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

We will cover issues from the Commission on Peace officer standards and training, the Department of Justice, and the Office of Emergency Services. We will take public comment on all items at the end of the hearing, and we are not taking any votes today to ensure we have time for everything on today's agenda. We are asking presenters to keep their testimony under five minutes. I would also ask my fellow Committee Members to keep their comments and questions concise. Do we have any comments from our Committee Members?

Seeing no comments at this moment in time, I will again skip quorum for the time being, but we will begin again as a Subcommitee. We will begin with our first issue, which is the Department overview and SB 2 implementation. We will hear from Manny Alvarez, the Executive Director of POST. You will have five minutes. Is Manny here? All right. And we will be timing, folks. Thank you. You can begin.

Okay. Good morning. Chairah Wahab and Members of the Subcommitee. Again, my name is Manny Alvarez, and I serve as the Executive Director of the California Commission on Peace Officer Standards and Training. Thank you for the opportunity to testify this morning. POST is a regulatory Department established in 1959 to set the minimum selection and training standards for law enforcement agencies in California. There are currently 609 law enforcement agencies that participate in the program. Participation is voluntary, with the increased certification responsibilities on POST.

Since the passage of SB 2, post staffing model has increased from 136 to 262 positions. As of today, we have 190 full time personnel on board and essentially 72% of full staffing. We have brought on board 21 temporary retired annuitants to help us with the increased workload and retroactive reporting called for in SB 2. SB 2directly defined serious misconduct by peace officers to include, in General terms, nine distinct disqualifiers.

Law enforcement agencies are required to report to post any complaint, charge, or allegation of serious misconduct as defined within 10 days. As a result, we've received a total of 21964 reports in year one, and of those reports, approximately 70% were related to three years of retroactive reporting. It is important to note that although retroactive reporting of serious misconduct was mandated, post was limited to enforcement action in only three types of retroactive matters.

Dishonesty, sexual assault, and the use of deadly force leading to death or serious bodily injury. For the remainder of my testimony, and for simplicity, I will include data received and actions taken for the 15 month period from January 1, 2023 to March 17, 2024. During this period, law enforcement agencies submitted 23739 reports of serious misconduct, resulting in 16,427 cases, with allegations naming 15,378 individual peace officers. Of the 16,427 cases, 3885 remain under investigation by law enforcement agencies.

A total of 6604 investigations have been completed by law enforcement agencies and are currently under review or are being investigated by Post. Post has received an additional 565 complaints from Members of the public. A total of 5788 cases have been closed by Post. As a result of the reporting, we have issued 116 immediate temporary suspensions for individuals who have either been charged with a disqualifying criminal violation or who have resigned or retired during an investigation of alleged serious misconduct.

We have taken action against 54 individuals for criminal convictions. 13 individuals have been notified of post intention to permanently revoke their certification, and of those 136 have defaulted on their certification by failing to appeal. A total of six individuals thus far have requested a review as defined by statute, essentially appealing post staff's intended decertification or suspension action. A total of 21 individuals have elected to voluntarily surrender their certification, an action which post has an action which has the same effect as a permanent lifetime revocation.

In summary, POST has conducted 205 formal actions since January 1, 2023. In terms of new peace officer appointments, law enforcement agencies are now required to query POST for separation and serious misconduct data for candidates who have previous California peace officer experience. As a result, Post has responded to 6876 requests for information from law enforcement agencies seeking to hire peace officers. Thank you for allowing me to speak before your Committee, Madam Chair. I'm happy to take any questions you may have.

Thank you. We'll first go to LAO.

Jared Sippel with the LAO. No comments to add, but we're available for questions.

Thank you, Department of Finance.

Thank you. Joshua Mortimer, House Department of Finance happy to answer any questions.

Thank you, Members of the Committee. Senator Durazzo.

One of a piece of information that you shared with us. Post is currently only receiving reports from 379 out of 614 total covered agencies. Could you shed some light on that? What does that mean?

So those are agencies who have had zero reports, essentially, or minimal reports in our agencies are required to submit an allegation within 10 days. We have approximately 379 who have submitted at least one report, and at the end of the year, we had 265 that had zero reports to POST. So, with those 265 that did not report, we sent letters to each one of them just to ensure that our data was accurate, that there was no reporting.

The majority of those departments had less than 49 peace officers at the Department, which some of them may have had five peace officers. So they may not have had any serious misconduct allegations.

I guess to not get a report is different from getting a report where there are no allegations. Right. No issues. So I just wanted to make sure. We're talking about not getting reports because it says only receive reports from the 379 agencies.

Correct. So they only have to provide positive, so to speak. They don't have to report a negative. They don't have to report to us that they have nothing. They only have to report when they have an allegation of serious misconduct. So, of those 379 have reported at least one allegation of serious misconduct, some of them, up to 4000 allegations for some of the big departments, and then 265 had zero.

Okay, so no reporting equals no incidents.

That we're aware of. Yes. Correct.

Okay.

I would like to establish a quorum consultant. Would you like to.

[Roll Call]

SB Thank you. Quorum has been established. We will continue with questions. I do actually have some questions for you, in particular, with 2. That, obviously has kind of changed a lot of things. If an officer. This is more of a technical question. If an officer were to be under investigation in, let's say, a city and decides to quit that city and move on to another city, what happens?

So, if an officer leaves under those circumstances and they are under investigation for an allegation of serious misconduct, we are allowed by statute, by SB two, to issue an immediate temporary suspension. And that's what I referenced, that we've issued 116 of those. So that individual can no longer work as a peace officer until it's resolved. It's not a punishment by any sorts. It really is to put a hold on that individual till there's some resolution.

We can issue it for a criminal charge when somebody's been charged with a crime, that will be a disqualifier when they've resigned or retired in lieu of an investigation for serious misconduct. And we do issue those regularly as a hold until resolve, or that individual resolves their criminal charges so they can't go work anywhere else.

Okay. So just serving on local City Council, this was a pattern that I saw pretty regularly where an officer chooses to resign and move into a different city. And I think that there is a lack of understanding amongst cities as to what their enforcement capability is, number one. And it's not just the cities in California, of course. Right.

But when an officer decides to move to a different state, we have seen this, I have personally seen this, where many of the lawsuits and investigations, it's completely on hold. They can't force the individual to come. They have no power, no say, no, nothing. So in that regards, what are the options? What's the case?

Well, for us, once we issue those orders and we do them regularly, we just did one this week. We list that individual on our website. We send notification to the DA, to the individual, as well as to the Last Department that they worked at or where the misconduct allegations occurred. And they're not allowed to work in California. Could they go to another state? It's up to that other state as to whether they're going to allow that person to work.

Generally they don't, but in theory they could. But in California, they couldn't go from a Bay Area Department to a Department in LA County and work.

Do you guys communicate with other states?

We do, on a fairly regular basis. And then when there's a permanent revocation or a criminal conviction, we supply the data to the national Decertification Index, which is also required under Senate Bill two. And we work with other states on a regular basis. We just had all the western states at post. It's a good collaborative relationship, but yet it depends on each state as to whether they're going to allow this individual to go work in their state.

What if the individual is not complying with investigation?

So one of the disqualifiers is failure to cooperate with an investigation. And it's both failure to cooperate with an investigation at the Department, and it's failure to cooperate with an investigation at post. That is one of the nine disqualifiers. If they fail to cooperate, they can either be permanently decertified or they can be the subject of a temporary suspension till we kind of resolve a situation. Okay.

And you have an 18 Member task force. What if they all are like 5050 split?

So there's two. There's a board which is made up of nine individuals, and that is a recent board that's been comprised by Senate Bill two. They have a 51% vote to pass something through for a recommendation to the Commission. The Commission has a requirement of a two thirds vote, majority vote, so it's more than 50%. So if it's not passed by two thirds, then it dies.

Okay, and then what is the makeup of these Members? Or are they all former peace officers?

They are not. So the new board is made up of nine individuals. Two of them are law enforcement or current law enforcement, and seven are not. Most of them are public Members, advocates, an attorney position. Seven of those Members are appointed by the Governor and two by the Legislature. In terms of the Commission, it's 18 Members. There's, I believe, four public Members of the 18 that are not law enforcement.

There's four public Members, two that are appointed by the Governor, two that are appointed by the Legislature, and then there's some other positions for an educator, for a city elected city administrator, a county elected county, which can be non law enforcement. So there's somewhere between 6 and 7 potential non peace officers on the Commission of 18.

All right, do we have any other questions? None. Saying none. Thank you for your time. We'll move on to item number two, controlled substance utilization review and evaluation system fee increase. We're going to first hear from the DOJ. You have five minutes.

Good morning, Madam Chair and Members of the Committee. My name is Ashley Harp, Budget Officer with the California Department of Justice. For this item, the Department of Justice, in collaboration with the Department of Consumer Affairs, requests trailer bill language to implement a license fee increase from $9 to $15 to support continued operation of the mandated Controlled Substance Utilization Review and Evaluation System. We call it the CURES system.

The fee increase is required due to a recent reduction in the fee from $11 to $9, which took effect in April 2023, combined with increasing technology vendor costs, and standard operational cost increases. The requested fee increase will support the department's expenditures, including personal services, information technology, and supporting operational expenses to maintain and operate the system. The DOJ and DCA teams are available this morning to speak to any questions from the Committee on this proposal.

Thank you. Do we have the LAO? Nothing. Department of Finance? Nothing. All right. Do we have any Members of the Committee willing to ask a question? We see nothing. I have a quick question, in what has the DOJ done to reduce and minimize its cost related to maintaining CURES?

So DOJ has experienced significant cost increases from the vendors related to the software that's required and the maintenance of the system. Also, over the years, costs have actually gone up a bit due to employee compensation increases and primarily those vendor cost increases that I mentioned.

All right, is the number of individuals registering and paying the fee somewhat stable?

I think DCA is here to speak to any questions regarding the registration volumes. And we have Taylor, here from DCA.

Morning. My name is Taylor Schick, and I'm the Chief Fiscal Officer for the Department of Consumer Affairs. I would say that the licensee population that pays the CURES fee is stable. It is growing slightly as our normal licensee populations are growing.

Thank you. All right, seeing no other questions, we'll move on to item number three, Department overview. We're going to hear from Chris Ryan, the Chief Operations of the DOJ. You will have five minutes. Thank you.

Thank you, Madam Chair. Chris Ryan with the Department of Justice, Chief of the Division of Operations. I want to thank you and the Members for our opportunity to present our budget issues today. As you said, I'll be providing a brief overview of the Department of Justice, and then Ashley Harp, our budget officer, is here to answer any questions about any of our budget proposals.

The Department of Justice is primarily made up into four program areas, the Legal Services Division, the Division of Law Enforcement, California Justice Information Services Division, and the Administration or Directorate. The Department's proposed budget is approximately 1.3 billion, which is a 4% reduction from current year resources available. Approximately 38% of the department's budget is General Fund, and there are 35 separate fund sources that provide the remainder of our budget.

The proposed budget includes approximately 5,900 positions across state across the state, in office buildings, labs, task forces, and other venues from San Diego to the Oregon border. The Legal Services Division is made up of the Office of General Counsel, the Civil Law, Public Rights, Criminal, and the Medi-Cal Fraud and Elder Abuse divisions. Briefly, the Medi-Cal Fraud division is charged to investigate and prosecute those who would defraud taxpayers of millions of dollars and divert scarce healthcare resources from the needy.

The Division of Medi-Cal Fraud and Elder Abuse also works aggressively to protect residents in nursing homes and other long-term care facilities from abuse and neglect. The Civil Division is made up of attorneys charged with protecting and enforcing California's state agencies, primarily the Department of Consumer affairs and the California Department of Corrections and Rehabilitation are their two largest clients. The Public Rights Division is charged with protecting and enforcing California statutes related to consumer protection, antitrust, healthcare, the environment, and many other public interest statutes.

The Crim. Division primarily focuses on criminal law and appeals in the criminal justice system, and the Office of General Counsel is responsible for supervising and coordinating internal legal work. California Justice Information Services Division is primarily made up of our technology services and supports law enforcement and criminal justice agencies throughout California, providing criminal history and information technology data. The Division of Law Enforcement, as it sounds, is our public safety law enforcement division and works with local law enforcement agencies throughout the State of California.

So that's our overview for today and we're happy to answer any questions on our BCP proposals.

Thank you. LAO? Nothing. Department of Finance? Nothing. Members of the Committee? Nothing. I do just want to ask, how is the DOJ contributing to reducing the budget deficit then?

So we have an item on the agenda that we're going to talk about later, the Litigation Deposit Fund. There was a proposal last year for transferring loaning 400 million, and the Governor's Budget includes a $100 million loan. Both of those together are being transferred to the General Fund, as I understand it. But I would defer to Department of Finance for further details on those proposals.

All right, I appreciate that. Thank you. We can move on to issue number four, which is Armed and Prohibited Persons Update. We're going to first hear from Michael Redding, Special Assistant Attorney General at the DOJ. Michael, you will have five minutes.

Thank you. Good morning, Chair Wahab. Good morning, Members of this Committee. Again, my name is Michael Redding. I'm a special assistant attorney general at the California Department of Justice. Beside me is Peter Wold, Assistant Director for the Bureau of Firearms. The Department of Justice recently released its 2023 APPS report. I provided a handout which hopefully you have all received and should be in front of you.

I'm going to briefly go over the numbers from last year, just to give you an update, and then talk about some of the recommendations. And then I welcome your questions on the first page. And everything's numbered at the top so you can follow along. This shows the total number of firearm owners in the state. As you can see, it goes up just a little bit every year. Last year was about 3.5 million.

Turning to the second page, this is the yearly removals and additions from the APPS list as of January 1 of each year. As you can see, over the last few years, removals have outstripped additions, meaning more people are coming off the APPS list than are being added. The results of that are shown on page three. So we reached a high watermark of about 24,509 in 2022. And now we're down to 23,451. DOJ can't take all of the credit for that.

But if you look on page four, that shows on the right side there the investigation contacts and the APPS' investigations closed year over year for the last four years. And as you can see, both investigation contacts and investigations closed have been increasing. That said, if you look on the left side of the page, you'll see that the number of prohibited people that are removed as a breakdown is about 3,500 are because they're dissociated from all their firearms.

And about 5,300 are because they fall off because they're no longer prohibited. Turning to the last chart, this is the breakdown of the pending category. Pending category is the number of individuals who have a registered or are on the prohibited persons list. But for some reason, we have not been able to take their firearm, usually because we've tried to contact them three or more times, unsuccessfully, because they indicate that they traded the firearm, got rid of the firearm, something like that, but have no proof of that.

That number remains at about 15,000 each year. So the total is just under 24,000 for prohibited individuals on the prohibited persons list, 15,000 in the petting category, and then about eight or 9,000 are added on and removed each year. So you can see the vast majority there are prohibited because of a felony conviction. And then finally, just to turn briefly to the recommendations, two major buckets. The first is really shifting more of the work on the front end.

People who have their firearm removed from them at the time of conviction, at the time that a restraining order is issued, those people don't end up in the APP system. Obviously, that's the best time to do it for public safety purposes, and that's the best time to do it because it's nearest in time to the prohibition. We've had some great successes over the last few years with that.

I've listed here a few of the bills that you all have passed, which have effectively helped that, both policy bills and some budget additions, specifically to the Judicial Council, to work on firearm relinquishment on the front end. And then the second bucket is really some work that we're doing at DOJ. One is moving toward competitive salaries within the Bureau of Firearms. This is an ongoing issue for the Department.

Agents don't receive competitive pay, so we're often losing them, retraining, and going through the process of hiring additional individuals. And then finally modernizing the APPS database. And again, this is a project that we're currently engaged in, and we are in stage two of the four-part California Department of Technology proposal. APPS is the first system of its kind in the country. It's also the first system of its kind to become outdated.

So we're working to update that so the systems all talk to each other and we can more quickly pull individuals who are prohibited and retrieve their firearms with that, I welcome your questions.

LAO? Department of Finance? All right, Members? Senator Newman.

A couple of quick questions. I guess first, if you look at your top slide, that's an impressively steep curve. What accounts for what in 15 years, more than tripling the number of Californians who are known to have firearms? Is it just better record keeping or is it the changes in behavior?

It's a few different things. So before 2014, the Department didn't track long guns. So we did see anytime you purchase a long gun after that date, that's going to be added. Before, I can't remember the year, but some point earlier, we weren't tracking handguns, so new additional purchases would be included there. So some of it is that some of it is better record keeping, making sure that all firearm transfers go through a firearms dealer, anybody who comes into the state.

But then the other part of it is more people buying firearms. Obviously, during the pandemic, there was a sharp increase in individuals purchasing firearms, and that's reflected on here.

And does your data also reflect the number of firearms owned by individuals?

This does not reflect the number of firearms owned.

It doesn't. But do you track it?

We do.

Looking at the yearly removals and additions, what's the average duration of stay for somebody on the APPS list, and what are the triggers or conditions to allow them off it?

I don't think that we're able to track the average yearly stay, again, with the outdated system that we have. What I can say is that we're working on individuals who come into the system and are trying to dissociate them from their firearms. So Assistant Director Wold and his team are going out and doing often APPS sweeps, so they'll identify a number of individuals in a given area, and they go and knock on the door, do you still have this firearm?

And ultimately go through a process of trying to retrieve that firearm from them. It's difficult, both because it's dangerous work and also because of the nature of the list. These are not hot, meaning somebody didn't just get prohibited, and we know they've got a gun. We're a few months later by the time the information makes its way to us. So we can't usually get a warrant because we don't have fresh information. We try and develop it, but that's obviously a longer process.

But so that's how we're working to get people off of the list.

And I think, lastly, for me, I think you've given me part of the answer. If you look at the pending APPS cases, your pie chart here, which loses a little something in black and white. But what would you need to clear more pending cases more quickly?

So the pending case is always a tricky one. The hard part is these are people that we have investigated. And the way that I would say it is that we want this information, and we want to know that these people, we're not going to take them off the list because somebody says, hey, I traded a firearm and I don't have the paperwork for it. But we really want to focus on the individuals who may still have a firearm.

So the pending list is always a little bit of a monkey on our back. The focus that we're trying to do is to try and get people as quickly as we can before they move, before they trade the firearm, before anything else happens. And we're hopeful that in the long term, that's going to reduce the pending list.

I guess one last question, sorry. Big state. Where are the resources? Where are the people doing this work? Where are they located? Are they distributed across the state or are they concentrated in different places?

We have six regional offices across the state, but we do get to every county in the state every year.

All right, thank you. Thank you, Madam Chair.

Thank you. Senator Derazzo.

If you could talk a little bit more about the recommendations promoting relinquishment at the time of conviction or at the time of restraining order issues. I know you point identify some, both funding as well as some legislation. Those are identified as recent successes. So what is the success that this is producing? Because I think everybody, I do, on the natural think when that person is convicted, that's the best time to take away the firearm or when there's a restraining order take away.

And we know that the sooner we take it away from them, the less likely further issues or problems.

So these are recommendations because these remain problems in the state, because exactly the best time to take a firearm from somebody who's potentially dangerous is now. And we have been preaching that for the last few years in particular, and we have seen success on that. I think part of the reason that the number of additions are going down in recent years is because those firearms are being taken on the front end.

That is also difficult work because people are not bringing their guns to court and saying, oh, hey, by the way, here's my gun, let's get rid of it. That requires probation and whatnot. I wanted to put the recent successes on there, both in terms of some policy bills that mandated some things at the local level and some funding, because I honestly wanted to recognize that we've been making these recommendations, and you all have been not say, just listening, but participating in this conversation with us.

And there have been successes there. So I wanted to acknowledge it. But, yes, absolutely, we still have 50% of the prohibited persons on the list are felony convictions, which means they're standing in court, told that they can no longer possess firearms, and then nothing happens. So we still have work to do.

But I think to call these successes for us to understand it, it'd be best to give us examples or numbers or how it's actually being successful, because in one it's an additional $40 million, in another one, it's an additional $15 million. I don't know how to judge. Okay. To do more of that, where's the outcome or the results of these successes?

So again, the outcome is really fewer people that are being added on to the prohibited persons list every year. So this is back on page two, if you look on, and I'm sorry, I couldn't find the color printer this morning or a color printer, but the lighter of the two grays is removals and the darker of the two grays is additions.

And as you can see, over the last four years, there's been a decrease in the number of additions year over year, from 10,762 in 2020 down to just under 10,000, to just over 9,000, to about eight and a half thousand last year. So the hard part is that we don't have the data to show the number of people that the firearm successfully retrieved at the front end. That's just a gap in our data.

But seeing that result of those numbers going down is indicative of that and maybe successes is the wrong way to put it. I think saying the point of that is to acknowledge the contribution that you all, by way of the budget, have put into this. The hard part with this is that it's going to look different in every county, Alpine County is going to look different than Los Angeles County and how they're going to remove those.

So the grants and the money that's coming by way of AB 28 is going to be helpful so that each county is able to develop the process that works best for them. So it's still in process and exactly, probably not correct to call it a success at this point, more of a legislative and budget success from our perspective.

Lao.

Anita Lee with the Lao to Senator Durazza's question, you heard both of these as part of your judicial branch hearing, but if it's helpful, specifically related to the 40 million, those grants were awarded to eight counties, partnerships between courts and law enforcement at the beginning of 2023. And so they should be collecting information to kind of capture the information that you're interested in.

Just as a reminder, though, that as part of this year's budget, $20 million of that $40 million is proposed to be reverted as a budget solution. And then related to AB 28, we had a little bit of a discussion about how currently, as part of the budget, there are no proposals from the Administration for expenditures of those dollars in '24-'25. The proposals are expected to come in '25-'26. And so that's something that the Legislature can consider as it's solidifying its budget.

So we just wanted to add those comments for your consideration. Thank you.

Thank you. I also just want to say that the White House had their largest convening ever, basically, on gun violence prevention this past December, which I was a part of, and they are looking to make significant, let's say, partnerships, investments, you name it. In regards to gun violence prevention, I specifically wanted to understand, can the Department provide an update on the gun violence reduction grant program?

Are there any counties planning on continuing the work, even though the grant funding is ending, or the current budget situation being what it is, what can we look at to ensure that the local counties and so forth can move forward with these programs and projects?

So, as you said, the money is ending. I think we're optimistic that the plans that they put in place will continue, but I don't have anything specific about what each county is going to continue to do. But again, that was the hope, was that they develop processes that would remain in place.

All right. And then I also just want to highlight that the number of prohibited persons on the list decreased, but it's less than 2%.

Yes. zero, no, absolutely.

All right. So I just want to highlight to some of the commentary, and obviously, when we see successes, we would like to see significant improvements year over year versus 2%. Right. So I appreciate your time. We can move on to item number five.

Thank you.

Issue number five is Litigation Deposit Fund loan. We're going to first hear from the Department of Finance on this issue, Anthony, and I apologize if I ruin your name. Franzoia.

It's pretty close, chair.

All right, thank you.

It's Franzoia.

Franz. What?

Franzoia.

Okay. I was close. I was close.

I've heard much worse.

Okay, thank you.

But good morning. Chair Wahab. Members of the Subcommitee, my name is Anthony Franzoia, representing the Department of Finance, and I'll be presenting on issue number five, which my colleagues from DOJ have already primed a little bit. But to address the projected budget shortfall, the '24-'25 Governor's Budget includes a budgetary loan of $100 million from the litigation Deposits Fund, or the LDF, to the General Fund in '24-'25 from idle resources that are not required for currently projected operational or programmatic purposes.

And again, this is in addition to the $400 million budgetary loan from the LDF to the General Fund that was included in the 2023 Budget act for a total loan amount of $500 million. To clarify, DOJ and the Administration do not intend for these loans to either negatively impact either the LDF or the various special funds receiving resources from the LDF, or to signal any type of ongoing reductions.

These loans are only intended as tools to help close the budget shortfall and unless something radical changes in the next few months, DOJ, the Administration agreed that they proposed $100 million loan, excuse me, is viable. And for that proposed loan, we made the decision to use the LDF as the source for the loan, given the best available information during the budget development process.

However, now that DOJ has transferred resources out of the LDF pursuant to Chapter 45, statutes of 2023, which is AB 127, the state government trailer Bill from last year, we're reevaluating our proposal and assessing which of these special funds that receive resources from the LDF would be more appropriate sources for the loan. So, as part of the May revision, we will propose, as the LAO recommends, an update to this proposed loan that uses various special funds as source for the loan instead of the LDF itself.

And that concludes my comments and available for questions.

Thank you. LAO.

Anita Lee with the LAO the Department of Finance has indicated an openness to our recommendations, but for the record, we will present them in full. And so we do have three recommendations on this issue. We do recommend rejecting the proposed loan from the LDF because we think there are some concerns about its ability to support it.

As highlighted, there was a $400 million loan that was made last year from the LDF to the General Fund, and a significant amount of monies were transferred from the LDF to state special funds subject to legislative oversight. And that's really something the Legislature was focused on. So, in combination, these actions left about $157 million in the Fund balance as of the end of December of 2023.

While that sounds like a lot, most of those monies are either tied to cases that are unresolved or they're supposed to be used for very narrow purposes. So we don't think that they're a good source. The first choice to borrow from. Instead, we do think that one or more of the four DOJ special funds that received nearly $485 million in transfers from the LDF would be a better source to borrow from.

And so because of that, our second recommendation is for the Legislature to direct DOJ to report by may revision a list of cases whose litigation proceeds could be used to support an additional $100 million in loans, along with the special funds from which they would be coming. So that allows DOJ to think about its current and future workload, as well as how much could be borrowed without impacting their operations.

This type of list would also be helpful for the legislature when monitoring loan repayments to make sure that when the money comes back in, we're sticking with the requirements that are included in the underlying court judgments or the settlements related to them. And so then our third and final recommendation is for the Legislature to take that list provided in May revision, make any changes that are necessary, and then modify the budget to reflect loans from the various special funds included on the final list.

In addition to any loan that's made, we do recommend reporting language for certain information, such as if there's any restrictions on the money. This reporting language would be consistent with the reporting the legislature required for the prior $400 million loan. And this type of information would help ensure that the Legislature has the information to monitor and track the information and ensure the money is used accountably. Thank you.

Thank you. Comments from DOJ. Thank you.

Members of the panel, Senator Newman to Department of Finance. I don't see any indication as to an expected date or schedule for repayment of the loans.

For the proposed $100 billion loan, we didn't include a loan repayment date because of, again, the interaction between the trailer bill and the proposal. Again, during the budget development process, we weren't sure exactly which funds would be transferred out. So just by nature of having to make decisions for the Governor's Budget, we chose to use the LDF.

But that loan repayment date for the LDF would no longer have been accurate because we needed to update the fund source for May revision. In general, I think most General Fund repayments to special funds happen in budget year three or four. But again, that's also made on a case by case basis, depending on the specific needs of that special fund. So the loan repayment will be part of the May revision with the updated.

I appreciate that. So I guess that speaks to the Lao's recommendation for kind of enhanced tracking reporting against those funds. Appreciate the answer. Appreciate the input.

Thank you, Senator Durazo. Thank you. Department of Justice given that the litigation Deposit Fund revenues are primarily transferred to DOJ special funds, for example, the Unfair Competition Law Fund, we used that to fund tenants' rights enforcement last year. What is the impact of this proposed loan on the current work that the DOJ is doing?

Sure, we are in agreement that the proposed loan would need to be taken from the special funds. The Unfair Competition Law Fund could potentially be one of those funds which the loan could possibly be taken from. Based on current sustainability estimates, it's anticipated that the additional loan would be feasible, and for DOJ to be able to continue existing operations, it would be feasible for the immediate future.

And we continue to work with Department of Finance on the proposed loan repayment schedule to ensure that DOJ operations are not impacted.

Okay. That means we'll continue with our tenants rights enforcement. Yeah.

Senator Durazo, just Chris Ryan with the Department of Justice. We've factored that into our calculation when we're determining how much funding we have and the period of time that it's.

Going to be available for. And we communicate that with the Department of Finance.

And along these lines and what our. We took last year, we took action to increase legislative oversight in two ways. And so I want to see if that kind of specificity and accountability is in your proposal this time. So the first one was we required that most litigation proceeds be transferred to a state special funding within three months after the case was resolved to ensure these funds are considered in the budget process.

The second one was we placed additional requirements on what money is allowed to be transferred. I know we've sort of been talking about this already, but if you could answer, that'd be great. Yeah.

So DOJ has been working over the last several months to be in compliance with that requirement to transfer all of the funds. And as of December, we had transferred the majority of those funds. And we continue to transfer the funds pursuant to the required time frames and the specific criteria laid out in statute for those transfers to occur.

You will be providing specificity and accountability?

Yes. We are reporting quarterly on the transfers that were made. So there's specific reporting requirements laid out in last year's budget act, and we are complying with those reporting requirements.

Thank you, Senator Durazo. All right, no further questions. We can move on to item number six. We appreciate DOJ's testimony. Item number six. We're going to start off with Office of Emergency Services. We're going to first hear from Nancy Ward. You will have five minutes.

Good morning, Madam Chair, Senators. I'm Nancy Ward, Director of Cal OES, and with me today is Eric Swanson, Deputy Director of our Finance and Admin Directorate. The Governor's budget proposes $3 billion for Cal OES, 530.3 in General Fund and 1909 positions. I'd first like to thank this Committee for your continued support in providing resources to ensure we fulfill our role as serving as a state's leadership hub during all major emergencies and disasters. When including all funding sources, the biggest component of our budget is in local assistance.

Cal OES serves as the state's administrating agent for federal Homeland Security Emergency Management and Victim Services Grants and is the primary liaison with the United States Department of Homeland Security as Federal Emergency Management Agency. In 2024-25, the budget estimates we will allocate 1.9 billion to local government agencies, tribes, and nonprofit agencies to provide frontline support in preparing and responding to emergencies, preventing cyber crimes, providing direct services to victims, and many other essential services to Californians.

A majority of our General Fund is dedicated to emergency services, which I'll get into more detail in just a second. But however, the Committee has also asked me to discuss a requirement articulated in the last few budget cycles for Cal OES to ensure a report that outlines our operational visions or our response gap analysis.

The intent of the report is to identify the types of risks Cal OES Considers during planning and preparedness efforts, the framework utilized to identify the appropriate resource capabilities, existing programs that support the framework goals and objectives for emergency response, how recently approved resources support the emergency response goals and objectives, and the gaps that may exist in the current resources. We've utilized internal interviews and stakeholder engagement input to develop the report. The report is in the final approval process and should be disseminated very shortly.

I was also asked to touch on the reductions included in our proposed budget. The Governor's budget identifies fiscal solutions where the funding had not yet been awarded to specific groups or agencies. The majority of our proposed solutions involve new or pilot programs. It's never easy to propose budget solutions, but our goal was to preserve our existing local and state capacity to respond to disasters and emergencies and honor any existing commitments to local service providers.

Cal OES is a world class leader in emergency management and homeland security. Our mission is to protect lives and property, build capacities, and support our communities for a resilient California. Simply put, Cal OES's role is that of coordination. We are charged with anticipating, planning, and preparing to coordinate critical resources and support impacted communities to protect lives and property, and to support their recovery from disasters.

Over the last several years, the state has experienced an unprecedented number of emergencies and disasters, severe drought, catastrophic wildfires, power grid and outage challenges, earthquakes, a generational pandemic, and intensive storms with severe flooding. 15 of the most destructive fires in the state's history have happened since 2015, seven of which in just the last four years. California has moved into a new chapter of emergency management and disaster response and recovery.

Emergencies and disasters are much more frequent, more severe, more challenging and complicated, and involving multiple counties and regions of the state simultaneously. For the recent January-February storm events, Governor Newsom requested and received a federal major disaster declaration, which provided individual assistance programs for San Diego County following the January storm. In regard to the most recent February storm system, we are finalizing with the federal emergency management our damage assessments.

We have worked closely with FEMA to conduct damage assessments throughout the hardest hit counties and to ensure that we can determine whether or not we meet the federal threshold. Like you, I've witnessed too many times the devastation of a community hit by catastrophic disaster. The recovery process for our communities is long and challenging, and particularly devastate disadvantaged communities and families of our state. We've taken steps to better support these communities.

We've established a priorities populations task force charged with identifying ways to protect and prepare Californians who these storms threatened the most. Materials are deliberately prepared to be culturally and linguistically inviting, accessible, respectful, and useful. Outreach likewise, intentionally designed to be people centered and people powered with local community...

Time. Sorry.

That's all right.

Thank you. No, I appreciate it. LAO? Nothing. Department of Finance? Nothing. Members of the Committee? All right. I have a couple of questions myself. Specifically, there's a high vacancy rate, obviously, throughout multiple departments, but what is OES trying to do, particularly to fill these vacancies?

It's been difficult. There's no question about it, to be quite honest. We're looking at resumes that five years ago we probably wouldn't even have join us for an interview, quite frankly. So we're going out to universities. We're using LinkedIn. We're using all of our tools, Wounded Warrior, all of our tools that we can, our other local agencies, emergency management agencies, the Federal Emergency Management Agency as well, to get the widest net we possibly can. But it is very, very tough.

Understood. And how is Cal OES going, like, what is Cal OES going to do to contribute to solving the budget deficit?

I'll ask Eric. Want to take that?

The Governor's budget assumes several proposals, they're in your agenda. The way I would characterize them are they're sort of new or pilot grant programs, including the Flexible Survivors Program, which we're going to have in another agenda item. We also had a multifamily earthquake grant program that was scheduled to start that was brand new, and that is not part of the Governor's proposal. We have a couple of home hardening or community hardening programs where we hadn't allocated the funds to counties or locals or homes yet, and we're proposing to not continue with those at this point

Thank you. And, you know, slightly a little off topic, but Cal OES was recently in the news related to sexual harassment claim. How is Cal OES ensuring that it's a safe place for women to work? For, obviously, recruitment efforts. And what proportion of Cal OES staff are women, and what are we taking as steps to diversify the emergency response force?

Well, we're taking all steps to try and diversify, for sure. I mean, it is an industry, if you will, over my 40 years in emergency management, where it was male centric. There's no question about that. So we are trying very, very hard to diversify in many, many ways our workforce. And to the sexual harassment, I will tell you, training, training, and training. We have started an extensive training process forward for not only our staff, but also focusing on our leadership as well.

Okay, perfect. Thank you. I do want to just prioritize this. I think one of the things that I care a lot about, besides the natural disasters that we're seeing and the fires and so forth, but also even recommendations that you guys may have as to what causes these fires, what do you see as recommendations? Right.

So we also know that a lot of fires are because of the poor infrastructure that we have and the lack of investment from some organizations in a better infrastructure, given climate change and so much more. Right?

Climate change is the word.

Yes. But it's more than that, obviously. Right. There are organizations that are not putting the proper lines in the ground and making sure that we can have some security and safety and so forth that we control. Right. With that said, one of the other considerations that I really want to understand is cybersecurity. Right. Cybersecurity falls under you guys, correct?

That's correct.

Okay. So in my area, and I'm sure in plenty of other cities, many cities, as well as just jurisdictions, school boards, colleges, so forth, they have been dealing with cybersecurity attacks left and right, absorbing a significant amount of funds from them because they have no way to defend themselves as well as prevent it and so forth. And the cost of investment for these jurisdictions is quite significant for small city, town, things like that.

And the ransom that some of these perpetrators are asking for is sometimes very small, sometimes a lot larger. And the recommendation to many of these folks have been to give the money up, which I think is a very poor recommendation. Right. And what is Cal OES doing proactively to help jurisdictions that, to your point, and we've talked about it across the board in multiple presentations, is we have a lack of qualified talent. We have a lack of ability to fill positions in need, including cybersecurity.

Which is, we're competing with the private sector of the best talent. And even in the previous conversations, we've seen that an investment in subscription models and technology and so forth continue to grow. It's not a static cost of however many thousands of dollars, and even for small jurisdictions, it's pushing in the millions. Right. What are you guys doing proactively to provide the tools and resources to these jurisdictions?

Well, first of all, I would say our Cybersecurity Unit and our Division of Homeland Security is pretty robust and getting more robust each day because we are doing hiring there. It is difficult, I agree with you. But they take all calls from any jurisdiction, schools, city governments, and they will help. Our resources will help them identify the threat actor, will help them, I would say, solidify and fortify their systems.

One of the things that I will say though, in terms of ransomware, is a lot of these entities now are getting their own cybersecurity insurance. And when they do, the insurance requires them that they don't really speak about the attack. And so it's very difficult when we hear about an attack and offer up our resources to any of these agencies that they can't really speak to us about some of the intricacies of how the actor got into their system, what was done.

And so they, on their own, will decide to go ahead and pay the ransomware, which we agree is not the best avenue to take. But we are doing grant programs for cybersecurity, and we are also in the midst of developing services with our cybersecurity office, which is a combination of not only Cal OES, but the Military Department, CDT, and the CHP. And we are working to open up that service so that people can either choose to utilize our service or we can pay them to get those services on the outside through our grants.

So you guys step in when you guys hear about it in the news, correct?

They typically just contact us. No, there is a system in place. Not only that, but we send out to all of these jurisdictions, tips, things to look for, how to fortify their systems, and then they can call us anytime to ask for our services when they get hacked.

Okay. And the reason why I say this is I've hosted, obviously, a bunch of different events and have utilized the resources available. But many of the organizations, these cities, these schools, these jurisdictions, they generally don't feel comfortable sharing their problem areas because it's weaknesses, it's potential security threats and holes in their system, if you will. Also recruiting people for their department of IT and so forth, especially in my district, which is Silicon Valley.

There's no way that a government agency can pay them enough compared to any of the tech. I would like to see a little bit more robust action. And it's not just these municipalities and jurisdictions that are having difficulty. And oftentimes, I will say this, they don't even know that there are resources out for them. So just even seeing a more proactive approach, my office is more than happy to work with your team and your Department as well.

But it's also even tips and tricks for smaller businesses. As we see brick and mortar organizations kind of fall, and obviously we see retail theft and so forth, we're seeing a lot more attacks on some of these smaller businesses that are moving into the online space. And they have no resources, many of them immigrants, trying to just understand how to even get into the online market space. So as much as we can, thinking that I would like to see a bigger investment in this area and some growth and some very robust marketing plan and handholding. I hate to say it like that.

No, but you're right. I think we can certainly make a wider net of our developed information that we send out on the regular to local jurisdictions. And as far as the schools, there was recent legislation that provided additional resources for our cybersecurity team to be able to and require schools to let us know when they have had an attack.

Yeah. And the reason for that is because it's identity theft, it's people's Social Security. It's like a bunch of students' Social Security. So there's thousands and thousands of domino effect of one attack. So I appreciate it. I will move on to item number seven, flexible assistance for survivors of crime delay. We're going to first hear from, I'm going to ruin this name, Gina Buccieri-Harrington.

That's it. That's good.

Okay, thank you. Assistant Director of Grants Management at Cal OES. Thank you.

So, actually, I'm going to start off with an intro. I'm Eric Swanson, again, Deputy Director of Finance and Administration for Cal OES. The next issue on your agenda is associated with a proposed delay of 47.5 million General Fund appropriated in the 2022 Budget Act to establish an assistance program to improve the safety, healing, and financial stability for survivors and the loved ones of those violently injured or killed.

The Governor's budget assumes 47.5 million for this program starting in 2025-26, rather than this coming fiscal year. We have worked closely with the advisory committee established to the original legislation to create parameters of the grant program, and we will be ready to implement the program as of July 1, 2025. As you said, my colleague, Ms. Buccieri-Harrington and I are available for your questions.

Thank you. LAO? Nothing. Department of Finance? Nothing. Members of the Committee? Senator Durazo.

Thank you, Chair. Just curiosity, why not delay the administrative portion?

I think we already started working on it. This fall, we got together with, there were appointments from both the legislature and the Governor for this advisory committee as it was established in the legislation. So we worked with them to create the parameters of the RFP. There's still more work to do. We need to make sure that we're getting this out and publicizing it and get ready for the actual release of the RFP when it comes. But there's still more work. And I should also say that that administration funding is not just for this year or next year. It's for the life of the entire grant process.

How many years is that?

Four years was the legislation.

Okay, thank you. Seeing no further questions. I have a couple myself. Why isn't the associated administrative funding also being delayed?

Yeah, we talked about that a little bit. It's for the life of the grant program over four years, and we already started the administrative processes associated with creating the parameters of the grant, working with the advisory committee.

All right, is this a purely fiscal decision or are there any concerns with the program?

No, actually, I think we're fans just as much as you are of the program. This hits in a space that I think is not served. It provides more flexible assistance than other programs. I think the Administration agrees that there is a need for this. They were just delaying it one year for fiscal reasons.

All right, perfect. Thank you. We're going to move on to item number eight, public safety radio modernization to support equal access to 911 services. We are going to first hear from Budge Currier, the Assistant Director of Public Safety Communications at Cal OES.

Yes. The final issue on your agenda is a request for 6.4 million in State Emergency Telephone Number Account, or SETNA Fund authority for 13 existing limited term positions and 12 new positions to continue implementation of the California Radio Interoperable System, which is a statewide public safety radio system that dramatically improves interoperability for state, local, and federal public safety responders. With me, as you said, is Mr. Currier, Assistant Director for Public Safety and Communications, and he's going to talk a little bit more about the proposal.

All right. Thank you, Chair. My name is Budge Currier. I'm the Assistant Director of Public Safety Communications, as Eric said. So if you want to think of this program, when you make a 911 call, the 911 system gets you to the 911 center. Those 911 first responders answer your call, provide the services. The next step they do, they dispatch resources to wherever you are to help you. We use a computer aided dispatch program to do that. We relay information from the caller to the first responder.

Well, if you've ever used your mobile phone, you know it doesn't work everywhere in California. So when you can't receive the information over that mobile dispatch system, the radio system is how you relay that information out to the first responder. So the dispatcher is getting information from the 911 caller, relaying that over the radio system out to the first responders in the field. So it's that last piece of the puzzle.

When we first started this program four years ago, we really intended it to be an interoperable system. So hence the name CRIS, California Radio Interoperable System. It was so successful state agencies are now coming to us saying, hey, we want to use this every day for our daily use. And this is where we came up with this budget change proposal to allow us the resources to build it out, not just for interoperable uses, but for day to day use.

So the request includes what we need in terms of staffing to build out the infrastructure, the security. Really tying into the cybersecurity conversation you just finished. To make sure that we've got a dedicated system able to move that all the way from those that need help to those that are providing the help. Happy to answer any detailed questions.

LAO? Nothing. Department of Finance? Nothing. All right. Members? All right, I do have a couple of things. So I just want you guys to be on record to address this. There are some telecommunications companies that look to no longer provide service to some of their landline or reduce service, if you will, as like a last resort. How do you see that in rural communities if there's an emergency happening and somebody's wanting to call 911?

So the carrier of last resort is sort of the term there. The CPUC has oversight of that. Of course, we are involved in this because, as you said, if they can't call 911, that becomes a problem. We're really focused on those areas where if a wireline connection is the absolute only option, it's those areas we're really engaged with the PUC to make sure that option remains available.

As you know, from when the carrier of last resort was first put in place decades ago, cell phones have come along, as well as broadband solutions that provide a voiceover IP type connection. So we're looking at where are multiple layers of communications available, and where does it make sense to ensure that that dedicated wireline service is still available. That technology is aging past end of life. I mean, it was past end of life 10 years ago. And so that's really the concern here, to make sure that the best technology available for everybody so that they can access these services.

Definitely. And the reason why I'm concerned is, obviously we have a rural community and we also have our aging population, as well as people of different backgrounds and socioeconomic standings and so forth. So I just want to make sure that as these conversations of carrier of last resort is kind of moving forward, that we actually hear specifically from Cal OES a potential recommendation, or they agree with this or do not agree with this because right now there's a lot of misinformation out there.

And I don't necessarily represent very rural communities. It's not my territory, but it's something I'm concerned with, especially because we do have constituents that ask us, even though our territory is not necessarily in that field. Right. So I would like a very public commentary from the Office of Emergency Services when that conversation keeps moving forward, if you guys can provide that. Other than that, thank you for your time.

Great. Thank you.

All right, we are going to move on to public comments. To ensure that everyone has a chance to be heard, please limit your comments to 30 seconds. And if someone else has already made a similar comment, please just add a me too. Thank you. And let's begin public comments.

Good morning, Senator and Members of the Committee. I am here to speak on issue seven. Anthony DiMartino, Government Affairs Director for Californians for Safety and Justice, Crime Survivors for Safety and Justice. We worked closely with the legislature in 2022 to get the funding for flexible cash assistance. Worked very closely with Cal OES as a member of the advisory council. We ask that you reject the delay and work to find a way to get some of the money out the door this year. Thank you so much.

Thank you. Moving on.

Kim Lewis with the California Coalition for Youth. And just want to elevate an issue around the loss of VOCA funding that is happening and losing some of the grant programs that support our homeless youth, our victims of crime, domestic violence, as well as some additional resources necessary for the California Youth Crisis Line. Hasn't received an increase in over nine years, and it serves over 15,000 calls, chat, and texts to our young people, and we have over 100 volunteers. So would appreciate some additional resource. Thank you.

Thank you.

Madam Chair and Members, Sarah Noceto on behalf of CALNENA, representing over 8000 public safety dispatchers and public system professional system professionals across the state. I'm here to speak on item eight. We don't have a formal position on the proposal, but we do have some concerns about the redirection of SETNA funding for building out CRIS and the CAPSNET because it's redirecting funds that are historically used for the ability to answer 911 calls from the network, including the adoption and implementation of next generation 911. We do understand the benefits of CRIS and CAPSNET. We just think that those should go from other purposes. Thank you.

Thank you.

Good morning. George Soares with the California Medical Association, speaking on issue number two, the CURES fee increase. I just wanted to note our concern and that we're monitoring it to see if it's justified and needed at this time. But that is all. Thank you.

Thank you. Having heard from all members of the public, Members, are there any additional questions or comments? Seeing none. Thank you to all the individuals who participated in public testimony today. If you were not able to testify today, please submit your comments or suggestions in writing to the Budget and Fiscal Review Committee or visit our website. Your comments and suggestions are important to us, and we want to include your testimony to the official hearing records. Thank you for everyone's participation.

We have concluded the agenda for today's hearing. The Senate Budget Subcommitee Number 5 on Corrections, Public Safety, Judiciary, Labor, and Transportation is adjourned. Thank you.