Assembly Standing Committee on Natural Resources

Good afternoon and Happy Earth Day, Mr. Kalra. Noticing a quorum. Madam Secretary, can we call the roll?

[Roll Call]. We have a quorum.

Thank you. We've got 24 measures on the agenda today. Assembly Member Joe Patterson is going to be subbing in for Assembly Member Mathis. Lucky us. The following eight measures are proposed for consent: Item Number Four: AB 2278 or 2276: Wood, Item Seven: AB 2401: Ting, Item Ten: 2572: Muratsuchi, Item 12: AB 2760: Muratsuchi, Item 15: AB 2815: Petrie-Norris, Item 18: 2968: Connolly, Item 20: AB 3023: Papan, Item 21: AB 3057: Wilson.

Move the consent calendar.

Second.

Madam Secretary, you can call the roll.

[Roll Call].

Great. The consent calendar has been dispensed with. Mr. Muratsuchi, you were granted reconsideration on AB 3192 with amendments. We'll take up that measure now.

Thank you very much, Mr. Chair and Members of the Committee for the reconsideration. I am resubmitting for your consideration--reconsideration--Assembly Bill 3192, which I believe we have taken three amendments to further clarify that this will not impact major golf tournaments. This is, as you may recall, the bill to strengthen environmental protections for major coastal resorts that operate golf courses.

We want to make sure that we have the necessary protections for these sensitive ecosystems surrounding these coastal resorts, especially in terms of their use of fertilizers and pesticides. We did allow--we are allowing golf courses on the covered resorts to use non-organic pesticides with this amendment. The Golf Course Superintendent's Association, the California Alliance for Golf, and the Southern California Golf Association have officially removed their opposition to the bill.

We also took amendments to clarify that it's only impacting resorts with 300 or more rooms within the same contiguous resort complex to clarify that the Pebble Beach Resorts would not be impacted. Here again, would you like witnesses to testify or just be here for any questions?

I'm open to either one. Would you like your witnesses to testify?

Please.

Sure. Good afternoon, Honorable Chair Bryan and Committee Members. My name is Jordan Fein. I'm a lead research analyst with Unite Here Local 11, which represents over 32,000 hotel and food service workers in Southern California and is the sponsor of 3192. I would like to recognize Committee staff for their hard work preparing the Committee analysis for 3192 and working with us on amendments. The bill improves the enforcement rules that major coastal resorts are already supposed to follow by moving enforcement from a solely complaint-based system to an audit-based system.

The bill also reduces the use of synthetic pesticides and single-use plastics in close proximity to sensitive coastal habitats. One of the properties that would be covered by the bill is the Terranea Resort in Rancho Palos Verdes. We've provided you with a report issued by Sunrise Movement Los Angeles, California Environmental Voters, and Local 11 issued last year on Earth Day titled, 'How Green is the Terranea?'

As reviewed in the report, data indicates that between 2017 and 2021, the Terranea, which features a nine-hole golf course, used 43 different types of pesticides, herbicides, or plant growth regulators, including one whose safety data sheet states the chemical is very toxic to aquatic life with long-lasting effects.

We've taken amendments that clarified that rooms for individual properties cannot be aggregated to reach the 300-room threshold for this bill, and to also make it clear that any costs associated with the administration of the list for independent auditors or receiving audit reports can be assessed as a fee by the Coastal Commission to the regulated resorts. This bill will result in no costs to the Coastal Commission. We are proud to stand with Assembly Member Muratsuchi as the author of this bill, and respectfully request an aye vote.

Hi. Good afternoon, Honorable Chair and Members. My name is Andy Seymour. I'm reading this statement on behalf of Nico Gardner Serna with Sunrise Movement in Los Angeles who couldn't make it today. So our organization chaired an April 15th--sorry--joined an April 15th letter to Honorable Chair Bryan, signed by 11 environmental groups and allied organizations urging an aye vote on 3192. This letter and the findings in this report--already mentioned--titled 'How Green is the Terranea?' show the deep need for AB 3192 authored by Assembly Member Muratsuchi.

California's coast is the site of some of the world's most treasured and sensitive habitats, yet portions of the coast are occupied by large golf resorts like the Terranea Resort, located along an environmentally sensitive stretch of the Pacific Ocean. Terranea prominently markets itself as eco-friendly, but the report suggests Terranea's public claims of environmental benefits and priorities may be overstated. According to the report, Terranea has a quote, 'disturbing record of raccoons and other mammals being trapped at the resort by commercial trappers.'

'The resort and golf courses operation has also coincided with a drop in the estimated local population of a sensitive bird species dependent on coastal sage scrub, the Coastal Cactus Wren.' End quote. Also in contrast to the Terranea's claim implying that it recycles and composts, workers have previously reported that plastic bottles used by guests in banquet events and other recyclable items such as food waste, have been discarded with the resort's ordinary garbage--sorry--as well as food waste.

So the sponsors have taken an amendment from the Southern California Golf Association to remove their opposition to the bill. This amendment will allow the use of non-organic pesticides on golf courses only when applied in a manner consistent with established integrated pest management principles and where no organic alternative fit for intended use and proven effectiveness is available. So for these reasons and many more, we respectfully request your aye vote on AB 3192.

Thank you so much. Usually on reconsideration, we kind of waive some of the normal presentation stuff, but I think when hard working people come up to the Capitol to be seen and to be heard, we should give them that opportunity. So if there are any people in the hearing room who would like to register their support for this measure, feel free to come up and give your name, organization, and position on the bill.

I think we're okay.

We'll take your standing as consent. Is there any opposition that wants to be heard on this bill?

Yeah. Thank you, Mr. Chair and Members. Yes. Good. It's a Groundhog Day, I think, here today. Julee Malinowski-Ball, on behalf of the California Hotel and Lodging Association. For those who weren't here the last time, you know, as it was discussed previously in the Committee, we believe it's inappropriate to weaponize the Coastal Commission in a labor dispute. Plain and simple. It sets a terrible precedent. Who's the next group waiting to distract an agency from its core mission?

Or are you ready for this to quickly expand to apply to more hotels or businesses in your district? So we remain opposed as amended. Who's in, who's out? Frankly, I wish I could be here today to tell you that certain coastal resorts were carved out of this. We have not heard from a single member who have said we believe now we're carved out of this.

I think they are still scratching our head. So though this measure is for focused on one hotel, one coastal resort, we have not heard that anyone feels that they are carved out of it with the amendments. So we also think that even as amended, lots of amendments were taken to reduce the burden on the Coastal Commission. The fact of the matter is still have a burden.

I don't think it is the intent of this bill to deliver audits and reports to the Commission and just have them sit on a desk. It is going to take effort on their part and take them away from their core mission. So we do believe that this continues to provide duplicative regulatory oversight and will still impede meaningful and effective coastal protection programs. We continue to oppose.

Thank you.

Thank you. I'll endeavor to be brief, Mr. Chair, and respect. Robert Moutrie for the California Chamber of Commerce. We are also opposed to AB 3192, filling in for my colleague Adam Regele, so I will be forced to punt the more detailed questions if you have them. Apologies.

The core issue here is that we see this bill as duplicative and potentially in conflict with existing recycling law, particularly policies coming out of SB 54, and the recycling rate for plastic bottles already have a relatively high recycling rate at 76 percent of PET bottles sold in 2023, and we expect that to continue to increase coming with the SB 54 funding. So we don't see this bill's action in that space as necessary or helpful that way. Thank you.

Okay. Persons of the Committee room who would like to register their opposition?

Audra Hartmann, on behalf of the American Chemistry Council, in opposition.

Mr. Chair and Members, Beverly Yu, on behalf of the International Bottled Water Association, in opposition. Thank you.

Hello. Nicole Quinonez, on behalf of the Household and Commercial Products Association, in opposition.

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

Taylor Roschen, on behalf of Western Plant Health Association, in opposition.

Mr. Chairman, Chris Micheli, on behalf of Niagara Bottling, in respectful opposition.

Max Perry, on behalf of the Pest Control Operators of California, also in opposition.

And Rob Spiegel, California Manufacturers and Technology Association, in opposition.

Thank you all so much. We'll turn it back to Committee Members. Seeing no--oh. Ms. Pellerin.

Thank you. Thank you so much. Thank you to the author for answering all my questions over the last few days. I do feel like this bill is trying to regulate things that are already being regulated as far as AG regulates the use of chemicals, the State Water regulates stormwater. I completely support the establishing the whistleblower protections. I think that's a really key component of this bill, but I think it goes so much further.

And I have great concerns about the impact on the Coastal Commission to oversee issues that are outside their jurisdiction. They currently have a backlog of more than 3,000 violations, and I'm just wondering if you've thought about another appropriate enforcement agency. Have you given any thought to it being a different agency than the Coastal Commission?

I have not, but I think the concerns about overloading the Coastal Commission goes to one of the main points of this bill, which is to require major coastal resorts to pay for the audit to self-audit themselves so that the Coastal Commission doesn't have to, you know, go out, send their investigators out to make sure that they're complying.

I think we all know that, you know, when we pass policies here, we often don't have enough resources to enforce, you know, the laws and the policies that we're passing here, and that's part of the point of this bill, that major coastal resorts will be required to self-audit themselves so that we can further ensure that they are, in fact, complying with existing laws and regulations. I don't know if any of you here want to add anything to that?

No, I think you said it very well. We've clarified by taking amendments that this will result in no cost to the Coastal Commission, and instead of placing the onus on workers who are not experts in environmental law to serve as whistleblowers, right, we want the resorts to do these audits and demonstrate that they're complying with the law.

Thanks so much. Any other questions from Committee Members? Ms. Bauer-Kahan?

Thank you, Mr. Chair, and thank you, Mr. Muratsuchi. And I have to say, you know, I've done fertilizer bills myself. I think it's really critical that we look at our fertilizers and what's in it and protect the ecosystem, and I appreciate your amendments because I do think it's really critical that we do so in a data-driven way, and I think that the amendments go a long way.

My one question is that the ban on straws, water bottles, styrofoam, plastic bags, I'm doing the plastic bag ban this year. So clearly, I believe in these things, and I've supported every plastic bottle bill, but the way that it's restricted to this population, I want to make sure that that's logical. So I just am wondering why this ban on those products would only apply to the folks in this bill.

Well, I mean, I see it as just another step toward, you know, trying to eliminate the single-use plastics right on the coast. You know, I think, you know, while the opposition is correct that, you know, this Legislature did pass, for example, SB 54, that, you know, is set out the, you know, long-term plan for phasing out single-use plastics, you know, we don't have time to waste.

I mean, I just, for Earth Day this past weekend, I just did a coastal cleanup where you know, after all the rains, we continue to see all the plastic that continues to wash up in my district. And so, you know, when Terranea in my district is, you know, is continuing to use these single-use plastics, notwithstanding, you know, the measures that we passed and that you're working on, I think this is, you know--another good example is Mr. Kalra's ban on the little plastic bottles. I mean, you know, it's--we need to push on all fronts because the damage to our beaches and our coast continues.

Yeah. So, I mean, I'll be supporting this today, but you know, Mr. Kalra's bill didn't limit which hotels that applied to, and I think that it is really important that we do this across the board because I'll tell you right now that we were doing an Earth Day cleanup in my community on a creek this weekend and all of those things were there, and guess where they were going to wash up? In the coastal district because that's where our creeks lead.

So I think this--I think it is important as we look at this, we do things that really protect the environment writ large, but I'm happy to support it today. But let's think bigger.

Thank you.

Do we have a motion?

Move the bill.

Moved by Mr. Kalra. Second by Ms. Bauer-Kahan. Madam Secretary can call the roll.

The motion is 'do pass to Judiciary Committee.' [Roll Call].

We'll leave the call open.

Thank you.

Ms. Soria. 2661. You may begin.

Thank you, Chair and Members. I would like to start by reaffirming the commitment I made in the Assembly Utilities and Energy Committee to accept the amendments outlined in the analysis. AB 2661 as proposed to be amended, will help achieve California's renewable goals by focusing the efforts of the CPUC and leveraging the existing capabilities of Westlands Water District, which is in my district, to deliver new solar generation and transmission lines.

To combat the impacts of climate change, California has set ambitious goals to increase the use of clean energy, aiming to achieve 60% of eligible renewable energy by 2030 and 100% zero carbon energy by 2045. To meet these goals, new renewable generation facilities and thousands of miles of new transmissions lines are needed. The CAISO has already identified an opportunity to develop 30,000 megawatts of solar in the San Joaquin Valley, Cal ISO's identification of these potential resources is especially timely given changes occurring in the Central Valley due to the Sustainable Groundwater Management Act.

As groundwater basins adopt to SGMA plants, many regions of the state are expected to experience as much as 20% decline in available water supply by 2030. Due to this massive change, it is estimated between 500,000 and 900,000 acres of farmland may need to be fallowed in the San Joaquin Valley alone. This fallow farmland can be the key to expanding our solar generation.

Westlands Water District, who is in the best position to identify suitable fallowed farmland in their service territory for conversion to solar generation, can help contribute to the state's renewable portfolio while making up for the lost water supply revenues needed to continue serving the remaining water customers. Unfortunately, there's not enough transmission currently planned for the Central Valley to capitalize on this opportunity.

Thus, AB 2661 will require the CPUC to evaluate this potential new solar generation and gives Westlands Water District the authority to build, own, and operate transmission lines to connect this new generation to the grid. This will help us achieve our climate goals while simultaneously providing an incredible opportunity for the disadvantaged communities that are in places like West Fresno County, where the need for skilled and well paying jobs are critical.

The projects that could be undertaken through the provisions of this bill will help these workers upskill and enter into the trades which will uplift these communities that are so often left out of the conversation when it comes to different climate investments. With me here today to testify in support of AB 2616 is Scott Wetch, on behalf of the California Coalition for Utility Workers and the State Association of Electrical Workers, as well as Jeff Payne, on behalf of Westlands Water District.

Thank you so much. You may begin.

Mr. Chairman and Members. Scott Wetch, on behalf of the California Coalition of Utility Employees and the State Association of Electrical Workers. Very proud to be here with the assemblywoman in co-sponsorship of this bill. This bill does two things. It authorizes the Westlands Water District to own electric generation, storage, and transmission. Currently, water districts are authorized to own generation and transmission if they have hydroelectric power, so this would be an expansion of that.

And secondly, it directs the CPUC in the next IRP to evaluate the potential for developing 10 to 30,000 megawatts of solar energy within the San Joaquin Valley, and if it meets the Commission's current standards for establishing if it's cost effective or not, then they would forward that on to the Cal ISO so it could be integrated into the Cal ISO plan.

It just for the Committee whose Members who may not be familiar, with the major bottleneck in the state's electricity transmission system is known as path 15, right within the San Joaquin Valley that runs contiguous to the Westlands Water District. That is where many times of the year we cannot get mostly renewable power north, and at other times of the year we can't get it to the south.

Westlands is uniquely positioned to be able to finish and do this project, and they can do it at a much lower cost because their credit rating using municipal financing is much lower than that of the investor owned utilities at this time, and because they've already done so much work upfront and are the lead agency for CEQA purposes. This is really a very unique situation where we can create tens of thousands of jobs, literally, and help the state meet its carbon goals. And so we would urge, an aye vote and happy to answer any questions.

Thank you.

Thank you, Mr. Chairman. Jeff Payne, assistant general manager for Westlands. Thank you for having us today. This bill, as amended, would apply, would provide authorities to us that are crucial for allowing us to effectively plan and provide strategic oversight of land being transitioned out of agriculture for solar within our district. We began a CEQA EIR process mentioned by Scott for this change.

Much like much of the San Joaquin Valley, relatively 35% of our district has remained fallow over the past decade due to water supply reliability problems. The scale of this has varied year to year, but approximately 140 to 220,000 acres of land is being fallowed annually over the past decade. Our current plans are to convert up to 130,000 acres to solar generation. This is less than the 140 to 220,000 that we've seen fallowed.

And importantly, the VSIP developments would be bonded such that they would have facilities removed and converted back to irrigable land or another purpose at the end of their useless life, which is about 30 years. At that time, different decisions could be made for the land based on relevant conditions at that time. Our oversight provided through this bill would allow Westlands to favor transition of these lands that are marginal, drainage impaired, or which are ideal for dual uses such as floodwater recharge, agrivoltaics and the like.

This also allows us to manage the lands consistent with the surrounding uses the community needs and to better preserve the agricultural heritage of the district as it makes a significant transition for the next 30 years. Thank you for your time.

Thank you so much. Are there any persons in the hearing room who would like to register their support?

Mr. Chairman and Members, Bob Giroux, on behalf of the International Union of Painters and Allied Trades, supporting our brethren and the Utility Workers Unions, also on behalf of the California Dairy Institute and a small district business in Assembly Member Soria's district, the Ian J. Gallo Winery family in support of the bill.

Thank you, Mr. Giroux.

Michael Boccadoro, on behalf of the Ag Energy Consumers Association and other agricultural groups in strong support.

Rob Spiegel, California Manufacturers and Technology Association, in support.

Taylor Roshan on behalf of California Citrus Mutual, California Cotton Growers, and other agricultural associations in support.

Mr. Chair and Members, Tricia Geringer with Agricultural Council of California, in support.

Dennis Albiani, on behalf of Santa Clarita Valley Water Agency, California Seed Association, California Grain of Feed, and a few others in support. Thank you.

Thank you. Is there any registered opposition who would like to be heard on this bill? Any folks in the hearing room who would like to register their opposition to this bill? Well now turn it to Committee Members. Mr. Wood.

Thank you, Mr. Chair. I want to thank the Assembly Member for bringing this bill forward. We saw this in Utilities and Energy last week. I'm happy to support this again. We heard in that Committee hearing that this is an elegant solution to a challenge, and I would agree with that for those who didn't get to hear that. And I would say that our transmission challenges, while they are really prominent in the Central Valley, they exist statewide and it is a huge challenge for us.

My understanding from the previous testimony is that this will reduce the amount of time it takes for the permitting and building process for transmission by several years. And I think that's really, really important. If we are going to achieve our climate goals, we must move forward as quickly as possible to shorten the seven to 12 year time period where transmission is site is permitted, sited and built. So happy to support the bill today. Thank you.

Thank you.

Thank you, Mr. Wood. Miss Pellerin.

Just a quick question and thanks for the author for this bill. Is this includes like the building of solar farms? And are you looking at doing it over the canals as well or is it going to just be on the fallow farmland?

Do you want to address this?

This is just for farm land.

Any other Committee Members? Mr. Patterson.

Thank you. Just like Mr. Wood, I also sat on the Utilities Committee and I was supportive of the bill before the amendments and in that Committee because I think a lot of water districts have the expertise and can do something like this to help expedite transmission, which we're desperately really going to need to do soon. But I think taking a first swing at it is great. And so happy to support this bill today. Thank you.

Thank you.

Thank you, Mr. Patterson. Seeing no other comments, would you like to close and also confirm that you'll take the amendments from Utilities?

Yes. I will be confirming that I have accepted those amendments, and I would just respectfully ask for an aye vote.

Thank you. This bill enjoys a do pass record from the Chair. Madam Secretary, can we call the roll?

The motion is do pass as amended to Appropriations. [Roll Call]

That bill's out.

Thank you.

Mr. Alvarez, you want to start with 2560?

No, we could please start with 3227?

Sure.

Appreciate that. Thank you, Mr. Chair.

Mister Chair and Committee Members, thank you again for the opportunity to address stormwater channel maintenance Streamlining Act Assembly Bill 3227. I'd like to begin by thanking staff working with our office and for the analysis that they've prepared on this issue. AB 3227 eliminates administrative delays for routine maintenance for stormwater channels that are fully concrete or that have a conveyance capacity of less than a 100 year storm event, which is the FEMA state standard for establishing flood insurance requirements.

Specifically, this Bill provides certainty to local agencies by providing specific exemptions under the California Environmental Quality Act for routine maintenance of stormwater channels to prevent flooding. Stormwater infrastructure has been historically underfunded across the state, and many channels are not built to withstand major weather events and often also are not maintained to make sure that they can withstand those events.

As we saw in January of this year in my hometown of San Diego, which was hit with an atmospheric river that brought nearly three inches of rain within just 3 hours. To put into perspective, three inches in San Diego is about one third of the total amount of rain that we usually get on an annual basis.

As you can imagine, that caused unprecedented flooding, which you probably saw the images of what was happening, the destruction that happened in the public streets as a result of this flooding, over 800 households, excuse me, with water levels that rose about 5ft and beyond 5ft in some cases, which caused widespread damage to communities.

As we see more frequent and more intense rain events, we need to allow our local governments to take proactive measures by clearing out stormwater channels without any administrative delays, lawsuits or other complex bureaucratic processes. AB 3227 responds to that by creating a five year exemption under CEQA to cut the red tape and pave the way for timely upkeep of these essential facilities.

Due to the immediate need to complete maintenance to prevent future flooding, we have proposed to add an urgency clause so this Bill may take effect before the rainy season begins again this year in October. With that, I'd like to introduce Miss Moira Topp, who who will speak on behalf of the City of San Diego, sponsor of this legislation.

Thank you, Mister Chair and Members, I am Moira Topp. Here on behalf of the City of San Diego. We are a sponsor of AB 3227. What this Bill does is it provides us opportunities to clear the storm channels before the rain events occur. Currently, CEQA will trigger mitigation, and that mitigation is required to be done before the clearing work begins. Obviously, that's particularly challenging when we're facing an immediate threat of a storm coming soon.

Essentially, this Bill provides certainty to local agencies, allowing them to move forward quickly with critical maintenance within stormwater facilities to prevent catastrophic flooding. AB 3227 makes it clear that local agencies may rely on the emergency exemption within CEQA for routine channel maintenance to prevent flooding and eliminating time consuming administrative delays. Moreover, disadvantaged communities have historically suffered underbuilt infrastructure improvements. AB 3227 will help local agencies expedite flood control measures ahead of storm events to ensure those communities are not disproportionately impacted by the negative effects of flooding.

On behalf of Mayor Todd, Gloria, and the full City of San Diego, respectfully ask for your aye vote.

Thank you so much. Anybody in the hearing room would like to register their support for this measure? Seeing none, is there any formal opposition to this measure? Seeing none. Anybody in the hearing room who would like to register their opposition to this measure? To this measure? Seeing none, we will now return it to Committee Members. Motion by Mister Muratsuchi second by Mister Wood Third by Miss Bauer-Kahan. Mister Alvarez, would you like to close?

Thank you, Miss Bauer-Kahan, for the second to the motion and to the motion. Mister Muratsuchi, appreciate the support on this as was stated, hoping to get ahead of what potentially could be a more common scenario of significant rain events, storm events, and again, appreciate your support.

I just want to thank you for bringing this measure forward. And I want to thank the City of San Diego for putting all the work in over the last several days to make sure that we got this right. And I think it's, it's wildly appropriate to put the urgency clause on it. This Bill has a do pass recommendation. Madam Secretary, can we call the roll?

Roll Call

Thank you. That measures out.

Thank you Mister Chair.

Yes sir. 2560.

Yes, thank you. Appreciate the opportunity to present my second Bill before the Committee today. This is Assembly Bill 2560. I want to take particular, take the moment to thank the Chair of the Committee who has been really supportive of this process, which has been a process of review where we started in terms of what this Bill aims to do and where we stand today. So this Bill is really about the ability to create affordable housing in all of California.

I can get into statistics about why housing is needed. You don't need to hear that. What I do think we want to place specific attention on is to the coastal metro areas, where a 2015 LAO report on housing prices in California identified that the typical us metro area cost grew by 54% in terms of housing units that were built while in California's coastal metros that only increased by 32%.

But less simple to quantify are the countless units that go undeveloped that do never get built because the majority of developers have completely abandoned trying to build in places like our coast. At its core, AB 2560 is a rejection of the status quo, which says that the current process for building and developing affordable housing in our wealthy coastal areas is sufficient. It isn't. We need to do more.

This is a recognition of the fact that we lack the objective standards for housing projects in the coastal zone that developers must rely on in order to just like the rest of the state in the rest of the state, in order to take on the risky investment of building housing, which is something that's no longer acceptable.

I believe I fully appreciate the importance of the coast as a valuable resource for our state and the need for it to have a layer of protection to stymie development in areas that nowhere we should never be building on, such as wetlands near cliffs or near cliffs that are subject to sea level rise. This appreciation is why we have added environmental car routes negotiated and agreed upon during last year's discussion of SB 423.

Additionally, unlike other housing laws, state density bonus is perfectly tailored to implement in the coast. If a developer can only utilize incentives and concessions in the state density bonus law in areas previously determined to be fit for housing through their zone residential designation, what does this mean? You can only use this program if the parcel is zoned for multifamily housing. You cannot build anywhere else, only where housing is currently allowed by local governments.

Finally, I'd like to point out that what is often lost in these conversations is the lack of housing is more than a housing issue. It's also an equity and environmental matter. For the coastal economy to function. It requires significant amount of service workers to serve as a backbone of that economy. However, being unable to afford housing near their job site necessitates these workers to expand the resources and emit further CO2 into the air to travel for work.

Compounding the climate crisis and threatening the very coastline the Coastal Commission is entrusted to protect. By ensuring that we increase housing density in all areas of California, including areas determined fit for housing on the coast, we can make a real impact on the housing crisis. I want to now turn my attention to the Assembly Committee's analysis, which is suggesting some amendments to my Bill.

I would like to specifically, call your attention to page eight of the analysis, the Committee amendment, Section nine, in which M one adds some exemptions to where this Bill could be applied. In particular, I call your attention to M 13, which is a subdivision a of Section 30603 of the Public Resource Code. The Public resource Code states these, and I certainly would be interested in this Committee's feedback on why we should exempt housing in these areas as this amendment seeks to do.

A sensitive coastal area which could be special marine and land habitat areas, wetlands, lagoons and estuaries as mapped and designated in part four of the coastal plan. No one disagrees with that. No one wants to touch those areas. B. Areas possessing significant recreational value. What are those areas? I don't know. I pose that as a question because I don't know what that speaks to. Highly scenic areas is another area that would be exempted. What is considered highly scenic in California.

You could argue all of California's coast is highly scenic. This would again prohibit density bonus from being used in those areas. There are others, but the other one I'd call your attention to is areas that provide existing coastal housing or recreational opportunities for low and moderate income persons. I remind you that density bonus law is about creating affordable housing opportunities within the development itself. Why would we prohibit from building in areas where low income and moderate income persons recreate or live?

I don't know what the reasoning is behind that. I raise that because it is a genuine question that I have. I will take the amendments today, but I will let you know that I'm trying to figure out what this means, because if this just creates more loopholes for where housing cannot be built, I don't think that's the right approach. Finally, I'll mention something that was eliminated from our language that's not in your analysis is areas that are local use plans.

These are in some instances, full cities that have been eliminated, and there's 31, according to Coastal Commission's website. And I am not clear as to why we eliminated those from places where we could build density bonus affordable housing. Those are questions that remain with me today. But in order to be able to move forward and maybe get answers to those questions as this goes through the process is the best case scenario is to take the amendments and try to figure out what that is.

So with that, I'll turn it over to the witnesses who are here to speak in support.

Thank you. Mister Alvarez, two minutes.

Good afternoon. I'm Nevada Merriman, Vice President of policy and advocacy for Midpenn Housing. We're one of the largest nonprofit developers, owners, managers of housing with over 8,800 homes. These are for low income families, seniors, homeless families and individuals with special needs. We have 331 homes and six properties in the coastal zone, with another 173 underdevelopment in Monterey, Santa Cruz, San Mateo counties, and we appreciate the Committee's dedication to balancing the state's coastal environment, resources and sustainable development practices.

The density bonus is a critical tool for building affordable housing. Virtually all 4,500 units in our development pipeline and 10,000 unit portfolio of operational homes have or have used the density bonus. Without this tool, we would roughly have 3,500 fewer homes. Building affordable housing at a higher density is a best practice, and the regional housing needs assessment planning process sets targets across the state to meet the scale of the housing crisis.

In our two most recent examples in developing in the coastal zone, we faced enormous headwinds. Jessie Street, a project 50 unit homes, four story project for veterans, formerly homeless individuals and folks with special needs in Santa Cruz County, the City of Santa Cruz. In 2019, the city asked us to use AB 1763 and AB 2162. These bills that were previously passed allow for more density and streamlined entitlements.

When these bills were passed, there was no clear path for how to implement them in the coastal zone. City staff and Coastal Commission staff worked collaboratively together, and that piece of the story is one of success. However, they needed over a year to confirm the path for obtaining a local coastal permit and CEQA exemption.

This is not the definition of ministerial processing as was defined in AB 2162 and each entity did their job what they believed they were tasked to do and did it with professionalism, with grace. However, staff at the Coastal Commission lack authority, in their view, to rely upon and tear off local review. Clear exemption exclusions and other applications of state law are necessary in this climate. Uncertainty.

I can say without hesitation this project would not have made sense to pursue had we not already owned a building that was operational for 30 years.

Thank you so much.

Good afternoon, Mister Chair Members. My name is Louis Mirante. I represent the Bay Area Council on Housing Policy and I'm proud to support AB 2560 today for, I believe, the second year. One of the reasons I am so passionate about this Bill is that the Coastal Act in particular is an area of state law that desperately needs modernization. No one here is proposing that we throw out coastal protection or that we allow some of the projects that the Coastal Act was designed to prevent.

What we're trying to propose here is itself an environmental protection infill housing, especially in high rent neighborhoods, as this Bill would allow is the best defense the state has against those projects that sprawl into our working and natural lands. And it is the best way for the state to accelerate, not just on its housing goals, but on its goals of getting more people access.

The coast infill housing such as this Bill would propose, thoughtfully designated, thoughtfully designed, in coordination with all of the local coastal plans that the Coastal Commission will review. This is the type of housing that promotes access to the the coast, that defends the coast environment, and that helps us house Californians in the coast.

This Bill has been immensely important to me because in talking with our Members about development in the coast, it has become extremely clear that for many developers, developing in the coast is regarded as professionally irresponsible because of the subjective nature of the process and because so few of the processes have timelines or ways to hold the government accountable for what the policy actually says. That's a shame because it encourages the sprawl that we in this Committee are purported to be against.

This Bill will increase development certainty. It'll increase housing development in the coastal zone and that together will increase coastal access along with affordable housing options and the state's ability to protect the coast. I urge your support for it. Thank you.

Thank you so much. Any persons in this hearing room who would like to register their support for this measure?

Thank you. Chairman, Members Moira Topp, on behalf of the City of San Diego, in support.

Good afternoon. Chair Members Sosin Maddenat W strategies here on behalf of California YIMBY and support.

Mister Chair Members Lauren De Valencia, representing the American Planning Association, in support.

Alex Torres, on behalf of the Housing Action Coalition, in support.

Rebecca Marcus, representing Leading Age California, in support.

Absolutely. Any witnesses in the hearing room who would like to register their opposition to this Bill? We got enough seats?

Mister Chair and Members, I'm Sean Drake, legislative manager for the California Coastal Commission. While the Commission supports the goal of providing more dense housing in the coastal zone, we are opposed to AB 2560 because the Coastal Act exemptions are not necessary to achieve that goal. This Bill would repeal the Coastal Act savings clause from density bonus law, which was codified to ensure that density bonus projects in the coastal zone provide additional density without harming coastal resources.

For the last 20 years, multifamily projects in the coastal zone have successfully incorporated the many incentives afforded by density bonus law while also avoiding unnecessary impacts to sensitive habitats, public coastal access, or climate adaptation efforts. This Bill would instead establish that density bonus law entirely supersedes the Coastal Act and invalidates local government's LCP policies. This would give developers of density bonus projects on the coast carte blanche to selectively ignore coastal erosion setbacks, wetland buffers, or public coastal access ways.

This exemption also punishes local governments that have proactively updated their LCP's to include density bonus provisions, cities like Santa Cruz and Long Beach that have been awarded the governor's pro housing designation. These cities are proof that dense infill housing and coastal resource protection are not mutually exclusive. We do appreciate the Committee's efforts to try to limit the damage of this Bill by using the model established last year by SB 423.

Unfortunately, in the context of this Bill, the suggested amendments still allow parcels to be entirely exempt from the Coastal Act. In many parts of the coastal zone, this goes farther than SB 423. 423 was not an exemption Bill. Thanks to this Committee, SB 423 projects are streamlined but are still required to comply with the policies of the LCP. This Bill exempt a class of projects from having to comply with the Coastal Act at all. Members, there is a demonstrated better way to do this.

We continue to suggest that the author and the Committee amend the Bill to require coastal local governments who haven't done so to amend their lcps to include density bonus policies. Before I respectfully request a no vote, I do want to clarify one factual inaccuracy that was stated previously regarding the number of jurisdictions that only have a land use plan. It is not 31, it is nine. And the majority of them, it is only a portion of the jurisdiction.

And in most of these, most of these, it is the portion that contains, for example, a wetland complex like the Bolsa Chica wetlands portion of Orange County. These are small areas. We respect the Committee's intention and including them in the amendments, but I think it's important to be clear about the extent to which these areas apply.

Thank you. Two minutes.

Thank you. Happy Earth Day, Chair Bryan and honorable Committee Members.

Happy Earth Day.

My name is Christopher Mouawad and I am a legislative fellow with the Environmental Action Committee, or EAC, and I'm speaking today on behalf of the groups that submitted an opposed unless amended letter on April 16. We submit an opposed unless amended letter rather than holding a straight opposed position because we firmly and genuinely believe there exists a path where the density bonus law coexists with public access and coastal resource protections. I'm going straight to the point.

I am here today to defend public access guarantees and coastal resource protections that the coastal act provides for all Californians. Current applicable law requires the harmonization of the Coastal Act and the density bonus law. This is evidence in statutory language within the Coastal Act and the legislative intent of the density bonus law. The question is, why upend this existing harmony? The author's assertions are unsupported by his own materials.

Most compelling is that the author's own fact sheet cited a paper on Massachusetts affordable housing law known as 40 b. That paper describes the Coastal Act as the following the Coastal Act provides a strong analogous basis for California 40 b legislation because it incorporates statutory features highly aligned to those proposed for California 40b, including a statewide policy initiative, local land use permitting system prescribed by state law, and state level appellate review system. So what's the significance of that?

Well, this paper urges the author to do the complete opposite of what this Bill proposes, simply utilize the Coastal Act to implement housing policy rather than exempt housing policy from the Coastal Act. Further, the author cites a PPIC report which discusses unaffordable housing in coastal areas. Three of those coastal areas don't even have a coastal zone. Further, the author's Bill has a multitude of unintended consequences.

Simply because an area has been zoned for residential areas, or just because a development currently exists on a site does not mean that site is devoid of natural resources or public access opportunities. Rather, it means the development which exists has had its impacts mitigated. The removal of mitigation requirements for additional development on that same site is illogical. Now, most important is that public access guarantees are not frivolous. There's no reason to remove review to ensure that the public can access our shared coast.

Public access is not always an eight foot wide cement walkway with hand railings. Ultimately, this Bill takes aim at the wrong target, and I encourage questions from the author and Committee. Thank you.

Thank you. Any persons in the hearing room who would like to register their opposition to this Bill? Bill.

Good afternoon. Alex Loomer, on behalf of Defenders of Wildlife and the California Native Plant Society, we appreciate the Committee's amendments. We're still in opposition, but appreciate future conversations with the author's office.

Hello. Jacob Evans with Seattle, California. In opposition, unless amended. Thank you.

Natalie Brown with the Planning Conservation League also in opposition,

Tomas Valadez with Azul and on behalf of California Coast Keeper Alliance, California Coastal Protection Network, California River Watch, Canyon Back Alliance, Clean Earth for Kids, Environmental Center of San Diego, Green Foothills, Forest Unlimited, North Coast Rivers Alliance, Orange County Coast Keeper, San Francisco Bay, Physicians for Social Responsibility, watershed Alliance of Marin in opposition, unless ammended. Thank you.

Good afternoon, Mister Chair. My name is Dan Jacobson, representing Surfrider. I've got a couple of groups also in opposition unless amended. Santa Clara Valley Audubon Society, Smith River Alliance, Center for Biological Diversity, West Sonoma County Alliance, Endanger Habitats League, Save the Sonoma Coast and Environmental Defense Center.

Thank you Ethan Nagler, on behalf of the City of Rancho Palos Verdes and respectful opposition. Thank you.

Thank you so much. We'll turn it to Committee Members. Mister Patterson, thank you.

My comments change based on this hearing, but I just want to say the absolute gall of a regulatory agency to come in here and lecture policymakers and rationally correct the author on legislation is offensive. It's not right. And I just think that just goes to show how the regulatory and bureaucracy are getting out of hand in this state. The Coastal Commission recently prepared a 129 page report for an ADU that blocks about a half an inch of a coastal line from like 300 yards away.

And if with that kind of behavior is why we can't have houses on the coast, it's why people of lower income have to live inland in order to be. And then they work on the coast, it's totally inappropriate. And the Coastal Commission is not participating in our policymaking to help us build housing on the coast. So I got to say, first of all, Mister Alvarez, you're a better man than me.

I am a co-author on this piece of legislation as written, and I do have some concerns about the proposed amendments. I think a lot of the legislation coming out of this body. I think if all we did in California, by the way, I'm the Vice Chair of the Housing Committee. I love this policy area, but if all we did in California was allow housing where housing is intended to be built, we would solve the housing crisis.

But instead we have piecemeal, piecemeal, piecemeal here, piecemeal there, to try to create more sites for houses, when the, the overall issue still continues to exist, which is we aren't building housing because you put up a housing proposal and it's like years and years, even if it's meant for that purpose. In my own city, there was an EIR addendum, because an apartment complex was going from 22 units an acre to 26 units an acre. It slowed down the project by six months.

During that time, interest rates practically doubled. And the projects, and that's 100% affordable unit, by the way, affordable project in my neighborhood. As a side note, so if we gotta, we gotta get serious about building housing on the coast, because I think a lot more people than just the elite deserve to live on the coast. And with that, if this Bill has not been moved, I will move it.

And I won't speak to whether Mister Alvarez is a better man than you or not, but I will pass it to Miss Pellerin.

Thank you, and I appreciate the discussion here today. It's, my understanding of the Bill is it's based off the premise that the Coastal Act is blocking housing development. But my understanding is that the Commission has never denied a single affordable housing project in history. Do you have examples of housing that have been denied?

We do. I don't have them with me. I'll make sure to get the report to you. There's going to be something published in the next couple of weeks. I will tell you, as someone who voted on a lot of local eight years on the City Council, in a coastal region, developers don't want to take the risk of going through a process that is completely subjective. That is the last thing you want to do when you're engaging in building housing.

And so what happens is, because of all these areas where the Coastal Commission could just say no, someone can appeal, holds up the project. No one wants to go into with that uncertainty. And so we're trying to create certainty. When you talk to folks who build and you analyze how building happens, certainty is the number one thing that is required. And so the uncertainty at the coastal region is what we're trying to address with one thing that I'd like to correct from the opposition.

This only allows housing to be built where housing is currently allowed to be built by cities, not on wetlands, not on bluffs, only where it's zoned for housing. And it's got to be multifamily. You can't even take a single family home and do that. And so I believe that we should build affordable housing on the coast. That's what this Bill is trying to do. It's trying to create certainty for the process.

I would even go a little bit further to say that not only does this Bill only apply to places where local governments have determined they want multifamily housing, it also only applies to where the Coastal Commission has allowed coastal jurisdictions, local governments, to designate for multifamily housing. So this is sort of an infill infill perspective here.

And I don't know if anybody has any examples of direct projects, but I will be providing you with some examples.

One of the reasons that the denial rates are so low in the coastal zone is that denial can come at the end of a many year process. I'm going to invite Nevada to speak next on the 10 years she spent. Well, eight years trying to title an affordable housing project. Denial could have come at any point or at the 8th year. And for many of my Members, they will pull projects well before they actually get to the denial.

If you'll accept the term, overturn approval as commensurate with the denial. I can give you the example of a project in Venice which has an LIP that this Committee would be removing from eligibility for this Bill. This project is about 30 units. The Coastal Commission overturned the approval of that project by the City of Los Angeles on the sole basis that it was inconsistent with the character of the neighborhood.

If any other local government in the state had chosen to do that, that would probably be a violation of the state's Housing Accountability Act. And. But for the existence of the coastal zone or the Coastal Act would also likely be illegal in that particular case.

That's a shame, because the three individual low income families that are going to live in the building that may or may not be built now because of an uncertain and years long process to continue, wrote in to support that project because they were going to get for sale home ownership options as a result of other state legislation, namely SB 330 by Senator Skinner. This is a problem.

Thank you. I think the question has been answered.

I think I'm just spoiled living in Santa Cruz.

This question of denial is a problem more actually revelatory of the fact that the process is so challenging for developers, they simply choose not to do it. That really is the Bill, I think, in front of you today. And the problem that the Legislature should be trying to solve for and again to modernize in other areas of law is not just here.

I'm absolutely pro affordable housing on the coast, and we're doing it. The City of Santa Cruz is building the housing we need, and they're doing it under the existing relationship with their local coastal plan and their building developers. So I'm really concerned about just the chipping away at the Coastal Act because I think it is such an imperative document to protect our coastline, which is really only 1% of our land here in California.

Thank you, Miss Pellerin and Mister Flora.

Thank you, Mister Chair and Mister Alvarez, thank you for bringing this Bill forward. I share with my colleague the frustration of this piece of legislation. And I think we both know whether we want to be honest right now what the intent of the amendments are. It's basically to kill the Bill. To make it relatively just is what is, and I say this because in section B of the Committee amendments, it says on prime ag land.

All right, guess whose district has a lot of prime ag land? Mine. And so if we're not using the entire state to build where people live, which is what we talk about a lot, and in this amendment, we don't want to pave over prime ag land. My cities have to sprawl. We're not going up, we're going out, which is also an issue, but we're paving over ag land that will never get back. And so I just, I get so incredibly frustrated.

Miss Friedman.

Like my colleague, I do not have a coastal district, and I'm just going to hold my comments. It's remarkably frustrating. But that one sentence in prime ag land irritates the heck out of me because we are forced to grow, and every time we expand, every time we sprawl, we're paving over dirt that feeds people, and eventually we're going to run out of dirt to pave over.

Thank you for the question. I think a couple points on that front.

Thank you. I'm wondering if the representative from the Coastal Commission could talk about that Venice development a little bit and maybe expand on that. I thought that the Coastal Commission's jurisdiction was about environmental protection. Is the Coastal Commission also weighing in on design standards in these areas? Because I had always assumed that that was something that the local governments had the authority over.

First, I want to clarify that in this instance, the phrase overturn approval, I think is being misused and misconstrued. In this instance, this was a local project that was appealed to the Coastal Commission, and the Coastal Commission had to review the appeal. And in choosing to review the appeal, that is what is being described as being tantamount to a denial. And in reality, the Commission is looking at the project more closely.

In this instance, with the Venice project, the coastal act does contain policies which protect and they look out for environmental justice and through that lens, they look at the affordability of neighborhoods and as it relates to a naturally affordable community like Venice, that historical character of affordability. And so in an instance where a project would replace existing naturally affordable housing with predominantly high end market rate housing, which, to be clear in the Commission's lived experience, is what we see with density bonus projects.

So wait, I want to just be clear. So you're saying that because the way that it was described by the proponents of the legislation was that the consideration of the appeal, I don't know where it is in the process right now, was about neighborhood character, which to me, in my mind, is different than affordability. Are you saying that it's strictly on the basis of affordability and not on any type of fit, in terms of number of units or design or anything like that?

The Commission is considering the product that's being proposed and its broader effect on that community. Who can afford to live there?

I don't feel like I'm getting much clarity in your answer.

Wait. It's a really clear question. Is the consideration only about the affordability of the units or something beyond that, in terms of the design of the structure itself?

The Commission considers the structure as it's being proposed and the relationship of that with the impacts on the community and who can live there.

There's a difference in terms of who can live in a building or whether you're looking at the design of the building itself. So are you looking, is the Coastal Commission looking at the design of the building in Venice?

Is the City of Los Angeles doing design review at the planning process as well on that project?

The Commission is looking at the design and interpreting that design through its environmental justice policy to consider the accessibility of that neighborhood to folks who have historically lived there.

I don't want to speak for our commissioners, but I can say that the Coastal Act does include these policies which allow the Commission to interpret this project and opine on it through a lens of environmental justice. Yes.

And then so you. So the Coastal Commission believes that it can have a different opinion about the design of the project than the local government itself?

I imagine they are, yes.

How does that become? How does that become, I mean, I'm genuinely curious. How does that become an environmental justice issue?

And so environmental justice goes beyond then the question of affordability and also to the actual physical design of the building?

Yes, it may.

Assemblymember, depending on how a project is designed, can vastly impact, in terms of the size and other features of it, the affordability of that project, and as a result, its impacts on the surrounding neighborhood and who can live in that neighborhood.

I can't speak to the particulars of this project that was raised by the proponents.

So you're saying that even if it had deed restricted, if it was 100% deed restricted, 100% affordable, you would still look at the design of the building?

But I thought that we were just asking about whether the affordability was a separate question from the design. You're saying that if it was designed differently. So does this particular project have affordable units? Does it have deed restricted units?

So the Coastal Commission, then, has designed standards for each of these neighborhoods. Because I know the planning. I know that the City of Los Angeles Planning Commission probably has design standards that they're reviewing when they review their applications.

In terms of the project's consistency with a local coastal program, if it's relevant, or the Coastal Act.

In terms of the impact on nature?

If the Commission, if the project was appealed to the Coastal Commission, the Commission would be required to consider the design of the building.

On the basis of the project's consistency with the Coastal Act, or if a local government has it, it's certified local coastal program.

Then on what basis would you be evaluating the design if you don't have a design standard?

You have your own design standards that are separate from the city.

The Coastal Act does not espouse specific design standards.

So you're reviewing the design of a project based on. On design standards that sort of. On what basis would you look at that?

If a local government has a certified local coastal program, the function of that local coastal program is to take the policies of the Coastal Act and apply them more concretely and in the vein of a design standard to projects that are within that local jurisdiction.

Okay, when you say design, what I mean, are you talking about the finishes of a building, the massing of a building? What are you actually evaluating? In other words, would you send the applicant back and say that you want the building redesigned to match your standard?

When a project comes to the Coastal Commission on Appeal, it is interpreting or it's analyzing that project against the policies of that local coastal program, which I said are more specific, and also the policies of the Coastal Act, which are inherently more General because they're intended to have a statewide application.

Again, I can't speak to our Commission. I don't want to speak for them. But the Commission, when the project comes, before, it considers the aspects of what is being proposed, and that could include its physical dimensions, it could include other aspects of the building, but in this case, the finish, I think that's a different story altogether.

Okay, well, look, you know, I respect the work of the Coastal Commission, and I understand, you know, my understanding was always to maintain access to the coast, make sure that development, you know, has some sort of.

And the Commission is looking at, through the lens of environmental justice, what the impacts of that product will be on the character of that community.

I mean, I'm assuming that what you're trying to say is, well, I thought originally that it was sort of that the mass was appropriate to, I don't know, you know, making sure that people can see the coast, that they could access the coast. But if you're telling me that the building's too fancy for the area and that that's the Coastal Commission's determination and not the local government, the neighborhood council that weighs in with the local government, I do have an issue with that.

I don't understand what criteria you would be using to make those determinations. And I say that as a former local government official, a former Council Member, and a former official on a design review board in my city as well. You know, if you don't have a set standard, how do you expect any developer to be able to design within the standard? You know, I struggle a bit with this because I certainly think there's an important role for the Coastal Commission.

But I do worry that when it comes to housing, that saying that a building is sort of too fancy for. I know Venice very well. Venice. I would never describe Venice as being naturally affordable at this point. I think there's probably some parts that are, and, you know, hopefully there's people who are still living there who, you know, who can. Who've been there a long time.

And I know the struggle of the community to maintain its traditional identity as a funky beach town, given the price of housing. And that's exactly why they're trying to add more housing so that more people can live there, so that it's not. So that housing is less commodified to where only the most elite people can actually afford to rent. I don't know whether this building is deed restricted or not.

Well, regardless, there's a lot of, really, of people I respect who are opposed to this legislation.

But if it's a deed restricted, 100% affordable building, and, I don't know, is it affordable units, but not 100% affordable?

Again, I can't speak to the specifics of the project that's being brought up.

I want to make sure that whatever is being given over, whatever new streamlining is being granted to the Bill doesn't interfere with the Coastal Commission's role of being able to provide access to coastal resources, certainly they're protecting the environment. You know, that's really important to me. And I would take issue with the proponents of the Bill and say that just because something zoned for housing doesn't mean that it actually is something that today should have housing on it.

There are neighborhood plans that are 1520 years old out there, zoning that hasn't been changed in many years. Conditions change, areas might become a lot more intense than they had expected 2030 years ago. And there might be a real compelling need to preserve existing green fields that maybe zone multifamily, but maybe have never been developed on, or were developed on, and a structure was removed and now native habitats come back.

And I think that just saying that that should never be evaluated for preservation, I think that that's a bridge too far for me. I'm going to support this today, but I have real concerns over a lot of what's in this Bill. And I think there does need to be some discretion for areas that are currently open space, whether or not they've been zoned multifamily. So that's something that I'll be looking for in further incarnations of this.

And I do agree that removing naturally affordable housing and replacing it without anything that those same people can move back into is a problem. I am concerned about this, you know, this sort of definition of the Coastal Commission doing design review in buildings that goes beyond massing and scale, or going on looking at, beyond what's, looking at what's actually affordable, and putting other stipulations on a project that maybe is deed restricted or replacing units with deed restricted units.

Thank you, Miss Friedman, Mister Wood.

Thank you, Mister chair. I've been planning to support your Bill today.

I'd like to learn more about this as move forward, but I'm going to support this today, so you can continue the conversation. But I would like to understand more about what happens, what the impacts are on some of these open spaces, etcetera, and on naturally occurring housing that's, you know, market rate, affordable older housing as well.

You know, I sat on a planning Commission for four years. I sat on City Council Member for eight years. I would imagine that this project, considering its sensitivity, would have gone through a CEQA analysis. It did. So we have all of the planning process plus a CEQA analysis.

You did.

Mister Alvarez, I do have a question for your witness, because I think, as I heard you said in that Venice development, there were affordable units in that Venice development. Did I hear that correctly?

And at the very end, we can, someone can appeal to the Coastal Commission that was the Coastal Commission, did not weigh in during the CEQA analysis or was not considered during the CEQA analysis. I'm really puzzled by this because as a former local elected, my blood pressure is going through the roof here right now, quite frankly, because it feels like you've just taken local control and a local control process and thrown it out the window.

And I represent, like in the north coast, and I respect that there are people, organizations that I have a tremendous amount of respect for in opposition to this Bill. But I look at like the City of Eureka, for example, which has a local coastal plant that extends very far inland, quite frankly.

And so what I'm hearing today is that local agencies could approve something that might be half a mile or more without any visual impact to the coast, could appeal a project to the Coastal Commission, and the Coastal Commission could say, nah, we don't like it, for whatever reason. And I take offense to that, too. And I'm very, very concerned about that incursion when you've already gone through a whole litany of things and you add the overlay of the fact that we desperately need housing.

Mister Alvarez, may I say, I mean, thank you very much. I've been listening to all the comments and always want to be respectful, the author and, you know, and respond to his thoughtful approaches by trying to be thoughtful in return.

We are not building housing in the state at a rate that is commensurate with the need. So I am, yeah, I would love to get some more clarification on this because this is really a problem. Thank you.

Thank you. Mister Wood,

I guess what I'm hearing, well, first of all, I want to dispel the notion that, you know, coastal communities are not building housing. I, whenever I've always told Senator Wiener, you know, come on down to Redonda beach, you know, it's my understanding that Redonda beach in my district is, has some of the highest housing density of any coastal community in the state. And so I think there are communities that are trying to build more housing.

And so, but the question here is, as I understand it, you're trying to, I mean, the case law that's cited in the Committee Analysis, the balloon Bill that was passed in 2018, it all seems to require that developers need to comply not only with the density bonus law, but also with the Coastal Act. I wasn't clear as to whether the amendments were going to be removing all the opposition.

It sounds like there still are concerns in terms of your Bill attempting to just override the Coastal Act in too many parts of the state. And that's my concern that, you know, whenever we have these one size fits all statewide, you know, bills that this doesn't acknowledge that there are sensitive coastal resources that need protection from all of those developers that are just salivating to build all the expensive housing on the coast.

And so that's why I think there is a need for the Coastal Act to be able to defend and protect our most beautiful, our most sacred resource here in the State of California. What makes the State of California so unique and so, yeah, I wanted to see where the amendments were, how it was going to be responded to by many of the organizations that I also hold in high regard.

And it sounds to me like it's still, the essence of the Bill is still trying to override the Coastal Act rather than trying to harmonize the Coastal Act. And that's why I can't support your Bill. Thank you.

Mister Alvarez, would you like to close?

Yeah. And in closing, just some response, Mister Chair, if that's okay. Thank you.

First, wanted to start by thanking you for allowing this conversation to happen, because I think it's really important that we hear those perspectives as opposed to not engaging conversation, to understand what all our perspectives are from the different parts of California. So thank you all for participating. I truly appreciate that.

If I can try to start on my way backwards with our colleague who spoke at the end here, we are trying to be very clear in harmonizing the act and calling out specifically the sensitive resources and the important resources that we believe are part of the act. This Bill does not allow you to build in those sensitive areas. Very, very specific to that. It is only allowed where housing is allowed to be built. That's very, very clear.

So nobody wants to touch any of those sensitive areas. There's wetlands or bluffs or where sea level rise is a concern. That's all we talk about all that in the Bill. We don't want to touch that. So that's first and foremost. Second, this would not be allowed for those, you said the word, I think, salivating developers. You have to build affordable housing with this density bonus law. Otherwise you cannot get any of these benefits that are described in this law.

And so if you don't build the affordable housing, guess what? Maybe they will continue to build their high income condominiums as opposed to building some affordable. Our goal is that we should get some affordable housing on the coast. As developers choose to develop, they should also build affordable housing.

So that's as it relates to protections, the protections remain and if we want to have further protections, let's talk about what those are to our colleague from Glendale who talked about that was I think one of the most important conversations or pieces of this conversation that was had because that is my concern, Assembly Members, with this.

What's added in terms of sensitive coastal resource areas which would also allow these, the Coastal Commission for there to be an appeal based on, you know, we need to define what a highly scenic area is. What a highly scenic area is to one of us is probably different to somebody else. And yet with this authority, if they feel that a project impacts a highly scenic area, they can pull that.

That can be appealed and the project then will get stalled and it'll go on through the process, perhaps delayed and maybe not even built. So I'm for protecting, but let's define what that is. Let's not give some arbitrary authority to a body that chooses with no real direct guidance, as you heard in this exchange earlier about something related to whether the character of the community gets changed because housing, affordable housing, gets built. That should never be something that is within the authority.

So all I'm saying is I thank you for the conversation. I welcome. And also to Miss Friedman. I think we need to make, be careful to make sure that green fields, to the extent our Bill currently isn't protected, we're going to go back and look at that and make sure that that is protected.

But as it relates to the amendments today, which we will take again, we need to be very specific about this authority and power we're giving to this body, which already has a lot of authority and power and how they can pull and potentially prevent projects from ever being built in areas that they consider highly scenic, that they consider that are special communities with visitor destination areas, neighborhoods, entire neighborhoods is what the language says that are significant visitors.

That's like every beautiful beach town in all of San Diego. That's probably every beach town in the State of California. So we give them that authority, they could pull a project. Who's looking to build affordable housing in those areas because of this section that is being drafted today. So again, I really sincerely appreciate, I believe that this is how policy making should happen. I know a lot of people talk about like going, going and working and working it out and then bring a cooked product.

Thank you Mister Alvarez, and Committee Members. I mean, this has been an important and lively and necessary conversation. One that I don't know that this Committee has had as robustly in a very long time. I heard many, many things that I have many feelings about.

This was very helpful to me. I appreciate the questions and with the amendments that we'll take, I would appreciate an aye vote on this Bill. Thank you Mister Chair.

When I think of design and I hear the phrase character of the community, that's very triggering for me as a renter. When I hear the coast is our most valuable asset, I think of all the people and the people who can no longer live here or live near where they work because we don't have the housing stock and housing infrastructure to match the needs of our state. This is a complicated conversation. It's a complicated policy issue.

And I want to thank the author for recognizing those complications and working with the Committee to continue to navigate these conversations so that we can find that space that's in the interest of all Californians, both protecting our natural resources, but making sure that we're ever cognizant of the growing need for housing everywhere, and the role that everybody has to play in participating in that. So thank you Mister Alvarez, for bringing this Bill before the Committee. It has a do pass recommendation. Madam Secretary, please call the roll.

Roll Call

Needs one more. We'll leave it on call. Thank you. Next, we're going to go to Miss Bonta and then we are going to turn to two Committee Members. We're going to jump the line. I'm giving you a heads up.

I'm going to jump the line with Mr. Muratsuchi and Ms. Friedman, but want to respect Ms. Bonta's time. She's been waiting a long time. You may begin when ready.

Good afternoon, Mr. Chair and Members. I want to start by thanking the Chair and Committee staff for working with me with my office on this bill. AB 2851 is an important bill for my community and it's personal. My district is home to a metal shredding facility.

Shredder waste from vehicles and large appliances contains heavy metals like lead, copper, zinc, cadmium, and other hazardous chemicals. For decades, such operations have resulted in many toxic fires polluting our communities. Even though prior legislation called on DTSC to place strong regulatory standards on metal shredders, numerous incidents have jeopardized the health and safety of Californians and their environments. Since 2018, the local Air District has issued 13 notices of violation to the metal shredder in my district.

This metal shredder facility has also been the subject of lawsuits for violating emissions rules. Located within a mile from this metal shredding facility are 18 daycare centers, ten parks, eight schools, four senior centers, and two hospitals. While motivated to work on this issue from the experiences in my backyard, this isn't just a problem in my district. Similar to refineries, metal shredding facilities are disproportionately located in our most vulnerable and underserved communities already suffering from higher amounts of pollution exposure known to cause negative health impacts.

AB 2851 is an essential first step in accountability. It requires DTSC and the local Air Management District to develop and implement facility-wide fence line air monitoring at metal shredding facilities. And if the monitoring indicates a potential adverse impact on air quality or public health, the local Public Health Department will issue a crucial community notification. AB 2851 will push forward the state's commitment to advancing environmental justice and equity for those who are impacted the most by toxic emissions.

With me today to speak more on this bill are Ms. Margaret Gordon from the West Oakland Environmental Indicators Project and Alan Abbs from the Bay Area Air Quality Management District.

Ms. Gordon, how you doing today?

Fine, thank you. As she said, this may be in her backyard, but it's in my face every day. Three freeways: 8, 89, 80, the Port of Oakland, the truck distribution centers and warehouses. A BART running 20 hours a day. That's all in our face, and also a post office distribution center across the street from affordable housing.

So this is--to have Schnitzer, this 19th century operation, still in a community, and having a history of fires and a history of not following their own permits over my time living in West Oakland, they need to be removed. Fence line monitored? Cool. Good. But that don't really solve the problem of them being in an urban area where this industry needed to be someplace else, very much remote.

There's no need for this type of a business to be in our communities. I don't care where people live at. It's no more--it's not a necessity. They want to make money, let them make money someplace else, whereas they are not causing health issues to our community, such as West Oakland. Thank you very much.

Thank you so much.

Good afternoon, Chair and Members of the Committee. My name is Alan Abbs, and I'm the Legislative Officer for the Bay Area Air Quality Management District, and it's always a pleasure to follow Ms. Margaret in testimony.

Our staff has been working with the Member--our staff has been working with the Member from the beginning to get to a bill that accomplishes what we really all want, and that is to have metal shredders in California operate better, to not allow light fibrous material and associated toxic particulate past the facility boundary, and to not have those facilities catch on fire, and to have a notification procedure that informs the community when those standards aren't being met.

As the Committee analysis notes, there's legislative history associated with trying to improve metal shredder operations, but despite making progress, there's still recent instances demonstrating that there's more to be done, specifically with ensuring that particulate matter and toxic emissions are stopped at the facility boundary and don't harm the public. If no one knows when emissions cross the boundary, then the public can't be appropriately informed and the facility has no incentive to operate better.

As the analysis also notes, DTSC, with the assistance of the Bay Area AQMD, conducted an air monitoring study and collected light fibrous material outside the Schnitzer Facility boundary for a multiyear period ending in 2023, and there was also a facility in Redwood City near several hospitals, parks, and schools that received an abatement order to clean up off-site toxic pollution.

AB 2851 attempts to protect people living, working, and going to school near metal shredding facilities and, if needed, inform them of any adverse health impacts and is consistent with actions taken in the past only after elevated concerns from the public. Thank you for the opportunity to speak on this topic, and we look forward to continuing to partner with Assembly Member Bonta and community members and hopefully DTSC to further this bill. And I'm here to answer any questions.

Thank you so much. Are there any persons in this hearing room who would like to register their support for this bill?

Hi. Good morning, Chair and Members. Kris Rosa, on behalf of the Natural Resources Defense Council Action Fund. NRDC is proud to support. Thank you.

Good afternoon. Gracyna Mohabir with California Environmental Voters, in support. Thank you.

Scott Andrews with the West Oakland Environmental Indicators Project, in support of the bill.

Thank you so much. Any primary witnesses in opposition? Two minutes each, whenever you're ready.

Good afternoon, Chair and Members. Ryan Flanigan, here on behalf of the West Coast Chapter of the Institute of Scrap Recycling Industries, and we have an opposed unless amended position. I'd first like to thank the author and her staff for working with us thus far. We're not opposed to fence line monitoring or community notifications. We do have concerns with the specifics of the implementation of those programs which we detail in our letter.

In short, we believe the primary responsibility for the development and oversight of these programs should be placed with the local Air Pollution Control and Air Quality Management Districts in consultation with DTSC. Air Districts have the necessary expertise and experience relating to these monitoring systems, allowing for more timely, accurate, and efficient achievement of the bill's objectives.

We believe the information should be collected according to accepted scientific protocols and methodologies and that the monitoring results be accurately interpreted according to officially promulgated ambient air quality standards and accepted thresholds pertaining to human health risk. Community notifications made on the basis of speculative, inaccurate, incomplete, or misinterpreted information do not serve the public interest. We look forward to continuing to work with the author and her staff as we move forward. Thank you.

Good afternoon, Chairman Bryan and Members of the Committee. Thank you for the opportunity to speak on AB 2851. My name is Tony Cuevas, and I'm speaking in opposition of AB 2851 unless it is amended to address Izri's concerns. I'm an employee at SA Recycling. I'm a manager at the shredder in the Port of Los Angeles. I have read the letter submitted by LWU Local 26 in opposition of the bill, and I support ILWU 26's position.

While I am not a member of the ILWU Local 26, I oversee ILWU 26 members working at SA Recycling. I have been employed by SA Recycling since the year of 2000. I started as a member of the ILWU Local 26 myself, doing routine maintenance at the shredder before working my way up to becoming the shredder manager. I led the team to build the new shredder in the facility in 2006. My grandfather started working at SA Recycling in the sixties, so he retired in the late eighties.

My father is currently working at the facility. He's been working at SA for 46 years now. He's also a member of the Local 26. My father is a crane operator and has been feeding the shredder for over 30 years now. Many of my extended family members, friends, have worked at the shredder at TI. SA Recycling provides good pay, benefits, provides very safe work environment. SA Recycling workers are healthy. I have no issues working in the environment at the shredder.

My family is very health-oriented and we would not want family members working there if it was an unhealthy environment. We at SA Recycling consider ourselves environmentalists. We provide a service of recycling end-of-life products that otherwise would litter the streets and fill up our landfills. The new metal products we use today cannot be made unless we recycle the old products.

With all due respect to the comments made that the California metal shredders are located in disparate neighborhoods, SA Recycling operates three in California and are all located in industrial areas.

Just two minutes.

Okay. While I'm not concerned about the results from the testing the air around the facilities, I am concerned that the testing will not act accurately and will cause false test results, giving the communities false impressions of the operations at our facility. After all, we are located in the middle of the largest port, surrounded by oil refineries. Thank you.

Any witnesses in the room who would like to register their opposition? Seeing none, we'll now turn it to Committee Members. Questions, comments, concerns? Ms. Bonta, would you like to close?

Thank you so much, and I appreciate the, you know, all parties coming to the table to really be able to work on this bill. I think the Wednesday, first week of school in Oakland where there were children headed to preschool, kindergarten, high school, what they woke up to in West Oakland was red skies and air that wouldn't allow them to breathe. That air, we know, filled with particulate matter and toxic chemicals is a carcinogen that causes those beautiful children and families and elders to die from cancer when exposed for too long.

It is not an unreasonable thing within the State of California to be able to hold accountable our facilities that produce potentially and knowingly dangerous chemical material for our communities. With that, I respectfully request your aye vote.

Can I ask something?

You know, we don't usually do that, but I'm down for it, Ms. Margaret. What you gotta say?

CARB and Bay Area Air Quality, West Oakland Environmental Indicators is an AB 617 site. We are in a--we've been in a plan going on five years to reduce emissions. Reduce emissions. This fire added emissions.

All right. So let's talk about the conversation about the fire.

I hear you.

Yes, ma'am.

I understand wholeheartedly your need to work, your family need for you to provide for your work, but we're talking about a fire, a major fire that happened in this community because of Schnitzer Steel, okay?

Thank you, Ms. Margaret. So we hear from a lot of Capitol folks and a lot of lobbyists often. We don't often hear from people who have been directly impacted, who made time out of the day to come up here, so y'all just get used to it in this Committee. We're grateful for the testimony.

I will be back.

I look forward to seeing you. One of the things I heard from the opposition, it seemed to indicate that we're not necessarily against frontline monitoring, we're against the monitoring because we think it'll show positive, but it's not all our fault.

And that's a complicated position to be in because I think the community is paying the price nonetheless. This bill enjoys a do pass recommendation. Madam Secretary, can we call the roll? Oh, do we have any motions? Motion by Bauer-Kahan and seconded by Friedman.

The motion is 'do pass to Appropriations.' [Roll Call].

That bill is out. We're going to jump to Mr. Muratsuchi: AB 2870.

Thank you very much Mister Chair. Members of the Committee, thank you for this accommodation. I am here to present AB 2870 a Bill that seeks to protect frontline environmental justice communities by directing CARB to strike a better balance by eliminating avoided methane emissions from the carbon intensity calculation for fuels derived from livestock manure. These massive dairy methane farms are the biggest polluters in the San Joaquin Valley which already has the worst air quality in the nation.

Aside from methane, these industrial dairy farms produce nitrous oxide, ammonia in particular pollution. As well as, poisoning the water and land for low income and immigrant valley residents. AB 2870 will end the state's practice of incentivizing dairy farms to increase their methane pollution. Here to speak on the importance of this measure is David Rodriguez. Mister Chair, you talked about, you know, not hearing enough from those that are directly impacted.

We have Mister Rodriguez, a resident from Planada, California who will share his personal experience and to be followed with Phoebe Seaton, co-director of the Leadership Council for Justice and Accountability.

Absolutely. Two minutes each.

Thank you for your time. My name is David Rodriguez. I am a founding Member of Central Valley Defenders through Clean Air and Water. I reside in Planada, California, population 4,164 residents. It's in Merced County and has been designated as a severely disadvantaged community, even before last year's floods. I have lived in Planada since 1960. For years we have endured putrid odors from local dairy that's less than a mile away from our town. Hillcrest Dairy arrived in 2002 with over 3,000 cows.

They now have over 8,000 cows and they are trying to expand again. And this time they are in talks with dairy digester developers. In 2012, a group of Planada residents complained to the Merced County Board of Supervisors to no avail. I have called the San Joaquin Valley Air Pollution Control district and they told me they don't respond to dairy odors.

I've had the opportunity to go to Washington DC and I spoke with the staff of the United States Environmental Protection Agency and the staff of Senator Feinstein, the staff of Representative Costa and the staff of Senator Padilla. I have been on numerous calls with CARB representing pertaining to environmental issues caused by dairies and the production of gas from digesters. And I have testified at several CARB workshops and hearings about the problems with low carbon fuel standards.

I have joined other Members of Central Valley Defenders in a meeting with the chair, Leanne Randolph from CARBS in August 24, 2023 in Pixley, California. That's another small town that's been affected by dairies surrounding their community along with the proliferation of dairy digesters. We raised time and time again that the conditions in our communities are getting worse as dairies are getting bigger and dairy digesters are installed. I've learned from my friends in Tulare and other areas that dairy digesters don't help. They only make things worse.

I know that Planada does not want Hillcrest to get any bigger and I know I don't want a digester there, and it would encourage Hillcrest to grow more and more. Despite our ongoing advocacy from local to the federal level. But more than anywhere at CARBS, our legitimate concerns are being ignored. Is it because the industry is so powerful? Is it apathy towards people of color who live in rural areas, or is it both?

CARB continues to ignore our concerns about the impact of dairies-

-passing that two minutes-

-and digesters. The state has encouraged production of and failed to regulate excessive dairy mover pollution and expense air, water in local communities. The goal of LCFS was to reduce carbon intensity of fuse in California. So why are we seeing it cause more pollution?

Thank you, sir.

Thank you.

Thank you, David. The low carbon fuel standards accounting tactic of avoided methane crediting for gas derived from livestock manure is bad policy. It's bad transportation policy, it's bad agricultural policy, and it's very, very bad environmental justice policy, as you've heard. Avoided methane crediting makes factory farm gas appear much, much, much cleaner than zero emission electricity. That alone should be enough to call this policy into question. There's nothing clean about the fuel itself. It burns just like conventional fuel.

And even if it were clean burning, which it is not, factory farm gas in the LCFS displaces little, if any, fossil fuel. It serves primarily as a credit generator so that fossil fuel companies can purchase credits to offset their ongoing pollution. Factory farm gas accounts for only about 1% of fuels in the LCFS, but 15% to 20% of credits generated. In short, the LCFS exports agricultural pollution to the transportation sector in the form of polluting trade, pollution trading credits.

The role of avoided methane crediting in undermining the Clean Transportation Aims of this state is enough of a reason for the Legislature to reform this program. Avoided methane crediting ignores that managing liquefied manure in massive manure pits that maximize methane methane emissions is a choice, not an inevitability, and even encourages that practice. Dairies that handle their manure in dry handling systems can reduce manure methane emissions by more than 90%.

A Missouri farmer describes the damage California's LCFS program is causing in the Midwest by creating a lucrative market for factory farm gas. Rewarding the biggest and most polluting operations while further stacking the cards against family farm livestock producers, like me, that are doing things differently. The perverse incentives that avoided methane emissions creates in the agricultural sector is enough to warrant reform of this policy.

Avoided methane emissions crediting encourage and incentivizes the concentration of cows and liquefied manure in the San Joaquin Valley near lower income communities of color. Since CARB signaled that it would change its LCFS rules to include avoided methane crediting, the number of cows in the San Joaquin Valley has increased, especially at the largest facilities. This means more pollution and more putrid odors. The harm created by avoided methane crediting and lower income communities of color is reason enough to rethink and reform this policy.

Avoided methane crediting is not just bad policy, it's as a union of concerned scientists put it bluntly in a recent blog, a disaster. AB 2870 puts us back on the right track toward climate, transportation and environmental justice. We ask for your aye vote.

Thank you so much. Are there any persons in the hearing room who would like to register their support for this measure?

Is that on?

Yes.

Tasha Newman on behalf of Earthjustice in support.

Thank you so much.

Kayla Karimi with the Center on Race, Poverty and the Environment in support.

Fred, Fresno County for support.

Thank you sir.

Leslie Martinez, organizer in the San Joaquin Valley in support please.

Soy Maria Gomez represento el condado de Fresno pido su apoyo. *I am Maria Gomez, representing Fresno County. I ask for your support.*

Thank you.

My name is Alicia Rivera, I'm from Merced and I'm asking for your support.

Good afternoon. Jennifer Fearing, proud to represent Leadership Counsel for Justice and Accountability in support and also asked to do a #MeToo of support from Climate Action California, 350 Sacramento, 350 Humboldt and Elders Climate Action.

Thank you.

Good afternoon, Chair and Members. Sosan Madanat, W Strategies here on behalf of Animal Legal Defense Fund and strong support. Thank you.

Thank you.

Good afternoon. Grisheena Mohabir with California Environmental Borders and support thank you.

Thank you.

Alexis Romero from Sanger, California in support.

Hi, I'm Christina Velazquez from Pixley, California and I really would appreciate your guys support.

Thank you.

My name is Beverly Woodfill and I'm from Pixley, California and I would appreciate a aye vote.

Thank you.

Mi nombre es Rodolfo Romero, yo represento la comunidad Sanger, California. *My name is Rodolfo Romero, I represent the community of Sanger, California.*

thank you sir.

Mi nombre es , y apoyo a la union de todos. *My name is , and I support the union of all.

Thank you sir.

Berta del Valle Central pidiendo su apoyo. *Berta of Central Valley asking for your support.*

Soy la senora Maria Sotelo estoy aqui para decir estoy en la sala. Senora Maria Sotelo estoy pidiendo su apoyo soy vengo de freno. Gracias. *I am Mrs. Maria Sotelo, I am here to say I am in the room. Mrs. Maria Sotelo, I am asking for your support, I am coming from brakes. Thank you.*

good afternoon. Veronica Garibayo on behalf of Fresno Building Healthy Communities and support.

Thank you.

Good afternoon. Katie Valenzuela on behalf of the Central Valley Air Quality Coalition, as well as Valley Improvement Project in support.

Good afternoon. Raquel Mason with the California Environmental Justice Alliance also asked to register support for strategic concepts in organizing and policy education, physicians for social responsibility, Los Angeles, and the Center for Biological Diversity. Thank you.

Thank you.

Good afternoon. I'm Ari Eisenstadt, also with CEJA, and I was asked to register support for Communities for a Better Environment, Asian Pacific Environmental Network and Central Coast alliance, united for a sustainable Economy. Thank you.

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

Thank you.

Rebecca Marcus, representing the Center for Food Safety and Support.

Michele Canales, Union of Concerned Scientists and support.

Thank you.

John White with the Clean Power Campaign in support.

Thank you, Chuck. Any formal opposition?

I'm sure.

Two minutes each. Whenever you're ready.

Thank you, Mr. Chairman. Michael Boccadoro, on behalf of Ag Energy. Been working in this space for about 15 years and trying to find incentives to get dairy digesters built so dairy industry can reduce methane. It's one of the lead negotiators on 1383 when it passed the Legislature in 2016. Reducing methane is the most important thing we can do in the short-term to address climate change.

So we have to be asking ourselves the question, why are we going to eliminate dairy digesters, which are the most effective tool this state and this country are implementing to reduce methane in the livestock sector? Dairy digesters are recognized as one of the most cost-effective programs that we operate here in California. They are recognized also not only cost effectively, but as the most productive greenhouse gas reduction tool we have. Why are we proposing to eliminate it?

Dairy digesters unequivocally improve environmental performance in the San Joaquin Valley. You heard some testimony a few moments ago that would suggest otherwise. Nothing could be further from the truth. We know this. They reduce methane in massive amounts, they improve of odor and nuisance, reduce hydrogen sulfide and other pollutants in the San Joaquin Valley. They're creating renewable natural gas, which is a clean burning--a low-emission, clean burning transportation fuel that is replacing diesel and heavy-duty trucks, providing significant criteria pollutant reductions in the valley.

Many of our fleets that deliver feed, deliver milk to the processor, are converting from diesel to run on cleaner burning, renewable natural gas that provides tremendous air quality benefits. And then finally, the dairy sector is well on its way to achieving the 40 percent reduction sought by 1383.

We have to ask ourselves seven years in, halfway to the 2030 date to achieve a 40 percent reduction, we're throwing out a very successful program that is going to lead to not only no additional digesters being developed, but the likely outcome that many of the existing operating digesters in this state will cease to operate.

So we're not only losing additional methane reduction, we're losing maybe as much as 2.2 million metric tons of CO2e equivalent, reduction from the digesters that are currently operating. This bill is fundamentally flawed. There's been a three-year process going on at CARB to look at the LCFS. This bill just discounts, throws that out, and comes up with an entirely different solution.

Appreciate you.

Thanks very much, Chair and Members of the Committee. My name is Sam Wade with the Coalition for Renewable Natural Gas. We're the national trade association for the RNG industry, headquartered here in California. We have over 400 member companies across the RNG supply chain. We oppose AB 2870 because it directly contradicts California's well-functioning, existing methane emissions reduction strategy. A lot of important prior work would simply be thrown out of the window by this bill.

Developing a framework for dairy digesters in the state required more than ten years of input from academic experts, extensive public process at CARB and CDFA, and smart legislation in the form of Senate Bill 1383, which currently guarantees Low Carbon Fuel Standard crediting to dairy projects. California's LCFS is the first in the nation's strategy to fight climate change, and it's working. Thanks to the LCFS, our air is cleaner, we are reducing greenhouse gas emissions, breaking our dependence on foreign oil, and lowering costs through market competition.

The LCFS has been successful in driving deployment of RNG projects at dairies, and methane emission levels from manure management in California are going down as intended. The US EPA has supported dairy digesters for more than 20 years in the AgSTAR Program and highlights the California LCFS as a success story on their website. AB 2870 hurts rather than helps the state's efforts to reduce methane.

It tells clean tech investors, dairy owners, and project developers who have committed private capital to these long-lived assets that the state's framework can't be trusted and that decade-long work to develop this current strategy was meaningless. This matters because these voices have previously promoted the LCFS nationwide as a model for other states to follow. Just this year, New Mexico, another major dairy state, adopted the policy based on the successful example they've seen from California so far.

LCFS proponents have also been able to get legislation introduced in states that produce 40 percent of U.S. milk product. Following California's existing successful example in other large dairy states would be the fastest way to deal with dairy methane manure emissions nationwide. California's leadership on practical climate solutions is important. We must not waver at this critical juncture just as we're beginning to see results. Over two billion dollars of public and private capital have been committed to these projects.

All that progress would be put in jeopardy should AB 2870 be enacted as currently written. On Earth Day, let's continue to go forward rather than backward on cutting greenhouse gases in this state. Please don't upend this important and well-functioning effort to control dairy manure methane. Thank you.

Thanks so much. Any persons in the hearing room who would like to register their opposition to this measure?

Good afternoon. Jennifer Hamilton with the California Hydrogen Business Council, opposed.

Thank you.

McKinley Thompson-Morley, on behalf of the Bioenergy Association of California, in respectful opposition.

Mr. Chair, Chris Micheli, on behalf of the California Renewable Transportation Alliance, in respectful opposition. Thank you.

Matt Roman with Niemela, Pappas and Associates, here on behalf of Land O'Lakes, in opposition.

Chair and Members, Steven Fenaroli with the California Farm Bureau, in opposition.

Chris Zgraggen, on behalf of Republic Services, in opposition.

Dennis Albiani, on behalf of California Grain and Feed and Pacific Egg and Poultry Association, in opposition.

Good afternoon, Mr. Chair. Jason Bryant, on behalf of Western United Dairies and California Cattlemen's Association. We're in opposition.

Hello, Mr. Chair. Kristin Olsen-Cate representing Monarch Bioenergy, in opposition.

Priscilla Quiroz, here on behalf of the Western Propane Gas Association, in respectful opposition.

John Moffatt, on behalf of Milk Producers Council and Waste Management, in opposition.

Steve Carlton for Athens Services. We're a Los Angeles-based recycling and waste selling company, in opposition.

Hi. Good afternoon. Ryan Kenny, on behalf of Clean Energy, in opposition. Thank you.

Mr. Chair and Members, Tricia Geringer with Agricultural Council of California, respectfully opposed.

Good afternoon. Taylor Roschen, on behalf of California Dairies, Inc, in opposition.

Good afternoon. Katie Davey with the Dairy Institute of California, opposed.

Thank you so much. We'll now turn to Committee Members. Mr. Hoover.

Thank you. Wanted to just ask a couple questions here. You know, I think the first is, you know, what I'm struggling with with this bill is that we probably handle dairy in the cleanest way possible of any state. And so I guess is it a bit counterproductive for this legislation or try to explain to me why it's not counterproductive when we are potentially pushing these animals out of the state to continue producing dairy in a less clean way and also obviously hurting our own dairy industry, but just help me kind of understand that a little bit, if you could, how this helps us meet our climate goals.

Certainly, Mr. Hoover. This is not an anti-dairy bill. This is a bill that's calling on CARB to recognize that, you know, one of the signatures programs in fighting climate change should not be incentivizing the production of methane. Obviously, this is a complicated situation to say the least. We want to incentivize dairy farmers to capture the methane being emitted from the manure that comes from the cows at our dairies.

Unfortunately, carbon intensity score, you know, the point of the Low Carbon Fuel Standard Program was to incentivize clean fuels, but as Ms. Seaton testified earlier, I mean, right now, an electric car that's charged with solar panels gets a LCFS carbon intensity score of zero. That should be, you know, what we're all aspiring to, but today the average carbon intensity score for fuels derived from dairy digester projects is -270.

Why is a program that was supposed to incentivize clean fuels, incentivizing the production of methane, that is not only, you know, screwing up the basic intent of the LCFS program to incentivize clean fuels, but more importantly, for all the people that you heard in this community, you know, it's not just about fighting climate change. It's about the air and water pollution of the people that live in these communities.

And so CARB needs to recognize that it's not just about incentivizing our dairy farms to capture that methane. We don't want that methane to just be released. We know that that methane is one of the worst greenhouse gases, and so this proposal to eliminate the--the avoided methane emissions from the carbon intensity calculation, it will place the carbon intensity of these fuels more in line with the methane captured from landfills. Why should methane from dairy digesters be more valuable than the methane released from landfills?

We want parity, or we want something that doesn't incentivize the production of this methane, especially in a way that recognizes that it's not just about the carbon intensity, but it's about the suffering that's being suffered by people living in these frontline communities. I wanted to see if Ms. Seaton had anything to add to that.

I'll just say briefly that I think there's a jump to kind of what this bill does. This bill--all this bill does is return us to our kind of 2017 reality before CARB changed its rule on the Low Carbon Fuel Standard, which, at which point gas from livestock manure was treated similarly to landfill gas. So all we're doing is saying that is the crediting scheme that makes sense in this context of trying to get to cleaner fuels, et cetera.

It does not push the dairy industry anywhere. And I think there's--this is--I think we kind of are hoping for a broader discussion on how to address the dairy industry more broadly. The LCFS is not that.

Okay. Well, if these, you know, if we get rid of these incentives, though, right, CARB is going to have to fund alternative programs, I presume, to continue to meet our targets. This is helping us meet our targets now. I mean, that could be in the billions of dollars in costs in obviously, a very bad budget year. So what is the plan for replacing the goals to meet these targets if it's not going to be dairy digesters?

So, again, to clarify what Ms. Seaton just said, I mean, we're not talking about eliminating any financial incentives for the capture of methane from these dairy farms. If we remove the assumption from CARB's calculations for the avoided methane, this bill would place the carbon intensity of these fuels in the range of 35 to 50, which is more in line with the methane capture from landfill. So the bottom line is there will still be incentives for the dairy farms to capture methane.

It's just not going to be this cash cow that currently exists right now. I mean, according to the Natural Resources Defense Council, biogas is captured in digesters, receive millions of dollars in LCFS funding under the current scoring system. Since the program's inception, factory farm gas has pulled in more than 1.26 billion dollars from the LCFS program. We need to take away that financial incentive to produce methane to consolidate these bigger farms, to engage in practices like these wet manure pools that's producing more rather than less methane.

Just one more, Mr. Chair, if I may. Appreciate that. Just for the opposition, I think we'd love to hear your response to those comments, but also, how do you think we're going to meet our climate goals in California without this technology?

I'm happy to try and answer that. So, first of all, let's make a really important point for this Committee. Dairy digesters on California dairies are not producing methane, they're capturing it. Methane's already being produced on dairies because all dairies in California, in the San Joaquin Valley, are required to have some liquid manure handling capacity.

Dairies in California are the only ones that I'm aware of in the country that are not allowed to discharge water off our property, which means we have to have containment solutions even in the pasture-based area operations in Mr. Wood's district, where they also have digesters on some of these operations. We have to have these liquid holding facilities so we can best utilize our nutrients and to make sure there's no stormwater runoff. They produce methane.

We're now covering those and capturing that methane and putting it to productive use, which can't happen and won't happen unless there are markets for the utilization of that captured methane. The LCFS is that market right now, and it is providing the incentives to the industry to build these projects. If it were to change in the manner proposed by this legislation, the incentives would not come even close to providing the revenues necessary to pay for the capital investments.

These are tens of millions of dollars on each dairy and tens of millions of dollars for the cleaning and conditioning capacity, and millions more for the interconnections to get the gas into a renewable natural gas pipeline. The other thing I would say, as I said earlier, dairy digesters do not worsen environmental circumstances, they dramatically improve it. That's well-documented. Renewable natural gas is much cleaner than diesel in a heavy-duty truck. We're not going to convert all heavy-duty trucks to electricity tomorrow or hydrogen tomorrow.

We're going to have fleets that are going to need to run on something. Running on something other than diesel is a dramatic improvement in air quality, not just in the San Joaquin Valley, but in the South Coast Air Basin. All those trucks.

Ms. Bauer-Kahan.

Thank you, Mr. Chair. One thing that was pointed out in the analysis that I thought was really striking to me that I didn't know was that 86 percent of these LCFS credits are being purchased from out of state. So I have to say that I've supported many bills to help with these digesters because I agree the methane is here, and until we all become like Mr. Kalra and stop eating meat and dairy, then it's not going anywhere.

And so that methane is being produced and capturing it is beneficial. But when I look at this and I see that actually what is being credited isn't helping these communities--the vast majority of it, 16 percent; so a very small minority is helping these communities and the vast majority of it is not--then I look at that and I think something's wrong with the system.

In addition to what our colleague from Los Angeles--probably somewhere more specific, but you're all from Los Angeles--

Manhattan Beach?

Said, which is, you know, we've got to get these incentives right, right? We should have digesters, but right now there's serious incentives to increase the amount of methane you're capturing, which is what I think I'm hearing, and so as long as we are getting these incentives right, so we are incentivizing the capture in our local communities and ensuring that we're driving down those pollutants.

Although methane is one of our largest greenhouse gas emissions, and it has a much larger climate change impact beyond California, so I see the benefit of incentivizing people outside of California, but we're California legislators, so I'm going to focus on our own communities, the ones sitting here today, I think a lot needs to be fixed. Do I think this bill is where it needs to be by the end of the legislative session? No.

Do I think it has a long way to go before it ends up on the Governor's desk? Yes. And so I'll be supporting it here today, but I think that there really is a way for us to strike that balance, to incentivize the dairy farmers to do the right thing, to help our communities, and also ensure that we're bringing more of those dollars home. I just think that's something we should all share a desire to do, and I hope the opposition shares that as well.

Yeah. Can I start with just saying the import production share of the RNG is actually sort of better than fossil gas. We import over 90 percent of our fossil gas, and the reason that we've been able to create more in-state projects recently is this avoided methane crediting. Essentially, prior to the institution of the avoided methane crediting at the direction of the Legislature under SB 1383, the out-of-state production share for RNG was even greater.

So we've been able to build more in-state projects because we are the largest dairy state in the country and we've had a good opportunity to capture that methane and create RNG because of this treatment. If you were to remove this treatment, we would not be able to build more projects and that percentage would actually fall down again.

Thank you. Ms. Friedman.

Thank you. So, you know, it is really impossible to hear the stories of the community and not be very moved by the impact that they are having from the dairy industry. I've been to these areas. There's no doubt that we're talking about very large operations with a lot of impacts on the people who live around them. And I think it's also undeniable that having the digesters and the methane capture is really important. I mean, it's primarily going into vehicles that are very hard to decarbonize.

It's better to capture. When you have an impact like--you have manure from existing dairies and you have methane, you want to capture that, you want to use it. So there's no question that the digesters are really, really important in this area as well.

And it seems to me that really the issue is, is the incentive correct enough to create more digesters, to capture more methane, to use it as a fuel, not just to spell it into the atmosphere without being so heavily lucrative that you're creating more? Too much consolidation within the industry, having dairies being created beyond what just sort of the milk and dairy market would bear, are you creating a new industry just to create methane? And I think that's where this disconnect is.

And what I'm struggling with actually in the middle of all this is CARB working on this issue. And that's the struggle I'm having because there's a problem. There's something we need to do. Maybe it's out of whack. CARB has now stepped in, has been going through this long process, and they're doing their rules to maybe straighten out some of this so that you don't continue to have consolidation and maybe overproduction of, you know, in the dairy industry or bringing this problem in from out of state even, because you're not just creating dairy now, you're also getting a methane credit that's highly lucrative.

And so I wanted to know where CARB is on this and why have they not dealt with this? Are they operating within a timeframe that was put on them through legislation? Where are they going with this? They tend to be pretty good at regulating stuff, but it seems like they haven't here.

So I'm curious from you or from anybody here, why have they not acted and are they about to do something? And if so, where does your bill fit in with their own rulemaking process?

Sure. I mean, I'm sure the opposition will--

And I don't need--I mean, maybe I'll--I don't need everyone to answer me, but I'm curious to hear your thoughts.

Yes. So, you know, I'm holding here a Low Carbon Fuel Standard FAC from CARB, and they do address the issue of avoided methanes. I mean, like this discussion has been correctly identifying, this is a balancing act. You know, it's a balancing act between how do we incentivize them to capture that methane being produced by the cows while at the same time, like you just said, not making it--I don't know if it was your words or mine--a cash cow, you know, to operate these, have these operations.

As the Committee analysis points out, they are in the process of working on a plan to try to address and to eventually phase out these dairy digesters, but I think the fundamental problem with CARB's approach to this is that they're just focusing on the greenhouse gas part of this equation, of this picture, as they are charged to do.

They are the lead agency to address the greenhouse gas emissions that the Low Carbon Fuel Standard Program originated out of the AB 32. It was one of the flagship programs to address climate change issues, but what they are failing to address are these attendant air and water pollution impacts on these frontline communities. That's where CARB has been woefully, woefully inadequate in recognizing and addressing these environmental justice concerns.

But if I may, it seems like they're undergoing a corrective process now. That's--they're going through a process. So I understand that they haven't acted, but why do you feel--or why do your sponsors feel that it's necessary to intervene?

Maybe I'll turn it over to--

Yeah, I'll start. Although I'm gonna curb a little bit of what David shared is, so CARB has been in the midst of rulemaking now, officially, since the beginning of this year. Unofficially, longer than that. They've heard time and time and time again from residents in the San Joaquin Valley and beyond, from the state about the perverse incentives embedded into this program to promote the creation of methane and wet manure.

There was a CARB hearing in September where board members kind of echoed and elevated those concerns, saying, we really need to see a change in this policy. I'm concerned about the perverse incentives in this program. Staff came back with a proposal that completely ignored that direction, completely ignored the direction from its constituents like David, and kind of papered over all of the environmental justice concerns and actually went in deeper on avoided methane crediting.

It called for kind of ongoing up to 30 years of avoided methane crediting for any project that breaks ground between now and 2030. And kind of an ongoing avoided methane crediting for projects that produce electricity, including through internal combustion engines that pollute through the burning of biogas.

And so to date, despite the many, many years and hours of travel and testimony from people impacted, like severely impacted by this program, CARB staff to date has shown no concern and no consideration and no intention of correcting this accounting problem.

Thank you so much. We're going to go to Mr. Wood, but also wanted to just put it out there, we did invite ARB to join us today in this hearing, and they graciously--

Declined.

Let me before you go there, I'm not going to ask another question. I'm just going to quickly say I mean I feel a little. I think this is your first policy hearing on this. Correct or have you?

That is correct.

So I feel a little you know, torn because clearly there's a problem and you have a regulator who's working on rulemaking, and I understand that the residents don't feel they're going where they want to. That happens sometimes. It's a little bit hard for me without hearing sort of ARB's rationale as to what they're balancing and why they came to where they did. And I don't. It's very. It's hard for me to feel equipped to overrule them which is what you're asking us to do.

And they haven't even come out with their regs as far as I can tell. There's you know, you've seen a report, you don't like the report. Now let's introduce legislation before the rules have been made. I'm going to support this today. But I really feel like I want to hear ARB's side of this before I, you know, commit to voting yes in the next Committee or on the Floor. Thank you.

Thank you, Mister Wood.

Thank you, Mister Chair. And thank you Mister Muratsuchi. I'm going to piggyback on comments by Assembly Member Friedman. I guess I'm troubled by the fact that I don't always agree with CARB. I really don't. Sometimes I think some of their policies are so overarching, so rigid that small communities and districts that have really good air quality often suffer from that, from that lack of flexibility in my opinion. And it's interesting that CARB is in the middle of a rulemaking process.

And it sounds like that the proponents of the Bill don't like that. And so I find myself in an awkward position in support of a regulator that I don't always support, but I support their mission. And I think that's really, that's a really important distinction here. This feels a little like a sweater with a string. And the more you pull, the more you unravel. The ramifications of this more industry-wide I think are really really significant.

I never thought I'd talk about consolidation in this Committee. I usually do that related to healthcare. But there's been a lot of consolidation in the dairy industry because smaller dairies have struggled to survive. We have lost hundreds and hundreds of dairies in California and I fear more consolidation down the line which doesn't help the folks in my district. Unlike the conclusion that Miss Friedman has gone to, I can't support this Bill today. And there's some things that trouble me.

I didn't hear anybody dispute that dairy digesters reduce methane. Part of this is an, and why would we want to eliminate incentives for building those diary digesters if we agree that they actually do reduce methane? It was interesting that one of the opponents to the Bill is Republic Services and they operate landfills. So I'm puzzled by that. Maybe I'll ask them about that later.

If this were to pass and they're, and knowing that the dairies are using some of this money to help build dairy digesters and they don't have that incentive to, to do that any longer, what do you propose as a replacement? Because the fear that I have is that we now have these dairies moving out of state. So we just pass our problem onto another state and we don't really do anything for the greater climate goals that we all want to support.

So what do you propose as a replacement? Knowing that these actually work, but we don't want, we don't want any more of them, essentially, is what I, what it sounds like to me.

Yeah, so I was trying to. I think you're raising a similar point to what Mister Hoover was raising and perhaps I need to do a better job of explaining it. But the proposed elimination of the avoided methane emissions that this Bill is proposing, it will not take away all incentives. It's just trying to rebalance the economics of the LCFS carbon intensity score here.

By removing the avoided methane emissions from CARB's calculation, this Bill will place the carbon intensity of the dairy digester operations in the range of 35 to 50, which is, you know, it is more than the zero for the electric car fueled by, charged by solar panels, but it's less than what conventional gas gets in a score of around 100. So, there is still the incentive to capture the methane produced by cows.

We just don't want it to be so lucrative that it may, you know, the evidence is, you know, is unclear in terms of to what extent this current treatment of avoiding methane, whether that may be contributing, reinforcing the consolidations of these dairy farms. I think they would disagree. But, you know, as I've been learning and doing a deep dive in all this, there, there appears to be a UC Davis Professor of Agricultural Economics, Doctor Aaron Smith, that seems to get a lot of recognition.

You know, currently, according to Professor Smith's calculations, it costs a farm about dollar 294 to run and maintain a digester. Whereas the value of the LCFS credits generated by the digester is in the neighborhood of $1,935, more than six times the cost of operating this digester. And this is calculation for a 2,000-cattle dairy farm in February of 2021, whereas the value of the milk produced by the cow would be $3,800.

So, I mean, the point of these numbers is that the number one driver of the profitability of these dairy farms is the value of the milk. But, you know, where we have the LCFS credits being more than six times the cost of operating these dairy digesters, that's where that rebalancing needs to be taking place. We don't want to stop the dairy digesters from operating, to your point, because we do want them to capture that methane.

We don't want it to just be released and contribute to climate change. But this is out of whack here. Six times out of whack.

And I would, I guess this is such a larger issue than just this. And that's why I go back to the sweater analogy, because it costs more to produce milk in this state than anywhere else in the country. It does. There's no question about it. So what's happening is we're importing more and more milk.

And as we make it harder and harder for dairies to exist in California, we're going to lose more and more dairies, and we're going to import more milk, releasing more greenhouse gases for transportation. We're shifting, we're shifting the problem, from my perspective, and there's been a lot of pressures on why dairies have closed. We had a huge problem with drought and the ability for dairies to buy food for their cattle. I experienced that in my district. We lost several dairies just for that.

And we lost some that were right on the very edge because of that. I guess my point is, it's really, really complicated. And I go back to this, and I wish CARB was here, because I'd asked this, if we have more and more dairy digesters out there and they are reducing methane, are we measuring this? And is it possible that there are other contributing factors that are having an influence on the communities that you're talking about? And it's not all just dairies.

There are other factors as well. And so I'd like to ask. I'd like to ask the opposition about that. Are we measuring that piece of the puzzle?

Of course. And the Air Resources Board and the San Joaquin Valley Air Pollution Control District are regularly looking at all issues that affect air quality. And dairies are not the leading cause of air quality in the San Joaquin Valley. It's transportation. We know that. It's trucks and cars going up highway 99 and I-5 that are causing pollution that impacts the San Joaquin Valley, not dairies. And we're talking about digesters, and we know these digesters improve that air quality from those heavy-duty trucks in particular.

So, there's no question these projects are reducing air quality impacts in a non-attainment area. Dairies in California are regulated far more heavily than anywhere else in the country, large part because they operate in a non-attainment area. Water quality concerns are not the purview of CARB, but they are being appropriately addressed by the State Water Resources Control Board. And the environmental justice community has been part of those discussions.

And there will be new, significantly more extensive water quality regulations for dairies in California in the not too distant future. In the next few months, they're going to be proposed. So these issues are real, they are being appropriately addressed. But throwing the baby out with the bathwater, the digesters that are achieving the significant methane reductions goes directly to the point that led to the way 1383 was written, which is the concern, very legitimate concern, about leakage and having cows simply move out of California.

And that's occurring. We're not building new dairies here. We haven't built a new dairy here in 10 years. California dairy families are building new dairies. They're just not building them here in California. They're building them in Kansas, Texas, South Dakota, and Idaho. And as those cows leave and those dairies operate, we lose control of the emissions. And it's not just shifting our burden to another state. Greenhouse gases and methane are global pollutants.

So, we're actually worsening the situation when we lose control of the methane emissions by having cows move out of state. And cows move very easily. And this is one of the significant differences, why the dairy sector is treated differently than the landfill sector is. You know, landfills don't move out of state very well, and we discourage people from shipping waste out of state. That's a big problem on the East Coast, a smaller problem here, still a problem.

And then, you know, I do want to address one other point is these projects are not designed to increase methane. Just the opposite. They're designed to decrease it here in California because of how we operate. Every digester that goes in in California is a simple covered lagoon digester. They're not being heated, which is what produces more methane. They're at ambient temperature, which means they're producing the same.

They're actually producing a lot less because we install a solid separator on the front end that probably reduces the methane being produced on that dairy by 20% before we capture it and then turn it into renewable natural gas. So just the opposite is occurring from these projects. I just wanted to make that point clear as well.

Thank you. And just two, and I will not a question, just a couple brief statements.

Thank you.

Sure.

Is that okay? Thank you. I'm trying to think. I don't know who else was. Maybe you. But I know I was here when we negotiated, when negotiated, 1383 was negotiated. And I don't know if you were or not. Heath, were you?

Almost there, almost

Almost here. Okay, then maybe I'm the only one who was sitting on this Committee during that process. And it was really contentious. And the whole bio, the dairy, the dairy digester was a big piece of this conversation. And CARB, and asking CARB to regulate this was a big part of this conversation. And I find it frustrating that now we're moving, CARB is moving towards a regulatory process and yet before it's even in place, this Bill wants to make that null and void.

And I just have a problem with that. I think that's beyond fair at this point. CARB is our air quality regulator and we should let them do what they plan to do and then see if we need to do something down the line. And I know about the study that Mister Bocadero was talking about from another UC Davis Professor, Mitt Lomer. You might read, if I got that name right, might read that.

Because transportation is a huge proportion of what is causing air quality problems in the central valley as well. Thank you.

Thank you Mister Wood. Miss Pellerin.

Well, thanks to the author, I have learned more about cow manure than I ever could have ever imagined. And just so I understand in my head that the intent of this Bill is to push CARB to reevaluate the carbon intensity scores of dairy digesters and not to eliminate the dairy digesters, right?

Not to eliminate incentives to capture methane emissions from cows.

Okay. Because we want to make sure we're continuing to encourage dairies to capture that methane. But the negative carbon intensity score for dairy gas seems really inaccurate to me. So certainly we all would have appreciated CARB being here today to explain that negative CI score. But working off the information we have today, I will be supporting the Bill, but I encourage CARB to re-evaluate that value of the LCFS credit because it does seem out of whack so thank you.

Mister Kalra.

Thank you, Mister Chair. And I want to thank the author for bringing this forward. I know it's tough to bring this kind of legislation forward. As one of the opposition witnesses said, reducing bad things, one of the most important things we can, can do to address climate change. And I couldn't agree more. And I think that right-sizing this score, if we don't do it, it's a subsidy that gives a market advantage to an industry that is dramatically increasing greenhouse gases in our atmosphere.

For generations, we've actually given subsidies to this industry at her own peril. And in fact, there's a lot of reasons why farms are closing. I had legislation to help incentivize small family-owned dairy farms from transitioning to other types of farming that could be more potentially lucrative and couldn't even get a hearing in Agriculture Committee for it. And the reality is that over the last about 50 years, approximately the per capita demand for dairy has dropped about 50%.

People are making market choices and they're deciding to move away from dairy. And that's what the numbers are showing on a per capita basis. It's not a surprise when you look at about two thirds of the global population is lactose intolerant or has some form of lactose intolerance. I mention all that because the market's the market. And when we do things that give advantages, we're not actually reflecting the market. We're giving a subsidy and we're making a choice that in this case increases greenhouse gas emissions.

And so, I fully support this Bill. I'd like to be added on as a co-author. And I believe that, yes, it is under CARB's jurisdiction. We delve into the jurisdiction of so many of either administration or commissions that are doing work. We've been waiting for years on the heat standards for workers for four or five years now. And the reality is that there are real people that are being impacted by this. We all collectively are being impacted by this.

And I think that we should move towards solutions that have the best and most effective outcomes. Reducing greenhouse gas emissions, not putting lipstick on a cow or putting lipstick on cow manure, as it were.

Because the reality is that we know that there are things that we need to be doing that are far more effective with our money, rather than subsidizing an industry in particular, as pointed out by my colleague, out-of-state industry in a manner that I believe is not balanced with other methods that are being scored through this program. And yes, as my colleague pointed out, today's Earth Day. And I'm very proud to be a vegan and the environment is a big reason for it.

But that's not the reason for my co-authoring or supporting this Bill. I think it's an equity issue in terms of how the program is being operated. Thank you.

Thank you, Mister Kalra, Mister Flora, bring us home.

Thank you, Mister chair, Mister Muratsuchi. I've always had a lot of respect for you. We've always worked well. And I do have major issues with this Bill. And it was last year you sat on this dais and got super frustrated with a fellow colleague because they ran a piece of legislation that affected your district. But they never talked to you about it. Right? And so here we are, Groundhog's Day, doing exactly that.

And so I want to ask you a couple questions and Assemblywoman, Friedman, asked you about CARB and their input on this. And there was a letter that you, Senator Allen, sent to the Chairwoman of CARB and then she responded back to you. And I guess I would just ask you, do you disagree with her conclusion that eliminating dairy biomethane from LCFS would jeopardize the state's climate goals? Do you disagree with that?

I disagree that that should be the sole consideration. I think that we need to strike a better balance.

So you disagree with CARB on that?

I disagree that CARB doesn't have the full picture in mind.

Okay. With all due respect, how many dairies are in your district?

Zero to my knowledge.

So let's talk about full picture. Okay. Because I grew up with dairies all around me. Okay. I used to play in the feed stalls on their silage mounds and how those look now. Silage is feed not manure.

Thank you for that clarification.

I'll educate you more on dairy when you want so we can talk about that too. Okay. My point is like these are, this is my hometown. This is us. Right? And so out of all of us electeds in the Central Valley, did you reach out to any of us before this Bill was put forward?

I did reach out to the Chair of the Ag Committee a few days ago.

And what was her response? I think I probably know.

We'll hear a full hearing if this Bill gets out of this Committee and her Agriculture Committee.

Okay. It's been said a few different times as well, that if we reduce this or take this incentive away, and I want to address the incentive, that number a little bit as well. But in 13, make sure I get that right in Senator Lawrence 1383 that Assembly Member Wood brought up there was a mandated 40% reduction in that. Do you know the percentage of GGRF funds that go to that. That have created a 20% reduction?

Do you know what that percentage of GGRF funds that we've used to get to 20%? It's 2% of total GGRF funds to get to 50% of a mandated reduction that we did in 2016. Okay. So when we talk about just risk versus reward, like this is a pretty good return on our investment, major return on our investment.

And I think one of the frustrations that so many of us have is we continue to set policy climate goals that we're not even arguing the goals, but if we continue to take away every ability for industry to meet those goals just because it doesn't fit a political narrative, we're not ever going to meet those goals. And the chair of CARB said that in a response back to you, that if we take that away, it puts in jeopardy our climate goals.

So, I really, really am concerned that as we continue this process and we move this thing forward, that if we're not open and honest about this. Right? And there is a lot of things that the dairy industry has done in the last 20 years, I mean, even to the point of figuring out how we feed cows differently, because there's methane on both ends of that cow. Right? So, it's something that we really need to discuss.

And I would just implore you and I have a couple questions for the opposition as well. But let's don't just let a political ideology be the enemy of good, be the enemy of perfect. And I will end on this before I get to my questions. That there are eight counties in the Central Valley. All of them.

Check. Check. Was it something I said?

That's enough.

I was on a good one there. He's so polite when he cut you off. Out of the eight counties in the Central Valley that are all on record supporting the climate smart agricultural processes, okay? Including dairy digesters. When the local electeds are on record supporting this, what makes us smarter than them? What gives us the ability from areas that are not, that don't have dairies? You know what, we're the authority on the subject. You.

You don't know what you're talking about, even though you're a duly elected local person. I'm the authority. So I really do wish that some of our environmental friends, which there are a lot of environmental groups that are opposed to this legislation as well, that we would have an honest conversation. And so it's more of a statement and if you can respond to that and you're close, that's perfectly fine. I lied because I did want to address the incentive part.

When we talk about recalibrating that incentive right through the Chair. I'm sorry sir, I'm just losing.

I've cut you off once already.

If we reduce that incentive or reevaluate it and that dollar amount is less than what's needed to actually build these projects to make it viable for them to invest in the state, we've effectively killed the projects. It's just really that simple. And that's what we're talking about here is reducing that. We can say we're not wanting to kill dairy digesters, but if we reduce it to a value that doesn't make it worth their time, then it's exactly what's going to happen. To the opposition.

I would just love your thoughts on in what world if we get rid of digesters can we meet these climate goals?

No. Yeah, yeah I'll say first and foremost with respect to the total incentive, the LCFS dollar amount that we've received has fallen from the high 200s to in the fifties today. So, it's already been cut down, you know, essentially by 75%. So, the projects are already hurting. And if they were to also lose their avoided methane crediting, they would absolutely not be able to continue to move forward. We would get no new ones, we would have multiple existing ones go into bankruptcy.

Thank you. Then one final question, Mister chair, if I may. I'm sorry. And then just. Doctor Wood brought it up about the consolidation of dairy industry. What's causing that?

And I'll take that one. Consolidation has been occurring every year for 70 years in the California dairy sector. We've gone from, from close to 20,000 dairies in 1950 to just over 1,100 dairies in 2023. It's a combination of heavy regulation, high labor costs, high energy costs are adding to this problem. But water supply reliability and the implementation of SGMA is going to have a huge impact. So, we're not only consolidating, we're losing total number of cows in the state.

We've lost 200,000 cows since 2008 through 2022. And we know that trend is going to continue. And that's when the leakage concerns really come to roost. We're very close to having leakage. We've been able to maintain production because of efficiency. But as we start to see cow numbers or attrition continue to increase, leakage will start occurring and those emissions will simply be produced elsewhere and likely more significant emissions digesters aren't causing consolidation. These numbers that get thrown around.

The farmer sees about $65 per cow per year for having a digester on his property, not several thousand dollars of income. Getting rid of the LCFs avoided methane crediting will eliminate these projects. Period.

Mister Muratsuchi, would you like to close?

Thank you. I just want to briefly try to wrap up, first of all, trying to address Miss Friedman as well as Doctor Wood's concerns of getting ahead of CARB. I mean, I think we can all agree that while we want to look to CARB for leadership in this space. Okay. We want to send a signal to CARB. Respectfully ask for your aye vote.

Thank you. I just want to thank Vice Chair Flora for your passionate remarks. And I want to thank all of the people from impacted communities who came up here today to testify. I think what you're trying to do is incredibly righteous, Mister Marisuchi. I would hope that ARB could address some of this in their rulemaking process. The idea that we need a policy framework to help guide them, I don't think that's completely unfounded.

At the same time, I think it's not completely fair to business who's made an incredible investment to have such an abrupt stop. But I don't think I'd like to see this legislation have that abrupt stop here today. So this Bill has a do pass recommendation. Madam, do we have a motion? And we have a second. Madam Secretary, call the roll.

The motion is do pass to Agriculture Committee. [Roll call]

That Bill is out. We're now going to go back to sign-in order. Miss Dawn Addis.

2537. You can begin when you're ready.

Well, good afternoon, Chair and staff, and thank you to the advocates that are here. Today, I'm presenting - today I'm here to present AB 2537 The Community Engagement in Offshore Wind Energy Act. And I want to thank the numerous people who have been working on this Bill for months, I would say, in order to get this right. As you know, California has established critical clean energy goals.

Our progress towards these goals benefits not only human communities, but fragile ecosystems and vital biodiversity on land, in the air, and in the ocean. Among these goals is the requirement to transition to 100% renewable and zero carbon energy resources by 2045, with 25 gigawatts, or enough power for about 25 million homes, coming from offshore wind energy. Planning for offshore wind energy is well underway in California starting as far back as 2016.

In 2022, the Federal Government awarded five leases in federal waters off the coast of our state, two along the north coast and three along the central coast. In June 23, the offshore wind energy leases were executed, and in January 24, the CEC released California's Offshore Wind Strategic Plan. Leaseholders now are moving into the surveying, planning, and permitting stages of development.

And as offshore wind energy moves forward in waters along the north and central coasts, particularly along the coast of my district, extensive input and interaction from local tribes and communities is needed. I would say that historically, we all know communities that hosted large infrastructure projects have been burdened with harmful impacts, and today we definitely look to do better. For offshore wind energy projects placed along California's pristine and fragile coastline.

We all agree that uplifting tribal and community voices is critical, both during the planning and the community benefits agreements processes. But there's one kind of problem, and that's that I've heard loud and clear from local communities, such as small tribes and cities, that there's a gap in resources that prevents them from adequately participating in offshore wind energy planning and community benefits conversations. As we each know, true engagement often necessitates possessing in depth knowledge, information, and technical expertise.

And it's especially important when the projects themselves are new and complex, such as in the case of offshore wind energy development. So AB 2537 The Community Engagement and Offshore Wind Energy Act creates a solution by establishing an offshore wind energy community capacity building fund that will provide grants to local tribes and communities.

These grants will enhance the ability to actively participate in the planning and community benefits processes so that local tribes and communities are more secure in their ability to have their voices heard and come to fair agreements. I should also add that we will be amending this Bill in the Utilities and Energy Committee to better align with provisions of AB 209, which will then remove section two of this Bill. And both, I would say all parties have agreed to these coming amendments.

So I want to thank our sponsors, this Committee, and our stakeholder partners for their engagement. With me as witnesses are Peter Ton from Brightline Defense Project and Andres Ramirez from the City of Morro Bay. And I mixed up my arrows, but they're both here. So, Peter, if you want to go first.

Thank you. Good afternoon, Mister Chair and Assembly Members. My name is Peter Ton. I represent the environmental justice nonprofit Brightline Defense, the sponsor of this Bill. I thank you for the opportunity to speak today. This Bill is very straightforward. Its singular purpose is to create important funding for impacted communities to prepare for offshore wind development. It would do so by creating a community capacity building fund administered by the California Energy Commission.

Disadvantaged or rural communities, tribes and qualifying nonprofits can apply for the grants for technical assistance to access existing community knowledge, to grow its own leadership, or otherwise remove barriers for meaningful participation in the offshore wind development process. Now, capacity building is critically important in Brightline's work on the ground. It's been abundantly clear that communities are actually curious and excited and want to engage in offshore wind development processes.

However, we've also been hearing that the biggest barrier, hands down, is the lack of resources, and this is the this prevents meaningful engagement. This Bill addresses this gap by creating an equitable, transparent fund that communities can access to actualize their own vision of what engagement is. The Bill also aligns with state policies such as the CEC's AB 25 Offshore Wind Strategic Plan, which specifically recommends that the state prioritize community capacity building. Many laws and regulations have been enacted to speed up the development of offshore wind.

CEQA exemptions permit streamlining. Those are prime examples, but there hasn't been an equivalent investment in communities to replace potentially lost procedural safeguards. This Bill helps close the gap to assure that communities can keep pace and not be left behind as the state urgently reaches its clean energy goals.

Thank you so much. You're at two minutes.

I thank you. Thank the community for this time and for that prompt, and I respectfully ask for your aye vote.

Thank you very much. Next witness. Two minutes, please.

Good afternoon, Members of the Committee. Andres Ramirez here on behalf of the City of Morro Bay, one of the communities on the front line of dealing with the future impacts of offshore wind development. Morro Bay, first of all, is very strongly supportive of the state's climate goals and is enthusiastic about the multifaceted approach to achieving such goals, I'd like to reference the Committee analysis which indicates offshore wind development can provide a variety of benefits to local communities, including tax revenues, supply chain, manufacturing activities and job creation.

These are all things that we can certainly look forward to, but it also indicates that it can lead to concerning impacts such as changes in the local workforce, increased construction, traffic and changes the environment. So establishing a standardized process with funding to build capacity at local jurisdictions could complement the existing efforts. We couldn't agree more with that last point. A standardized process with funding to help local communities. That is absolutely critical if we want to get this right.

Morro Bay has already come to the realization that, for example, the Morro Bay Harbor is not properly equipped to accommodate the heavy usage with the construction and constant maintenance of offshore wind infrastructure. Additionally, we're not still fully aware of the environmental impacts or community impacts. These are critical factors that we need to understand, be able to educate the constituency on, and address head on.

So ultimately, what the city needs and other communities need are funding to bring on board the subject matter experts and engage in the process, as noted, to provide technical, legal, communications and environmental expertise. This Bill would provide just that. So supporting this Bill is supporting our climate, but also supporting local communities respectfully or drive vote.

Thank you very much. Anyone else in support of AB 2537? Name and organization please. We'll turn the mic on. There you go.

Michele Canales on behalf of Union of Concerned Scientists in support.

Thank you.

Hi, Gracyna Mohabir with California Environmental Voters in support. Thank you.

Thank you Mister Chairman, Environment California in support.

Thank you.

Thank you Mister Chair, Eduardo Martinez. I was asked to convey the support of the Monterey Bay Aquarium.

Thank you very much. Anyone else in support of.

Kris Rosa on behalf of NRDC Action Fund in support.