Assembly Standing Committee on Local Government

Good afternoon, everyone. Welcome to the Local Government Committee hearing of May 1, 2024. I'm going to go through some housekeeping items first and we'll be operating as a Subcommitee since we don't have a quorum. Welcome to the Assembly Local Government Committee hearing.

I would like to remind the public that for this and future hearings, testimony will be in person, as we're no longer using a moderated telephone service. We also accept written testimony through the position letter portal on the Committee's website.

I would also like to go over our ground rules for appropriate conduct. The Assembly has experienced a number of disruptions to Committee and floor proceedings in the last few years. Conduct that disrupts, disturbs, or otherwise impedes the orderly conduct of the hearing is prohibited.

Such conduct may include talking or making loud noises from the audience, either in loud, threatening or abusive language, speaking longer than the allotted time, extended discussion of matters not related to the subject of the hearing or the bill or any other disruptive acts.

To address any disruptive conduct, I will take the following steps. If an individual disrupts our hearing process, I will direct them to stop and warn them that continued disruption may result in removal from the Capitol building.

I will also document on the record the individual involved and the nature of the disruptive conduct. I may temporarily recess the hearing. If the conduct does not stop, I will request the assistance of the sergeants and escorting individuals from the Capitol.

We have 13 items on the agenda this afternoon. Five of these items are proposed for consent. Item three, AB 2293 by Assemblymember Mathis. Item four, AB 2325 by Assemblymember Lee. Item seven, AB 20618 by Assemblymember Chen.

Item eight, AB 2663 by Assemblymember Grayson. Item 13, AB 3198 by Assemblymember Garcia. Additionally, item 11, EBIT 3018 by Assembly mates, has been pulled by author from the hearing.

We will hear all other bills in the audit shown on the agenda, unless otherwise noted. We will take up to two primary witnesses in support and up to two primary witnesses in opposition. These witnesses will have three minutes each to provide their testimony.

All subsequent witnesses should state their name, their organization, and their position on the bill. Like I said, we don't have a quorum. We will be operating as a Subcommitee until we are able to establish quorum. I see Assemblymember Reyes here. Whenever you're ready. And that's item number six on the agenda, AB 2590.

Thank you, Mister Chair and Member. AB 2590 raises the procurement threshold for San Bernardino County Transportation Authority, also known as SBCTA, so that they can continue to operate in a cost-effective and efficient.

Committee's proposed amendments. SPCTA plays a critical role in shaping the transportation landscape of the Inland Empire, which is crucial for economic growth and the well-being of its residents. Aligning SPCTA's procurement authority with its similar-sized transportation commissions is crucial for streamlining processes and enabling strategic, cost-effective decision making. SBCTA's procurement limits have not changed since the 1980s. Since then, they have been limited to $25,000 procurement authorizations.

But the cost of supplies have increased as well as equipment and materials, and as a result, minor repairs, projects, or purchases often exceed the existing limits, which necessitates a lengthy formal bidding process. With the proposed amendments, AB 2590 would update SBCTA's procurement requirement threshold for contracts from the current $25,000 to now $100,000. Here to testify in support of AB 2590 is Ross Buckley, who represents the San Bernardino County Transportation Authority.

Good afternoon, Chair and Members. Ross Buckley on behalf of San Bernardino County Transportation Authority. We are pleased to sponsor Assembly Bill 2590. First, we want to thank the Chair and Committee staff for working with us on amendments. We'd also especially like to thank Assembly Member Reyes for sponsoring this legislation on our behalf. AB 2590 simply seeks to modernize the procurement process by raising the bid thresholds for supplies, materials, and equipment. This helps our agency by providing another option to help stretch our dollars/

For SBCTA, the existing thresholds have not been raised in decades and simply have not kept pace with the changes in economics or the realities of the procurement process. The cost of basic supplies and equipment has increased significantly while our policies have remained stagnant. This is not only hinders our operational efficiency, but places unnecessary burdens on our staff. By increasing the thresholds under this legislation, the Bill presents a practical approach for two smaller purchases.

This change is designed to reduce administrative overhead and expedite the procurement process, ensuring that projects are on time and within budget. In conclusion, Assembly Bill 2590 represents a prudent update to our procurement statute. It promotes efficiency, fiscal responsibility, and effective management of public resources. We urge your aye vote on this Bill, which will enhance transportation infrastructure and service delivery across San Bernardino Cunty. Thank you.

Thank you. Anybody else in the room that wants to add on support? How about any primary witnesses in opposition? See none. Anybody wanted to add an opposition of the bill? Seeing none, take it back to the Committee. Assembly Member Haney, have any questions? Comments on? No. I don't either. Thank you for presenting today for working with the Committee on the Amendments, which I hear you say you accept.

Yes.

With the amendments, I will be supporting your Bill. Once we have a quorum and a motion, a second, then we'll take action. But until then, we'll see you soon. Okay. Thank you.

I do respectfully ask for your aye vote when all Members are here. Thank you.

Thank you. While we wait for other Committee Members and authors, if you are hearing this, your staff, please let your Members know that we are waiting at Local Government. You guys want to take a small recess while we get other authors? Thank you. Madam Secretary. Looks like we have a quorum now. Please call the roll.

[Roll call]

We have a quorum, Madam Vice Chair. Do you want to present your Bill? Is this a good time? And that is item one on the agenda, AB 1819 by Assembly Member Waldron.

Thank you, Mister Chair and Committee. I am here to present AB 1819. I would like to thank the Committee Chair and the Committee for working with me on this Bill. And first and foremost, I will be taking the Committee amendments. AB 1819 allows for the creation of special infrastructure financing districts in areas characterized as high or very high fire severity zones. By directing resources towards these high-risk areas, AB 1819 ensures that the most vulnerable communities are better protected against future wildfires.

These districts will generate funds specifically for wildfire mitigation efforts, such as heavy equipment to clear vegetation, creating fire breaks, and hardening infrastructure. As we've seen in recent years, the frequency and intensity of wildfires in California has posed significant risk to lives and properties and also our environment. Last year, over 7,000 fires burned close to 325,000 acres. This is a clear signal that our current efforts must go further.

In a time where our budget is in a deficit, creating a program that does not raise taxes or impact the state budget makes sense. Please welcome Fire Marshal Jason McBroom from Alpine to discuss the critical importance of AB 1819 for wildfire mitigation.

Thank you very much and good afternoon, Council Members. Thank you very much to Assembly Member Waldron for 1819. The necessity of fuel breaks in the wildfire areas are detrimental to slow down forward rate of spread to provide safety buffers in existing communities that are out there. This is a direct alignment with the Title 14 state responsibility laws for fuel breaks. This also supports the firewise adapter communities creating fuel breaks and creating an opportunity for the infrastructure of finance districts will be able to help support long-term fuel breaks, creating new ones, and providing maintenance mechanisms to go in and continue to conduct routine maintenance. That is necessary.

It's not just a matter of putting them in and letting them go back to natural state, but there has to be a maintenance mechanism that goes into it. So this is definitely in direct alignment with what our current situation is for high and very high fire hazard severity zones within the state responsibility area.

It works very closely and in alignment with the County of San Diego General Plan. This is under the safety element for the local hazard jurisdictional grant opportunities. And this is a funding source, going to create an opportunity. So we're asking from the County of San Diego to be working alongside with our Assembly Members, look at this in long term. Fuel breaks are what will help slow down forward rate of spread of a fast-moving wildland fire in our backcountry areas. Thank you very much.

Thank you. Anybody else in the room that wants to add in support.

Good afternoon, Mr. Chair and Members. Marcus Detwiler with the California Special Districts Association in support. Thank you.

Thank you. Seeing no one else. Are there any witnesses in opposition? Primary witnesses in opposition? Seeing none. Anybody in the room that wants to go on the record In opposition? Seeing none. Take it back to the Committee Members. Committee Members, any questions, comments? We have a first and a second. Thank you for working closely with the Committee on the amendments. I will be supporting your bill today. Would you like to close?

Thank you, Mr. Chair. I urge an aye vote on this really important issue. And we know that these fires are not going away. We need to do all we can to protect our communities. Thank you.

Thank you. Madam Secretary, please call the roll.

[Roll Call]

The motion is do pass as amended, and the roll's been called. And the bill is out, 5-0. We leave the roll open for other Members to add on. Thank you.

Thank you.

And I see Assembly Member Boerner, item number nine on the agenda. AB 2715. Please.

Yes. Good afternoon, Chair and Members. Thank you, Chair and your Committee staff for working with my office on this Bill. AB 2715 would allow local agencies to discuss threats to cybersecurity during a closed session. We have been working with the opposition to address their concerns and will continue to do so should this Bill move forward today. The Brown Act generally requires that all meetings of a legislative body of a local agency are open to the public.

Currently, local agencies can hold a closed session only due to discuss threats to the security of public buildings, the security of essential public services, or the public's right of access to public services or public facilities. However, current laws do not explicitly list threats to cybersecurity as a reason to meet in closed session.

As a result, local agencies are left in a potentially dangerous position of discussing their cybersecurity risks and vulnerabilities in open session, with the only exception being of local agencies that are actively experiencing a cyberattack. AB 2715 would simply add threats to cybersecurity to the list of closed session exemptions in the Brown Act. This measure would allow local agencies to protect themselves and their citizens from cyber attacks to critical infrastructure that are becoming increasingly common.

Therefore, it's essential that local agencies be able to discuss cybersecurity infrastructure in closed session. I respectfully ask for an aye vote. And with me here today is Cindy McMahon. I want to actually pronounce the H and the O in there. Who's the City Attorney with the City of Carlsbad, who's the sponsor of this Bill.

Thank you. Good afternoon, Chair, Mister Chair, and the Members of the Committee. I am Cindy McMahon. I'm the City Attorney for the City of Carlsbad, the sponsor of AB 2715. First, I would like to express our sincere gratitude to Assembly Member Boerner for authoring this Bill and to Chair Carrillo and the Committee staff for working with us on the language of this Bill.

As City Attorney, I am tasked with providing legal counsel and services to the city council, the city departments, and city boards and commissions. My duties include not only ensuring that the city complies with the law, but also, and just as importantly, protecting the public interest and information. The Brown Act was enacted in 1953, and although it has been amended over the years, it does not acknowledge the level to which technology has advanced and the significant cybersecurity threats that are faced by public agencies.

While the Brown Act does allow for discussion to occur in closed session about specific threats, it is silent on the general topic of cybersecurity. This Bill would allow for closed session briefings about General cybersecurity threats, thus making the legislative body more informed about the nature of the threats and the extent of the vulnerabilities that the agencies face. For example, if reducing a vulnerability to cyberattacks would require a financial investment, such as the procurement of a large software contract, that investment can be determined in open session.

But, the closed session would allow the legislative body to learn what the vulnerability is and why the investment is needed without alerting cybercriminals to the vulnerability. Under this Bill, the legislative body must continue to comply with the applicable Brown Act requirements for agendizing and allowing public comment on closed session items and for documenting and reporting on actions taken in closed session.

The Brown Act currently requires closed session agendas to state the statutory authorization for the closed session and, in the case of security threats, to identify with whom the legislative body is meeting. As stated earlier, actions involving contracting decisions and similar expenditures are done in open session. AB 2715 is a modest amendment to the closed session provisions in the Brown Act that will allow local public agencies to protect sensitive information that might make them or put them at greater risk for cyber attacks.

I thank you once again for considering your attention and for considering our strong support for this Bill, and I would be pleased to respond to any questions the Committee has.

Thank you. Anybody in the room that wants to add on the record for support?

Good afternoon, Mister Chair, Members of the Committee. Sharon Gonzalez, on behalf of the City Clerks Association of California, the California Association of Recreation and Park Districts, as well as the cities of Rancho Cucamonga, Eastvale, and Redwood City. Thank you.

Good afternoon. Johnny Pena with the League of California Cities in support. Thank you.

Good afternoon. I'm Eric Lawyer with the California State Association of Counties in support. Thank you.

Mister Chair and Members, Jean Hurst here today on behalf of the Urban Counties of California and the Rural County Representatives of California in support.

Thank you. Are there any primary witnesses in opposition? Seeing none. Anybody in the audience that wants to add on in opposition? Seeing none. I take it to the Committee Members. Committee Members, any questions, comments on what's in front of us?

Thank you.

Second.

We have a first and a second. Would you like to close?

Thank you. I respectfully ask for your aye vote.

Thank you and your staff for working closely with the Committee as you refined the language on your Bill. I am pleased to support your efforts to ensure local agencies can address threats to their cybersecurity systems. I will vote in an aye. And we have a motion and second. The motion is do pass. Please call the roll.

Motion is do pass. [Roll call]

Thank you.

The bill is out. We'll leave the roll open for other Committee Members to add on. Thank you. And are you present for somebody else? And we move on to agenda item number five, AB 2457, Assemblyman McCarty.

Hello again. Thank you, Mr. Chair. I'm presenting a district bill today that is sponsored by my utility district, SMUD, which some of you may know here if you live here part time in Sacramento. First, I want to thank you for working with us and accepting the Committee amendments.

This measure extends a sunset and statute on a program that I created in 2019, which allows SMUD here, our public power entity here, to enter into partnerships with companies, non-stock option partnerships, that help, you know, bring some resources to the district, helps them financially, and also allows them to keep their rates low and continue their efforts to invest in clean energy, helping achieve our carbon goals for the region and also California.

This bill simply extends this sunset for another 10 years, allows them to do up to six partnerships with this statutory change. And with me today to testify is our SMUD district. Respectfully ask for your aye vote.

Chair Carrillo, Vice Chair Waldron, and Members of the Committee, I am Laura Lewis, Chief Legal and Government Affairs Officer for SMUD. I'd like to start by thanking the Chair and his staff for their work with us on this bill. SMUD is the 6th largest community owned electric utility in the nation. We serve about 1.5 million residents in Sacramento County and small adjoining portions of Placer and Yolo Counties.

As a publicly owned utility, every dollar in revenue that we generate is invested in the community or used to offset any future rate increases. Thank you for the opportunity to address the Committee on AB 2457, a bill that would allow SMUD to continue the authority to hold non-stock security in a corporation. This authority is important because it allows us the opportunity to realize a return on the products and services that we help develop, which will help keep our rates affordable for our customers.

Importantly, SMUD does not pay anything in these deals beyond what we normally pay to procure the product or service. As we have background, in 2019, the Legislature passed AB 689, which granted SMUD this pilot authority, and with this legislation, we're looking to extend the program as well as make some additional clarifications. SMUD often partners with companies to develop innovative products and services that enable us to achieve the state's clean energy goals and maintain affordability and reliability for our customers.

For some of these products and services, SMUD provides access to our intellectual property, devotes staff time, and provides critical field testing to ensure their effectiveness. The companies that we partner with may then capitalize on our contributions by marketing those products and services to other utilities. As an example, several years ago we worked with a company to develop software that analyzes a customer's meter data to compare customer energy usage and encourage energy efficiency.

The company was later acquired for hundreds of millions of dollars, but we had no mechanism to obtain even a small return for our customers. SMUD exercised its authority under AB 689 to enter a partnership with a company that is developing long duration energy storage that will be essential for us to meet our carbon reduction goals reliably. We're currently negotiating a second deal with a company that is developing medium and heavy duty all electric work truck chassis.

To meet our carbon reduction goals, we will continue with these innovative partnerships regardless of whether we continue with this authority. This authority simply allows our customers to reap the potential financial upside of the partnerships should the company succeed. Thank you for your time, and I'm happy to answer any questions.

Thank you. I see members of the audience coming in support. Please state your name, affiliation, and position.

Thank you. Julee Malinowski-Ball on behalf of the California Electric Transportation Coalition in support.

Thank you, Chair and Members. Ross Buckley on behalf of the City of Sacramento in support.

Hello, Chair and Members. Derek Dolfie on behalf of the California Municipal Utilities Association in support. Thank you.

Good afternoon. Chris Lee on behalf of the Sacramento Area Council of Governments in support.

Good afternoon. Marcus Detwiler with the California Special Districts Association in support.

Thank you. Are there any primary witnesses In opposition? Seeing none. Anybody else want to be added on the record in opposition? Seeing none. Committee Members, any questions, comments? Is there a motion, second? A first and a second. Assembly Member McCarty, would you like to close?

Thank you. Respectfully ask for your aye vote.

Thank you. And I did hear you say that you accepted the amendments, right? You did? Thank you for presenting today and for working with the Committee on the amendments. With the amendments, I will be supporting your bill. We have a motion and a second. The motion is do pass as amended. Secretary, please call the roll.

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

The bill is done, and we'll leave that roll open for other Members to add on. We have Assembly Member Wilson presenting two bills.

Would you like to start with AB 2257? And that's item two on the agenda. AB 2257.

Good afternoon, Chair Members. Today I'm here to discuss the critical importance of AB 2257 a Bill designed to enhance the transparency, efficiency, and fairness of the rate-setting process for water and sewer services in California. At its core, AB 2257 is about fostering a constructive dialogue between public agencies and the people they serve. Our state's water and sewer agencies are at a critical juncture. The challenges posed by climate change require substantial investments in our water and sewer infrastructure.

To ensure that public agencies can make these necessary investments, it is essential they have a stable and predictable revenue stream. Under existing law, Proposition 218 requires public agencies to provide advance notice to property owners and public hearings for protest and restricts the imposition of fees unless they represent the actual cost of services. However, the increase in Proposition 218 litigation challenges local agencies' ability to set fair rates to cover operational and investment costs.

Often, these legal challenges come without prior objections being raised during the public comment period, leading to costly and unforeseen lawsuits that strain the financial resources of these agencies. For this reason, AB 2257 establishes an exhaustion of administration, excuse me, an exhaustion of administrative remedies procedure. This means that for someone to challenge the fees in court, they must first raise their concerns through the process provided by the public agency.

This requirement aims to resolve disputes early and reduce the frequency of litigation, which can be costly and time-consuming for both parties. This proactive engagement facilitates informed decision making, enhances transparency, and ultimately fosters trust between agencies and the communities they serve. Moreover, it mandates public agencies to respond in writing to all comments receives, fostering transparent and informed dialogue between the agencies and the public.

Importantly, this Bill still protects the right to litigate against ongoing failures by an agency to implement rates in compliance with the substantive requirements of Proposition 218. This ensures that agencies cannot misuse fees for purposes other than those explicitly stated. Amendments to the Bill have been largely technical in nature. The amendments help clarify the public noticing process.

The fees that would be subject to the provisions of the Bill and specify the Bill is not intended to preclude lawsuits related to a local agency's failure to implement a fee or assessment in compliance with existing law. And to be clear, this Bill maintains Prop 218 45-day minimum timelines, and we have since taken amendments on that to clarify this section. This represents a balanced approach to rate setting. This Bill is about more than just procedural adjustments.

It's about ensuring our public agencies and our communities can work together more effectively to tackle the challenges we face. With me today are two witnesses, Kristopher Anderson Esquire, the Senior State Relations Advocate at the Association of California Water Agencies, also known as ACWA, and Eric Robinson, managing shareholder at Kronik, Moskovitz, Tiedemann, and Gerard.

Good afternoon, Mister Chair and Members. Kris Anderson, on behalf of the Association of California Water Agencies. First do want to thank the Committee staff for all the time and attention that's been paid to this Bill, and certainly the author for her willingness to carry this important measure. Public water and sewer agencies provide essential government services for the benefit of communities, agriculture, industries, and the environment.

These agencies are responsible for ensuring a consistent and reliable water supply, safeguarding the quality of drinking water, planning, constructing, and maintaining critical infrastructure, and much more. And with climate change presenting unprecedented challenges, these agencies must also adapt and enhance aging infrastructure to mitigate against the impacts of increasingly severe and frequent climate-related events and in order to ensure reliable water supply for future generations.

Prop 218 places strict limitations on how agencies can raise revenue, and as a result, public agencies rely predominantly on revenue from service rates and assessments to finance their essential government services. While these agencies require financial stability to meet increasing demands. As the Assembly Member noted, a rise in Prop 218 litigation is making it increasingly difficult to ensure agencies can pass fair and reasonable rates to cover the cost of operations and investments.

Oftentimes, these suits are filed without first having raised the concerns during the rate-making process. These surprise lawsuits prevent agencies from endeavoring to resolve the dispute and avoid litigation they also have the potential to undermine an agency's ability to maintain stable budgets necessary to operate effectively. AB 2257 would bolster the existing rate-making process in order to enhance dialogue and transparency between public agencies, agencies, and their customers.

The goal of this legislation is to shine sunlight on potential objections to the proposed rates and assessments at a time when agencies have an opportunity to resolve those concerns. This Bill will also promote financial stability necessary for public agencies to operate effectively and prepare for climate change. We urge your support and happy to answer any questions.

May it please the Committee my name is Eric Robinson. I'm Managing Shareholder of the law firm Kronick, Moskovitz, Tiedemann, and Girard in Sacramento, and since 1997 I've practiced water resources and public agency law, and in that capacity, I've assisted public agencies in complying with Prop 218's rate-making process and in litigation defense. Prop 218 imposes procedural requirements and substantive limits on the adoption of new, extended, or increased property-related fees and special assessments that pay for water supply.

Under Prop 218, public agencies are at a steep disadvantage when they step into a courtroom to defend their water service rates or other property-related fees. First, under Prop 218, the burden shifts from the plaintiff bringing litigation to the defendant to show that its rates comply with Prop 218. Under that Proposition, courts exercise independent judgment review on the lawfulness of the rates rather than deferring to the public agency's technical determinations on issues involving the operation, construction, maintenance of complicated infrastructure.

Rate-making is inherently a legislative action. So in litigation, the agency's evidence for defending its compliance with Prop 218 is limited to the administrative record of proceedings developed up to the moment that the rate-making decision occurs. If nobody raises an issue with Prop 218 compliance during that rate-making process, it's difficult for the agency to defend itself. It doesn't know what's coming. A typical agency rate-making process provides multiple opportunities for public involvement. There are public workshops, local outreach.

Rate-making proceedings are done by noticed Brown Act compliance public meetings. The goal of this Bill is to bolster public participation, to develop sound, well-informed fees, promote financial stability for agencies building, operating, maintaining critical public water supply infrastructure in the face of increasing floods, fires, and droughts. We support AB 2257 and respectfully request your aye vote.

Thank you. Any Members of the audience want to be added on in support, state your name, affiliation and position.

Good afternoon. Karen Stout here on behalf of the Santa Clara Valley Water District, we are in support.

Jamie Miner on behalf of Santa Margarita Water District and Eastern Municipal Water District, pleased to support. Thank you.

Julee Malinowski-Ball on behalf of the Contra Costa Water District in support.

Jay Snicket on behalf of the Los Angeles County Sanitation Districts and the California Municipal Utilities Association in support.

Good afternoon. Kylie Wright on behalf of Environmental Defense Fund, Olivenhain Municipal Water District, and Padre Dam Municipal Water District. Thank you.

Cyrus Stevers for the Las Virgins Municipal Water District and the Municipal Water District of Orange County in support.

Eric Lawyer on behalf of the California State Association of Counties in support. Thank you.

Clifton Wilson on behalf of the South San Joaquin Irrigation District in support. Thank you.

Marcus Detwiler with the California Special Districts Association in support. Thank you.

Sharon Gonsalvez on behalf of the cities of Santa Rosa and Rancho Cucamonga and the Town of Hillsborough in support.

Thank you. Are there any primary witnesses in opposition.

Oh, it's okay. I can stand here. You prefer me to sit there? Yes, sir. I will do as you ask. Okay. Happy to. Scott Kaufman, Legislative Director for the Howard Jarvis Taxpayers Association. First, I'd like to thank the author for the amendments. We do think that they improved the bill, but our main concerns still remain.

The bill requires nothing more of an agency than mailing the notice that is already required under Prop 218, stating the amount of the charge and the basis for the computation, but then forecloses litigation for any ratepayer who fails to raise specific objections during a time when the rate study and methodology are likely to not be even available for review.

For example, if the rate study contains an indefensible arithmetic error, the fact would not be disclosed in Prop 218 notice, and yet the customer would be barred from legal recourse based on their inability to identify grounds for objection during the 45 day notice period. Further, there's already 120 day limitations period - that is really 75 days because there's an agency response period baked into it - that applies to water and sewer. AB 2257's obstacles are creating due process and takings concerns, while we do not think create meaningful dialogue. Thank you.

Thank you. Anybody else who wants to be added on in opposition? Seeing none. Committee Members, questions, comments? Assembly Member Essayli.

Yeah, I have some questions about this. So my understanding is this is like the speak now, forever hold your peace law, right? I mean, you're basically saying unless a ratepayer, taxpayer, specifically objects with the exact legal issue during the rate making process, they'll be foreclosed from bringing a lawsuit in court later. Is that essentially my understanding of this bill...

I'll let... I would take exception with speak now forever hold your peace. But I will let the technical aspects go to the sponsor.

So when we drafted this bill, I will make note that this is not a new or novel concept in any way. In fact, exhaustion procedures are a common practice in administrative agency decisions. For example, CEQA has a similar requirement. One thing to note is what we are doing here is not just placing obligations on ratepayers. We are raising the bar in terms of what is required during the rate making process.

So, for example, under Prop 218, you are required, the agency is required, to consider all objections. This bill would require for the agency to be afforded this exhaustion defense. The requirement to respond in writing to all comments received, present those to the board, because the real critical aspect of this bill is you're trying to present all objections and all agency responses to the board at a time that they have the opportunity to address, hopefully resolve, or at least create a better administrative record in the event of litigation.

So is that a yes, that if you don't, if a rate payer doesn't make the objection during the rate making process, then they can never bring a lawsuit challenging...

Depending on what the objection is. So if the objection is related to a failure on the part of the agency, they get that right no matter what. Right. So if the agency has failed in some way, then no, it's not a speak now forever hold your peace. It's just that if you're raising an objection that could have been dealt with in advance, then you should speak. You should say. That's the time period that allows us saying, there's an issue here.

And to, you know, the opposition noted that it's just a postcard that you get. True, the notification is a postcard. But it points to detailed information that is available at whatever agency that is.

I just wanted to establish, yes. So the answer is yes. If you don't object, you will lose the ability to...

Not in all cases, so partially true.

Okay, but what if you, what if they miscalculate the rate? What if... Cause you're only supposed to collect fees to reimburse for cost. You can't make a profit, for example, and transfer it to the city's coffers, which happens with a lot of public utilities. Riverside County or Riverside City, which I represent in a lawsuit, got dinged because they were taking surplus money from their utilities and dumping it into the city coffers. So you're only supposed to be charging for hard costs. So if that calculation is not done correctly, you would have to object to that But...

That's against the law. They're not allowed to do that. So there is a remedy for that.

You'd still be able to sue for that.

The bill makes clear, if there is a misappropriation of funds, yes, you can sue.

Okay, but what about this miscalculation?

Well, you would... If there was an objection that the rates do not comply with the substantive limitations of Prop 218, that is what it limits, the cause of action. That's what limits.

So what if I move into this area after the rate has been adopted? So I just... Because I was not living there at the time, even though I'm paying the monthly fees, I can't bring a lawsuit. Is that correct, counsel?

If you moved into property, and rates had been adopted, and you had a problem with the rates, and it was after the 120 day limitations period, which is already existing law, you would not be able to litigate against those rates. And that's because the limitations period is to protect the stability of the revenue needed to protect that infrastructure. And so, no, you wouldn't be allowed, and that's as a result of the statute of limitations alone.

Okay, let me just, one last question for Howard Jarvis. Do you see this statute as violating Prop 218?

The spirit, if not the letter. I mean, our main concern here is, again, that you wouldn't, there's nothing in this bill to require the agency to present a rate study or methodology or anything within this 45 day period. So you don't know what you're objecting to within the 45 day period. You cannot make a specified objection. And if you can't do that, that really limits your legal recourse going forward because you can only bring forth objections that you've objected to in the 45 days.

Does it change the burden in court? You're saying under, currently, if you bring a challenge, the burden is on the agency to prove that it was...

Well, I want to clarify the record if, through the Chair, that the rates and the rate study is already done, the information is already available. When the postcard, the notice is that I want to change the rates, and this is what I'm changing them to. And then there's a whole set of documents - they're not on the postcard - but where they can go get those documents. They can request.

I know in our area, I believe this is standard statewide, that you can request those documents be sent to you. But they also are available for inspection at the jurisdiction as well as online.

So you have to go. It's available to you.

Yes, but it's cheaper to send you a postcard and tell you that it exists and this is what's happening and giving you notice than it is to send you an entire deal. Yes. And so that's not required by law, and this doesn't change that. But I would like to note in regard to your concerns, two things happen with this law.

One, as was noted through testimony, is that the standard has raised. Right now a ratepayer could submit an objection, and we, as the jurisdiction, whoever's the governing body, can say, okay, thank you, and that's it. Now they are required to respond. So before there is no response, they just have to take it into consideration as they consider the objections received. But now they are required to respond to every single objection.

And then now it also allows that, if we've gone through this open process where we are back and forth dialoguing about a particular objection or concern, it says use that process versus litigating later after the fact, having never raised that concern. If you do that during that process, then the rate could actually change. Or if there is an issue, it could be addressed.

No, I get it. It's like a safe harbor thing, but... So I want to just ask the attorney, so does this bill change the burden in court? Because you're saying initially the burden's on the agency. Would this change those burdens or it would be the same?

Absolutely no change in the burden of proof. The burden of proof remains on the defendant agency to show that its rates comply with Prop 218. And this enhanced ratepayer engagement process develops a better administrative record to show the issue that was raised, the agency's response. And that response could be a better explanation of the rates, and that the objection isn't really a real objection, it just needs a better explanation.

It's not changing the burdens, it's just changing who can bring a challenge at a later, after the rate's been adopted.

Yeah, it just requires advance notice of what the agency is going to defend against.

Okay, I don't have any more questions. Mr. Chair, thank you.

Thank you, Mr. Essayli. Any other Committee Member questions, comments? Assembly Member Wilson, would you like to close?

Thank you so much. By promoting early and meaningful dialogue between public agencies and ratepayers, this bill lays the groundwork for more equitable and effective water and sewer service rates in California. I appreciate the dialogue as well as the testimony, both in support and in opposition to this bill. I respectfully ask for your aye vote.

Thank you. Is there a motion to move? First and a second. Thank you for presenting your bill today. I will be supporting it. Madam Secretary, please call the roll.

The motion is do pass. [Roll Call]

The bill is out. We'll leave the roll open for the Members to add on.

Appreciate it.

And agenda item number 10, also by Assembly Member Wilson. AB 2791. Whenever you're ready.

Again. Thank you, Mister Chair and Members, I'm here to present. AB 2791. This Bill would allow local governments to choose to enact an ordinance to restrict the operations of sidewalks within 250ft of a fairground during the time of their annual fair. California fairgrounds currently provide 30,000 permanent jobs and generate more than 3.5 billion in annual economic activity, while contributing over 200 million in tax revenue to local and state governments. Annual fairs alone draw nearly 10 million attendees, highlighting their importance to local economies and communities.

Fair boards face considerable pressure to main profitability, especially given the reduced state funding since 2011-2012 budget. Effective vendor management during high-traffic events like annual fares is crucial. In 2018, SB 946 limited local government regulation of sidewalk vendors except near farmer markets or flea markets. Since then, there has been an uptick in unregulated sidewalk vending around California's fairgrounds during their annual fair.

AB 2791 gives local governments the power to tailor decisions to their communities, offering a tool to improve operational strategies during significant local events such as fairs. The proposed ordinance would be active only during the days the fairgrounds are hosting the annual fairs. This targeted approach ensures the ordinance does not overextend beyond necessary times. AB 2791 responds to a direct need for local autonomy and managing significant community events.

By supporting AB 2791 we can protect the interest of local businesses and maintain the cultural and economic integrity of California's cherished annual fairs. I have with me today as my witness Louis Brown, representing the Western Fairs Association.

Good afternoon Mister Chair Members of the Committee, Louis Brown on behalf of Western Fairs Association, the California Fairs Alliance, I'm asked to send the regard to Patricia Conklin, who is the manager of the Dixon May Fair within Missus Wilson's district that brought this issue to Miss Wilson's attention. She is doing a staff training today because her fair opens next week, so she's a little obligated. But I want to thank you for the opportunity to present AB 2791 and ask for your aye vote.

This is an important measure that we've been dealing with across the state, with our 76 fairgrounds across the state, but also, more importantly, in addition to our vendor members that use the California Fair Network for their livelihood, many small business operators utilize the fairgrounds for this purpose. And whether they're selling you a hot dog on a stick, a fried Twinkie, or whatever it might be, this is where they go and make their livelihood.

And so it is in their interest that we're asking you to help support the Bill. It's also the local community groups that utilize that fair for fundraising opportunities, and we believe that this will give them that opportunity to continue to do that. And then finally, there is a public safety measure that is addressed by this Bill, especially when we see large number of street vendors congregating by our parking lots with large numbers of cars coming in and leaving at a significant period of time.

We believe that this is in the best interest of our patrons. The vendors and others when it comes to public safety. So for those reasons, we'll ask for an aye vote and available for any questions. Thank you.

Thank you. Anybody in the room that wants to be added on in support? How about any primary witnesses in opposition? Seeing none. Committee Members, questions? Comments? Assembly Member Ash Kalra.

Thank you Mister Chair and I appreciate the author bringing this forward. I appreciate the narrow nature of it. I understand that while the state fair is going on, a lot of vendors pay a lot of money to be there and sell their wares and their food and what have you.

I also know that over the years, certainly in my jurisdiction, there's been a lot of tension and we've relaxed some of the rules that have limited where street vendors can go because a lot of people rely on that for their livelihood. And we want to make sure we don't. We're not overly restrictive on street vendors. So I think they add a lot to our culture, certainly, and they're all small business owners as well.

So I appreciate the fact that it's narrow to when the fair is happening. I also appreciate the Committee amendments adding the specificity of the distance. Otherwise, whenever you add that vagueness that causes problems at the local level, they're like, what did the state really mean, right? So the specificity, I think also helps a lot. So will certainly be supporting it.

And just in this case, I think that with the narrowness is fine, but would caution adding more and more categories to where street vendors can or can't vend, as long as they're abiding by local jurists, by local ordinances and local rules. But in this case, I think that it's done in an appropriately narrow way.

Absolutely. And just to comment, if I could, through the Chair, is that SB 946 did that limitation and it was narrow. And I too think we shouldn't add lots of places. And I feel like with the fairgrounds during a fair adds to the spirit of what we saw with farmers markets and flea markets, which is why they have that exception. And so I think that that because it's narrowed to fairgrounds only when a fair is operating, adds to the same spirit of that.

And as noted, you know, appreciate the Chair's perspective, as well as the Committee staff that worked on these amendments, that even allows for that, very much defined by law, a certain amount of feet, 250ft, instead of it being vague to where you can have that friction and then maybe not enforcement because who wants to get their hands slapped? And so I think that, you know, with the support of the chairs and the chairs and the Committee staff.

I think we've gotten to a really great place that follows the spirit of the original Bill without setting a precedent to every year get a Bill where a new place is added.

Assembly Member Essayli, questions, comments?

I was gonna say, unlike your last Bill, I support this Bill. I think it should be broader.

I. You know, I think vendors should be regulated like everyone else for safety reasons. And I also hear from a lot of small business owners who have to have the expense of brick-and-mortar city permits and that undergo a lot of other expenses to run a business, and they think it's not fair if someone's unlawfully operating a street vendor. So I support the Bill. Thank you.

Any other Committee Members with questions, comments? How about a motion?

Second.

We have a first and a second. Would you like to close, Assemblymember Wilson?

Thank you. I would just like to note, as the testimony was, is the Dixon May Fair is celebrating 147 years of its existence this year. And it's in my district and proud to be able to participate in the parade this year. And by supporting this Bill, you are supporting the continued efforts of that particular fair. As other fairs across this great state, we require them to be self-funding, to be self-sustainable. And so this goes to ensure that. And so I respectfully ask for your aye vote.

And you do accept the amendments, right?

Absolutely.

Thank you, Assembly Member. I appreciate your work and the work of your staff and sponsor on this Bill and your collaboration with the Committee to address my concerns. Thank you for that. With the amendments, I am pleased to support your Bill. The motion is do pass as amended. Secretary, please call the roll.

The motion is do pass as amended. [Roll call]

The Bill is out. We'll leave the roll open for the Members to add on. We do have one last item on the agenda. Assembly Member Quirk-Silva is on her way. In the meantime, can we take care of the consent calendar, please?

Carillo?

We need a motion. First and a second. Aye.

[Roll call]

Consent candidate is out. We'll leave the roll open for the Members to add on. And we have agenda item 12, AB 3130 by Assembly Member Quirk-Silva. When you're ready, please.

Good afternoon, Mr. Chair and colleagues. I would like to begin by thanking the consultants for working on this bill and I accept the Committee's recommended amendments. And dare I say, this is a simple bill, but it is pretty straightforward. Today, I present Assembly Bill 3130 which promotes transparency and accountability by mandating that boards of supervisors disclose specified relationships before distributing public funds to nonprofit organizations. Conflict of interest laws are based on the principle that government officials must prioritize the public interest over any other considerations.

Current law prohibits a public official from participating in governmental decisions that will affect their personal finances. These instances create a potential for biased decision making, favoring the officials personal financial concerns over the welfare of the public. By barring officials from prioritizing financial gain over the public good, conflict of interest laws help ensure fairness and accountability at all levels of government.

AB 3130 is a good government bill that upholds holds trust, integrity, and fairness in the distribution of public funds while promoting ethical conduct among members of boards of supervisors.

Thank you. And I don't see any primary witnesses. How about anybody in the room that wants to be added in support? How about any primary witnesses in opposition? Seeing none. Committee Members, any questions? Comments? We have a first and a second. Would you like to close?

Respectfully ask for an aye vote.

And you do accept Committee amendments?

Yes.

Thank you for your efforts on this bill and for working with the Committee on Amendments. I agree that actual potential conflicts of interest for the members of the county Board of Supervisors should be disclosed to the public and to fellow board members. I will be supporting the bill. We do have a motion and the motion is do pass as amended. Secretary, please call the roll.

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

The bill is out. We'll leave the roll open for the Members to add on. Thank you. Congratulations. Thank you.

Thank you, Members.

That was the last item on the agenda, but we have some votes that need to be recorded if you want to go over the list.

AB 1819 is a do pass as amend.

We need a--

[Roll Call].

The bill is out. Eight/zero.

AB 2257: the motion was by Pacheco, second by Kalra. It was a do pass. [Roll Call]. The vote is now six/two.

The bill is out; six/two.

AB 2457 is a--motion was by Pacheco, second by Wilson, so do pass as amended. [Roll Call].

Seven/one. The bill is out. We'll leave the roll open for other Members to add on.

AB 2590: need a motion. The motion is by Ramos, second by Wilson. Do pass as amended. [Roll Call].

The bill is out. Eight/zero. We'll leave the roll open for other Members to add on.

AB 2715: the motion was by Wilson, seconded by Waldron. The motion is do pass. [Roll Call].

The bill is out; seven/zero. We'll leave the roll open for other Members to add on.

AB 2791: the motion was by Pacheco, second by Essayli. Do pass as amended. [Roll Call].

The bill is out. We'll leave the roll open for other Members to add on.

AB 3130.

We are done. We're gonna leave the roll open for Assembly Member Ward to add on.

Madam Secretary, please call the roll.

Consent calendar. [Roll Call].

Nine/zero; the bill's out. The bills are out.

AB 1819: do pass as amended. [Roll Call].

Nine/zero; the bill's out.

AB 2257: the motion is do pass. [Roll Call].

Seven/two; the bill's out.

AB 2457: the motion is do pass as amended. [Roll Call].

Eight/one; the bill's out.

AB 2590: the motion is do pass as amended. [Roll Call].

Nine/zero; the bill's out.

AB 2715: the motion is do pass. [Roll Call].

Eight/zero; the bill's out.

AB 2791: the motion is do pass as amended. [Roll Call].

Nine/zero; the bill's out.

AB 3130: the motion is do pass as amended. [Roll Call].

Nine/zero; the bill's out. And that was it. And with that, we adjourn the meeting. Thank you, Assemblyman Ward.