Senate Standing Committee on Judiciary

All right, Senate Judiciary Committee is going to convene as soon as we have an author here. So first come, first serve. Senator Eggman is first with item number one, SB 1184, then Senator Menjivar, then Senator Rubio. So we're anxious for an author. All right, Senate Judiciary Committee will come to order. Good afternoon. We're holding the Committee hearing in room 2100 of the State Capitol. I ask all Members of the Committee to be present room 2100 so we can establish a quorum and begin our hearing.

Before we begin today's presentation, I'm going to announce several items. One is that file number five, SB 1212 by Senator Skinner, has been pulled from the agenda. The consent calendar consists of two Bills. File item number three, SB 1293 by Senator Ochoa Bogh with amendments. And file number nine, SB 1146 by Senator Wilk, with amendments. All right, so we have, again, we have 50% of the Republican component of the Committee here and only 30%. Thank you, Senator Blakespear for being here. Senator Blakespear is an attorney, and we're privileged to have her sitting on this Committee.

All right, well, thank you, Senator Niello. We appreciate your presence. Right, right. But we are grateful for Senator Blakespear's appearance here today. So thank you for joining us. All right, so we're going to start as a Subcommittee, and we'll ask Senator Menjivar to step forward and present SB 1103, file number two.

Thank you, Mister Chair. You have not - you and I have worked very closely this year on a lot of Bills. This is the last one out of your Committee, hopefully. And Committee Members, I want to start off with just explaining the hot off the press amendments for this Bill. I know you haven't gotten a lot of time to read the amendments because they're recent. I will be accepting all 200 amendments from the Chair.

I have three more so.

That's how it's been this weekend. Every time I agree, more amendments were added. Because the final amendments, like I mentioned, came down just a couple hours ago. This is what the Bill does now. SB 1103 will define qualified commercial tenant as a tenant of commercial real property - that is, a micro enterprise - a restaurant with fewer than 10 employees in a nonprofit organization with fewer than 20 employees. Second provision, it will require the tenant to notify the landlord that they are a qualified commercial tenant under this law through self attestation. The tenant will have to themselves tell the landlord that they qualify under this law. Third provision, it will require the landlord to inform the tenant prior to at the execution of the lease of their right as a qualified commercial tenant. The tenant has to disclose their qualified.

The landlord would then respond by saying, these are your rights under - your new rights as a qualified commercial tenant. And those rights are to review supporting documentation that justifies an increase in CAM fees, which in the commercial world, it's like HOA fees. That's what you can compare it to. But makes an exception for those tenants who are on a month to month agreement to inform their landlord of their status outside of the parameters that we included here at ... or execution of a lease.

The fourth provision is what it would require the landlord, upon request of the qualified commercial tenant, to provide supporting documentation of what we just explained. That justifies an increase in CAM fees 30 days before the tenant is required to pay those costs and 90 days before a tenant is required to pay for these costs if the cost increases 10% or more. Finally, the last provision is going to put certain parameters on how CAM fees can be charged.

I hope that brings a little bit of clarity as to what this Bill does. This Bill does not limit commercial rents or impose any form of commercial rent control. It does not impose or change any requirements for other contracts or financial documents. It only affects a very small subset of commercial leases. So why are we doing this? Across California, small communities serving businesses and nonprofits are being displaced. You'll hear from eyewitnesses as examples of what's happening, and they're going out of business at an alarming rate.

Inaccessible commercial leasing is a major culprit in this wave of small business displacement. Unclear and unfair lease terms, as well as exorbitant or added fees - for example, CAM fees - make it extremely difficult to find and stay in a commercial space. And when these small businesses are phased out, we all lose business owners and workers lose their livelihood. Our economy suffers, and we all lose access to culturally significant goods and vital resources.

Entrepreneurship is not only a dream, it is a critical economic lifeline for so many Californians seeking financial stability and opportunity. So inaccessible commercial leasing is an obstacle for low income entrepreneurs. But fortunately, SB 1103 will remove some of the obstacles for that. So to that, Mister Chair, I'd like to bring on my two witnesses in support of SB 1103.

All right, thank you, Senator Menjivar. Before we take the witnesses, let's establish quorum. And welcome to Senator Dodd. I know Senator Dodd's legislative lifelong ambition was to serve on Judiciary Committee, so I'm glad we could grant that request. All right. All right. Madam Secretary, please call the roll for purpose of establishing a quorum here.

[Roll Call].

Great. Thank you very much. Assemblymember Menjivar. Your first witness, please.

I'll have him introduce himself.

Good afternoon, my name is Yabe Perez and I'm here to represent my both parents from Dos Palillos ..., located at Los Angeles. Los Angeles is located in Van Nuys and Dos Palillos ... We started off our business roughly four years ago during where the pandemic was about to hit. And it's been real hard struggle to recover from that and especially when landlords are raising up the rents and raising up rent. And I believe SB 1103 would help small businesses thrive throughout these years through - help us thrive if passed. That's all I have to say.

Thank you very much.

I have a second witness.

All right.

Hello. Good afternoon, everyone. My name is Babatunde Afolabi. I'm an immigrant small business owner out of Oakland, California. I've operated about three businesses in Oakland in the last 10 years, and when I was signing my lease, CAM fee was something that wasn't clearly stated to me. We know what our base rent was going to be, but we didn't know what the CAM fee was going to be. I think the CAM fee came about three months after we opened.

And when we saw it, for example, last year, we were paying $11,000 for base rent and the CAM fee was about 4700. That's about over 40% of our base rental. So that's something that's not included in our ... when we were planning our business. So SB 1103 will really help us understand what the cost of operating business will be. It will mean transparency, will mean fairness for small business like ourselves.

As you guys all know, the pandemic has devastated a lot of small businesses and added cost is something that we cannot bear going forward for someone like me, I end up closing that business earlier this month and a lot of my staff have to go somewhere else to look for a job. And some of them will probably end up on the streets because that was their livelihood. So I'm hoping that you guys really support this Bill and bring it home. Thank you.

All right, thank you, sir. Other witnesses in support, please approach the microphone in a second. You know what? Before you testify, come on up to the microphone. I'm going to announce the rules of the game here for all Bills I neglected to do so early on. So for each Bill that we hear, including this Bill, we'll allow for two witnesses, two primary witnesses, to testify and support. Each of them will be allocated two minutes after the support witnesses, the two primary witnesses in support testify.

Then others who wish to have their position noted may approach the microphone, give us their name, their affiliation, and their position. Their name, their affiliation and position, and that's it. Then we'll turn to the opposition. Same rules for the opposition, two minutes each for the two primary witnesses, and then others may approach the microphone to give us their name, their affiliation, and their position. So, having said that, the floor is now yours for your name, affiliation, and position.

All right, let's kick it off. Good evening, or. Yeah, good afternoon Chair and Members. Rachel Mueller, on behalf of the California Coalition for Community Investment in strong support. Thank you so much.

Thank you.

Good afternoon. Glenn Backes. Ella Baker Center for Human Rights in support.

Thank you.

Christopher Sanchez on behalf of the Rise Economy in strong support.

Thank you.

Matt Lege on behalf of SEIU California in support.

Thank you.

Hi. Carol Gonzalez on behalf of Small Business Majority, proud co sponsors and in support. Thank you.

Thank you.

Good afternoon. Doug Smith, Inclusive Action for the City. Proud co sponsor, strong support.

Thank you.

Good afternoon. Jassmin Poyaoan, on behalf of the Lawyers Committee for Civil Rights in the San Francisco Bay Area, proud co sponsor and strong support.

Thank you.

Hi, Nadia Segura from Bet Tzedek Legal Services. Co sponsor and strong support.

Thank you.

Hi, Cheng. Sean Bunn on behalf of National CAPACD, strong support.

Thank you.

Hi. Dara Dado, on behalf of CAMEO Network in strong support.

Thank you. All right, seeing no one else approached the microphone, let's turn the opposition. If you're opposed to SB 1103, please approach the microphone.

Good afternoon, Mister Chair and Senators. Skyler Wonnacott with the California Business Properties Association and our members BOMA California and NAIOP California, here to express our strong opposition to SB 1103 as in print. While we understand the author has agreed to amendments in the Committee, the short notice has not afforded us sufficient time to thoroughly analyze these changes. Therefore, we remain opposed to the Bill in its present form.

This legislation, while well intentioned, poses significant risks to the very foundation of California's commercial real estate sector, an engine of economic growth and opportunity in our state. SB 1103 applies residential tenant protections to business agreements, ignoring the crucial differences between commercial leases and residential leases. This bill's one size fits all approach, particularly its limitations on security deposits, could deter leasing to new or financially unproven businesses, undermining its intent to support entrepreneurial growth.Moreover, the Bill introduces vague regulations that increase operational costs and legal complexities, discouraging investment that threatens market stability.

We hope the revised language of this Bill will effectively address our concerns by eliminating the rent control provision, omitting the mandatory translation requirements, lifting limitations on security deposits, clarifying the definition of real property, and allowing for an opt out provision. We look forward to contributing to this effort to ensure the legislation accurately reflects the complexities and necessities of California's commercial real estate sector. Given these considerations, we strongly urge a no vote on SB 1103. Recognizing the unintended consequences this Bill may oppose is essential to protecting the businesses it aims to support and maintaining the robustness of California's commercial leasing market. Thank you.

Thank you.

Hi. Good afternoon. My name is John Vinjoki. I'm a local businessman here in Sacramento. My day job encompasses building urban infill, transit oriented development. We do a lot of privately financed affordable housing. We work with a lot of local tenants, and I understand the intent of this Bill is to help small businesses. But the reality is when you work with local tenants and they don't have great credit or they don't have a lot of experience, maybe this is their first time trying to get a business open.

You need some sort of security in order to offset that risk. And a lot of the provisions in this Bill actually will hurt the people that you're trying to help, which is disappointing. When you're working with folks who have never done a tenant improvement or never done a construction project, a lot of times a developer will step in to actually provide those services.

And so by limiting the security deposit to one x monthly rent, you're actually increasing the likelihood that the tenants just won't have an opportunity to move into these physical spaces, which is what they need to expand, to grow, to make money for themselves. I think that's really problematic. I think there's better ways to solve this type of issue. I think when I studied economics at Cal Poly, there's this great saying.

The curious task of economics is to demonstrate to people how little they know about what they imagine they can design, and the unintended consequences of this Bill will actually do more harm than good. Thank you for your time and urge a strong no vote on this and maybe some other workaround to solve the problem that you're trying to address. Thank you.

Thank you very much. Before we take other testimony, and I realize the opposition as well as the proponents have had virtually no time to review the amendments. But just a quick aside, to the extent there was any rent control provision, there was no rent control provision in the amended version, and the security deposit provisions have also been eliminated. So go ahead.

Excuse me, Chair. Are you able to hand out the actual Bill so we could see it?

I believe you have it, but if not, we'll make sure you do. It's in the analysis. Yes. Yes.

Thank you.

Hi, Indira Mc Donald, on behalf of the California Mortgage Bankers Association, we are just seeing the amendments now, so we'll review those, but as of today, we're respectfully opposed.

Good afternoon. Audrey Ratajczek on behalf of the California Building Industry Association, in opposition.

Thank you.

Good afternoon, Chair and Members. Adam Regele with the California Chamber of Commerce in the same position, still reviewing but remain opposed at this time. Thank you.

Thank you.

Lawrence Gayden on behalf of the California Manufacturers & Technology Association, still reviewing the amendments, but remain opposed.

Thank you.

Hi. Natalie Boust on behalf of the California Business Roundtable, in opposition.

Thank you.

Good afternoon. Chris Wysocki, Western Manufactured Housing Communities Association, in opposition.

Thank you. Others in opposition. Please approach the microphone. Seeing no one else approaching the microphone, we'll bring it back to Committee. Yes, Senator Laird, then Senator Min.

I thought I would follow up on the Chair because it was hard for us, too. We only got the analysis mid morning and we had read everything else beforehand. The two opposition lead witnesses listed specific concerns and the Chair listed two that had been addressed by the amendments. Were any other of the listed concerns addressed by the amendments?

And I apologize if I don't give you all of it, but what I heard the main concerns were security deposit, which was removed from the Bill. The other concern was the translation services removed from the Bill. And the third actually concern was that there was language here that was unclear, that made it seem like there was rent control. That was also reworded.

To be very, very clear that there's no rent control component to this Bill whatsoever and that we were just speaking to the CAM fees and the notice of when CAM fees increase. Unless I miss another main concern. Those are the main concerns from the opposition that I feel that once they have time to read through everything could potentially be removed or neutral.

Thank you. I think the difficulty is in doing it this way is I had strong concerns about the original, and it seems a lot of it's been addressed. It might make sense to give you a chance to explain it to people and see what's remaining and see if there can be work.

That's why, Senator Laird, the first thing I started off with was describing the 5 provisions that exist. It's the defining of what a qualified commercial tenant is. Micro enterprise. 10 or fewer for restaurant, 20 or fewer for nonprofit. It would then require that tenant to disclose that through self attestation that they qualify for this. So a tenant would - it's upon the tenant to disclose to the landlord. Hey, I qualify under SB 1103.

I think it's more of a process thing. Like, of those five things, were they in the original Bill, un amended and then the other.

No, this is new. This is brand new. My previous version had no.

See, I'm trying to understand. Excuse me for interrupting. I'm trying to understand the process, which is what was in the Bill. What's not in the Bill are the changes to get a grasp of the overall. Okay, and let me just ask one other. Cause I suspect everybody else is gonna keep going and stuff.

Probably have the same question.

How does this affect what you were originally trying to do with the Bill? Do you think this still does that?

It trimmed it drastically, but I'm here for the long run. I got 10 years to come back and look at how else we can add to it. Right. So it's one step in the right direction, but it did trim a lot of the things. And to be honest, there was one that I felt I couldn't come to this Committee and have the response for.

So I felt comfortable removing security deposits of it, because I felt that I couldn't really adequately defend it here in front of all of you, because in my meeting with the Chair over the weekend, he had wonderful questions. And in that conversation, I was like, okay, if he asks those same questions in Committee, I don't think we have the correct answers or have the adequate answers to respond to that.

So that's why a lot of the provisions were removed, so as to further work with our stakeholders and our work groups to see how else we can address the bottom line. And the bottom line is to prevent as many evictions as possible.

Last minute evictions, to further protect our small businesses and our nonprofits, to be able to thrive, to additionally provide resources to the nonprofits, like that Tzedek and other organizations that work on pro bono assistance to our small business tenants, on providing them with access to additional rights. You heard example from my witness that their lease costs about 11,000. On top of that, it's $4,700 for CAM fees. And at the end of the day, you don't really know what the cam fees are being used for.

You are just told to charge. So this puts a little bit more on the developer. I'm sorry, on the landlord to say I'm going to charge you 4700. But this is what it's going to go towards. So we just want further transparency. And that was one of the main things that the Chair and I agreed on, is the transparency part of it all to ensure that we're paying for things that we know where our pennies are going to.

Thank you. I appreciate the candor in the first part of that statement.

Let me address the process issue first. This is not how Senator Menjivar nor I. We typically want to have this Bill heard. If we had another hearing, if we could have it heard at a later date, we would, but we can't. And so, as a consequence, there has been tremendous amount of movement. Let me describe what I think the problem is.

And, Senator Menjivar, you can correct me where I'm wrong, and what the Bill now seeks to address, as Senator Menjivar indicated it, is in a much skinnier version than existed originally. And the problem was illustrated by one of the witnesses who said, when we signed the lease, we agreed to pay, for example, maintenance fees. And then we found out that maintenance fees were two times the rent. So what this Bill says now is, look it.

If you're a qualified business, you first got to tell the landlord, hey, I'm a qualified business. Before you sign, landlord could say, yes or no. I don't want a qualified business. And there's no prohibition on a landlord basically refusing to rent to a qualified business. Secondly is to the extent that maintenance fees go up, then the tenant upon request can say to landlord, landlord, what are these fees? Tell me what these fees are so that there's some visibility with respect to the fees. And that's basically where the Bill is now. And I'll ask Senator Menjivar if she concurs with that.

That's correct.

Okay. All right. I hope that answers some questions. And yes. You all should have had much longer to be able to review the Bill and the amendments. Okay. So I think it was Senator Min, then Senator Niello. Yes.

Senator Menjivar, you and I spoke before this, and I guess I'm maybe confused about the aim of this Bill, because when I first talked to you, it looked to me like you were trying to address the problem of small business owners who maybe weren't fluent in English, who might have had a severe discrepancy between what was represented to them in oral discussions and the written contract. Is it now correct that you've just taken out the translation requirement entirely from this Bill?

We took that out because there were some unintended consequences. So we didn't have enough time to clarify the language. So with that current language, it was also imposing that requirement on, if I remember correctly, like bank mortgage contracts and so forth, which is not my intention. And we didn't have enough time to clarify that language. I mean, yeah, that language to say that the translation services were only for commercial contracts, so we removed it altogether.

So I guess the question I have for you is, what is the problem this Bill now is trying to solve? Because, like, I understood the problem, you know, and I expressed concerns. I thought that maybe limiting the security deposit to one month was arbitrary. And I found credence in the argument from opposition that there were circumstances in which you might want to rightly have more of a buffer against loss than that. So you and I discussed that, but I overall thought the thrust of your Bill was appropriate. But now that you've taken out the language part, I'm not sure what the problem is that you're trying to solve. So maybe you could explain that to me.

At the end of the day, we all know we have very ambitious Bills and that in the first time that you introduce them, you're going to get everything. You're not always going to get a home run. Right? So this is the first space that I'm getting to in terms of just protecting our small businesses. So when I look at this and I see that our small businesses are having to pay CAM fees that are an exorbitant amount without having any justification, without seeing anything changed in terms of maintenance around them, that alone is a big step to ensure that they know, or landlords know, that they can't just impose a random number just because they can. So this now will include transparency.

So landlords know that they can't just say $4,700, pay it or leave, that they now have to disclose what they're going to be utilizing that for. So, Senator, I agree with you. If it was, you know, obviously up to me, we'd have all the single provisions. But I do recognize that I need to move forward and then moving forward with the transparency, with the transparency part is better than moving forward with nothing.

I guess I'm, when I think of a contract, I think of something that's duly and fairly negotiated between two sides, and obviously that is not happening. And I represent, like you, a lot of immigrant owned small businesses that we've seen a lot of predatory practices. You know, I tried to author Bills protecting small business owners because in a lot of ways, they resemble consumers more than they do sophisticated, like CEO's of big corporations. And so I hear the point you're trying to address. But I guess my concern is that by taking out - like to me, the core of this Bill from my perspective was.

I think your question should be directed to the Chair, not me, on that part because I didn't take that part out.

So I can respond to that. So to your question, what is the issue the Bill now is trying to address? The issue is where there's been an increase in, for example, maintenance fees and the tenant doesn't know what you sent.

Didn't consent to them ahead of time or it was not in the language of the contract, not authorized?

In a triple net lease where the triple net lease says, look, here's the base rent, plus you pay for insurance, taxes and maintenance and you get an invoice that says maintenance fees increased from $100 to $1000. What the Bill says is if you, the tenant say, hey, listen, I'd like to know how it is that my maintenance fees went from $100 to $1000. You landlord now have to demonstrate to me what the basis is of that increase. So that's the issue. As Senator Menjivar said, it's providing some transparency to the tenants so that they can at least see what these fees are.

Mister Chair, can we also turn to my, I have a technical, an expert in this.

Hi, my name is Reed Tumahaj and I'm with Public Counsel. I'm an attorney. I just wanted to clarify something on this language piece. So the requirement to translate commercial leases if they're negotiated in a language other than English, as long as it's limited to the five languages that are in the code, it's still in the Bill.

That's still part of the Bill.

It's still in the Bill. The reason there's confusion is because initially we had said let's expand it to more than those five languages and we heard some concerns about that and so we took that expansion out. But the Bill still does say that for those five languages, if you're negotiating in those languages, then the written lease has to be provided to you in your language.

Okay. To me that is a core ... of what the Bill was like. The reason I was initially inclined to support it was they have a set of provisions, but that is still intact?

As was illustrated, that portion - is that existing law, by the way?

So existing law applies this rule that if you negotiate your residential lease, consumer contract like a certain types of lease.

But this extends it to small businesses?

Exactly. To commercial leases.

That's still present in the Bill just to be clear.

For those qualified.

For those five languages.

Yes. For those businesses that are qualified, that still exists.

Okay.

All right. All right. Thank you.

A lot of changes. Thanks.

Yes, there are a lot of changes. Thank you, Senator Min. All right, other questions. Senator Niello?

Thank you, Mister Chair. Senator Menjivar, what happens if a qualified commercial tenant does not identify itself as a qualified commercial tenant? What happens from that point forward?

Nothing. The Bill specifically says that they have to self attest that they qualify for these additional disclosures. So if they don't disclose that, the landlord is not required to say, hey, you can request additional documentation from me when I increase your CAM fees.

And I appreciate one statement you made. You and I both will be around here voters willing for another, well, six and a half years. And I also will attempt to passed legislation that I've been unsuccessful at so far. And I think what you said was your true intent is to get what you can passed but improve on it next year or the year after.

I think, yeah, I think you could say that statement for so many of the issues we work on, correct?

Yeah. Thank you.

Thank you. Other questions or comments? Yes, Senator Allen?

Okay, so just want to clarify with all this discussion, as amended today, the Bill doesn't apply any provisions beyond the defined qualified commercial tenants. We're limited to the definition of qualified commercial. Okay. Okay, great.

Thank you. And just to make sure that Senator Menjivar and I are on the same sheet of music in response to Senator Niello's question, is that if a qualified commercial tenant doesn't basically inform the landlord, they may not avail themselves of the protection, the provisions. Okay. All right. Other questions? Other comments? Is there a motion, Senator Dodd?

Yes. First of all, I appreciate the author and particularly the Chairman for bringing these amendments forward to more clarify what's going on here. I still have, you know, some, some concerns ultimately, but I prepared to support this today, but reserve, you know, judgment obviously on the floor if we can't get to where we need to be ultimately. But I appreciate both of you doing the work.

All right, thank you, Senator Dodd. Senator Caballero.

Thank you very much, Mister Chair. And I want to repeat, what Senator Dodd just said is that I, I think I know what the Bill does, but that I had a concern about the, because I wrote down that there were no translation services, not an issue I was looking to take out, but I just then found out there was clarification. So I'm a little bit nervous about supporting something that I'm just not sure I understand completely. It seems very simple.

I'm anxious to see what the opposition has to say. Some may not like it just because it really is an expansion of residential treatment, but I also have worked with small businesses over the years. And in my community because they can't afford to rent a single space by themselves, these swap meets have popped up, and the swap meets sell space within a bigger store, and they proved to be really successful for small mom and pop businesses.

And it's a way for people to get in and to see whether they really like being in business for themselves. And it's difficult because they violate all kinds of state laws because of how they're set up, but I support them because I think it's a really good way to encourage small business development. So I'm going to support the Bill today. I want to take a look at it, have some more conversations, but I appreciate how hard you've worked on it and worked with the chair, so I'll support it today.

Thank you, Senator. I would be in that same position. Right. I've talked to some of you. The deadlines and timelines are sometimes really pushed up against us, and it doesn't allow us a lot of time to look at it. That's why I tried my best to just describe what really it does. And I apologize, Senator Min, for the translation part. I was really focused on all the changes that we incorporate into this Bill. But I do hope, and I do think that once it's officially, officially on print and before it gets you on the floor, you have a really good and clear understanding of what this Bill intentions are.

All right. Is that your close?

I'll use that as my close.

Okay. All right. Is there a motion? Senator Caballero has moved the Bill. Yes. Senator Menjivar, you have worked hard and diligent, and we both recognize that this is a work in progress, made, I think, great strides, and there may still be some other issues that need to be tied up. So, having said that, Madam Secretary, if you please call the roll.

This is file item number two, SB 1103. The motion is due passed as amended. [Roll Call].

Thank you.

7 to 2.

7 to 2. We'll put that on call.

Thank you, Mister Chair.

Umberg?

Aye.

Umberg, aye. Wilk?

Wilk. Aye. Allen. Allen. Aye. Blakespear. Blakespear. Aye. Caballero. Caballero. Aye. Dod. Dodd. Aye. Durraso. Laird. Laird. Aye. Min. Aye Niello. Niello. Aye. Wiener. Nine to zero on consent.

Aye.

Excuse me. All right, we'll put the consent calendar on call. Next we have Senator Eggman. Senator Eggman, floor is yours. File item number two, SB. I'm sorry, strike that. File item number one, SB 1184. And that will be followed by Senator Rubio.

Thank you very much, Mr. Chair and Members, let me get my notes up. But Senator Minh left, but I wanted to start off by saying, what is the problem I'm trying to solve? Because that's how I try to start all my legislation. And I ask my staff repeatedly, what problem are we trying to solve? Because if we don't have a good answer for that, we probably don't have a good reason for a Bill. And this has to do working again on the issue around mental health.

And once somebody is put on a hold, making sure they don't decompensate between separate holds, as you know, we have a 5150, a 5250, and then it goes on to a month, possible another month before, and hopefully not, someone reaches the conservator issue. And the issue is sometimes when somebody is putting on a 5150 and if there's a Riese hearing held, to make sure that their rights are protected. And so that's what we're trying to do.

And I really want to start off by saying, accepting the amendments and really appreciate all the work the staff and the Chair did on this to really help us, we think, being able to address the problem and maintain people's rights in the process, their due process. So we believe the amendments we were doing today put that, put the Riese hearing back in place to make sure people's due processes are protected.

But the language making sure that it doesn't, once that file is, the petition is filed, that that is enough and that somebody doesn't have to go off medication before the court hearing can be scheduled. It's one of the issues we're seeing. The court issues can't be scheduled. Somebody holds out, the rehearing goes, and they decompensate and then have to start all over again. So that's what this does. We never want to hold somebody longer than we have to.

And of course, if somebody returns to competency, then that medication would be stopped if they don't consent to it. But this just provides the ability to continue treatment until the rehearing can be scheduled and/or competency is returned. With me today, I have Doctor Erick Cheung and Randall Hagar.

Thank you. Floor is yours.

Thank you, Committee. My name is Erick Cheung. I'm a psychiatrist, and I have 17 years of hospital based practice at UCLA, where I am presently the Chief Medical Officer for the Resnick Neuropsychiatric Hospital. Appreciate the opportunity to address you on SB 1184, which is fixing the Riese gap. It is a gap that applies to the most severely ill of our patients and our citizens.

It, right now, as current law stands, causes patients who move from one hold to another to abruptly discontinue their much needed medication for a period of approximately two to five days while waiting for another hearing to occur. I've seen this personally play out over the 17 years that I've been working in the hospital and my colleagues as well across the state. I will illustrate it with a very brief patient case.

Not long ago, we had a patient, young man, who got admitted to our hospital with schizophrenia. His condition included delusions that he was to save the world by falling backwards and striking his head on the ground. He had suffered severe skull fractures as a result of this and required psychiatric hospitalization in order to restore him to be able to move safely into the community. Because he had no capacity into his illness, we filed for a Riese.

We did prevail upon the Riese, and he was started on medication during the 14 day hold. When it came time for the 30 day hold, which he's still qualified for, we were required to stop the medication while waiting the next Riese hearing to occur several days later. This causes major problems for the patient's treatment. It's medically counter indicated. It creates discontinuation effects that the patient must endure and suffer.

It causes a backsliding in their mental illness, probably the most profound of all the issues, that they are set back in their treatment as they await their next Riese hearing. And during that time, they can experience worsened behaviors, aggression as part of their illness, and may require intramuscular injection as a result, and sometimes restraint and seclusion if that problem worsens.

We're trying to avoid all this by SB 1184 so that the patient may continue the medication until the next Riese hearing occurs during the next phase of the hold. It's in the best interest of the patients. Thank you.

Thank you.

Mr. Chairman and Members of the Committee, Randall Hager, representing the Psychiatric Physicians Alliance of California. Our members, as well are medical directors throughout the state, and many of the facilities that do hold people when they're put on 5150 holds. And it is a regular occurrence that people are on a medication, start to respond to the medications, start to get better, and then because of administrative reasons, are not able to continue because the order does not persist from one hold to another.

So that Riese hearing is really important and our members believe that there needs to be support for both the patient's right to be able to consent when they can consent, but when they can't, that's why we have the Riese hearing. And so this Bill leaves all the other due process protections in place. So there can be writ hearings, there can be several other kinds of hearings. Those are not affected by this.

This is merely assuring that we bring a very timely and important process to bear on a patient so they can stay stable and they can continue their recovery. Pulling back to about 20,000 feet, this is really important because we put 120,000 people on 5150s every year. This is the latest data that we have from the state.

So there's a large number of people and they are not only knocked off their recovery arc, but they are often agitated and they can be a danger to themselves while they're on psychiatric units, while they're not being medicated. I could go on, but I think we have, you know, I think, very clearly defined a very narrow solution for a really critical patient support issue. Thank you.

Thank you very much. All right, those in support, please give us your name, your affiliation, your position.

Thank you, Mr. Chair Dylan Elliott, on behalf of the California State Association of Psychiatrists, proud sponsor of SB 1184, as well as the city and County of San Francisco in support. Thank you.

Thank you. Others in support? All right, those in opposition, please approach the microphone. If you're opposed to SB, excuse me, 1184, please approach your microphone. The floor is yours.

My name is Melanie Roland, a senior patients rights attorney with the Law Foundation of Silicon Valley and the Legislative Committee of CAMHPRA. We appreciate these amendments, but oppose SB 1184 because there isn't a problem and we don't need to change our current system. Santa Clara County is the 6th largest in California, very few refused medications. Last year, only 40 5270 petitions were filed. There aren't treatment gaps. What is called a treatment gap is the hospital's legal duty to offer medications.

The California State Association of Psychiatrists says these hearings are redundant and that medication is stopped at arbitrary points during a person's detention. This is not true. Due process isn't redundant. A length of stay isn't arbitrary. These are legal frameworks medical professionals must work in while they detain people as long as 77 days under probable cause, which is the lowest burden of proof and the same legal standard as a warrantless arrest.

Our county conducted a year long study with 2000 patients who told us they aren't consistently informed, given informed consent, and we found widespread gender and race disparities. Patients have a non deniable right to be free from harm, from medications, from staff convenience, under welfare and institutions code, which is what this Bill is all about. We must get away from the mindset that engaging in one's own medical care is redundant and arbitrary.

This view isn't just paternalistic, it's not producing the results we want to see, and we can do better. On a personal note, my mother was diagnosed with a mental health issue before I was born. The only medication that worked for her was lithium, which she willingly took. Lithium destroyed her kidneys. She had to go on dialysis. And in 2021, an aneurysm in her dialysis port exploded. She bled out and died. We can't pretend these medications don't have serious consequences.

So when I have Riese hearings and clients tell me that doctors are limiting their conversations by stopwatches, they're concerned about diabetes from Zyprexa, and they're being refused clinical studies on the effectiveness of medication based on race. These are legitimate concerns. These patients deserve to have their due process right to protect them.

Thank you. I'm sorry for your loss. Thank you. Thank you for your testing.

Thank you. Thank you very much.

Thank you.

Hi. Good afternoon. My name's Claire quartwright. I'm the policy Director for Cal Voices and an attorney. And I would like to thank the Committee for their work on this Bill. I think you significantly improved it. However, we still feel that it violates the Riese holding. And I think it's important to understand that the problem that this Bill seeks to address is not actually a problem with the existing statute.

It can only be a failure of psychiatrists or the court participants to hold a Riese hearing on the days that are required by law. A Riese hearing currently must be held within 24 hours of filing of the petition wherever possible, but never more than 72 hours after filing. Therefore, there's nothing in the existing law that compels or permits involuntary orders to have gaps, so long as the psychiatrist is properly noticing the hearing and the hearing is happening when it should.

The timely hearing requirements don't exclude any days of the week. So there's nothing in existing law that mandates a gap happen. And I think it's also really important to understand that the Legislature, when they codified Riese, spent two years arguing over what that law, what that court hearing required when it put it into statute.

And what was put into statute by the Legislature was that on every hold, patients have the right to refuse medications, and on every hold, patients have the right to have a Riese hearing before they are involuntarily medicated. And to roll back those rights, calls into question whether the Legislature is complying with that Riese requirement. The core holding of that case was you can't presume people incompetent.

So although this is a significant improvement, you're still into the territory of presuming patients incompetent past the end of their involuntary hold. And I think it's also important to understand that that means prone restraining someone. Those intramuscular medications have to go in a major muscle group. They glow in the gluteus maximus. It's an extremely violent process. And the Legislature, frankly, considered this in 1991 very carefully, codified it carefully, and there's no reason to alter it. Thank you.

Thank you. All right. If you're opposed to SB 1184, please approach microphone.

Hello. Chair and Members Rachel Bhagwat from ACLU California Action. We are opposed to this Bill also registering the opposition of Disability Rights California. However, both of our organizations are still reviewing and analyzing the most recent amendments.

Thank you. All right. Others opposed seeing no one approached the microphone, let's turn it to the Committee. Questions by Committee Members? Seeing no, Senator Laird?

I would just, just ask one question that came up in one of the testimonies, and it was that in Santa Clara, and they contacted me, they said it was less than one, I think one petition. Less than one petition per month in each hospital in the county. So is volume an important consideration here?

One petition that didn't make the court date or one petition for a Riese hearing?

It is one petition for, there were only 40 Riese's filed on patients in the entire county for a year, and so that's less than one per hospital in the entire county per month. And so they're sort of saying, it's saying this isn't a problem, the volume isn't high enough. And that's basically the question is the pro-witnesses were speaking to how important this was for the process, but not the volume.

Right. Randall could probably speak more about the volume, but I mean, Santa Clara, I mean, that's one county out of all of them as well. And I would guess LA County, San Francisco county have very different pictures.

If I may, Senator Laird, I think the question of volume comes down to this. I mean, if there's only 200 people in the whole state that have to go through a Riese process and then the process is delayed and their medications are interrupted, that's a whole lot of wear and tear on 200 people that we are taking care of in our hospitals. It's also partly an issue of their potential disruption in the care of other people around them.

So that there are a lot of factors, I think, other than the raw numbers that need to be considered before you make a decision about whether those numbers are as meaningful as someone might think they are.

Thank you. Thank you, Senator Min and Senator Caballero?

Thank you. I just want to applaud the author. I know you've been working on this issue for my entire time in the Senate and I know it's something you care about. I appreciate your efforts to try to get this right and finding the right balance is important. I hear the concerns, the opposition. At the same time, I would disagree. I know in my community this is seen as a real problem. So I want to just thank you for bringing this forward and would move the Bill.

Thank you.

Thank you, Senator Caballero?

Thank you very much, Mr. Chair. So, I want to second what Senator Min had to say. And I listened carefully to the testimony and I think one of the things that is important is that the world doesn't work perfectly. And if there's one thing that I can say is having practiced in the courts for 25 years, is the number of times I had to go back to court for a reason that had nothing to do with me or my client, was very high.

Court calendars being what they are, judges absences, for whatever reason, shortages or not, they're busy, busy places. And the fact that they're still not all on an electronic system will tell you a little bit about how far behind, far behind we are. And I take very, very seriously

the rights of the individual to make choices for themselves. But I've also seen firsthand what happens when people are suffering from a mental illness and they can't. And the interrupted care is what creates the restraints and the intramuscular need. And as much as possible, the ability to avoid that and avoid a disruption is really, it's important in my analysis. So I want to thank you for doing this Bill. It's not easy. It's not.

Nobody wants to be affecting the rights of an individual to make their own choice. But being in the right mind is really important, and so I will support your Bill.

Thank you.

Thank you. Other questions? Comments? Seeing no other questions or comments. Is there a motion? Senator Min. zero, I'm sorry. Senator Min moved the Bill. Thank you. Senator Eggman, I've had a front row seat to see your leadership in this space. I don't know if you're going to be for this Committee again, but there are tens, if not hundreds of thousands of Californians and their families whose lives have been improved because of your passion and your leadership. So thank you.

All right, Madam Secretary, please call the roll. Oh, I'm sorry. Would you like to close?

Well, I'll close with thanks and say ditto back to you in your partnership, especially on the care court, and being able to usher these things and get them right. I think Californians deserve that we get these things right.

And yeah, and just to point out, somebody's already. They're not competent. They're already on a hold. This is just for the medication. So even if we say right, I mean, they're still there in the hospital and then disrupting everybody else. So the hold and the Riese being two separate things, these are folks already in care. And with all of that, and I thank you all for your support and ask for your. I vote.

Thank you. Madam Secretary, please call the roll.

This is file item number one, SB 1184. The motion is to pass as amended. Umberg?

Aye.

Umberg, Aye. Wilk? Wilk, aye. Allen? Allen, aye. Blakespear? Blakespear, aye. Caballero? Caballero, aye. Dodd? Dodd, aye. Durazo? Laird? Laird, aye. Min? Min, aye. Niello? Niello, aye. Wiener? Wiener, aye. You have 10 to 0.

10-0, we'll put that on call. Thank you, Senator Eggman. All right, next, Senator Rubio. And then we're going to turn to Committee Members for their bills, starting with Senator Nielo. So, Senator Rubio, floor is yours.

Good afternoon, chair and Committee Members. Today I am presenting SB 1106, known as the KSUM, Nichols and Rooney Law, named in honor of prominent individuals whose lives ended tragically under conservatorship. I want to thank the chair and his staff and many stakeholders for working with us and trying to get this right. And thank you for your engagement.

SB 1106 aims to safeguard protections for our seniors under conservatorship. Many are being isolated by their caretakers and separated from their loved ones.

It is absolutely heartbreaking just to see how someone could end their life without being around their loved ones, especially in horrific circumstances. They go from being healthy, smiling seniors to bedridden, unable to speak. And I've had time with some of these family Members who have shown me pictures, and it's really, like I said, extremely sad to see someone that was healthy lose their health and their smile so quickly under a conservatorship. This Bill is just one small step.

There's so much more that needs to be done in this regard. But this Bill will require conservators to notify loved ones under conservatorships of the following if they have changed their residence, and what happens sometimes they're under conservatorships and they're moved, and their loved ones are trying to figure out where they live, and that is really not a great place to be. And it's happened to many of these families that would be testifying where they had no idea where their either father or loved one had been taken.

Second, when they pass, they're not notified, and they're not able to attend funeral arrangements because they're not told. So this Bill would also include notifying them of the person's death and being able to also get details on funeral burial arrangements so they can be part of that once again. They spend a lifetime loving their father, their mother, and at the end, they're not able to be present to be with them in their last days.

There have been countless of instances of elder abuse under conservatorships, and I know we think of that conservatorships, of taking care of a person. But again, if you have seen some of the pictures that I have seen, it is extremely sad to see that someone, they cannot advocate for themselves or place in these conservatorships where they cannot speak or move, and they end up passing away because their health declines as well.

One notable instance is the late Casey Kasem, who suffered from Lewy Body dementia, the second most common type of dementia after Alzheimer's disease. His spouse at the time became his primary caretaker and prevented his children and all his friends from seeing him, speaking with him, and knowing his whereabouts.

And he was transported to different facilities, different states, and eventually out of the country. After he passed away, he was ultimately buried in an unmarked grave in Norway, despite never having any personal connection to that country and his children, struggling to see where his resting place was. His children had no idea once again, and the spouse just moved him and make sure that they evaded contact.

When his children finally gained visitation rights, they found him in extremely poor physical and mental condition. This tragedy was not only isolated, similar cases have occurred across various backgrounds and is now an epidemic in this country. Casey's tragic demonstrates the severe impact of caretakers who isolate those individuals. His family's prolonged struggle to simply locate and visit him underscores the need for this legislation.

By requiring conservators to notify family Members of major decisions taking place, SB 1106 ensures that our seniors are at least taken to places where their family members know where they are and there's oversight. According to a 25. I'm sorry. According to a report by Public Policy Institute, the 65 or older population will grow by 4 million in the next 15 years.

And I venture to say might be all of us up here, and we must continue to be proactive in protecting our seniors, who, again, are the most vulnerable in making sure that they have, that we are their voice. Again. We have several people here that are going to testify, which is Kerri Kasem, founder of Kasem Cares foundation, activist for elder abuse, and daughter of the iconic radio personality Casey Kasem.

We have Angelique Fawcette, CEO and founder of Elderly Lives Matter USA, and Executive Director and producer of Archangel films LA. And even though she's not able to testify, we also have Kelly Rooney, Mickey Rooney's daughter, who also dealt with some horrific circumstances at the end of his life. And we have Rick Black, who's just going to be here for technical support. So, Kerry, Angelique, thank you.

I note there's no opposition, so whomever would like to go, two primary witnesses, two minutes each.

Thank you, Mister chair and Committee Members. Isolate, overmedicate, steal the estate. That's what's going on. Quietly cremate most of them. This is an epidemic in the country. I've been doing this for 11 years, talking to committees just like this, testifying in front of both houses, going to DC, doing everything I can to fix this problem. And no matter how many bills are passed, and there have been 22 states that have the case and cares. Visitation Bill or a Bill like it, it's getting worse.

This is getting worse. I have testified in front of people over and over again that say this is not that bad or we're going to pass a watered down Bill and then it will happen to somebody on a Committee or happen to somebody on AARP, and then they do something about it, but it's usually too late for them. So I'm urging you. This Bill has got to be amended. It's got to be even stronger than what we have now.

I know Senator Rubio is doing her best, and I thank her so much for her efforts. And she told me when she met me a year ago, I want to do something about this. Let's make this Bill stronger. And she did just that. And I'm urging you that if we make more amendments, stronger amendments, so that people can see their mom or dad, if they're put into a conservatorship or a guardianship, that you allow, that you take a look at it.

Most of the time, when somebody says all the kids can't visit, all the friends are bad, or they get. They come up in front of you and say, zero, you know, this is just harmful. It's a harmful Bill. That's the perpetrator. You're looking right at the criminal themselves. If there's a conservator or a guardian, I'm looking at my time that says, this person is bad, and it's just one person, okay?

But when they vilify the entire family and they vilify the friends, you're looking at the criminal right there. We've got to do something about this. It is getting worse. Thank you so much for your time.

Thank you very much. All right, next witness, please.

Thank you, Chair Umberg and your esteemed colleagues for hearing us today. Thank you so much for your time. And I just wanted to let you know who I am. My name is Angelique Fawcette. I am the CEO of Archangel Films LA. I'm the founder of Elderly Lives Matter USA. I'm a nationwide elder rights activist, and I am on the board of Kasem Cares. My victim, someone that I love, was Nichelle Nichols.

If you're familiar with Star Trek, she is the African American lady who played Lieutenant Ahura. But she wasn't lieutenant Ahura to me. She was just my mama Nichelle. I watched as my mama Nichelle suffered. Suffered in an abusive conservatorship. She stated exactly what she wanted in her life, and she didn't get it. When an absent family member came in and put her in an abusive, isolating conservatorship. Unfortunately, when this is done, the elderly don't get to see their good friends.

They don't get to see their family Members, and they suffer. Nichelle asked for things specifically. She did not get them. And additionally, on top of all of that, Nichelle was on video basically screaming for her dear life, saying, you know, please, I didn't ask to be in a conservatorship. I didn't want these things in my life. And she was screaming for her dear life as her son manhandled her. And then he cussed her out as she left. Additional videotapes came out.

I stood up for human and civil rights in court and gained some visitations. If it wasn't for the case and cares Bill, I would not have had that time with her. So the last words I heard from Nichelle Nichols was, I love you more than, more than, more than, more than, more than, more. If it wasn't for a visitation Bill, I would not have had that. Please understand. Please hear me. I hope that you would hear me. Is that in the future with other bills?

This Bill is so important in providing the elderly with the non isolation that they need. They need to have people around them. My esteemed colleagues are here with me as well, and they have tons of stories to share. Thank you so much for your time. I really do appreciate it.

Thank you very much. All right, others in support of SB 1106, please approach the microphone. Give us your name, your affiliation, and your position.

Good afternoon. Thank you. My name is Carol Herman. I'm the President and founder of the Foundation Aiding the Elderly, a nationwide organization for the prevention of elder abuse. I'm here locally. I'm based in Sacramento. I've had hundreds and hundreds of cases of conservatorship abuse in California. I worked with the LA Times 18 years ago.

Sorry, ma'am. Are you in support of the Bill?

I am in support of the Bill.

Okay. Thank you very much.

Good afternoon. Thank you for hearing us today. My name is Kelly Rooney. I'm Mickey Rooney's eldest daughter, and I just wanted to come on behalf of my father and eight other children and 10 grandchildren. We miss him very much. He was put into abuse, and I stand behind this Bill 1000%.

Thank you.

Thank you very much.

My name is Guy Hart. My mother is 84 years old. She just had her 84th birthday last week. I was blocked from seeing her.

And are you in support of the Bill?

I'm in support, but I just want to let you know she's alive still. But I'm being isolated. It's happening as.

Thank you. Thank you.

Good afternoon. My name is Lacy Rooney. I am support of this Bill. My grandfather was Mickey Rooney. Thank you.

Thank you.

Good afternoon. My name is Sandy Kobianki. I represent Kasem Cares and CEAR with Rick Black behind me. And I am support of this Bill. And I don't want to talk about personal details of my mom.

Thank you very much. Thank you.

Hello, distinguished Senators. My name is Rick Black. I'm the founder and Director of Cear, and we advocate for all victims of fraudulent conservatorships and guardianships, those 18 and over. And we are fully in support of the Bill.

Thank you.

But California must do much more for these people.

My name is Phyllis Kalbach and I. Am support, in support of this Bill. I am with Kasem Cares and with CEAR .

Thank you. Others in support, please approach a microphone. Seeing no one else approaching, let's turn to the opposition.

My name is Mike Lonergan. I live in Berkeley, California, and I've witnessed through friends that the California laws are just inadequate to prevent fraud. Thank you.

Thank you.

Are you in support?

Thank you.

My name is Cyril Kaubach. I am represented with Kasem Cares and CEAR, and I support this Bill.

And I am strongly in support of this Bill as a partial step. Thank you very much.

If anyone is in opposition, SB 1106, please approach. I see no one rising. No one approaching. All right, let's bring it back to Committee. Let me just. Senator Rubio, have you accepted the Committee amendments?

Yes, I will accept the Committee amendments. Thank you.

Thank you, Mister chair. Actually, not a question, but a comment. Right now we're going through the silver tsunami. 10,000 Americans every day are turning 65. I hit that mark last March. And then I've read recently that the largest transfer of wealth in the history of man is the baby Boomer generation to the next. So this is only going to get worse and not better.

Thank you. Questions by Committee Members I'm sorry, Senator Wilk and Senator Caballero.

So I so apologize that it hasn't happened sooner, but it's going to happen now. So happy to move the Bill and support it today to the Rooney sisters. I believe your dad was a Member of Indian Wells Country Club. So I was there for a conference a long time ago. I think it was like '85/'86. He was out there in the putting course. I went up, introduced myself.

Senator Wilk. Senator Caballero.

He was so gracious and engaging, and I really, really appreciated the time he spent with me because I'm just a little kid. He didn't need to do that. So I am so sorry for your loss. Thank you,

So I appreciate you bringing this Bill forward and appreciate the testimony here today. You know, as I want to support, what Senator Wilk had to say is that there is a tsunami, and some of us up here are part of that. We can feel it building. And, you know, as you age, you have to start thinking about the forms you fill out. Right. And how you, how you want to end your last days.

And there's a form and I'm drawing a total blank on it now, which is, you know, if you have a heart attack, whether you have special care, they try to bring you back to life, do anything to bring you back to life. Well, it's a do not resuscitate, but it's called a special form. And now I can't think about it.

But my point about this is if you have to think about filling out those kinds of forms, then you might want to, we may want to create a form for who do you want to be notified and how. It seems to me that we need to do everything possible to honor the wishes of the individual who's having the conservatorship set up for them. And I know some people that I like to be considered my conservatee and others that are not on your life. Right.

And so as you're making choices about who has these decisions, it might make sense for us to think about creating a forum. I'm going to support you Bill today. I think it's a really very simple, it's a very small measure, but important. And I think there's more that needs to be done. So I look forward to working with you on this.

Thank you.

Thank you. Senator Caballero, other questions or comments? Seeing no other questions or comments, Senator Caballero has moved the Bill. Senator Caballero, you move the Bill. All right. Thank you very much. zero, I'm sorry. I apologize. Senator Wilk had first dibs on that Bill. All right. Senator Wilkes moved the Bill.

Senator Rubio, thank you, Committee chair. I know that the Bill seems simple right now and there's no opposition. But because it didn't start off that way, to Ana Caballero's point, there's so much that needs to be done. But it happens sometimes as it's moving through the process, we find walls and we have to take, you know, out. Certain things are critically important because this is just one piece.

We have to figure out, the accountability piece, and that is that there's a lot of predatory people out there that are actively looking for these vulnerable seniors that have a lot of wealth or even without wealth. They'll take them in eventually. I heard a couple cases that they'll take them in and eventually start selling off all their property, getting the income from those properties that they had, and then they end up putting these individuals in these, just these awful conditions.

And so again, it seems easy now, but we really had hope for this Bill to have a lot more teeth. And again, we need to focus on, you know, even probate court. I know that Senator Caballero was talking about a form. Believe me, we've discussed all kinds of ideas, and then we've learned why it's not in place. And so it is a big issue. It's an issue that we need to tackle.

This is a small step, but we're going to continue to speak to stakeholders, and hopefully, as it moves through the process, be able to put in some things that were critically important to safeguard this process. But, you know, I thought all the time they tell people, make sure that you either put your estate in a trust, and as I'm talking and learning about the issue, there is no right way.

Once he goes to probate court, sometimes it's out of your hands, and sometimes your estate is turned over to someone that's not ethical, and that really takes everything away from the family Members, and they're left without anything. So it's a discussion that we're going to continue to have, and all of us are going to be 65 and older at some point, some of us sooner than later. But I thank you again. This is one small step, and we will continue to work on the Bill. Thank you so much, Sharon. With that, I asked for an Aye vote.

All right. Thank you, Senator Rubio. Madam Secretary, it's been moved by Senator Wilk. Please call the roll.

This is file item number four, SB 1106. The motion is do pass as amended. [Roll Call]

Bill's out. All right, next. Senator, those of you paying attention, item number five, SB 1212 by Senator Skinner, has been pulled. So next we have item number six, SB 1141 by Senator Nielo.

All right, Senator Nielo.

Silver Tsunami, I have to move very slow. Thank you. Thank you, Mister chair and Members, for considering SB 1141. First of all, I'm accepting the amendments as proposed by the Committee, and thank you for your good suggestions. California courts are congested. Senator Caballero made a comment about that earlier in this hearing. In each of the last three years, the number of unlimited civil case filings were more than double the number of case dispositions.

The total civil case backlog grew by over 800,000 cases, approximately half of which was attributable to the increase in unlimited civil case backlog. The hurrieder we go, the behinder we get. It seems. Current law allows a trial court judge to order a case into mediation as long as the amount in controversy does not exceed $50,000 for each plaintiff. The current threshold of 50,000 was set over 30 years ago. SB 1141 raises that threshold to $150,000, which really just accounts for inflation.

Mediation can be a helpful tool to the ultimate resolution of the case, even when the case is not settled through the mediation process. A pilot program in San Diego of over 5000 cases achieved a resolution rate of 58% to 76%. But even beyond that, 74% of the attorneys whose cases did not settle at mediation indicated that the mediation was very important to the ultimate settlement of the case.

The total potential time savings from reduced numbers of court events were estimated to be 479 judge days per year in San Diego, with an estimated monetary value of about 1.4 million. A report by the Judicial Council evaluating early mediation pilot programs in San Diego, Los Angeles and Sonoma county suggest that early mediation programs can help courts save valuable judicial time and can be devoted to other cases.

That for judges attention, I have with me today as witnesses Elie Vilendrir, excuse me, on behalf of the Conference of California Bar Associations, and David Slayton, the court Executive officer of the LA County Superior Court, to testify in support of the Bill.

Thank you very much. Floor is yours.

Thank you very much. Good afternoon, Mister chair and Committee Members. My name is Ellie Vilendrir. I'm a mediator, arbitrator, judge pro Tem, and for the past four years I've served as co chair of the American Bar Association's Early Dispute Resolution Committee of the Dispute rResolution section. SB 1141 simply raises the threshold amount of a statute that has been in existence for over 30 years.

Given the delays in case disposition created by the over 1 million cases that have been added to our civil case backlog in the last five years, this threshold adjustment is needed to protect the fundamental rights of the parties to timely adjudication. Mediation, even when mandated, has high success rates and is beneficial. Mediation provides the parties with a host of benefits, including control, certainty, lower costs, creative solutions, and preserved relationships.

As concluded in a 445 page report, about five California court annexed civil mediation programs between 2000 and 2003. All five programs were successful, resulting in substantial benefits to both litigants and the courts, including increases in litigant satisfaction with the court services and decreases in litigant costs. In San Diego, the total potential time savings from the mandatory mediation program was estimated to be 521 trial days per year and savings of 670 trial days per year in Los Angeles.

In addition, there were fewer post disposition compliance problems and fewer new proceedings initiated, suggesting that the programs not only reduced the court workload in the short term, but they may have also reduced the court's future workload. SB 1141 advances our common goal of ensuring parties rights to timely adjudication while saving time and expense of the courts and of the many litigants who are able to self determine their outcomes. I respectfully ask for your aye vote. Thank you.

Thank you very much. Next witness, please.

Good afternoon, Chair Umberg and Members of the Committee. My name is David Slayton and I'm the Executive Officer and Clerk of Court for the Superior Court of Los Angeles, the largest trial court in the state and nation, serving nearly 10 million people in our 36 courthouses across the county. I'm here today to express the court's strong support for SB 1141. I want to start by first thanking Senator Niello for advancing this important Bill.

Expanding the number of cases a court can order into mediation provides parties an alternative, cost effective, self directed and more efficient way to reach a resolution and enables the court to focus our limited resources on cases where resolution between parties is unlikely. This Bill would enable our court to build upon the success of our existing alternative dispute resolution programs, which enable parties with disputes to pursue mediation through free court connected resources at any point during the life of litigation.

Our ADR program is a court annexed program, again free for all litigants. Consistent with rule of court 3.853, court annexed mediation programs must be conducted in a manner that supports voluntary participation by the parties. If parties don't reach an agreement during mediation, they always have or are always entitled to their day in court without delay. Right now, the statute that's being amended in this Bill limits orders of mediation to unlimited civil cases under $50,000 in controversy.

With the increase last year of the unlimited civil jurisdiction floor to $35,000 starting on January 1. Court ordered mediation is only available to a small fraction of cases. It could potentially assist those between 35,050 thousand. Senate Bill 1141 would allow that increase to go up to $150,000.

An evaluation, as has been noted, of the LA program by the Judicial Council, found the program resulted in an almost 50% resolution rate, reduced the trial rate by 30%, shortened the median time to resolution by 23 days, had high user satisfaction rates, and reduced litigant cost and court workload.

Thank you very much.

Thank you very much. And we ask you for an I vote.

Thank you. All right, others in support.

Good afternoon. Ashley Hoffman at the California Chamber of Commerce and Support.

Thank you.

Good afternoon, chair Members. Jamie Huff with Civil Justice Association of California in support.

Thank you.

Hello. Heather Resetarits, the Judicial Council in support.

Thank you. Others in support. Seeing no one else approaching, let's turn to the opposition. If you're opposed to SB 1141, please approach the microphone.

Mister chair Members Sabina Takar with the Consumer Attorneys of California. We have an opposed position to the Bill as it is in print, but we thank the Committee and the author for the Committee amendments and agreeing to those amendments. They address many of our concerns, we're looking forward to see how those bullet points are drafted into statutory language, and we also would like to see a sunset on those provisions. So we'd like to move from an opposed position to a working with the author as the Bill moves forward. Thank you.

All right. Thank you very much. Others who are in opposition, or tweeners seeing no one else approach the microphone, let's bring it back to Committee questions by Committee Members. Senator Durazo?

Yes. If the author could address the last comment that was made about a sunset, because that came to my mind as well. And since there are going to be so many more potential mediation, what about a sunset to so be able to take a pause and say, how's it going? Is this the right way? Should we do something different?

I would be, excuse me, happy to meet with the opposition about that.

All right, other questions? Comments? Seeing none, is there a motion, Senator? Somebody yelled, moved the Bill. Senator Minh yelled, move the Bill. So did you have a comment, Senator Wilk?

Yeah, I had a comment and a question. All right. That's okay. Yeah. That is. I do appreciate the fact that you like to move quick, but sometimes a little too great. But thank you, Mister chair. So it was your Bill, Mister chair. I believe it was your Bill that increased small claims courts up to 35,000.

Your memory is accurate, so that's great.

So right now, because the 30 year old law is 50. That's very narrow margin. So that doesn't make any sense. So it makes sense to increase up. So I'm happy about that question. I do have, though. Are there any factors or guidelines that the courts must consider before they refer it to mediation?

Well, I would love to answer that question, but I have a feeling that probably one or both of my witnesses might be better qualified to address that.

Thank you so much. Well, a couple of points. Rule of court 3.891 already requires that prior to a determination by a court to refer a case to mediation, that the court consider the expressed views of the party on the amenability of the case to mediation. That's number one. Another really important rule of court is 3.853, and this goes to the voluntary nature of mediation.

Even under mandatory mediation, under the rules that apply to court connected mediation programs, it says a mediator must conduct the mediation in a manner that supports the principles of voluntary participation and self determination by the parties. So the mediator must, number one, inform the parties that any resolution of the dispute in mediation requires a voluntary agreement of the parties. Number two, respect the right of each participant to decide the extent of his or her participation in the mediation, including the right to withdraw at any time.

And number three, refrain from coercing any party to make a decision or to continue to participate in the mediation. I'd like to note the Advisory Committee comment to that says, voluntary participation in self determination are fundamental principles of mediation that apply both to mediations in which parties voluntarily elect to mediate, and to those in which the parties are required to go to mediation in a mandatory court mediation.

Thank you. Okay.

I think that was pretty. No, that was pretty comprehensive. So thank you for that. Happy to support the Bill and happy to move it when appropriate.

All right. Any other questions or comments? Did Senator Min moved the Bill? But. So just a quick comment, is that again, since we're making legislative history here, one of my concerns was that mediation not be used, let me underline, not be used to move a trial date. And that's why I'd ask that we amend the Bill that the mediation be set or ordered after trial date set, so that we have a marker.

Not that defense counsel would ever use mediation as a mechanism to delay the trial, but it's my experience that as a trial date approaches, people become much more flexible in resolving disputes. And so to the extent that this evolves into a mechanism that is used to move the trial date, either by the parties or the court, that would be problematic because that's not your intent, I believe, Senator Nielo, and certainly not at least my intent. All right, having said that, the Bill has been moved. Would you like to close?

Yeah. Again, I appreciate the amendments. They all made sense, and Aye ask for an aye vote.

All right, thank you very much. All right, Madam Secretary, please call a roll. [Roll Call]

[Roll Call] Congratulations, Senator Niello. The Bill is out. All right, next we turn to Senator Stern's Bill presented by Senator Laird, SB 1399.

Thank you, Mister chair and Members. I'm presenting Senator Stern, Senate Bill 1399 on his behalf. It adds a clarifying provision and statute to ensure that the recordation of private transfer fee covenants are permitted for properties that had an agreement for such transfer fees in place prior to January 12019. It aligns with federal law on this subject. To avoid confusion, it will bring state and federal provisions into alignment, eliminate ambiguity as to continued implementation of previously recorded agreements. It's an essential clarification to support these agreements.

We know that the one place that for sure this applies is the agreement surrounding the Tejon Ranch Conservancy. There's no opposition here. Testifying in support are Jared Kramer, Executive Director of the Tejon Ranch Conservancy, and Joel Reynolds, western Director and senior attorney for the National Resources Defense Council. And at the appropriate time. I respect an aye vote..

Right under the rules. Committee, primary witnesses, two minutes each and whenever you're comfortable, go ahead and begin.

Thank you, Mister Vice Chair and Members of the Committee, and thanks to Senator Laird for presenting SB 1399 and Senator Stern's absence. My name is Jaron Kramer. I'm the Executive Director for the Tejon Ranch Conservancy, and I'm pleased to be here today in strong support of SB 1399. Let me provide some additional context. In 2018, the Legislature amended California Civil Code 1098.6 to prohibit the creation of new private transfer fee covenants after January 12019.

While well intentioned, this law inadvertently created ambiguity and uncertainty for the ongoing implementation of feed covenants required by agreements that were entered into prior to the prohibition date. SB 1399 seeks to rectify the situation, clarifies that state law does not prohibit the ongoing implementation of private transfer fee covenants required by agreements entered into before January 12019 and which meet additional narrow criteria. These agreements may be tied to land conservation efforts benefiting California's future generations.

SB 1399 will also align state law with federal regulations to eliminate a confusing inconsistency. While the existing law in Civil Code 1098.6 references an exemption from the prohibition against private transfer fees in the federal CFR title 121228.1, it fails to mention the prospective exemption provided in CFR title 12, Section 1228.3. This oversight unintentionally confuses and hinders the implementation of fee covenants required by these pre existing agreements.

By passing SB 1399, we ensure that these pre existing agreements, which meet specific criteria, can continue to be implemented as originally intended at the time of their execution. By harmonizing state law with federal regulation, we remove uncertainty and in doing so, support our state's conservation legacy for future generations. Thank you for your attention to this matter, and I urge and I vote for Senate Bill 1399. Thank you.

Thank you. Next speaker, please.

Thank you, Mister chair and Members of the Committee. And thank you very much, Senator Laird, for presenting I'm Joel Reynolds, Western Director and senior attorney for NRDC, speaking in support of SB 1399. Very briefly, I'll make just three points. This Bill does not contradict the prohibition against private transfer fee covenants in Civil Code Section 1098.6. That prohibition remains. Second, this Bill only seeks to clarify a confusing mismatch in timing, one corrected under federal law in 12 CFR section 1228.3 but not yet corrected under state law.

Third, NRDC is concerned about this confusing mismatch because in 2008,11 years before the state prohibition went into effect, we signed an agreement that relies on transfer fees to fund land conservation in California. That 2008 agreement for transfer fees is legal under federal regulation because of 12 CFR section 1228.3, but it became unclear under state law the minute Section 1098.6 took effect in 201911 years after our agreement was signed and 10 years after it was formally recorded.

The only thing SB 1399 does is to make crystal clear that under the narrow circumstances provided in the Bill and consistent with federal regulation, the ongoing implementation of our pre existing, carefully negotiated agreement can continue as intended. This is consistent with state policies on 30 by 30, biodiversity protection and climate change balanced with the need for new housing. These are battles we have to win, and we urge an aye vote on SB 1399. Thank you very much.

Thank you, sir. You hit it right at the two minute mark. True professional. Anybody else here to add me, too. Comments in support of the Bill? Seeing none. Anyone here speaking in opposition to the Bill? Seeing none. Let's pull it back to Committee for questions, comments, concerns. So we have a motion by Senator Wiener. The only thing I'd like to say, this actually, is in my district, and I'm supportive of the Bill. So appreciate you carrying this for Senator Stern today. And with that.

And it's also, I think, in Senator Grove's district. Just for the record.

Well, the important areas are in my district because she gets the outlet mall.

I really look forward to that conversation with her, and I would just thank the witnesses for traveling that length for that brief testimony. And, respectfully, there is no opposition. Respectfully. Ask for an odd phone.

Thank you. I don't know what direct it's do pass.

Do pass. This is SB 1399 by Senator Stern. The motion is. Do pass with a motion by Senator Wiener. [Roll Call] You have 10 to zero. One Member missing.

All right. Congratulations, Senator Stern, and we'll leave that open.

Okay. Thank you.

Don't worry.

All right, up next, we're going to skip ahead to item number 10, SB 900 by Senator Umberg. The recommendation is do pass and send to the floor.

Thank you, Mister chair. And by the way, you're doing excellent job. Thank you. Appreciate that. High praise coming from you. Well, thank you. First of all, I want to thank Committee staff is always for doing such an outstanding job. In particular, Ian Doherty. SB 900 concerns residential developments governed by homeowners associations and their boards.

And this Bill is a product of a disaster that happened in my district when the gas lines were, in essence, non operational, to a complex with 200 units, which precluded folks from having heat, water, any kind of gas, hot water, the ability to cook for months. And what this does is this Bill. By the way, congratulations to my district staff for trying to mitigate and ameliorate some of the harm caused by this horrible breakage.

So what this Bill does is this Bill gives HOA boards 10 days by which to start repairs for critical interruptions, such as a gas interruption, allows the management company to act swiftly to fix utilities if the board doesn't meet and requires repairs to have fair pricing, institutes Reserve studies to ensure organized and transparent budgeting processes, and allows the HoAs to conduct electronic voting to achieve a quorum so they can act expeditiously.

This Bill is still a work in progress, and we're still meeting with stakeholders, but it's an issue that needs to be resolved, because it's been repeated many times in California, where folks have been without an important utility and have had no place to go to get it remedied. With that, I urge an aye vote, thank you. oh, we do. Yes. Right over there, sir. I'm sorry. I'm sorry, Mister. Eric Thornson from City of Orange, one of my cities. Thank you.

And the rules under Chairman Umberg is two minutes.

Well, I will hopefully be less than that. He already covered most of what I was going to say. Thank you. Vice Chair and Members of the Committee, my name is Eric Thronson with Townsend Public affairs. I'm here representing our client, the City of Orange, in support of SB 900. I apologize to the Committee staff for the late submittal of our support letter past the deadline.

On behalf of the City of Orange, I would like to express our gratitude to Senator Umberg for introducing SB 900 and tackling this important issue, which can be critical to ensuring that matters of public health are addressed in the community. As the Senator mentioned, this Bill stems from natural gas service being shut off to the residents of the Levator Monterey condominiums complex in Orange for nearly two months in 2023.

Fortunately, gas was largely restored in September, but only after significant efforts were made by the Senator and his staff, Orange County Council Member John Dimitriou and city staff to compel the accountability from the homeowners Association, the property management group and contractors. During this time, City of orange staff stayed on site for hours at a time to approve new gas line installations as they happened in real time.

While the City of Orange is happy to provide these services for its residents, the city recognizes that the substantial efforts to prompt a sense of urgency is unacceptable. And in response, the Council Member and state Senator Umberg have worked to develop this legislation to make certain this does not happen again. The city believes that this Bill is the right approach to addressing the problem that occurred in the City of Orange by legally requiring action and effectively preventing another public health issue for anyone else. Thank you for your consideration.

Thank you. Any other primary speaker seeing none. Anybody wanting to add me to testimony and support?

Good afternoon, chair Members Brady Guertin, on behalf of the League of California Cities, we've heard from our cities this is a big issue, so we are pleased to support this Bill. Thank you.

Great. Thank you. Anybody here in opposition to the Bill? Primary. You can be primary. You're going to be in. Me, too. Primary, you know. There you go. Two minutes, sir.

Mister Vice Chair and Members of the Committee, my name is Tom Sur. I'm on the legislative Committee of the Center for California Homeowner Association Law, which is a nonprofit 501 that protects consumer and civil rights of HoA homeowners statewide. Our opposition to SB 900 is based on several reasons, the first of which is the way it shifts potentially huge cost burdens onto individual homeowners for repairing interruptions in utility services of all kinds. Not just gas lines, all kinds.

It also insulates all utility companies from any responsibility in all of the 55,000 Hoa communities in the state. If there was an interruption in your neighborhood or condo of gas, electric or water services, to whom would you look for a solution? Wouldn't you look to the agency best equipped to respond quickly, to diagnose and fix the problem? Yet this Bill puts responsibility for repairs and replacements on the HOA, which is, after all, comprised of homeowners.

Why cut out of the picture the agency with the most resources and expertise to deal quickly with the problem? This same agency, that is the utility, likely actually owns the pipes or wires that carry utility services, and they certainly are the agency that installed this infrastructure in the first place. And it should be maintaining that infrastructure. This Bill would short circuit that process by putting the entire responsibility on the homeowners and conversely, absolving the utility company of any responsibility.

Secondly, this Bill goes on to extend an abuse, often abused, taxing power of HOA boards, known as the emergency assessment, to a whole new class of situations called threats to health, without defining that term or indicating who determines a threat to health exists.

All right, thank you, sir. I gave you two minutes and 30 seconds.

Thank you.

And I appreciate you coming and test. Appreciate you coming and testifying.

My colleague from the center also has some information to add.

Okay, wonderful. Please come up.

This is Marjorie Murray, the President of the Center.

Good afternoon, Members of the Committee. What I want to address are the amendments of April 13, which have now been incorporated into the legislation. The amendments of greatest concern to us are that they make homeowners responsible permanently, not just for emergency conditions, but they make them responsible for maintenance, repair, restoration, etcetera, of all utility lines. And how do they do that? By incorporating these major components into the Reserve study, which is done every three years by an Association board.

This is revolutionary, because one of the stunning things about the Levita case is that if you look at the governing documents, which are the CC and Rs, the condomap, and the tract map, the pictures of who owns what and who is responsible for what, there are easements on the maps, and there are which belong to the utilities. So the utilities are responsible for the maintenance and care of their infrastructure in that particular condominium.

So it's just a mystery to us why this burden is being placed on homeowners, not only the cost, but in transferring the cost, presumably the liability as well. And if you look at the CC and Rs, they are quite explicit that, yes, the Association is responsible for the maintenance of the common area, except for those areas maintained by the utility companies. So we are actually, we're baffled by the legislation, to tell you the truth.

We're baffled by the new amendments, which now transfer the care and feeding of the utility infrastructure to homeowners. The cost and also liability. I would be glad to answer any questions or comments.

Thank you very much. With that, we're going to pull it back to Committee Members for questions, comments, concerns. Senator Laird?

Well, I just want to go right to where the opponent just wasn't, and because in the original version, that was the opposition, was the notion of utilities. The question was whether utilities are responsible for what's on essentially private property. And I know that with water, it's wherever the meter is, even if it's in the private property away, the utility is responsible for the utility side of the meter, and then the property's response. So could you respond, I don't know how that works totally with, like, gas or other utilities.

So it is analogous, in other words, that the utility is responsible to the point of embarkation, and beyond that, then it would be the. Either the homeowner or the homeowner in this point, in this case, the homeowners Association. So it's roughly the same thing. And that's the sort of misunderstanding, maybe even misinformation, is that in the Levita case, is that it is true up to the point of embarkation.

Basically, if you think of it like a square on a map, the utility is responsible all the way up to that point, to the. In essence, in this case, the property line. Beyond the property line, it's no longer their responsibility. It's the homeowner's responsibility, homeowners Association responsibility. And this is a crazy sort of situation where there's a break. The break is within the, basically the HOA responsible area. So the HOA then is responsible to address it.

If the board doesn't address it, though, then homeowners themselves are left without the utility. So what this Bill does is this provides, in essence, a mechanism, when there's a break where there's a health issue that's at issue, a mechanism to, for example, convene the board, a mechanism to begin the repair. And, yes, if, just as you illustrated, Senator Laird, if the break happens in an area for which you're responsible, yes, you still do bear responsibility.

But just to get down to the finer point, because I think it's the issue, does that mean there's some places that the so called place of embarkation is 80ft inside the place that the homeowners Association is responsible? So it's not just at the property line, it's if it comes in, and that's where there's just a lack of understanding either way.

Well, I don't know about other locations, but the point of embarkation is a known point and known for responsibility, as is a portion between, in this case, an HOA or a property owner.

No, I understand that. The thing I didn't understand, because it seemed like in the analysis or one of the opposition letters, they were talking about the property line and the point of embarkation can be inside the property line of the HOA.

Yeah, it is my understanding that that may be possible, but that it's an understood and delineated separation between utility responsibility and other responsibility.

Your Bill does not change. What the understood line is, is that the deal.

The Bill does not change that. What the Bill simply provides as a mechanism when there's a breach, to be able to remedy that situation in relatively short order and to start to hold certain folks responsible for getting it resolved, as opposed to.

So if your Bill were in effect prior to the incident that is cited in your district, it would have been much clearer and able to be addressed much quicker?

That's correct.

Thank you.

Senator Caballero.

So I appreciate that discussion. Let me ask this. This whole area is new to me. What I know is that if something happens in a private residence that's not part of a condo that has no hoa, then you're responsible for anything on the private property. The issue that was raised was the potential for the CC and Rs to indicate that area within the development has an easement and that the easement is owned by the utility company. Would this Bill affect that so.

Well, as a matter of law, CC and Rs can't basically supersede the law. So even if the CC and ours say the utility is responsible for all internal repairs, that's not determinative of who's responsible for the repairs. So this Bill does not transfer responsibility if there's an easement. An easement is different than, for example, a delineated point of embarkation. So just as your example for your home, if the gas line breaks prior to probably the meter or someplace otherwise denominated, then that's the utility's responsibility. Post that, it's your responsibility.

Okay. I guess I was trying to figure out if there are situations where the development was done differently, and it may be that it's the embarkation is somewhere further into the property than what would normally have been done. For whatever reason, your Bill would not change that. It would still be the embarkation?

That's correct.

Okay. Thank you.

Senator Durazzo.

Yes. I guess I'm a little thrown off by where the responsibility lies. I sort of assumed, never having been a part of a homeowners Association, that those are the kinds of things that would be in an agreement with the homeowners, you know, what's covered, what's not covered, what are you responsible for? How do we address emergencies? Is that the case or not?

And are we superseding what they would do if that's the case, are we superseding that and saying, no, it's the homeowners Association responsibility and not the utility? I'm trying to see, you know, what has been traditionally done and are we changing and what that responsibility level is.

The short answer is no, that there's a misunderstanding. It doesn't reallocate responsibility. It simply says, when this happens in the area for which you're responsible, in this case, a homeowners Association, this is how you need to proceed. You can't simply just say, you know, I'm sorry, people, you will no longer have gas.

Thank you, Mister chair. I'm still confused because what's been said so far is diametrically opposed to what the opposition said.

You are correct.

So I don't know, maybe give them an opportunity to get some clarification as to where their perception is different from reality.

I think this has been a longstanding conversation. I'm not sure. You may ask them. I mean, we have complete difference of opinion as to the law, what CC and R's impact is on the law. We have a complete difference of opinion as to whether utilities are responsible, for example, for the maintenance or the repair of pipes within the area of homeowners responsibility. So I'm not sure there's a resolution, but yes, you are correct. There's a complete difference of opinion.

So let me ask the opposition then. The discussion so far is that this is not altering the responsibility of the utility versus the homeowners Association. The responsibility by the utility continues, has been, and continues to be to the point of embarkation, as you mentioned it, regardless of where that is. And the homeowner or homeowners Association is responsible for the infrastructure within their property beyond that point. Do I understand that you disagree with that particular point of law?

What we disagree with is what the Bill says versus where the responsibility should lie. Now, it's our understanding in the Levita situation that the meter, the gas meter, is, there's 10 buildings in Levita, each of which I think have about 20 residents. There's 200 residents, and they're individually metered units. That's our understanding.

Southern California gas itself, both in its illustration, and we did meet with a representative of them, and they say their responsibility goes up to the meter and then from the meter inside, you know, towards the residence. That's the homeowner's responsibility. Short of that, it is the utility's responsibility.

Now, the lines that feed these individual buildings do run through common area, and the way the statute, I mean, the proposed Bill is worded, it says that if an interruption occurs within the common area, then it is the HOA's responsibility. And so that would just short circuit any discussion over who really is responsible, where's the meter and so forth, and just resolve everything in favor of the utility. So that's our position. We're very concerned about that enormous cost.

So what Senator Umberg has said is that the Bill doesn't say that. That what the Bill says, or his intention of what the Bill says, is that the utilities responsibility is to the point of embarkation, even if that is within the common area.

And if that point of embarkation is a meter, that's. They may be the same. So. And to the extent that we make it crystal clear that this doesn't reallocate responsibility, we can add that language, but I believe it is. But, you know, we can gild the lily. That's fine.

Thank you.

Thank you, sir. Any other questions? I found this whole thing kind of interesting as well. I'm going to support your ability today because you're a good author, and hopefully you can clarify that so that the opposition is more comfortable with that. Look for a motion and then we can have the Chairman close. Moved by Mister Dodd. Mister chair, please close.

No. Thank you very much. I appreciate that conversation. A special thank you to Councilmember Dmitri and the City of Orange stepping in in a very robust way to provide necessary services for the folks at Levita. And special thanks to my district staff who spent many, many hours on site handing out hot plates and those kinds of things. With that, I urge an aye vote.

[Roll Call]

Thank you, Mister chair. In due course, we would turn to Senator Caballero. Next. Senator Caballero, would you like. And I'll come back. Thank you.

Thank you Mr. Chair and Members.

Senator Wahab.

Yes. Thank you for the opportunity to present SB 981 on behalf of Senator Wahab, who has agreed to accept the Committee's amendments and would like to express her thanks to the Chair and the staff for all of their assistance. SB 981 combats a growing problem of digital identity theft, specifically targeting the unauthorized posting of digitized, sexually explicit images or videos.

This bill requires social media platforms to create a complaint process, to accept reports of digital identity theft, and to ensure quick responses and action. Social media platforms will be required to respond to reports of digital identity theft, determine if the reported content is digital identity theft, and provide updates to the victim reporters. Current law does not treat the dissemination of digitized, nonconsensual, sexually explicit images on social media platforms as identity theft. This creates a loophole that is currently being exploited.

SB 981 ensures that if reported images are confirmed as digital identity theft, they will be promptly removed from the platform, preventing further harm and exploitation, provides crucial protection, particularly for young women who are disproportionately targeted by unauthorized digitized, sexually explicit images, offering them a shield against exploitation and harm. To testify in support of SB 981 is Daniel Felizzatto as the Crime Victims Alliance.

Thank you very much.

Mr. Chairman, Members, Dan Felizzatto on behalf of the Crime Victims Alliance. With the rapid advancement and accessibility of artificial intelligence programs, we've unfortunately seen a tremendous increase in the type of behavior that SB 981 would regulate. Many of these images are of such high quality that it takes specialized computer programs to determine whether or not the image is a deep fake or an actual image.

As technology keeps advancing, the ability to distinguish between actual images and artificially generated images will be nearly impossible for the general public to distinguish. Deepfake pornography was first observed back in 2017, when there was a Reddit user with a screen name of Deepfakes that was using the AI technology at the time to swap female celebrity faces with pornographic images.

This type of digital abuse has increased dramatically, especially during the COVID pandemic where people started spending more time isolated from one another and using social media, the internet, as their recreational time. As a result of the AI technology improvements, it is becoming more and more accessible. The scope of this abuse has grown. Now, targets are no longer just celebrities or social media influencers, but it's members of the general public.

In 2020, there was a program called Telegram Bot that was used to make these deep fake porn, and it was determined that there were over 100,000 thousand private citizen.

Thank you very much. Thank you. You urge an aye vote. Yes, thank you.

Floor is yours.

Thank you, Mr. Chair, Members. Jason Schmelzer here today on behalf of Technet, we're not quite yet in support of the bill, but we're having very positive conversations with the author. We're hoping to iron out a few final issues and be in support soon. So thank you very much.

Thank you. Others in support.

Good afternoon, Mr. Chair and Members. Ryan Sherman with the Riverside Sheriff's Association in support. Apologies for not getting our letter in on time. Also in support today is with the California Narcotic Officers Association, California Reserve Peace Officers, and the Deputy Sheriff Association of Monterey and Placer Counties, and the police Officer Associations of Arcadia, Burbank, Claremont, Corona, Culver City, Fullerton, Murietta, Newport Beach, Nevada, Palosford, East Pomona, Riverside, Santa Ana, and Upland all in support. Thank you.

Thank you. Thank you very much. Others in support. Seeing no one else approaching the microphone. If you're opposed to SB 981, please approach the microphone. Seeing no one approaches the microphone, bring it back to Committee. Questions by Committee Members. Seeing none, is there a motion? Senator Allen moves the bill. Senator Caballero, would you like to close?

Respectfully ask for your aye vote on behalf of Senator Wahab.

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

This is file item number eight, SB 981. The motion is due pass as amended. [Roll Call]

11-0 bill is out.

Up next would be file item 11, SB 918, by Senator Umberg. And with the recommendation is do pass as amended. And whenever you're ready, please proceed.

Thank you, Mr. Chair. And thank you, Allison Merritt, for your help on this bill. This is the Social Media and Law Enforcement Cooperation Act. This bill requires social media platforms to have a telephone hotline available for law enforcement agencies to be able to make a timely request for information. It compels social media platforms to immediately comply with a search warrant provided by law enforcement if the subject of the search warrant is an account on social media.

And here's the reason for this, is that there have been a tremendous number of crimes, most importantly crimes involving, for example, fentanyl, where the purchaser of a product thinking that they were purchasing, for example, oxycodone, turns out to be laced with fentanyl and the person the recipient dies.

Law enforcement checks to see what the phone looks like sometimes, and they see that there's been some interaction between a seller and a purchaser and they want to immediately, immediately, both for investigative purposes as also for prevention purposes, find out who the seller is or who the others are that may be involved in the conspiracy. The problem is that social platforms historically have taken sometimes months to respond, and this simply is designed to expedite.

It requires them to have a phone and a person on that phone and a portal for which can be reported so that search warrants, also require search warrants to be able to be responded to immediately. I get that immediately still needs to be clarified, and we will do so should this pass out of Committee as the bill moves forward.

We accept the Committee amendments to reaffirm existing privacy rights and clarify the bill does not displace existing law related to search warrants, which include procedures for obtaining information from electronic communication service providers and limitations relating to out-of-state warrants. I am the witness. I urge an aye vote.

Thank you sir. Anybody else in the room in support?

Yes, Mr. Chair and Members Ryan Sherman again with Riverside Sheriff's Association and all the other associations I previously mentioned in support. Thank you.

Excellent job. Thank you.

Mr. Chairman Members Dan Felizzatto on behalf of the Crime Victims Alliance in support.

Thank you sir. Anybody here in opposition? You may have two minutes if you like.

Thank you. Becca Cramer-Mower on behalf of ACLU California Action in respectful opposition. People of all ages rely on social media platforms for everything from accessing information and connecting with others to paying for goods using transportation, getting work done, and speaking out about issues of the day. The vast stores of information social media platforms hold about people are subject to some of the strongest privacy protections under the law, and for good reason.

Rules that accelerate the handing over of this private information to the government raise concerns, even with the amendment from the Committee. Ensuring that people's rights are protected takes time. When a platform receives a search warrant, they must carefully review the warrant, perform a reasonable search for responsive material, and understand the scope of those records in order to determine whether the warrant is tailored as the law requires.

The platform should also notify the target of the search to allow the person to take action to protect their rights. The platform might also communicate with law enforcement about the scope and breadth of the warrant and seek and obtain legal advice from counsel regarding the breadth of the search warrant. It might also be necessary for the platform or the target of the warrant to seek relief in court to void or modify the warrant.

All these steps cannot be completed if the platform must respond immediately even with the Committee amendments, and for these reasons, we respectfully remain opposed.

Thank you. I see another speaker. You may have two minutes.

Oh, I will be very brief. Just Dani Kando-Kaiser, on behalf of the Electronic Frontier Foundation, would align our comments with the ACLU, appreciate the recent amendments that the Chair has taken, and look forward to continuing the conversation. Thank you.

Thank you. Anybody else in the room in opposition, seeing none, pull it back to the Committee. Questions, comments, concerns? Senator Durazzo.

Thank you. Thank you. I know you said, Senator Umberg, that you were looking at the definition of immediately complying, so that has a lot to do with my concerns. If you could just kind of walk me through a little bit more. You kind of did of what would happen in case there was a suspected crime being committed and the kinds of things that the search warrant would be looking for. Give me a better sense of that in reality.

Sure. So using an example from a real-life case where a young woman is found dead, and they see that she has been chatting with someone on her cell phone, it looks like she's died from fentanyl poisoning, and there's reason to believe that she recently purchased some product. And so at that point in time, police officers, to get a search warrant, they have to provide an affidavit sworn under penalty perjury.

It provides probable cause to believe that there may be evidence, for example, located at the social media platform, because they see that Snapchat was used, and so they serve that search warrant upon the social media platform that says and has to be defined, in particular, that we are requesting you to provide, for example, documents or other evidence concerning, you know, in this case, Mr. X, and communications between Mr. X and Ms. Y, and other communications involving what may be, in this case, the sale of illicit drugs, the purpose of which is one, to identify the perpetrator, but two, also to identify that person before they sell or distribute drugs to other people.

The platform then, as was illustrated, has to look at that warrant and just like anybody else, has to make a determination. So, for example, you serve a warrant upon a business, right? If you're a bank and you get a search warrant, you have to comply in a reasonable amount of time. The problem has been that social media platforms have taken months to comply, and during that period, there's all sorts of things that happen. One, evidence disappears, and two, other harm is done.

So the purpose of this bill is to require them, one, they have a person on the phone, so you can actually talk to a human being to say, hey, we've got a search warrant. We want to serve it right now. Who do we serve it upon? It doesn't evade anyone's privacy interest. And then two to be able to, and again, this does not override any privacy laws that exist.

But two is to, as we move along this path, have to figure out what a reasonable amount of time is. Clearly it's not months, to be able to respond to that search warrant.

And what is it? Why would it take months to enforce a search warrant?

Senator Durazo, that's an excellent question. I don't know.

I mean, it seems like the search warrant is meant to.

Well, I mean, that was a flippant answer, but yes, social media platform, then they have to do a search, basically an electronic search. So they've got a name. So now they need to sort of see who that person, what that IP address, who are they communicating with? What are they accessing, what are those kinds of things?

And they do have to assess whether or not the search warrant is compliant with law and they can move to quash, or the subject of that search warrant can move to quash the search warrant. So, for example, if a search warrant says, you know, Tom Umberg said that so and so is suspected of committing a crime, please give us all their records. If there's nothing more than that, that's deficient. So, yes, the purpose of this is to shorten that period of time dramatically.

And what happens if one of the users that becomes the subject of the search warrant or some other, what happens if their rights turns out their rights were violated? What do you go from that?

So there's a, so let's say the person who actually sold the fentanyl right, that their privacy rights are invaded, or that the search warrant is invalid, or that somehow there is a violation of the Fourth Amendment, then current law says in most cases that evidence may not be entered into evidence, which basically kills the. Well, may kill the prosecution. So that's the protection.

And to the extent that there's another invasion of privacy rights, the issue would be if there's a search warrant issued for Tom Umberg and it turns out that it's me and they invade my son, whose name is the same as mine, his privacy, what recourse could he have? And there are other, it's the same recourse as anyone else who, for example, has their data breached or other privacy invaded.

But for example, if the, the platform is not using due diligence, then they also may be maybe liable.

And if I could just ask the opposition in terms of, and also to the author, this timing issue, how do you propose, is that, how would you propose that, that get resolved? Just, I want to get a sense of that.

Yeah, thank you for that question. I don't have a specific timeframe that I can give you right now. I'm happy to take that back to our experts and think about it. But it would need to be something to balance people's rights, because while there are sometimes recourses, there are not always recourses if rights are violated while also expediency. So happy to be thinking about it.

But immediately, especially as it's undefined, does raise the risk that in trying to comply with this law, social media companies might hurry and not do the due diligence that they would need to do to make sure that they are meeting their obligations to people under other laws, as well as protecting people's rights.

So to answer your question, I'm not overly concerned about social media platforms going too fast, but it does require, and understandably so, is that if immediately means within 10 minutes, that's too short. I agree that's too short. If immediately means in three months, that's too long. And so there are practicalities to work out as to what is a reasonable amount of time for the platform to respond. We could use the term reasonable, but that would leave up to judges.

What we want to do, what I'd like to do at the end of the day is provide a standard by which the company understands it, law enforcement understands it, and then later on, should there be some sort of violation, that a court could understand what that means.

Is it correct? I think I heard you say you were going to continue to.

Oh, yeah. Yes. I think that the. I understand the ACLU's concern. The issue right now is working out what is practical, reasonably practical, to require the social media companies to respond as quickly as is practical, and I don't know what that is.

Thank you, Senator Durazo. Senator Allen, I believe he answered your question right, during his comments. Okay. Any Members on this side of the room have questions? Seeing none, I'd love to have somebody make a motion. Senator Min moves the bill. With that, you may close.

Excellent. Again, recommendations do pass as amended. And with that, we'll call the roll.

I urge an aye vote.

This is file item number 11, SB 918. The motion is due pass as amended. [Roll Call]

All right, 10-0 bills out and we'll leave it open for the missing Member. Now, our final action item of the day, file item number 12, SB 940 by Senator Umberg.

Thank you, Mister Chair, and my apologies, or I guess it's the reward or punishment for those who support and oppose my bills, that they've got to wait till the very last Bill to make their appearance known. This is my also apologies to Senator Niello because I'm now invading his space on arbitration and mediation. What this does is this is a Bill that has a number of different aspects to it.

One aspect is to provide some protection to consumers who are compelled to resolve their disputes through arbitration. So, for example, if you bought a consumer product, whatever that may be, a cell phone, and it says you got a problem, you got a dispute, you need to resolve it through arbitration.

Some of those consumer contracts say you've got to resolve it with a particular company, with a particular alternative dispute resolution entity, which struck me and strikes me is somewhat unfair to the consumer if you are compelled to use that particular company and that hundreds, if not thousands of arbitrations go to one particular company. Secondly is if that arbitration is compelled to be out of state, if you've got a $2,000 dispute, you're not going to travel to Denver to resolve that dispute.

So it simply says you've got to do it in the jurisdiction in which you would normally resolve disputes. And then thirdly, is that if you're compelled to go to arbitration, if your consumer agreement says that, but it falls within the jurisdiction, the monetary limits of small claims court, you can opt to go to small claims court versus going to arbitration. That's up to the consumer. And as you know, attorneys can't represent individuals in small claims court. Other aspects of this provide that.

There are ADR firms, many both firms, individuals small and large here in California, that perform mediation and arbitration and provide other services. Not all lawyers, by the way. Many, many, many folks who provide these services are not lawyers. It is my view that we should have some standard for them, some ability for, in this case, the state bar, to outline a series of guidelines that if an ADR firm follows them, they are certified.

It's in the same genre as for lawyers here who have seen people that are certified as family law specialists or something is not compelled, it's not required. You can continue to perform services in this space, but if you want to get that seal of certification, you've got to meet certain guidelines and the state bar is allowed to charge to be able to review for those services. It also provides for the ability to, if you're in arbitration, to subpoena witnesses. Some arbitration agreements require you can't call.

Basically, you can't subpoena witnesses, which means that if you can't compel a witness to testify, you're without a witness. In sum, that's the Bill. I am the witness. So I urge an aye vote.

Mister Chair. I apologize, but I don't recall you saying you accept the Committee amendments.

Sure. All right, I will.

All right, I guess we have got primary speakers in support.

Go ahead.

My name is Scott Bernstein. I'm here on behalf of the California Employment Lawyers Association in support of this Bill. What I'm going to talk about specifically is sections 4 and 5 of the Bill, which deal with situations in which there's the conflict of interest that arises. Okay, so what we're concerned about is the conflict of interest that arises when there are multiple cases before the same arbitrator.

So what happens is, and it's intuitively obvious, that if you have an arbitrator who is taking extra business from your opponent, you've got a problem. That's at the crux of this. So actually, I want to just take a little side trip to Cook County, Illinois. Some of you may remember a scandal, Operation Greylord, in which arbitrary, or judges rather, were taking bribes and there was prison time meted out.

What makes that important is not only the principle that a decision maker who is conflicted by being paid by a party is going to give conflicted decisions, it's the fact that it's so rare to happen in the courts. But in arbitration, it's a different story. We have forced arbitration proceedings so people don't have the ability or the right to stay in court if they're forced into arbitration. And so what happens is there's a striking and ranking process for picking arbitrators.

The two sides rank them, the ranks are combined, and the arbitrator is selected. So far, so good. It's after that that the trouble starts. If you represent a worker or a consumer and you're at AAA or jams or any other arbitration company, you may very quickly find yourself receiving a disclosure from the arbitration company saying that your opponent has retained the arbitrator to serve as an arbitrator on another case or maybe as a mediator. And these folks don't work cheap. The fees can be substantial.

And so imagine you're an employee in this situation. You've got an important claim, a claim that's central to your life, and you find out that your arbitrator is doing business in multiple cases with your opponent, are you going to get a fair shake in that hearing? How confident are you that you're going to get a fair shake in a hearing? It's really a neutral arbitrator. So what we're trying to do is to stop that practice. This Bill will stop it. Sections 4 and 5 address that very issue. And so we ask for your aye vote.

Thank you very much. Next speaker.

Good afternoon, I'm Nancy Peverini with the Consumer Attorney's of California in support. I'd like to particularly point out the provision that we're very happy to support, which is that you can't force a consumer to go out of state to have their claim arbitrated. We are a cosponsor along with employment lawyers. If that provision, as it applies to employment contracts, makes sense to apply it to forced consumer contracts as well. So we do support the Bill. Thank you.

Thank you. Any, me too testimony in support of the Bill? Seeing none. Any speakers here in opposition. Miss Huff, you have two. I'm gonna give. If you go over a little bit, that's okay, because he went over so.

Oh, all right. That's fine. I appreciate it. We'll keep it short to leave room for Mister McKaley. Jamie Huff, on behalf of the Civil Justice Association of California, opposing only part of the Bill, just part of it. We have no problems with the choice of venue, the small claims changes, or the California bar certification process. Our issue is primarily with Section 4 and 5 as it deals with arbitration. And I think it probably is said best when we are looking at these provisions.

And actually, the language of it was taken from a 2016 Bill that was authored by Hannibeth Jackson. And in Governor Brown's veto of that Bill, he stated, arbitrators in California are already subject to stringent disclosure requirements under existing state law and Judicial Council standards. I am reluctant to add additional disclosure rules and further prohibitions without evidence of a problem. We don't see any evidence of a problem from our perspective.

Further, the existing Judicial Council procedure for amending arbitration ethics standards is in a deliberative and public process that can more appropriately consider additional requirements. We still think that that is valid and that is the best way to handle these changes. We obviously support fair and accountable marketing solicitation arbitration process. Of course, we want all parties to feel like the outcome of those things are fair, but we don't necessarily think the way it's written in this.

It really affects that change, while we can't support it today, we've had very productive conversations with the Senator staff, and we want to continue to have those conversations moving forward. Thank you.

Thank you, Mister McKaylee.

Good afternoon, Mister Chairman Wilk and Members Chris McKayley, on behalf of the Los Angeles Area Chamber of Commerce. Similar to my colleague, the comment six, which is on page 12 of your analysis, sections 4 and 5 of the Bill seem to be the ones of most interest. We have met with Zach a few times and appreciate the engagement and of course, the thorough analysis.

You know, California's Arbitration Act in the Code of Civil Procedure provides a lot regarding the neutrality of arbitrators, the process enforcement of arbitration, awards, etcetera. We don't think that there is a sufficient showing that this provision in particular is necessary. We've heard for more than a decade from opponents of arbitration, this notion of repeat players. I think that those types of claims impugn the integrity of those often former state and federal judges, among others, who are very good arbitrators here in the State of California.

I think that they are already subject to disclosures similar to those affecting the judiciary. And as was indicated, both parties have the ability to strike quite a few lists of arbitrators. And the other interesting piece is that even local bar associations, and certainly specific groups such as consumer attorneys in their local associations, for example, keep information about arbitrators, the types of cases, who has employed them, etcetera. We think that those disclosures are more than sufficient to protect consumers in this regard.

For those reasons, we will continue to work with the author, but we respectfully oppose this provision of the Bill. Thank you.

Thank you, sir. Anybody else that want to add me to comments in opposition? Seeing none, we'll pull back to the Committee. Questions, comments, concerns? Okay, we have a motion. I'll just throw out a question. I know both of the opponents quite well, known him a long time, respect him a great deal. You want to respond to what they threw out there?

Sure. And I've met with the opponents here of late, and they've raised issues of, for example, let's say there's an arbitration company that has 100 offices all over the United States, an office in New York, an office in Denver. Each take a case, the individual arbitrators have nothing to do with one another. Is that a problem? Probably not. But if, for example, as lawyers most often represented defendants, if I see that plaintiff's law firm has hired while in the course of arbitration, that arbitrator, I'm concerned.

And if I see a plaintiff's law firm has hired that arbitrator for three other cases. I'm very concerned that this may skew. Now, I'm not imputing the integrity of the arbitrators, the mediators, many of whom are retired judges. But it is human nature. By the way, if you see that the hand that is feeding you and may continue to feed you has an interest, hard to put that aside. Hard to put that aside. And so we'll continue to work on these things.

I, too, respect the opponents. We'll continue to work on these things. But I think it is an issue. It is an issue with respect to, in particular, individual arbitrators or mediators. So.

Okay, I'll let you go as Chairman, Senator Dodd, and then I got to follow up. Go ahead.

I appreciate this Bill. I, too, respect the opposition. But what the Senator just said I think is absolutely true. I had my own personal case, and I ran an arbitration Bill Earlier in my career and got a lot of criticism, was passed, signed by the Governor.

There are situations where the relationship between the company, perhaps even the arbitration company, and who their clients are and everything that really do, I am fully convinced that the decision, which I won, gave something to their client that they never would have gotten into court with a ruling like that. I went to a number.

I dont want to really get into the details, but im absolutely convinced that this is a good Bill, that this will take away that cozy relationship and give every more people a fair shake. I hope you can work out some differences that perhaps will make it better for them in the end. I think this is a great Bill.

Thank you, Senator Dodd. So my census will be doing history today. The opponents also brought up that Governor Brown vetoed back in 2016 a similar Bill. So how is this Bill different than the effort in 2016, do you know?

Well, there are a number of aspects of the Bill that are different. It's much, much broader in terms of the other consumer protection issues, those kinds of things. The question that was raised, I think, by Governor Brown is that there's no issue that was in, I think 2016, 8 years later. I think that there, if nothing else, there's certainly an issue as to perception. And as arbitration becomes much more prevalent and in particular, forced arbitration is now almost the rule of the day, that it's even more important.

Okay, great. Well, we have a motion from Senator Wiener. I don't know if that's your close or if you want to have another.

I'm going to adopt what Senator Dodd said and then close. Then I'm done. So.

Okay with that? Again, the recommendation as do pass is amended. And with that, let's call the roll.

This is file item number 12, SB 940. The motion is do pass is amended. [Roll Call]

All right, 9-1 Bill is out. All right, we're going to go through the roll one time and one time only, so. Madam Secretary. Thank you, Senator Wilk. Madam Secretary. Let's start at the top and work.

[Roll Call]

That's it. All right, we are adjourned until June, when we'll enjoy quite a number of Assembly bills. All right, thank you all. Thank you, staff, for your excellent work here. I hope you take a little breather, and we'll be back here in a month. Thank you. Bye.