who's getting it and stealing it, and it's always going on. So I know that this is the pilot project that you're doing, but will the public be able to go in and actually see all those agreements at some point?

If I can just start, I'll say--Eric--just yes. That is the vision, and it isn't just a pilot, although we'll first be coming out with pilot versions. We're here to really have a full-throated, if you will, modernized water rights data system that we can be proud of and then to your point, water right holders themselves can say, 'I see what's happening. I see where my neighbors are.'

'I see where I am,' and create some trust in the water rights system so that more people will engage with it. And it's really that vision is having a platform to actually be having the discussions that we really need to be having. But I'll kick it over to Eric.

Thank you. Know, as Chair Esquivel said, it is more than a pilot. And so the scanning part was the pilot, but the actual system build is well on its way. We've contracted with Deloitte to be the systems integrator. That build is ongoing. We have agile sprints. I think we're in sprint nine now or maybe just wrapping up sprint nine, so that we are actually very far along in building the system itself.

We think it's going to be operational at kind of the internal scale sometime later this year and then would be released to the public in 2025. The key elements of that new system are what we call it a geospatially-driven system. It's a fancy word for a map, right? You go on Google Maps and you can click on something and it zooms right in. You can see where everything is. The goal of the new system is to do something very similar.

So you have a map of the Pit River or any watershed in California. It locates all of the points of diversion. It ties in all the digitized records from the more than seven million physical documents that we have in our records room that right now don't have backups.

In some circumstances are unobtainable unless you drive down to Sacramento and go to our records room that's in the CalEPA Building. You can link it to past diversion records, which right now we have that information, but it's kind of separated off and it's very difficult to lengthen unless you're a data scientist and can accurately do it. So that's kind of the vision of the new system. And again, hopefully, if things continue to go on pace and on schedule, which they are--so far we're on schedule and on budget--the beta essentially done in 2024 with public release in 2025.

I was attempting to find out what utilities had water rights--PG&E--in my district, and there was no easy way for me at least to try to get that access to that information. And I know that they have clear--in 1914 is when they went in and grabbed all the water, and that's what caused the water rights system to happen. And I was trying to figure out where that is.

There is an online system now: eWRIMS, electronic water rights information management system, and there is a public tool for it. I will confess up front, it is very difficult to use, but you can search by county, you can search by other tools, and you then have to kind of wade through multiple pages of kind of excel-formatted type things. That's in part part of the reason why we're so strongly advocating for the kind of redo of the water rights system. It's very difficult to find that information. Making it accessible and easily findable for anybody is a key step.

Thank you. Okay. Now, Mr. Chairman, were you going to talk about the--you said something about the Sackett ruling. Are you start on that because I do have--

I had a few questions, but you can go ahead.

So can you just, off the cuff maybe here, explain what the Sacket--explain how you expect the Water Board's workload case to increase given the Sackett Decision?

Yeah. Thank you for the question. So again, the Supreme Court really narrowed the jurisdiction of the federal rule on the Clean Water Act. So what is no longer protected by activities from the federal government are on wetlands mainly. This is a rally around dredge and fill, is one of the biggest impacts in the program. But then also, the ruling was pretty broad. It was--ephemeral streams were also kind of in question.

So all that to say, the work that was going on, though, in the federal rule was wetlands delineation by and large, so Army Corps of Engineers work and just the processing of permits. There are what are known as general orders that under the Clean Water Act were established. So a lot of this has been streamlined. A lot of this decision making, if you will, and work under the federal programs was as fast as it could be, if you will. So a lot of it is wetland salinization. A lot of it, again, is just tied to dredge and fill and that narrowing of the federal jurisdiction.

So how much will the fees increase to cover the cost? Will there be proposed fee increases for the applicants?

So importantly, this is applicants. So this is from the Waste Discharge Permit Fund. And I have Karen Mogus here from the Division of Water Quality and our folks here as well from Division of Administrative Services that can talk about fees. And so, I mean, Karen, do you want to fill in then?

Sure. Karen Mogus, Deputy Director, Division of Water Quality at the State Board. Yeah. So the fee increases based on the BCP request will be approximately 38 percent increase for the applicants. That is lower than what was presented at our fee stakeholder meeting last week. It's more around 40 percent for the total program due to annual increases in costs to the program. So we're in the middle of our fee increase or our fee setting discussion with stakeholders.

We've included the BCP as a potential increase in fees, as well as the regular increase that occurs as costs of salaries and benefits and all of the increased costs of the state are incurred.

So I know that yesterday there was a hearing. We were trying to get information, and we already had our briefing for this hearing, and so we were trying to get some information. I understand that you provided some information to my staff on the fee setting budget for the current fiscal year for the 401 Certifications program, which was 17.8 million. So I'm trying to wrap my head around it. Can you walk me through, like, number one, what's the current cost for an applicant seeking a 401 Certificate?

Yeah. Thanks for that question. So I want to start with, it depends on the size of the project. So around 63 percent of the approximate 1,500 applications that we receive every year are very small impact projects, less than 0.2 acres. And so for those projects, the application fee will go from just about 3,000 dollars to 4,000. So an increase in the application fee by about 1,000, and then the project fee also would go up just under 1,000.

And then we have, as the project continues, depending on how long the project is, there's an annual fee that also goes up about 1,000. So for those small projects, which represent about 63 percent of what we receive every year, there'll be about a 3,000 dollar increase in fees.

So on a project that's more than just a few acres--so these are housing projects that are going to be--so obviously, California is in a very difficult housing market and trying to develop them. So can you talk about something larger than that? Is it--

Well, let me make sure I'm clear. The 0.2 acres is the impact to the waters. It's not the project footprint. So if a project is done in an area where they're not impacting waters, they may still be in this small impact category, which is why most of our projects--we're hoping that this program avoids impacts to waters. And so it's good that most of our projects are under the 0.2 acre impact, but yes, for larger projects--and sorry, I have this also. Apologies. We were doing a bunch of printing this morning and I don't know where my--larger projects do have higher amounts.

So a dredge and fill project basically is going to get a huge increase?

Can I just take a moment to find my table?

Yeah, sure.

And if I can add while Karen's find that, it's important to note that if you're looking to build on a wetland, right, this isn't all activity. It really is centered around wetlands and dredge and fill of them. And as I understand it, of the current Waste Discharge Fund permits that are out, only about three percent of those are Ag related.

So when we're talking about the impacts of these fee increases, what will be impacted most, it is a lot of housing, certainly, and it's why we're asking for the resources. We don't want to be a bottleneck, but it is also housing that's looking to infill and wetlands--or not infill and wetlands, but do dredge and fill.

And just, while you're looking, for me, it's like, I'm a farmer and it just makes me crazy when I get on I5 and go home and they're paving over the best farmland in the world. And it's in a floodplain. It was a wetlands. I think we should go to the foothills where we don't have the farm ground and there's better places to build. But unfortunately, that's not how it works and we need housing at the same time, but it's very frustrating.

When I came here 12 years ago, you could leave Sacramento and before you got to the airport, there was no houses out there. And it's solid houses. It's almost filled in. It's the best farmland in the world. Anyway, I know that that's a side note to what you're doing here, but that's projects that are going to be affected by this Legislature or this court case, quite frankly, and then a budget on top of it. So I wanted to just nail that down because the cost of housing is going to go up if you're paving over Ag lands, I guess, or wetland. Those were wetlands.

Yes. Appreciate your comments.

Or rice fields at one time.

Just to follow up, the medium-sized projects will go up about 5,000 dollars in fees, and then the very large projects will go up approximately 90 to 100,000 depending on the size of the impact. And then there are some outliers that are utilities that will go up significantly more. Southern California Edison and PG&E both would have increases in the 250 to 500,000 dollar--

Which will get--the ratepayers will pay that bill again, too. All right. Thanks for coming.

Thank you, Senator.

Okay. In the interest of time, I won't ask this question. I'll just note that the BCP states in many cases, the state processes are less efficient and more resource-intensive than the lost federal protections. So just want to note that, and hopefully we can work to make them more efficient and less resource-intensive. We can discuss that maybe at a future time.

I know it's part of our thinking, and this just here is the budget change proposal component of that, so we'd love to think and talk more about that.

Okay. Thank you. Good discussion. Recommendation is--obviously very important topics. Several recommendations hold open so we will do that. Thank you, and I will, following that, ask the Department of Toxic Substance Control to come on up.

Yeah. Thanks, everybody. Thank you, Chair and Members. My name is Craig Scholer. I'm the Chief Deputy Director at the Department of Toxic Substances Control. I'll jump right into it. Due to time, the governor's proposed 24-25 budget includes $399,000,000 to support DTSC's mission, consistent with the reforms authorized in SB 158. Over half of that total is to support our oversight of cleanup activities throughout the state.

This includes an additional 27 million approved in last year's budget to support cleanup of parkways in the neighborhood surrounding the former exide battery recycling facility. It also includes 20.5 million to continue our work with USCPA to address some of the most contaminated sites throughout the state, including federal Superfund sites, as well as state orphan sites where no responsible parties have been identified. The governor's proposal also includes modest but critical proposal to support our work in climate resiliency.

Specifically, we are requesting $1.6 million to ensure that all sites under GTSC's authority have protections in place to address the threats of climate change now and in the future. The budget also has an increase in funding to support the Board of Environmental Safety, or as we refer to it, as BES, and it continues to include expanded funding made available by the reforms of SB 158, including in all 158 the expansions there.

Equity has been at the forefront of our decisions and has enabled us to work that into our initiatives going forward. Specifically, this year, we plan on implementing our EJAC, our Environmental Justice Advisory Committee, and this will include community members from across the state dedicated to partnering with DTSC's executive team and the board on applying environmental justice principles to DTSC's work. Later this year, after recruitment and appointment of the council members, we expect to have our first meeting.

Also wanted to touch on our hazardous waste management plan. Last year, the team responsible for this research in creating a hazardous waste management plan released a data report which will be used to inform the first plan due to the board in spring of 2025. This work will be critical first step towards modernizing waste management in California. It'll also support a more circular economy as we use the plan to incentivize hazardous waste reduction.

Comprehensive solutions will require meaningful engagement across stakeholders, including the Legislature, and we look forward to that as that report that plan comes forward. On fee reform, which I know is a topic we'll get into, more despite the changes of fee structure 2021, the Department is still facing a significant fee revenue shortfall. Lower revenues compromise the department's ability to deliver on promises of fiscal reform.

We've been continue to work on identifying those root causes of this shortfall, and that work is going to inform how we most effectively work with stakeholders to fill that. On enforcement, DTSC's increased enforcement and disadvantaged communities in our presence is paying off. By the end of 2023, we held a 90% return to compliance rate for violations issued to permitted facilities and vulnerable communities. We also strengthened oversight of metal shredders facilities, many of which were located in EJ communities, most notably through inspections and enforcement actions.

Strengthening DTSC's oversight of these facilities continue to be a top priority, and we expect to continue to work with the regulated community as well as the Legislature on issues that we identify. Moving on to CVCI, our cleanup and vulnerable communities initiative. As of the end of 2023, all programs within the CVCI have been launched. This includes discovery and enforcement. ECRG, our equitable Community Revitalization grants, our technical assistance grants, and Workforce Development Internship Program that we've developed. Also wanted to touch on safer consumer products.

Safer consumer products doubled in size due to SB 158. And last year we issued a report detailing the progress it's made over the last decade. Yeah, and I'll stop there. I know that's an issue we may get into later. Thank you.

Okay, thanks. Yeah, we do have a few things to dive into. I did want to ask, and I'm probably interested as well, on kind of green chemistry and updates there. I was just reading through the 10 year report and feels like certain things have been accomplished for sure, but we just want to be frank. But you could provide us a little bit more of an update.

Yeah, a lot of that 10 years was kind of building the program from the ground up from scratch. And so I think we're really hitting a stride there. That report, I can definitely provide follow up with that, but we feel that safer consumer products really provides an opportunity to evaluate alternatives and make sure that we are adding all that additional research. I know that takes time.

We don't get through as many products as I think, as some people would like, but I think the outcomes have been positive. And some of those products, just to name a few, have been flame retardants in children's sleeping products, spray polyurethane foam systems, certain products containing PFAs, six PPD in tires linked to endangered coho salmon and toluene and nail products. And so those are some of the highlights of what we've been able to get to.

Yeah, I did read through a lot of those in the report. And some of these are hard to pronounce, some of these chemicals for sure. I don't know if, Senator Allen, if you had anything specifically you wanted to kind of touch on.

Yeah, I know time is tight, but I will say I think I wanted to just talk a little bit specifically about the safer consumer products. And we've been doing some work in green chemistry.

It's my strong feeling that the pace at which the program has been regulating harmful chemicals and consumer products has been pretty slow. I think we've seen only seven priority products in something like 15 years now. And we've made some policy changes, we made some funding changes as a Legislature, including some new positions to help the program pick up the pace.

So I do want to just express my concern over the slow pace, at least up until now, and see how you think these changes, getting more staffing, et cetera, are going to help to get more work done in the program. And what sort of achievements can we expect in terms of tangible benefits for the state, given how little it's happened so far?

Yeah, we very much hear you. I think we hear other stakeholders with similar sentiments. I don't have a metric or something, a number to directly point to today. I do think we've learned a lot over the last 10 years on how to prioritize these products. I will say I think we're in development and should be releasing soon our fourth priority products work plan, and that kind of outlays the next several years of the products that we see is ready for our review. So again, I apologize.

I don't have a direct kind of metric for that. I'm happy to follow up. Obviously, Director Williams has worked within this program for a long time and it's a priority for her. So I'm happy to kind of report back to you in your office based.

On, I'd really appreciate, mean, I don't know if you have information about. Do you have some sort of timeline for releasing the priority work plan?

I wish. My goal today was to try to have a timeline for you. I don't, unfortunately, but it's going to be soon.

Is there any information you can give to us about types of product categories that you might be planning to evaluate?

Unfortunately, no. Again, I'd rather follow up. This has not been my specialty since I've been with the Department, but I'm happy to follow up with you.

Okay. All right. One thing that's been coming up, I've been hearing some pushback from folks about the Equitable Community Revitalization Grants that DTSC runs. And I know a couple of years ago, we allocated money, something like half a billion dollars, to expedite the cleanup of idled properties that could be contaminated. And something like half of that went to these grants. Can you give a little bit of a report on how those funds have been allocated so far? What are the current grant funding priorities for those grants?

Yeah, I don't know how those numbers, if I have them with me, but as far as ECRG, we completed its round two application period, and that was approved, 41 million in grant requests. I think one thing I want to mention about round two is we got a lot of, I think, really good feedback from the environmental justice community after our first round, and we were able to build that into round two. So I think we're hoping that that 41 million is going to be a lot more impactful and produce, I think, some of those outcomes that the Legislature intended.

Well, I do want to raise one concern associated with all this, because I know that those conversations produced a shift toward affordable housing related projects, which I think is totally fair and important. There have been some cases where there are other types of uses that provide a real tangible benefit to a community that just because housing isn't at the heart of it, it doesn't mean that it shouldn't be effectuated.

I know there's a case in Southern California outside of my district, but that a city's been involved with, and I'd love to kind of do some follow up because it got me thinking about. I do agree with the focus on housing. The flip side is there are lots of sites that need to be cleaned up, and there are lots of benefits to communities, from whether it be parks. We're talking about food deserts, so grocery stores, other types of non-polluting job centers. How are we evaluating those kinds of projects?

Yeah, I know the projects that are receiving funding aren't strictly affordable housing. So I'm happy to kind of look into and kind of provide you a better split up of what types of projects got funded. And also happy to talk more about your example to see if there's better ways to evaluate projects like that.

Okay, one final question about fees that I did want to talk about, and I would like follow up on all these things with respect. We found out last year that the fee changes in SB 158 that were expected to generate almost 100 million, I mean 80 million, resulted in only something like half of that being collected. So do we have new information about that shortfall?

I think I'll turn first to Brian, who's been the point for us on that project.

Good afternoon, Mr. Chair, Senators. Senator Allen, this is a high priority issue for the Department. So as you noted specifically, the generation and handling fee which is applied to hazardous waste generated in the state in fee reform had been anticipated it would generate $81 million last year. Our updated estimates are that it brought in roughly half that amount, as you noted, about $43 million. So over the course of the past year, since that issue was identified, the Department has a team that's been working on it.

Specifically, we've been doing a few things. One, we've been going through the data that we have available to have to us, both within DTSC. We have a few data systems that we utilize that has information on our generator community and the hazardous waste that's generated and manifested. We've been trying to marry that with CDTFA, who is our fee collection agency, and trying to marry the data that they collect from their returns, from their tax returns, and trying to identify where the estimate went wrong.

So why is it that we collected so much less revenue than we had projected at the time of fee reform? So we've been going through that data, doing that analysis. That information is going to then inform a may revised proposal that we anticipate you'll see very shortly with recommended solutions and path forward. But I do want to highlight as well, we haven't just been doing that analysis.

We've also been trying to work within our existing resources and authority to find other ways to do a couple of things. One is increase our outreach to fee payer communities. We recognize that this is a new fee with a new structure. And we have thousands of generators, registered generators throughout the state, and thousands and thousands of sites. And so we needed to increase our communication externally so that they understood the changes. That includes both us and CDTFA updating our communications, our websites.

We had our first ever webcast on the fee in January. So the month before the final fee payments were due just a couple of weeks ago. And then we've also been doing a lot of work to recognizing that the data systems that we do rely on are incomplete in some cases. And because those CDTFA and DTSD systems don't naturally marry together, identify ways to kind of create those connections so that going forward, we can do better oversight. Okay.

I'm interested in seeing what you come up with there, too. Okay, thank you.

All right, sounds like we have some follow up. I'm going to tell you what we're going to do. First, just ask specifically on the green chemistry pieces and such who is the Department would be a good follow up for a follow up meeting on that. Was that Director Williams herself or somebody else?

Yeah, we can go Director Williams herself. We also have a safer consumer product team that we can pull together to provide any feedback or briefing for any of the Members.

Okay. So maybe Senator Allen and I could have a fall meeting.

Absolutely.

To dive into that. Okay, good. I think, did I just make sure the Department of Finance or LAO, any additional comments on issue 21?

Christian Beltran with Department of Finance, nothing to add, Chair. Thank you.

Frank Jimenez with the Legislative Analyst Office. No concern specifically on issue 21, but related to the shortfall in the hazardous waste control account, we recommend that the Legislature begin to weigh its options now in solving the shortfall either on an ongoing or one time basis, and that will put the Legislature in a better position the way the merits of the governor's may revision proposal that is forthcoming.

Okay, great. Thank you. Well, because of time constraints with flights and such, what we're going to do is we're going to push Cal Recycle to a follow up meeting because we do want to leave time for that. So thank you. A recommendation of hold open on this item. We will now move to public comment and then we will hopefully be able to take votes on a bunch of the other items. Thank you all. Thank you all. Thanks. And go ahead when ready and we'll ask you to keep your remarks to one to two minutes, please.

Yes, sir. Good afternoon. Robert Gore from the Guelco group on behalf of Kings River Conservation District, Kern County Water, Modesto Irrigation and the California Association of Wine Grape Growers. Issues nine and 20 are general benefit and thus most properly General Fund, not a ratepayer burden. We stand ready to assist with redirection as appropriate. On issue 20, we at the very least go with the LAO recommendation for a prudent approach, not full bore. Thank you.

Thank you.

Gail Delihant with Western Growers Association. Our members are in California, Arizona, Colorado, New Mexico. We grow fresh fruit, fresh produce in all those states. We are very concerned with issue number 19, the pesticide fee increase and the increase in fees in the State Water Resources Control Board, Issue number 20, agriculture budgets. The state's budget is not the only one that has a deficit. As Senator Dahle has said over and over and over again, all of these fee costs are on the back of agriculture.

Every single Department in this state that we have to hand a piece of paper to, we have to pay a fee. These fee increases are eating into everything, and it's causing the small farmer and the medium sized farmer to completely go out of business. And so we are here to ask that you relook at these things, see if we can't get some General Fund in here, or postpone some of these issues for another day when the budget is more robust. Thank you.

Thank you very much.

Thank you, Mr. Chair, Members. Dawn Koepke with Mc Hugh, Koepke, Padron on behalf of a few clients, on a couple of quick issues. On issue number 19, the DPR budget change proposal on behalf of the California Manufacturers and Technology Association and Chemical Industry Council of California just would echo some of the concerns, although we certainly do look forward to working with the Department and the Legislature further on that.

On issue number 20, related to the State Water Board's approach for the recent court order, the California Council for Environmental and Economic Balance, CCEEB, does have some concerns just generally in terms of the impact that will have, in terms of the fee payers that have essentially been seeing year over year increases, in some cases in the double digits, for many years, and particularly for CCEEB utility members, those increases, as was stated by one of the Senators, certainly very significant.

And then finally, on the issue of issue number 21 related to DTSC and the Board of Environmental Safety, while CCEEB does not have opposition or concerns necessarily with that proposal in and of itself, CCEEB does have concerns just generally with the department's deficit around the hazardous waste control account, and is highly concerned about any move to result in just increasing fees that have already been increased two to 300% for generators. We would look forward to further discussion with the Committee.

We certainly are already in conversation with the Department on that to come up with some ideas how to mitigate that and avoid just purely empty increases. So thank you.

Thank you.

Good afternoon. Kim Delphino. I'm representing Defenders of Wildlife, Audubon, NRDC, California Environmental Voters in the Alta Peak chapter of this California Native Plant Society. I'm speaking to issue 20. Let me just say first, thank goodness, California has the Porter-Cologne Act. If we were in Arizona, 90% of your waters would no longer be protected at all.

The whole point of the fact that the saca decision has pulled back Clean Water Act Protection raises issues on how we actually protect water quality, which has direct impacts to people and wildlife. And so it's very important that we fill in the gap left by the pullback from the Federal Government. And we think that we strongly support the BCP by the State Water Board. We think it's reasonable. It is actually quite modest in many respects.

Because given the scope of what's actually going to be impacted, and we would strongly urge that if funded, it be funded at at least three years because you need to have certainty of funding to hire staff. People are not going to take a job if they only know they have one year of funding available. And the last thing I would say is that whether or not it's General Fund appropriate or fee based, we made a big move to have the waterboard be fee based.

If you move to General Fund, it creates great uncertainty in the Administration of the program, which is why you went to fees in the first place. And you wouldn't be triggering a fee if you are avoiding impacts to intermittent streams, ephemeral waters, and wetlands. And finally, with respect to agriculture, from dredge and fill permits, they have huge exemptions within the state wetlands policy that was negotiated back in 2019. When we finalized that policy, pretty much most agricultural activity.

In fact, all agricultural activities do not trigger dredge and fill. So they're not implicated by this particular issue unless they're converting their areas to housing. And even then they have a lot of exemptions. So thank you.

Thank you.

Good afternoon. My name is Cody Phillips with California Coastkeeper Alliance, here to speak on issue 20, the Sackett decision. I just want to echo what Kim was saying there and add a couple of interesting details. California Coastkeeper Alliance does a lot of work with both the State Water Board and for permittees that get their NPTES permits, which is under the Clean Water Act, and also waste discharge requirements, which is under the Porter-Cologne.

And we're already seeing everywhere that any permit holder is going to challenge whether or not they're going to discharge into a water in the United States because now that is an option to them. And that's going to require the State Water Board to do quite a bit of just clarification. In addition to the backfilling that they have to do, they're going to have to determine whether or not these permittees need an MPDs permit or WDR. There are subtle but really significant differences between those two.

That's going to be a huge administrative burden, and it's going to have a lot of issues that are going to come from years from now. And so it is imperative that the Water Board gets this funding to support that staff as they move forward. Thank you.

Thank you.

Good afternoon, Chair and Members of the Committee and staff. Alex Loomer, on behalf of the Environmental Defense Fund, the Sierra Club, the Center for Biological Diversity on issue 20, echoing the previous comments and strong support of the funding for the Sackett decision backfill that's needed at the Water Board. Also, on behalf of the environmental Defense Fund, I'd just like to emphasize the need for a really equitable and robust climate bond.

I think all the cuts that have been discussed today that were in the early action plan that was released this morning highlight the need for that funding and really thanks Senator Allen for his leadership on that. Thank you.

Thank you.

Good afternoon, Chair Becker and Senators. Here, part of the Issue 20 Choir also expressing our strong support for the proposed BCP. So appreciate your support of that as well as the climate bond. Similar comments as to what were just made. Additionally, we would urge the Legislature to reject the LAO's proposal to revert unspent funding from the Wildlife Conservation Board's Stream Flow Enhancement Program, which supports critical habitat restoration and streamflow projects that benefit Fish and Wildlife and increase the climate resilience of California's watersheds.

Additionally, we saw that this morning Senate leadership released their proposed budget shortfall document. We still need to analyze it a little bit closer, but it seems to preserve critical funding for coastal resilience. So we appreciate that. Thank you so much.

Thank you.

Good afternoon, Chair and Members. Annalise Rivera here on behalf of California Trout and Trout Unlimited. We are here in strong support of item 20, the Sackett decision, BCP. As on the ground practitioners, it's absolutely critical the waterboard maintain the ability that now falls upon them to process the permitting. We rely on that a lot in restoration work as well.

And we are further here in support of item number seven, the Gualala TMDL BCP, which will help address the sediment issues in that critical watershed for our endangered species. Thank you.

Thank you very much.

Hello, Chair and Members. My name is Natalie Brown with Planning and Conservation League urging your support. Also of issue 20, the Water Board's budget change proposal related to the Sackett Supreme Court decision. I'm also voicing support on behalf of Friends of the River, the Environmental Protection Information Center, the Committee to complete the refuge and the Water Foundation. Thank you so much.

Thank you very much.

Good afternoon, Mr. Chairman, Members. Chris Reardon, California Farm Bureau. I'm here to talk about the budget proposal by the Department of Pest Regulation. Three quick points, $33 million over three years, plus 117 new positions. It's surprising when you consider where we are in terms of a budget deficit in this state. Yes, I understand they are a special Fund Department, but the $16 to $17 million, which is a tax paid by my members for this increase for us, is hard to swallow.

I know the LAO mentioned that a small subset, or we are a small subset that's impacted by this increase. But many of our farmers cannot pass on those increases because of the global marketplace we face today. And those that can't will only increase costs for families who struggle to pay constantly for increasing food prices. Secondly, the other thing mentioned, it was talked about when the department's presentation today was the issue with sustainable pest management.

Folks, there hasn't been one minute of policy discussion in this Legislature as it relates to SPM or sustainable pest management. So our view on it from a Farm Bureau perspective, and by the way, we've invited the Director to speak at numerous farm bureaus around the state. We still aren't clear about what this really means, to be honest with you.

So our view is, before we create a new program in sort of the current budget crisis that we face ourselves, let's sort of fix what we know we have to fix within a Department before we create a new program. Then third, and then just last. Look, we understand the Department hasn't raised the mill in 20 years. We believe in a strong DPR. California is the most comprehensive regulatory system in the world, but we also should be efficient and effective.

Having reviewed this BCP, we believe and acknowledge some really important issues like eliminating their budget surplus or I mean imbalance, streamlining our registration process, and then also addressing what this is actually going to take long term to make the Department whole. But I must tell you, at the end of the day, and I think Senator mentioned this earlier, we pay a vast majority of that mill assessment.

So I hope when you look at sort of the numerous challenges faces agriculture in the coming years, and we all know what they are transitioning to a sort of global climate change and what that's going to mean for us, that you'll acknowledge that sort of the constant increasing of costs, not only on this issue, but other issues will effectively strangle our industry. So wanted to make sure that you pay close attention to that and we're very concerned about this proposal.

Thank you very much.

Hello. Good afternoon, Chair and Members. Jamie Fanous with the Community Alliance with Family Farmers. We represent over 8000 small and historically underserved farmers across the State of California. Speaking on issue 19, DPR specified mill fee. While we support the mill fee increase, we request several amendments to ensure these additional funds go beyond regulatory action and towards bringing safe products to market.

We request that the funds at DPR and the portion dedicated to CDFA focus on sustainable pest management programs that prioritize farmer to farmer learning, training demonstration, and incentives. While I'm here, I'll also like to request that the proposed cuts in the Governor's Budget to CDFA's California Underserved and Small Producer Program, as well as the Farm to Community Food Hub Program are rejected. Thank you very much.

Thank you very much. We have 10 people in 10 minutes, so we're going good, but please continue.

I'll go quickly. Asha Sharma with Pesticide Action Network also speaking on issue 19. I'm in support of LAO's assessment on page 28 to include funding for AB 652, the Environmental Justice Advisory Committee. I also agree with LAO that the Legislature should review the SPM management activities and the proposal. Specifically, we urge the Legislature to establish an SPM grant program at CDFA in partnership with DPR to get direct support to farmers to adopt SPM.

We've heard a lot about costs of this proposal, but actually helping farmers shift their farming practices so that less pesticides are needed in the first place would be a great start and a great way to address those costs while also addressing the tremendous costs associated with the environmental harm, human health harm associated with pesticide use. Lastly, the Legislature appropriated $1 million to Fund a study on the mill fee.

But the current proposal is not in line with what the Mill Fee Study recommended, which was an increase to 33.9 mils over a three to five year period. So we are requesting that the proposal is adjusted to 33.9 mils by 2027. Thank you so much.

Thank you very much.

Good afternoon. Jane Sellen, Californians for Pesticide Reform also commenting on issue 19, I'd like to align myself with the comments of Pesticide Action Network. In addition, we strongly oppose the inclusion of language preventing impacted community members from requesting review of permits for restricted material pesticides, which would exclude farm workers, students, teachers, and many more from eligibility to challenge permits.

We agree with the LAO assessment on page 29 that the policy implications of this proposal are substantive enough that it should properly go through the policy process via AB 2113. We also strongly agree with the LAO assessment on page 30 that DPR must have accountability via enforceable targets for completing and not just managing reevaluations. There are chemical pesticides that have been in reevaluation since the 1990s, so forget the two to three years for registrations.

And finally, the governor's proposal does include ambitious targets for increasing registration actions, but our coalition supports expedited registration only for pesticides already certified for organic use. Thank you.

Thank you very much.

Good afternoon. Abby Alvarez on behalf of the California Food and Farming Network, which is a network of over 50 food, labor, farming, and environmental organizations. I want to align myself with the prior two comments on issue 19. We ask that the Mill Fee funding be used for sustainable pest management activities and to Fund the recently chaptered AB 652. Thank you.

Thank you very much.

Good afternoon, Chair and Members. Nicholas Mazati on behalf of Series urging the full funding for SB 253 and 261 from last year. These laws were supported by over 30 major businesses, many of whom do similar reporting and feel like they can comply with both laws as written. They specifically appreciate the use of TCFD risk reporting framework as well as GHG protocol in the laws because they are well understood and already used by many.

Additionally, these laws have built in filing fees, meaning only a small portion of the funding is needed for the beginning stages of implementation before the laws can fully Fund themselves. Investors and companies cannot afford a delay in implementation of these laws. Thank you.

Thank you.

Good afternoon. Taylor Roshan on behalf of a variety of agricultural associations, including the Fresh Fruit Association, California Citrus Mutual, and the Avocado Commission. We'd like to echo our support for issue number 16 for CDFA and provide comment on issue 19 regarding DPR's BCP and trailer bill. AG supports a strong, properly resourced DPR. Our growers depend upon the availability of products, the professionalization of our licenses and strong enforcement action.

We appreciate the staff and LAO's very specific review of this proposal, but we would like to highlight the Department is asking for a significant amount of new resources and staff, and while the mill has remained flat, it is tied to the value of the products that we sell, so it automatically has an inherent inflationary component and the Department's budget has grown prodigiously because of this. Firstly, we'd like to object to the Legislature ceding its authority to dictate that the mill go above the third year cap.

We believe after a 30% increase to DPR's budget over three years, if they need more money and they want more money, they should come back and propose a comprehensive proposal and daylight that proposal for hefty legislative and public policy. Comment Additionally, in concurrence with the LAO's comment on accountability for registration, the BCP 117 positions $33 million. Only 10% of those positions would be allocated for registration and reevaluation. So we see a disconnect between the Department's priorities and functions and what they've proposed, particularly for registration.

It was discussed after a product is registered at USCPA, particularly for agriculture, it can take five years for that product to be registered by DPR. Mr. Chair, you spoke about the increase of invasive pests. Our farmers can't wait that long. And you also asked about the onboarding of safer products, organic products. Those are required to go through a registration system. So from our perspective, the best way to advance sustainable pest management is to have a system that facilitates the onboarding of safer products. Thank you so much.

Thank you.

Good afternoon. Chair Becker and Members. Tricia Geringer with Agricultural Council of California, echoing the concerns articulated about issue number 19, the DPR budget that Ms. Roshan just spoke about, specifically want to highlight, Chair Becker, we really appreciate that you discussed that you're supportive of improved registration timelines and the need for the Department to ensure that there are plans in place to speed up those timelines.

And then we also want to mention we agree with the LAO and Senator Dahle's comments about the needs for statutory caps on that mill assessment. Thank you very much for your time.

Thank you.

Good afternoon. Michael Jarrett, on behalf of NextGen and over 168 other organizations asking you that you reject the $35 million cut to the California Nutrition Incentive Program. The CNEP program is incredibly important to provide farmers market access to low income Californians for fruits, vegetables. We also ask that you preserve the Farm to School Program. And we're joined on that with the Center for Eco Literacy. Thank you for your time.

Thank you.

Mr. Chair and Members. Pat Moran with Aaron Read & Associates, representing the California Association of Professional Scientists. Regarding issue 19, we're in support creates 117 new positions, many of which are state scientific positions, which are needed to help the Department fulfill their mandate. Thank you.

Thank you.

Hopefully I have 30 seconds left. Nicole Kenyon is on behalf of the Household and Commercial Products Association, commenting on item 19 for DPR. Our members manufacture the nonagricultural pesticides. So things like disinfectants, pet and pet care products, your home, lawn and garden products. So first we want to say that, like others have said, it's very important to us that the Department be well resourced.

And as part of the accountability measures that I've been talking about and improving registration process, we are specifically seeking statutory timeframes for registration. This is something that happens at the federal level every five years. Even we say at the federal level, nothing gets done. But every five years, the USEPA, a broad array of stakeholders come together. They negotiate timelines, they negotiate fees, and it's passed in a bill.

And we think we could do something at the state level as well to provide that accountability and those improvements that we're all seeking at the Department. And then I would also just add that from the non ag sector, we make up about half of the total mill that is raised. So we are a very big, significant piece of the pie as well. And then finally, just agree that we would prefer the Legislature not delegate its authority to the Department to raise the mill in out years.

We think it should be stagnated over however many years the Legislature thinks is appropriate, and then if more research is needed, come back to the Legislature and have this conversation again. So thank you.

Thank you.

Good afternoon. Melissa Romero with California Environmental Voters. I'll keep it brief because you've heard me say these things before, but the Legislature absolutely needs to reject further cuts to the climate budget, especially when there is so much money going to tax credits and subsidies to the oil and gas industry.

You all should know by now about the environmental advocates proposal to cut oil and gas subsidies, which would be to the tune of about $9 billion that would open up for investments that we could be putting towards climate investments. I also want to once again say we would love for you to continue to prioritize the funding for SB 253 and SB 261, the climate corporate accountability bills. Now that the SCC rule is final, it does exclude scope three emissions reporting. So California's law is even more important now. Thank you.

Thank you.

Dennis Albiani, on behalf of the California Seed Association, California Pear Growers, California Bean Shippers, several agricultural organizations, we support 16, item 16 in the DPR budget. We do have some questions on 19 and actually agree with kind of the tone of the LAO on sustainable pest management.

This is a new program, and just because the farmers, as Mr. Senator Dahle mentioned, are going to pay for a significant amount of this, and it's not General Fund, it really needs the scrutiny of what elements are necessary, what elements are important for this year, and what ones are luxuries going out. For instance, we have a world leading, who really invented integrated pest management at the University of California here. And so why would we duplicate that? And especially in these challenging budget times?

Those are the kinds of questions, I think, that need to further discussion on that and then just wasn't planning on doing this. But border stations, border stations. We appreciate Senator Dahle's comments on it. There are things like Blythe red imported fire ant prevention, when they come in on ants to prevent that, when they come in on bees, excuse me, those kind of things. So they are a very important infrastructure. Maybe they could be used even better, but that is something that is important to continue to Fund. Thank you.

Thank you very much. Excellent. Well, I want to thank everyone for the public comment. We're going to move to vote only and initially on items eight and 14. And I'd entertain a motion at that time. Excellent. And, Consultant, please call the roll.

[Roll Call]

Okay, four to zero, those items are out and approved. Thank you. Now we will take motion on items issue. Sorry. One and 2, 4 and 5, 9 and 10 and 12 and 13. Do I have a motion? Senator Allen motions. Please call the role.

[Roll Call]

The vote is three to one. Those issues are approved. And finally, I'd like to motion on issues 3, 7, 11, and 15.

[Roll Call]

The vote is 3 to 0 and those issues are approved as well. That ends our voting. I want to thank everyone who participated on the panel, everyone who testified and answered our many questions. Look forward to the follow up. If you did not get a comment in, you can do so via our website. Thanks, everyone, for their patience and cooperations. We've concluded the agenda for today's hearing. Senate Budget Summit Committee number two is adjourned.