Senate Standing Committee on Rules

On behalf of the Senate Rules Committee, we welcome you to the hearing today. Thank you so much for taking the time out of your busy schedules. What we'd like to be able to do is establish a quorum and then take care of some administrative businesses. And then we'll get to those appointees who are scheduled to appear. So why don't we kick off and get a quorum established? Secretary, can you please call the roll?

[Roll Call]

Quorum has been established. We do want to let folks know that wifi on one of the busiest weeks of the year is down. So we do apologize.

Oh, they're going to have to pay attention. This is going to be good.

Exactly.

Doesn't mean you all have to testify.

That's right. So no secret watching sports in the back, so. My goodness. But we do welcome you to Committee. What we'd like to be able to do first is take care of some of the administrative items. And we'd like to be able to start with Governor appointees not required to appear. If there are no objections, we'd like to be able to take up item 2d. Is there a motion?

Good. Well, it's got at least two votes.

There we go. We got a motion by Madam Vice Chair. Madam Secretary, can you please call the roll?

[Roll Call]

That's 50 vote. The motion passes. We're now going to be moving on to item number three, Bill referrals. We'd like to be able to see if there is a motion reference of bills to committees. We have a motion by Madam Vice Chair. Thank you so much. Madam Secretary, can you please call the roll?

[Roll Call]

Five to 5-0 vote. That motion passes. Members, there are several floor acknowledgments in front of us. Items 456-7456 and seven under. Floor acknowledgments. Is there a motion to approve? We have a motion by Madam Vice Chair. Madam Secretary, can you please call the roll?

[Roll Call]

That's a 5-0 vote. That measure passes. Thank you so much. We have dispensed with the administrative matters for the day. We are now going to be getting into those who are scheduled to appear. Governor appointees and first and foremost, wed like to be able to take up Miss Cumpian, if you can, please come forward. Norma, welcome back. Its good to see you. Thank you for being here. Were going to be focusing on the board of state and community corrections here today.

First and foremost, were going to allow you to be able to provide one to two minutes of testimony. We look forward to that. During the time of testimony, we welcome you to acknowledge any family or friends who may be with you here today and or watching online. What we'll do then afterwards is that we'll open it up to the Committee to be able to ask any questions and provide any comments and have a conversation with you. And then we'll move towards the boat. The floor is yours. And again, welcome to Committee.

Thank you very much. Good afternoon, Mister chair and Members of the Committee. My name is Norma Cumpian, and I'm very pleased to be here today and so honored to be joined by some of my colleagues from the anti recidivism coalition who are here today, and also some of the BSCC staff. As a formerly incarcerated person, I spent nearly 20 years in state prison. The majority of my time at the California Institution for Women while incarcerated.

I firmly believe the programming I received absolutely transformed my life and that of my son. I want to specifically thank Governor Newsom, who, by appointing a formerly incarcerated woman to the BSCC, has not only demonstrated compassion and grace, but has also taken a courageous step towards a more equitable state. This appointment is not just a symbol, though. It serves as a light of hope for countless formerly incarcerated people who have faced the challenges of reentry after incarceration. It sends a powerful message.

No one should be defined solely by their past mistakes, but rather by their potential to contribute positively to their communities in a real and meaningful way. As a formerly incarcerated woman, I'm very humbled to be standing here, and along with my community support, I will use my experience, judgment, and knowledge to be a responsible and thoughtful board Member always. Thank you.

Thank you so much, Madam Board Member. Again, grateful. No, this is incredibly personal to you, and we truly appreciate your testimony. Let's open it up for the Committee to be able to see if we have any questions or comments from Committee at this time. Please, madam Vice Chair.

Thank you. Thank you, Mister chair. Welcome, Miss Cumpian. Did I say that right?

Okay, thank you. Thank you for being here. You know, often we have people that come that are appointed to the board that have lived experience. We call them lived, experienced experts, and you obviously are a lived, experienced expert. In this particular field and background, I just have.

Yes, that was great.

The only question I have for you is having applying that and probably being the only one on the board that has that background, how does that give you information on how to process your thoughts and your work on the board? What do you think your background adds for your work on the board? And I know it's an obvious question. I just want to put it on the record and go for there. Sorry.

Oh, no. I think it's a great question and love talking about it. Actually, when I first joined the board, it was mainly law enforcement, and that was pretty intimidating. And as life is, you build relationships, you get to know people. And I feel very strongly that I'm representative of someone who's formerly incarcerated. Maybe the only person that people in the room will ever get to know. And I take that very seriously.

And I think things through and I think about what the people incarcerated will be going through. Should something pass or should a regulation be in place. I know firsthand what it's like to make a mistake and want to come back from that mistake and also knowing what it's like to visit your loved ones and to have those tough conversations and needing that support as well. So I think those are all the things that really guide me when I sit on the BSC.

Thank you. Not ever been incarcerated, but Juvenile Hall kid, right? So I was a Juvenile Hall kid and I know. Shocker.

Oh, I love that. I love it.

You know, and I just. The reason why I ask you that question is because, like, I speak at Grizzly Academy, or I'll speak to youth, you know, incarcerated youth or, you know, Juvenile Hall youth, or, you know, we don't have that anymore, really. But. And they're like, you'll never understand what I went through. I said, zero, yeah. And I just think that having. I'm not saying that everybody should have it. I'm not at all.

But I'm just saying that having that experience gives you a different perspective. And I just wanted to know if that was your thoughts as well. And I know my colleagues are not shocked. They do this every day. So thank you for that question or the answer. I appreciate your participation in this process.

Thank you. And I appreciate you and your share. Thank you.

Please. We're going to go to Senator Eggman and then Senator Laird.

Who are you saying no to.

I was worried. I'm going to comment about it.

Thank you. And thank you for being here today and talking with me yesterday. Can you talk a little bit about, since, you know, you talk about formerly incarcerated in prison and now you're doing the overview of the county jails, and as we see recidivism at the county jail level, that revolving door that eventually ends up people in prison, how do you see your role or the jail's role in being able to help break that cycle?

I think it is a little bit different. This is my experience. The jail is a Shorter time span for people. So a lot of times people are newly sober or they're filled with trauma. They're focused on fighting their case. They're trying to win that, win their case or get as much time taken off as possible. Once you get to prison, it's more of a settled space where you're able to really dive into, if you so desire, dive into what happened in my life.

How did I get here? And there's a longer span of time where you're able to really focus on yourself. I don't know how many programs there are in the county jail. I'm from Los Angeles, and I know there's not a lot of vocation there. There are some orgs that go in. So I think that that that's maybe a bigger conversation about the programming that exists at that lower level of the county.

And do you see that as an area where we could potentially grow and then stop?

Yes, absolutely. That is, that's a great place. And I think also in line with that is with the juveniles also, and to really flood the juvenile halls and the camps with programming and opportunity and hope for the young people so that they do see another way of life and they have hope then.

Do you see any possibility through your role of helping that transformation be realized?

Oh, I think so. I think today, those tough conversations that we're having about suitability at the BSCC, it shines light continuously on the lack of programming for the youth. I know they're working really hard to get those, and it's really necessary for the, the programs and the college programs and the vocational trades, especially for the youth.

Especially for the youth. Right.

I would.

Okay. Thank you.

Thank you so much, Senator. Please, Senator.

Thank you. I wanted to follow up because I was going to ask about the youth part. And the thing about it is there has been a transformation in the last 15 or 20 years on juvenile halls, where they used to be just a high number of people there in some ways warehousing. And there has been this transition in the last decade or two of only having people that really are a risk or at risk, and the numbers have dropped.

And I noted in your answers that one of your major concerns was to deal with juvenile halls and youth in what you're doing here. And so I was going to ask how you approach that, given the fact that there are these changes going on or have gone on, and it means that there's a different level of people that are in juvenile hall, just sort of intensity as opposed to when it was. The numbers were huge. So how do you deal with that?

What do you focus on? And in some ways, this turns out to be a little bit of a follow up to Senator Eggman's question, but I was curious to hear your talk about that.

Do you mean the SYTF versus the DJJ with the DJJ closure and recreating of... ?

There's that. But in county juvenile halls, there's been this whole scale change in sort of who's there as well. So you've got the changes on both sides going, and it sort of means there's a different population and a different level of programming. And in some ways, it's some of the people that are the hardest to reach that are left. And you mentioned that this is a priority for you.

So I'm just looking to see what you think you can do or what your focus would be if you were to do what you said, focusing on it. What's that mean?

I think for the juvenile facilities, the one program that really gives me hope is the credible messenger program, where people who are formerly incarcerated or system impacted go back and as a leader in their community, but having done a full turnaround of their lives, but coming from the same place as the youth, those people are now in place in Berry J. In the SYTF, and also at Los Padrinos, at more of the Predispo facility.

And I think by bringing folks in like that to work with probation, I think that's the best snapshot of community work that we can really hope for.

I appreciate that. I ran a nonprofit 30 years ago. And we were dealing with HIV transmission among youth, and they didn't believe anybody. And we got a grant and did a study that the people they believed were young.

And so actually, if you educated five or 10% of the people, you were actually educating most kids because of who they listened to or how it happens, would seem there's another thing that was in the papers that sort of comes up in this, and that's what is the conflict between occasionally you're dealing with interests of local government and interests of state government, and they're both running programs that you have some measure of interaction with, and yet they're in conflict. Have you experienced that and had to try to navigate that at this point?

I think at my day job, my day job, not the VSCC, but in the day job of being a facilitator and going inside the institutions, I think recently there's been a lot of overlap and people with good intentions that believe their program is, you know, is the best. And I think it's carefully working together that is really the best solution for that. And really listening to the youth, what the youth want, sometimes they want things that we think that they should have.

For instance, we think they should have financial goals setting. That's what we would like. And they respond, can you make that fun? Can we do that outdoors? Can we do that with a basketball? So I think those things are things that we have to take that feedback. We have to be open to that feedback. If we're really, truly listening to the youth and we really want to see change, we have to be innovative and think outside the box of what can reach them.

I really appreciate that, and I also just appreciate the special view you bring to this. And I appreciated your statement about building relationships and people seeing in you something they might not see any other way. So I would just say thank you for your service and thank you for being that person in those situations. I appreciate it. And barring some bizarre testimony, which I don't think going to happen, and we'll look forward to voting for your confirmation.

Thank you so much.

Thank you so much. Senator Laird, let's go to Senator Jones, please.

Thank you. Just a couple of comments and a couple, maybe a question or two. I just want to say congratulations and respectfully appreciate that you've been able to complete your sentence and get out of prison and turn yourself around and then become deeply involved with ARC, which I really greatly appreciate. I've shared before in this Committee that my brother in law was not so fortunate to be able to get out and have those same opportunities to turn his life around.

So I think that your experience on this board is going to be important and valuable to what we're doing. The question is in your background. A couple of times, SB 519 has come up, and that's the Senate Bill that allows more authority for the VSCC to go into the local jails and have some more oversight on visits and unannounced visits and things like that. And you seem to be very supportive of that and open to that.

I didn't support the Bill, and I don't remember the specifics of the Bill. I don't. That's not what's important today. What's important today is I would like for you to kind of share with us what that specific piece of legislation, why you're excited about that, what you intend, how to use it. And, you know, the issues that SB 519 sought to address haven't gotten better. And I will specifically point out San Diego as one of those examples.

But I'm sure there's other examples around the state that you can maybe point to. And so if you could just walk us through that, I'd appreciate it.

Okay, thank you. Thank you for that. The SB 519. And then I would like to hear from you also after about what it is about the Bill that you felt maybe could be tweaked a little bit. Just kind of curious.

That's a fair question. I'll go back and look at it.

Okay. Okay. I'm going to tell you a little bit about it. So it was so grateful to Senator Atkins for this Bill, and I think what it will do will provide a snapshot of the deaths in custody across California, and those will be available on the BSC. I know that there is a Director coming to the staff at the BSC, maybe in July, around then, sometime.

And I'm sorry, that was actually within my notes, too. Will you have a say in who that Director is?

I believe that that's a Governor appointee. Yes. Yeah, you'll have a say. But you can call me also if you want. I'm just saying. Okay. All right.

All right. Fair, fair. But hopefully this. By having that position on the BSC, that families will have a place to. To reach out to. To talk with. And I'm thinking that if we have it on the website, that we'll be able to maybe see some trends that maybe previously we weren't able to see. So those are some of the things I think about when I think about that Bill in that position.

Thank you, and I appreciate that. And I will go back and look at it, because it is quite possible that given the history between then and now, it might be something I would support. So, yeah. More than happy to have that follow up conversation and get to spend some more time with you on that.

Okay. Appreciate you. Thank you.

Thank you so much. Robust conversation here with the Committee. Thank you. What we'd like to be able to do now, is open it up to each of those who are here in the room. First and foremost, we will be opening it up for those who are in support of. Madam board Member, if you could please step forward to the podium. We respectfully request that you give us your first and last name in the organization who you're with and you will have 30 seconds for testimony.

I am guilty of this and probably one of the worst offenders. Just a reminder, the Committee and all those who are up at the dias that we talk over ourselves. It is difficult to be able to capture each of the words for our madam court reporter. So just want a reminder. And that's a reminder for myself as well. Sir, it's good to see you back again in Committee. The floor?

No, definitely. Thank you. Hi, everyone. My name is Christian Ramirez. I'm a life coach with the Anti Recidivism Coalition and I'm here in support of Norma Cupian.

Thank you. Thank you so much. Appreciate you being here. Good afternoon.

Good afternoon. Peace, power and positivity. I am Sean Gage. I am a life coach with the anti recidivism coalition. In total and full support. I'm about to cry. Total and full support, Norma Cupian.

Thank you so much, sir. Appreciate it. Good afternoon.

Greetings and good afternoon, chair Members. Chris Lodgson, policy and community organizing manager in the Sacramento office of ARC. The anti recidivism coalition. I could not be in stronger support of Norma. She is an amazing, amazing, amazing person and contributor to this effort. Strong support.

Thank you. Thanks so much, Chris.

Good morning, all. My name is Shawn Robinson and I am in full support of Norma Compion.

Thank you so much, Miss Robinson. Thanks for being here. Good afternoon.

Good afternoon. My name is Wajuba Mcduffie. I'm a regional manager for the anti recidivism coalition. I am 1000% supportive of Miss Norma Kupiana.

Thank you so much, Mister Mcduffie. Appreciate it. Good afternoon. Good afternoon. I'm John Jarvey, a life coach with the anti recidivism coalition. I wholeheartedly support Miss copian honor. Thank you so much, Mister Jarvey. Welcome back. It's good to see you. Hello. My name is Jack Castello. I am a Member of the anti recidivism coalition and I am in strong support of Miss Norma Compierre. Thank you so much for your comment. Appreciate it. Good afternoon, sir. Good afternoon. My name is Tremaine Amos.

I'm a pine Grove life coach and I am in support of Miss Norma Kupiana. Grateful for your testimony. Thank you. Good afternoon. Good afternoon, board. My name is junior with the anti recidivism Coalition, and I strongly support Norma compion. Thank you for being here. Good afternoon.

Good afternoon, everybody. My name is Joseph Osorio. I'm the associate Director with the anti recidivism coalition here in Sacramento. Also a really good friend of Norma Compion for now five years. She's my mentor, good friend, and I strongly support. And just wanted to point something out really quick. It was asked how she could keep the separation between the work that she does and sort of the jobs of the BSEC.

And I appreciate the answer with, it's not about what I want or what any other agency wants, but more about what the kids are looking to get. And I think that speaks volumes of the work that she does. So congratulations, and I hope you get it. Thank you.

Thank you so much. Appreciate that. We're going to do a last call. Last call for those in support, if you could please come forward at this time. Last call. We're now going to turn it over to those who may be opposed. Anyone in opposition? If you could please step forward to the dais at this time. We're going to do a last call for opposition. If you could please come forward.

Hearing, seeing no one stand, we're going to bring it back to Committee to be able to see if there's any additional conversation. And we also will welcome a motion by any of the Members so moved.

I make a motion to move Cumpian to the full vote of the Senate Floor.

Thank you so much, Madam Vice Chair. We have a motion in support. Madam Secretary, can you please call the roll?

[Roll Call]

Five to 50 vote. That motion passes. Congratulations, Madam board Member. Next stop will be the Senate Floor. Thank you so much. Thank you for your testimony. Very grateful. We're going to take a 62nd recess. 62nd recess. Miss Compillon has brought her fan club, and it is amazing. It is so good to be able to see. 60 seconds will allow folks to be able to come in. Come out. And we're going to welcome Mister Director.

In the meantime, if you can please step forward to the table. Thank you so much.

You will be given one to two minutes. I'll give you a 32nd heads up when you get close to that two minutes in your opening statement, obviously welcome any family, friends who are here or who may be watching. That's always fun to be able to see. And then what we'll do is we'll bring it back to Committee, have conversation, provide comments, and offer any questions. Mister Director, we welcome you. The floor is yours.

Thank you. Good afternoon, honorable chair and Members of the Committee. Thank you for the opportunity to appear in front of you today. I'd like to take a moment to recognize my wife Michelle, and our two sons, Wyatt and Logan, who are here to support me. Also present is ABC's Chief Deputy Director, Francisco Robles, as well as other ABC staff. I am truly honored to be sitting before you. I've spent my entire public service career with ABC, starting with our San Francisco office in 2001.

I would never have imagined when I first started with the Department that I would be sitting here today seeking the confirmation of my appointment as Director. As Director, I'm committed to promoting public safety, fostering economic development, and working to regulate the industry in a fair and impartial manner. I believe that ABC should be proactive in serving the people of this great state. Early in my career, I learned that collaboration with stakeholders is a powerful tool in reducing alcohol related violations.

This includes regular and active partnerships with community organizations, local law enforcement agencies, local governing bodies, alcohol policy groups, licensees, and trade associations. I plan to harness these relationships to help keep our communities safe while prioritizing voluntary compliance over discipline. I also believe ABC can better serve our licensees by harnessing technology to improve our operations. To that end, I am focused on business modernization efforts that include accepting online applications, renewals, and regulatory reports from licensed businesses. Our licensees are constantly innovating and the ABC should too.

It has been a privilege to serve as Director since September of last year. I am truly passionate about the departments, mission, programs, employees, and service to our stakeholders and the public. I'm thankful to Governor Newsom for this appointment and deeply humbled to be leading such a great Department. Thank you for your consideration and I'm happy to answer any questions.

Thank you so much, Mister Director. We're grateful for that. We're going to open it up for questions. Comments from the Committee. Madam Vice Chair, why don't you kick us off?

Thank you Mister chair. Thank you Mister McCullough, for being here today. I just wanted to know if you could talk to us a little bit about some of the programs that work best when you're trying to Detour youth from being able to have access to alcohol. And what are some of the greatest challenges that you face regarding that? Because I know that's a big issue.

We want to make sure that they have a. You know, they stay away from it, you know, obviously, and there's not an addiction that develops later. But just out of curiosity, what methods are you using to make that work?

So we have several methods that we use. The most probably visible and best known is our minor decoy program that's been in existence for about 30 years now. And we also partner with local law enforcement to administer that program. So through our alcohol policing partnership grants, we've given 48 grants to local law enforcement agencies throughout the state to help be a force multiplier in running that program.

We also have offered, I believe, 26 grants with funding from the Office of Traffic Safety to also run similar programs to local law enforcement agencies. That really focuses on the supply side of the equation. We also have programs that deal with, not necessarily the licensees themselves, but just the General public who may be willing to try to furnish alcohol to minors. So that's our shoulder tap program that we utilize similar to the minor decoy program, and that we utilize underage decoys.

But we're really focusing on trying to get the message out to the General public not to furnish alcohol to minors. I think it's important to note that we really tried to do a lot of publicity prior to running these operations so that we can amplify the message and let the General public know that it's not okay to give alcohol to kids.

Thank you. Thank you, sir. Thank you, Mister chair.

Thank you so much. Let's go to Senator Jones.

I just wanted to follow up on that, and if you can answer that same question regarding vape and tobacco products. But I think more importantly, the vaping.

So ABC doesn't regulate vaping or tobacco products, but we.

Thank you so much. Please. Senator Eggman.

Can you talk a little bit about. I was a former City Council Member about your work with local municipalities, because that's always a hot topic, either somebody wanting an ABC license or somebody abusing an ABC license. So can you talk, and it's a hot issue, I can tell you there. So can you talk a little bit about that?

Yeah. So we really try to make good relationships with all of our local community groups, local governing bodies, and there is no one size fits all approach. Each jurisdiction is different in what they're looking to achieve with their business district and or what type of entertainment areas they may want to have in their jurisdiction. We do work very closely with a lot of local governing bodies.

Just recently, we've assisted with doing some things that we've kind of thought outside the box on to try to find a solution to an issue that was specific to a particular jurisdiction. We actually worked with an entertainment Commission and created a condition on a license that only exists in that city to try to bring in line the regulations in that city with our ABC conditions.

So we are routinely trying to think outside the box and work with local governing bodies to find solutions to problems in their local communities.

And do you find local governments, because this is such a high revenue stream, too, as well? It's a big business in California that they're wanting more licenses or less licenses.

It depends. I do believe that we've seen an uptick in what would be called entertainment districts. I think that coming out of the pandemic, we have locations that are really trying to harness and revitalize downtown areas, especially when you have telework and other things that have come into the mix. So we have seen an uptick in that.

What I will say is that the local police departments in those jurisdictions where we've had those departments, those desires have been working with us, and we've worked with the locals to try to mitigate any concerns that might come from that.

And how about the challenges and perhaps opportunities that come with you being able to get liquor delivered to you now and getting to go cups?

Yeah. So two somewhat separate issues, although similar. So during the pandemic in April 2020, we were alarmed to find out that we had, there was an article that was in the Washington Post that spoke about these delivery companies delivering alcohol to kids during the pandemic. And so we immediately jumped on that fact, and we ran a decoy operation, and the first violation rate was 79%, which was completely unacceptable. And that was really our first inkling that we had a big problem on our hands.

And so one of the first things the Department did, which I think was really proactive, is we reached out to the delivery companies themselves and said, hey, we've got a big problem. And so we really worked with them to help give them best practices and guidance on how to properly check identifications. And they really created a lot of internal checks and balances to help deal with that issue. So we're continuing to run those decoy operations on a regular basis. And I'm proud to state that last year in 2023, we had a 9% violation rate.

So do the decoys both going to stores and, and having deliveries come.

So we differentiate between the minor decoy operation where they go in the stores and then the delivery decoy operation. So in the second operation, the deliveries, we actually have them delivered to a particular location where we have a decoy station to receive that delivery.

And the to go cups.

And the to go cups. So on sale licensees have had the ability to sell pre packaged manufactured alcohol for years and years and years. They just, not a lot of them exercise those privileges until, of course, the pandemic rolled around and we were looking for ways to, or they were looking for ways to increase revenue. We have not seen any discernible impact to public safety with cocktails to go.

We do have occasional issues where our agents, while working their routine enforcement, will see that maybe a cup isn't packaged correctly or there's some minor violation with the manner in which that they're allowing those cocktails to be taken out. But we really just deal with it at the local level, talk to the managers, and in almost all circumstances, they address it immediately.

How many staff in the organization?

So we have 551 authorized positions.

Okay. Okay. Are you full?

We are not full. Of those, 271 are sworn positions and we are constantly working to try to fill our sworn ranks.

Thank you.

You're welcome.

Do you have enough to do the job?

We do.

Thank you so much, Senator, please. Senator Laird.

Thank you, Mister chair. I have a few questions, and one is that in your opening statement, you talked about how your whole career has been in ABC and working up. I wanted to ask about both sides of that. And the first one is, what do you think you bring to this job by having served at all these different levels and having that experience as the Director of the Department?

I think it's invaluable. I will admit that as I rose through the ranks, you keep getting higher and higher. You keep seeing a different and different picture of the industry itself. When I started off as an agent in San Francisco, I was out there trying to write every ticket I could and make every case that I could that was a violation of the ABC act.

And as you move through the organization, you start to realize that there's better ways to dedicate resources to bigger problems in the alcoholic beverage industry. And you get to a point where you realize that sometimes the more minor violations can be addressed through a warning or a discussion with an employee or a manager versus filing an action against them. So really trying to get to a place to where we're working with the industry to get them to come into compliance.

And that leads to. I still want to get to the other half of that question, but that leads to question I know came up in the staff, and it was about a specific case, and it was about a case that I believe was in San Diego, county, where a minor was served alcohol and then was involved in a high speed chase and a child was killed. And in the end it was settled for.

They don't if it happens again in the next year, they have their license, whatever, revoked or limited. Where's the line? Because you just said that as you moved up, you learned there might be other ways to do it. But a child was killed in that instance, and there's incredible culpability for the serving. Why is it, oh, if it happens again, why wasn't there a higher penalty when something like that happened?

So there's still some things that I believe are working behind the scenes in this particular case, and it may be inappropriate for me to comment on it here. I'd be happy to have those conversations with you because I believe there may be some information that's not publicly known.

Then let me ask a question that does not require that you refer to that. But you moved up and you hinted at, you learned that there's other ways to do it. Where's the line in those other ways? How do you know that? By trying to get somebody prospectively to deal with something that might have happened, that that's the best way to go. At what point is actually revoking a license for a while? The deterrent that might send the message in a different way?

So we evaluate each case on a case by case basis. We do have regulations that spell out what the penalties can be for particular violations. Obviously, there is discretion within the Department, especially when we're talking about settlements. And so really it's a case by case determination. I can tell you that if you look up rule 144 of our regulations that speaks to penalties, you will see that there is a graduated penalty and the violations that are more public safety related. Cells and narcotics.

I used to teach personnel practices and you have to do progressive discipline where somebody has to do it once and be warned. But I used to always say, but you don't murder somebody once and get warned and murder somebody a second time and get warned. You're really. The book is thrown at you after you murder somebody the third time. There are times when it is so severe that you don't have to go through the progressive thing. And that's what I'm trying to get at.

Do you find that there are times when you believe it's so severe that they pay a penalty in a way that is the highest level of your discretion?

Yes.

Okay. Does that happen regularly?

I want to say in 202223 fiscal year, I believe we had. I don't have the exact number, but it was somewhere around 200 revocations of ABC licenses. I can get you the exact number after that.

Well, it's interesting because we're having this discussion. I never got to the second half of the question, and the first half was all the benefits from having served in the Department your whole career. What do you have to guard against having served in the Department the whole career, to be able to truly look from the outside and see things that you might start to become relaxed about or take for granted? How do you keep that edge as an outsider that would look and take actions in different cases?

Yeah. So before I started with the Department, I actually, in college, worked at a small brewery in the area as an assistant manager. And it was while I was going through college and working at that brewery where I was asked to work Thursday, Friday and Saturday nights in a college town while studying criminal justice. And that's when I realized that perhaps ABC was the place for me because I would be able to use some of my experience from working in the restaurant and brewery.

But to your point, I think I am always cognizant of the fact that I have blind spots. I am not an autocratic leader. I really rely upon input from others when making decisions. I think it's very dangerous to think that I have all the right ideas or I know the right way to proceed without seeking input from others.

Oftentimes that involves us, not necessarily as far as penalty is concerned, but just General decision making, reaching out to our stakeholders and asking them what they think we should do, confiding in our local law enforcement agencies and getting their input on a particular location before we take action. So I hope that that answers your question.

It does, but I'll ask a follow up, and that is, as somebody that has been a manager at different stages in my career. I had one experience where there was fairly egregious sexual harassment that went on, and it was settled. The person did not pay. They had it out the door, but on their own terms. And I'm aware that this may well have repeated itself.

And so this comes to my attention, and I sort of changed the ethic and the policy that I don't care how hard it is, I know it's easier to just settle and not fight, but there's impacts of this. We're not one of those institutions that just passes people around that do that. And the thing that it made me realize is I have to be open to figuring that out.

I have to be open to knowing in a massive organization how I am going to tap into that and know what's going on. How do you know that if something egregious is going on, it's going to get to you.

Internally or externally?

Internally, most likely. But obviously some of these things involve external things. The question is, how do you not rely on the chain of command when the chain of command may not be producing the facts to you that you need to do your job?

That's a fair question. So, first off, I have a fantastic team works with me. I often go to people who are beneath me in the chain of command by several levels and talk to them, and because they're the subject matter experts, and so I will go to them and say, this is the road that we're thinking to go down. Please tell me why this is a really bad idea. So I do try to solicit input.

I do try to create an environment where other Members of the Department feel that it's safe to be able to provide their opinion on decisions that are before us. Okay.

And then I have one last question, and it's more administrative. You rely on the ABC Fund. It is in some ways headed total insolvency. What do you do to try to stave that off? And is that something where you have to come to us and ask for General Fund? What is the status and what are the options?

So we already came and asked for General Fund last year, and fortunately that was approved. That was to backfill a lot of the lost revenue from the pandemic, because during that time, we were not issuing daily licenses. Those are the licenses for your events, for catering, authorizations for weddings, things of that nature. And that actually created quite a hole in our budget. We were authorized through the Budget act for 20.5 million. We were actually provided with 15.5 million has already been transferred.

That's what was ultimately agreed to. Our projections for the end of this fiscal year show that we're going to have a Fund Reserve of 14.5 million, and then it goes down from there. We're confident that with CPI increases that we're statutorily authorized to be able to trigger each year that we should be able to remain solvent and have the funding.

Do you think the current solvency crisis was due mostly to the pandemic? But I got the impression there was a long term trend that had the Fund on the edge, unrelated to the pandemic. Is that not the case?

Well, I think that we certainly were using our Fund to help Fund a lot of our modernization efforts. We have things that we needed to do as a Department to better serve our licensees and the people of the state. And so we had a larger Fund balance that we were paying down, and then the pandemic hit and then that made things much worse.

Okay, I appreciate that. Thank you Mister chair.

Thank you so much, Senator. We'd like to be able to see if there's any. I have a couple quick questions. Any additional comments, questions for the Director? Mister Director, thank you again for appearing today. A few items live in smack dab in the middle of wine country and have a couple of items. And we get frequent calls, whether it's from tasting rooms, wineries, et cetera. And I will say that Santa Rosa office is a busy office.

You are all over the region and grateful for their frequent response, which I truly appreciate, as you know, when you're in customer service, want to be able to get back to folks immediately. And I will say there's a trend, as we've been seeing if wineries going in with coffee shops or wineries going in with tasting rooms, I should say tasting rooms going in with other types of businesses. And I know that's something new. Just give us your thoughts on that. Obviously we think it's good.

My own bias is good for downtowns, etcetera. But it seems to be something new that staff team is working through. I'll just say a bakery in the morning, turning into a wine tasting bar in the evening. Your thoughts on that as we come out of the pandemic? And there's new ideas.

Yeah, so that's the interesting thing is that we have laws that were really created from around 1933 and we have licensees who are continuing to innovate and come up with new business models. So we're constantly trying to wrap our minds around some of these new ideas for us. Really, it comes down to who's actually selling the alcohol and receiving profits from the sale of that alcohol. So that's our major concern.

There can be different arrangements that are made between licensees and other parties to share space and do different things. Ultimately, we just want to make sure that the licensee themselves is responsible for the area where alcohol is being consumed and for the sales and service of alcohol.

Yeah. And I think that where what we've been seeing a lot of is that as we come out of the pandemic, commercial rents are incredibly high and businesses coming together to be able to make that rent and not just have a 06:00 a.m. To a 03:00 p.m., business, but being able to sublease and then potentially look at, for example, wine tasting room. I know we have three different applications that have made it way through ABC Santa Rosa and then have contacted our office.

So just wanted to get your thoughts. I think it's, again, a new way of thinking, and it's been done in other parts of the country and needing to be able to keep those downtowns vibrant. Right. With additional service and or entertainment for longer.

Yeah, each location is different, and it's really going to depend on the location and the business model that's being presented. But generally, we're open to any type of innovation that's going to help in that space. We just want to make sure there's some guardrails up so that we can hold the correct people responsible should there be any issue with their license.

I'd like to go back to the issue of staffing and especially on the law enforcement side. It seems that, and again, I can only speak to the region where I live on the north coast, that it's really challenging, especially to be able to hire sworn every seems like every sheriff's office, the MCHP, and I say that the MCHP have signing bonuses. Right. And recruiting away along with local municipal departments. You're stuck.

So can you talk to us about that and what that looks like as you go forward? Because it seems like that is the one Achilles heel that the Department has of having enough staff to be able to do all the tasks that are needed.

Yeah, I would agree, and that is tough for us. We've taken great strides to revamp our hiring process. We have vacancies now, but we have over 200. We have 263 people in the pipeline for our agent hiring process right now for roughly 30 vacancies. The issue becomes, it's twofold, as you pointed out. One, we're competing for the same pool of candidates and other departments are going to be able to pay more than we are able to pay.

But more importantly is our ability to be nimble and get people hired on quickly. It takes between eight months and a year to hire a peace officer candidate from the time that they take the test to the time that we actually bring them on board. And so we invest a lot of time in that process. And if they fall out at the seven month mark under our old model, we just lost seven months worth of time to get that position filled. So we revamped our process.

We have more people in the pipeline, which has allowed us to be more nimble, and we're pretty confident that we're going to be able to get to a target of about a four or 5% vacancy rate here very quickly.

By cutting down on the time CalHR is taking.

I'd love to be able to blame CalHR, but it's not just CalHR. It's background investigations stuff on our side, too.

And how many folks fallout through that background, would you say? Just attrition rate? Ballpark. Third.

So we have actually broken down our hiring process, and we are now able to see where people fall out at every single stage of the process. So we have data that shows by demographics as well, how many people fall out at the exam level, how many people fall out at the first interview background all the way through our process.

And so I don't have an estimate as to how many fall out during background, specifically because we do a pre interview review of their personal history statement, which sometimes automatically disqualifies some candidates.

And I'll just call it a lateral. How many folks do you see that have had previous experience in law enforcement versus coming in new?

An estimate on my part is about 50% of our staff are coming in with experience and the other 50% are new and needing. And.

And your biggest challenge area is what? In regards to staffing for sworn region.

Oh, region. So the Bay Area is the biggest problem for us.

Yes. Got it. And again, can't stress this enough. The Sonoma County office has been, they're incredibly responsive, very customer driven, and I know it's high volume and just truly appreciate that. If you can pass that on.

I will. Thank you.

Thank you so much. Mister tractor would like to be able to see if there's any additional questions, comments before we go to those who are in attendance today. All right, hearing scene, none. We're now going to invite anyone who would like to be able to speak in support of the director's appointment. If you could please come forward to the podium. We're going to ask you to please provide your first and last name, the organization that you're with. We respectfully request that you keep your comments to 30 seconds. Schmelzer.

Good afternoon, I'm Schmelzer, I guess. Hi, I'm Tim Schmelzer with Wine Institute. We're here in full throated support of Director Mcculloch's confirmation just to comment on some of the things that were said today. We found him also to be very accessible and responsive, a fantastic listener and a good collaborator. The fact that he and his staff are able to bring outside the box thinking to solve problems is something we really appreciate and look forward to working with.

And then somewhat surprisingly, some of the enforcement stuff you spoke to, we feel is really important for our industry as well. In particular, you spoke to direct to consumer shipments. It is vital to our industry that those are legitimate and considered legitimate, as they are the absolute lifeblood of small wineries in California. And efforts to ensure that it's done right, like we support, are greatly appreciated. We think your work in that has been great work. God's work work in our opinion, frankly. So anyway, encourage your strong support today. Thank you.

Thank you. Schmezer, good to see you. Welcome. Thank you.

Good afternoon. Chair and Members, Marlon Lara with the California Restaurant Association. We represent many neighborhood restaurants throughout the state, many of which are ABC licensee holders. I'm here to support the confirmation of Mister McCullough as the Department Director of Department of ABC. Mister McCallan has vast experience within the ABC. He's proven himself incredibly knowledgeable on the complex issues under its jurisdiction. He's been tough, but fair and has always been very accessible.

And for this, we're really grateful, happy to fully support Mister McCallan as a Director of ABC. And we respectfully request your vote in favor of his confirmation. Thank you.

Thank you so much. Thank you for your testimony. Hey, good afternoon.

Good morning. Good afternoon, Mister chair. Members of Committee, Chris Walker, on behalf of the California Craft Brewers Association. Glad to hear that. Director McCullough started out in a brewery. That's a very good beginning. And we just want to say that we support his appointment and confirmation in the strongest terms. We as an industry rely upon strong enforcement of the rules and the regulations and the laws in this state, particularly tied house.

And we have every trust and confidence that Director McCullough will continue to do that on behalf of the ABC, on behalf of our industry. Thank you.

Really appreciate that. Good to see you. Thank you so much. Welcome to the Committee.

Thank you. Chairman Mcguire. Mike Scippa, on behalf of Alcohol Justice, San Rafael based organization and also CAPA California Alcohol Policy Alliance, we are delighted to be able to support Director McCullough as he moved up. It's important for those of us who work on the public health and safety side of this to have a channel of communication with ABC. And Joseph has done nothing but encourage us to continue that. And we have quarterly meetings with him and his staff.

And it is invaluable that our perspective is taken into consideration when it comes to rules and regulations on serving of alcohol. We appreciate the opportunity and we hope that you will vote to confirm him. Thank you.

Thank you so much. Thank you for being here. We'd like to be able to do a final call for those in support. Final call for those in support. Can you please come forward at this time? Hearing see no one stand. We're now going to offer those who may be in opposition. If you're in opposition, if you could please come forward to the podium at this time, we're going to do a last call for those who may be in opposition.

If you could please step forward at this time. Seeing no one, we're now going to bring it back to Committee to be able to see if there's any questions, comments, or we'll welcome a motion as well.

I'd like to make a motion to move the ... to the full Senate Floor, please, sir.

Thank you so much. We have a motion by Madam Vice Chair. Madam Secretary, can you please call the roll?

[Roll Call]

Laird I five to 50 vote. Congratulations, Mister Director. We truly appreciate you being here. Next stop will be the Senate Floor. Thank you so much.

Thank you.

Thank you. Thank you so much. Thank you to Michelle and the boys for being here as well. It's good to see you. Thank you. We're going to look to Miss Leblanc Blanc. How you holding up? Do you need a little bit of break? Yes, ma'am. We're going to take a five minute break. Five minute break. We'll be back with you. Five minute recess.

All right, we're going to get started in 60 seconds. We're going to have Mister Milder please come forward. We'll get started in 60 seconds.

All right, ladies and gentlemen, Committee, and to those who are in attendance, we're going to be coming back with our last consideration here today. And that's Mister Milder, the Director, division of petroleum market oversight via the California Energy Commission. Mister Mildred has brought out the whole family, which we're excited to be able to see here today. Thank you so much, Mister Director. You have one to two minutes to be able to provide opening testimony to the Committee today.

We would love to be able to have you introduce your family to us. We look forward to hearing about them. And of course we'll be opening up for questions and comments up from the Committee as well today to be able to have a conversation with you. Mister Director, welcome. You have two minutes. I'll give you a 30 second prompt. Thank you so much for taking time out of your busy schedule.

Thank you, Mister chair.

There we go. Coming in hot.

Madam Vice Chair, all the Members of the Committee, I am really honored to be able to introduce my family. And if I don't do that, they'll probably introduce themselves. I see.

There we go.

Specifically, my son Henry, who's in third grade. My daughter Rose, who's in fifth grade.

Henry has his own dance ready to go, so I like it.

My partner Jessica, my brother Tom Milder, and also Division Chief Ryan McCauley from DPMO is here as well. And Leslie Wolf maybe stepped out, but a colleague and the chief of the San Francisco office of the Antitrust Division, US Department of Justice. This is such an amazing opportunity. I want to start with a note of humility and thanks for your time. And also this opportunity for my children to see a civics lesson in person, to see our government work.

So I accepted this appointment with deep humility and a sense of responsibility. I was born and raised in California, and I am proud to have graduated from California public schools. I am so grateful for the opportunities that this great state has given to me. I was fortunate enough to begin my legal career as a prosecutor in the US Department of Justice. And I learned a few things about what a prosecutor does. You follow the facts wherever they lead.

You are independent and you promote transparency and seek accountability. These principles guide the work of the new division of petroleum market oversight every day. When I took on this role about eight months ago, I was clear eyed about the challenges we face. We're a brand new division, and yet we face an urgent need. And that need is reflected in the passage of SBX1 2 in special session. California consumers have been price gouged. We've seen significant price spikes in three of the last five years.

The two years without price spikes were during the pandemic when demand had fallen off of a cliff. Independent economists have concluded that retail gas prices in our state are inflated even after accounting for taxes and fees. Californians have been paying too much at the pump for too long. We're still in the early stages of building our team and gathering critical information. We're following the facts and using the new data and transparency tools in the statute. Even at this early stage.

Looking at that data, we see a very clear trend. Price spikes at the gas pump are profit spikes for the oil industry. I am hopeful that using these new tools and bringing a whole of government approach, we can tackle this problem as we build our team of attorneys, economists, and investigators. The division is focused on deterring and detecting misconduct. So protecting consumers is our core focus. And I know that's a shared priority with each of the Members of this Committee. I look forward to taking your questions and thank you so much for your consideration.

Thank you so much, Mister Director. We're going to see if there's questions, comments from Committee at this time. Madam Vice Chair, floor is yours.

Thank you, Mister chair. Good morning, sir. And thank you for meeting with me yesterday. I know we went over several questions and had a very lengthy conversation. I do have some questions, and I got some new questions last night from several people. So I guess we'll just start. So the CEC, as you said, has collected a tremendous amount of data from the refiner since June of 2023.

As we look at that data that's posted online on the CEC website representing the net gasoline refining margin in quotes, I guess I should say the majority of the refiners show a negative net margin from October through February of this year. And the overall volume weighted is the average of per gallon since June of 2023. Given those facts and the data that the CEC is reporting online, doesn't it confirm to you that refiners margins are cyclical and most commodity, as most commodity businesses are?

And how will the proposed margin cap protect refiners on months where they lose monies and try to offset them with months that they make money?

Thank you, Madam Vice Chair. And thank you for your time in the meeting. I enjoyed that discussion very much as well. So first, I would really highlight the fact that SBX1 2 is a new piece of legislation, a new statute being enforced. And there has been some bumps in the road. I would identify the net profits as one of those bumps.

What we've seen in that data is that the industry is interpreting it very differently, even amongst the industry, so that those numbers appear to be divergent even within California's refineries, and they don't match up with those same refineries or reporting to the SEC. So the cost that they're reporting to CEC and the cost that they're reporting to the SEC are very different. Now, the SEC reports have other requirements, including, you know, accounting principles that are attached to them.

So I think one of the things that we need to do is try and synthesize those two reporting streams so that the public can have confidence in those numbers. As we look at the profitability of the industry, we don't think that the net profit numbers that are being posted on the CEC website are fully representative, particularly when we compare them to the SEC numbers. But that's a process that needs to be improved. This is a new law.

So one of the things that's happening at the California Energy Commission is we're revisiting those forms. And I say we, BPMO is an independent division. We're giving input on that process. There are a lot of colleagues here from, from the CEC as well, and we're super appreciative of their support in this process. And so we're encouraging them to improve the forms and work with industry, and that process is ongoing.

Thank you. So you're saying that the refineries are reporting different documents to the CEC than they are from the SEC?

Different numbers regarding profit? Yes.

Are they required to provide their financial statements or anything they report? Like, I mean, are you saying there's two sets of books? Is that what you're saying?

On the first question, my understanding is that they're not actually submitting books and records at this point to the CEC to confirm those numbers. Rather, it's sort of a form that you submit with numbers that you fill into the form. So I think maybe having the underlying records would help. In terms of my own assessment, I'm starting with a follow the facts approach. This is a new law. I think we need to make sure folks understand the forms and how they need to be filled out. If they're being filled out incorrectly, we need to give them a chance to do it correctly.

Thank you. Since 2020, California has lost two refineries that produced CARB gasolines. What did the CEC anticipate on the impact of consumer prices would be. I mean, if, obviously, if it's a supply and demand issue and we're losing supply and the demand is increasing, what's the plan for the CEC to manage future refinery shutdowns if the demand stays as high, high as it is now? And do you have any oversight over that?

Because that, obviously, if the supply is affected, it's going to increase gas prices, which is going to trigger you to go after the refineries for price increases. But it actually is just an ebb and flow situation where supply and demand meet the river in the road.

Being eight months into the job. I think one thing that has surprised me as we're looking at this market is that with demand falling, with the adoption of zero emission vehicles, you would think we would have a surplus of supply. But in fact, the refineries have either. In this case, they've converted to renewable diesel at a rate where the prices have stayed high. And that was a bit of a surprise in terms of the CEC.

I think their role, and again, I can't speak for them new in this role and part of an independent division, but as I understand it, they're not actively managing which refineries close. They are working with industry and understanding what the industry's plans are. And there are some requirements that industry notify the CEC, but that the CEC isn't green lighting or red lighting. What's happened in the last three years, that's been those industry participants making their choices.

You said in your comments right now that that was a surprise that people are converting to a renewable source of fuels. It was a surprise that they would convert that fast.

I mean, obviously, if you're shutting down, if the policies coming out of this building are shutting down one mechanism of way of making money, but you can convert the plant to another mechanism way of money, why would it surprise anybody that they would try to convert as fast as possible to gain market share of the new product being produced?

Thank you, Madam Vice Chair. My comment was surprised that capacity is coming offline as quickly as it has in terms of keeping prices high. So it's not a reaction. You know, I think if you look at the profit numbers from industry in 2022 and 2023, these were record high profits. So in an environment where profits are quite high, I think I would say this is more my personal view that it's surprising that the refineries have closed as quickly as they have when they're so profitable.

And so I think as we dig into the data and understand the refinery's operations better? Absolutely. The transition to renewable diesel is a positive in terms of having that option available in the market, and the switch from motor gasoline means that we have less of it. So I think we need to really be thoughtful as we think about policies going forward and looking at our refineries supply and the demand that we're expecting. Expecting.

Thank you. What are the legal risks in the state for undertaking trying to regulate non regulated business without offering regulated protections for other industries? Does the state anticipate lawsuits? We discussed that just a little bit yesterday. But you explained to me, and just explained publicly about how it's the CEC. Well, let you explain it. So you basically said the CEC is not going to say yes or no. They're just going going to. To be notified, basically. Is what you said something to that effect.

Thank you, madam Vice Chair. I think the conversation yesterday was around notification of maintenance for refineries. So at this point, the law requires that the refinery operators notify CEC, but that there's not a yes or no about whether that refinery maintenance is going to take place, although potentially the CEC could adopt regulations that impose restrictions on refinery maintenance or turnaround. So I really can't speak to the legal risk calculus of that question.

I would defer to attorneys at the CEC at the same time because there is no current regulation sort of mandating that type of response. At this point, I think it's just a notification requirement.

Thank you, sir. I have a couple of questions. They're gonna get really hard, I guess, after I think people found out you were going to be here today, my inbox kind of blew up. So I do have a couple of questions, only because they came from different sources and similar. The same questions? Not exactly.

Have you been instructed or encouraged directly or indirectly by the Governor, the CEC commissioners, or their representative staff to implement a max refining margin and penalty, or are you going to do what you said and follow the facts?

So the first question, no to the second question, yes.

Thank you. Number two, do you have any knowledge or reason to believe that the Governor or the CEC commissioners already intend to implement a max refining margin penalty is going to be established? Is that conversation that's taking place, or are we going to wait until the data is in and you pursue the facts?

I was on the dais in April at a public workshop discussing the potential penalty, and we've talked about and stressed very much so, that this needs to be a public process, and that discussion about the penalty, how it might affect folks incentives, how it needs to blunt price spikes and encourage refiners to bring in more supply. These are the issues that are going to determine whether or not the penalty is enacted. And so I think, again, from my perspective, we're going to follow the facts, and I'm aware of no one prejudging the outcome.

Thank you. Do you anticipate that if there, there is a penalty applied, that that's just going to increase cost consumers?

I do not.

You do not.

And I'll explain that first. The process of considering the penalty by statute is supposed to consider whether or not that would happen. So I think how it's devised would and should take that into account. And I think consumers should, I think, feel confident that the process will be guided by the data, by economists, by professionals in this space, some folks who are being very thoughtful about it, and that I think DPMO will only support a penalty if the penalty does one of two things.

Incentivize folks to bring in more supply and sell more volume of gasoline or recoup from price gouging, and therefore get money back for consumers. So to benefit in one of two ways, and if it doesn't do that, we will not be supporting it.

So, I mean, we talked a little bit about supply chain yesterday, because obviously the root cause is the lack of supply, because refineries are closing down or leaving the state. We just lost a major one. I guess my question is that the shortest supply route is a to b, not a to z. A to b would be, I don't know, air at a PBX and a pipeline just a few miles long, and then producing fuel.

But we have created a policy, or this body is created a policy to bring crude and now refined fuel back from Indonesia, Japan, Iraq, you know, just name it. Ecuador, there's a port capacity. There's a longer supply chain. I guess when you compare our gas prices to Texas, where it's $3 a gallon, 3.25 a gallon in here, it's much higher than that. The response I get back is it's all about supply from CEC.

And a little bit in the conversation yesterday that Texas has a greater supply. We could have a greater supply if we didn't limit the supply. So we're purposely, I feel like we, the body, this body has created the problem of limited supply and limited refinery capacity. And now we're like, zero, my gosh, it's the refinery capacity, it's refineries that are doing this.

All that to say that SBX1 2 addressed the crude, you know, the producers and then the refinery piece jobbers and the retail piece, which you have authority over to go after if there's price gouging or price inflation, artificial price inflation in SBX1 2. And I've asked this question several times. Producers in Kern County represent 70% of the state's oil and gas, 53% of the state's renewable energy. But in the oil and gas industry, my little random oil companies don't set the price.

They're price takers. If the global market is trading at $80 a barrel, they sell it $80 a barrel. It's $120 a barrel. They sell it $120 a barrel. How do you anticipate price takers? Or what's your thought process about price takers being in this piece of legislation, as somebody could potentially be price gouging when they take the price from a global market and have no control over it.

Thank you, madam Vice Chair. I think there was a lot packed in that question. I think starting with the last point about price takers versus price makers, I think in this context, we have to differentiate between small independent oil producers in Kern County and the four major refineries that own over 90% of the refining capacity in California. And so as we started to analyze this, and we're still in the early days of looking at the data, we're seeing excessive profits in the refining industry in California.

And what that means is profits above what the competitive market would normally provide. So one of the reasons why California's gas prices are higher than gas prices in Texas is that there's a much larger industry margin. The amount of money that's going to the industry as a result of their refining, distributing and selling at retail, gas is much higher when you compare those numbers. So if we look at where

Higher, Where?

So higher in the refining, it's called the refining margin, or crack spread. It's higher in California than it is in those other states. So just some data. Look this morning at the AAA website. The average cost in California today is $5.41 a gallon. The national average is $3.66 a gallon. So we're paying $1.75 more per gallon. The price in California went up relative to the nation in this last month, but nothing in our sort of policies or the gas tax, none of that changed.

What changed is the industry profit went up in that time period, and so it went up. The CEC has a gasoline price dashboard where you can look every week and see where, when you fill up on gas, that money goes. And so that industry margin went up $0.42 between March and April, and now stands at $1.66. So that's one of the reasons we also have cleaner burning gasoline, which is, in part, an investment in public health.

We also have gasoline taxes, which is an investment in infrastructure, whereas these profits are really profits that go to the private sector, to the executives, to the shareholders.

So you said the difference between the cost of the national average plus California at 541 versus, I think you said 366 or 365 is $1.60. Out of that $1.60. Do you know how much of that is? Gas taxes, fuel, underground fuel storage supplies. Like, what's the cost that State of California imposes on that gallon of gas?

So I believe it's 50 odd cents, maybe $0.58.

Okay.

And other states have gas taxes as well. And math was never my strong suit. I was more of a, you know, social sciences and law type person. But, yeah, I think the numbers I did this morning was $1.75 higher.

Is there a statutory requirement out there that says the Commission shall not set a maximum gross gasoline refining margin or accompanying penalty under super subdivisions b and c, respectively, unless it finds that likely benefits? Can consumers that outweigh the potential cost to consumers if that's out there, does SBX1 2 supersede that piece of legislation or that code section?

I think the language that you're quoting is related to SBX1 2. You know, but we could follow up and talk about the specifics of that reference. I do believe that SBX1 2, which is now the gas price gouging and transparency law, as in statute, does require a consideration of benefit to consumers. And so I don't think it's going to move forward unless the Energy Commission makes that finding. And that's part of that public workshop. Again, DPMO gives input. It's not the penalty is not something that's under our control, but we give input in that process.

Do you think that setting, I don't know, like a state gas price, is going to be beneficial if that's one of the solutions that it comes up with? And is that something that your Department would pursue if they exceeded that gas price?

Madam Vice Chair, I don't have any familiarity with that proposal. I don't believe that's part of the penalty framework. But what's happening right now is that there's a request for information to stakeholders, to interested parties, as the California Energy Commission considers a potential penalty framework for folks to give input on what a framework should look like. So if that's one of the proposals, perhaps DPMO would weigh in on that and give input. But at this point, that's not something I'm familiar with.

Okay, thank you. Thank you, Mister chair, for allowing me to ask those questions.

Thank you so much. Please, Senator Laird.

Thank you, I appreciate the meeting. And I also have already communicated, since I was communicating anyway, with the President of Cabrillo College to let him know that a former student is doing quite well and hopefully they will take advantage of that at some point.

And I wanted to sort of talk a little bit about where you just were, but in a different way because when we were discussing this Bill that created the position, the one place there was a lot of consensus among people in the Legislature was that we needed the facts and we needed a process to get to the facts. A lot of people were advancing to coming to a conclusion there needed to be. So here you are.

You have to stand up an agency and you have to decide what the ways are you get at the facts to be able to convince stakeholders and the public of what's really going on, because that wasn't apparent in the discussion about the Bill. So as a layperson, how would you walk me through how you are going to look at the different facts that are laid out here to get to a conclusion? I suspect your kids are laypersons, too, so they might enjoy this explanation. But that has been the puzzle to me, and thats why I enjoyed our talk. You started to get into it, but how will you do this?

Well, thank you for that question. Senator Laird and I enjoyed our meeting as well. And Cabrillo College is a junior college in the Santa Cruz area. I'm proud that I graduated there before I transfer or got an associate's degree before I transferred to UC Berkeley for undergraduate before law school. Part of my story in public education and why I'm so grateful is Pell grants, Cal grants, and going to institutions like Rio college.

In this way I think, as the conversation with the Vice Chair illustrated, we need to show folks where the money goes. And I think the transparency measures in SBX1 2 kind of do that in a new way. So if the cost of gasoline is so much higher, I think the public wants to know, where's my money going? And so for the gas tax that's publicly known, I think $0.58 was right. But it's in that neighborhood, and that's an investment in public infrastructure.

That's a political decision, a policy decision. Our elected leaders decide, and folks can know where that money is going. But I think up until very recently, folks had no idea where the money was going for the industry. And so we saw Chevron, one of the most profitable companies with record profits in 2022, when we had the gasoline price spikes over $30 billion. And so I think it's right for the public to ask, well, when these gas prices go up, where is that money going?

So part of what we're doing is uncovering those facts and providing some of that transparency. I think it's really important for the public to know where that money is going and understand why that's happening. And so, as a prosecutor, you always have to have the facts before you lay out any sort of discussion or argument. And so what's so great about the Bill, the statute? And one of the reasons why I accepted the position is we're empowered to get the facts and to surface the facts for the public.

And practically, what does that mean? So, because you were talking about refineries, talking about supply, what do you assess in sort of what sequence to decide that you are getting to the facts, and you can convince all of us to come to some kind of conclusion based on them.

So we're early in the process again. But in the April workshop, our economist, GG Moreno, presented data that I don't think anyone has analyzed before, or at least discussed publicly, which is, here's the industry margin at the refiners, and here's how it compares to back before there was an explosion at a Torrance refinery, and prices started getting much more expensive in California because they used to be a lot more, you know, a lot closer to the national average.

And so it turns out that during price spikes, the industry profits are up 200%. So we're starting to show that. But that's an economist, and those are charts, and those are sometimes hard to follow. So one of the things that we're working with the CEC to do is potentially to improve that gasoline dashboard I mentioned where folks can see where the money's going, and to really highlight in a way that's digestible for the public.

Okay, gas prices went up this week, or they went down this week. How much of that is profit to oil companies? And so we need some very publicly accessible tools in order to show folks where the money is going.

And what you just mentioned and you had in the exchange with Senator Grove is the role of refineries. And we know we have two that are transitioning out to more greener stuff, and then you have refineries where there's either a Torrance incident or they're down for maintenance. How does all that factor in?

Should there be, I mean, is that a place where at some point the Legislature might conclude that there's some regulations about scheduling maintenance or some of the other things that actually are very much tied to price spikes? How do you get at that in what you're doing?

So, in January, the new division put out policy proposals in response to a directive from Governor Newsom. And what we are proposing is that what will help blunt the price spikes, mitigate the price spikes, is we need more supply to buffer the state when the refineries go offline, because it's largely the refineries that choose when they go offline for these maintenance events. So there's both planned and unplanned maintenance. Right. And so if you're planning your maintenance, we're saying you should have a resupply obligation.

You're planning to take this very big, complex refinery offline, and it's probably for very necessary maintenance. That's great. Are you going to be buffering the state by having enough inventory or bringing in other substitute supply? And using the SBX1 2 transparency tools, we were able to look at the refineries reports because now they have to tell the CEC, if they're doing that, bringing in resupply, and they weren't bringing in sufficient resupply to protect the state.

And that's one of the reasons why we had a price spike. So we are proposing obligations on resupply and on inventories. There is a workshop on May 23 that's been scheduled. That's a tentative date, but that's the date, as I understand it, that will look at the supply conditions and consider resupply and inventory as part of a larger picture. I would defer to my colleagues at the CEC in terms of analyzing their own statutory authority.

From DPMO's perspective, it does appear that SBX1 2 already addresses the potential need to impose requirements on refineries related to maintenance. At the same time, explicit statutory authority could be helpful, both as to resupply requirements and especially to inventory requirements.

And just for the record, you said your colleagues at CEC, you're independent, but you're nested within CEC, correct?

That's absolutely right.

And then to follow up on what you were just talking about, is there a time at which you think there might be an issue about more refining capacity and that is something that's on the table, or are we being so successful in electric cars and other things that so refining capacity is matching where the demand is in the change in type of cars we have here.

So I would defer here to colleagues at the Energy Commission. And again, we are independent, a division within the CEC, which means we get to make our own decisions about investigations and potential referrals for prosecution. So we don't have to rely on the CEC for that. But I'm very happy to call them my colleagues because we've gotten great support from the CEC, and they have deep expertise, expertise in this field.

So part of the transportation fuels assessment that was just published looks at long term models of supply and demand, and crystal balls are hard to construct. And I think that report considers different alternative scenarios. And so at this point, I think there's a pathway. California is still the third as of 2021. That's the most recent data I could find on global is the third largest market for gasoline in the world.

So it goes to the United States, China, then California, so more than Russia, more than Australia and the United Kingdom combined. So the fact is that we still have a very significant amount of demand for gasoline, although it is declining. So I think there's no reason why in state refineries can't continue to be profitable, but perhaps not at record levels, and be part of serving that demand even as we start to transition to more zero emission vehicles.

And I do tease the Vice Chair regularly, and I'm sorry she's not here, because I would inform you in your comparison to other states and countries that if Kern county were its own state, it'd be the fourth largest oil producing state in the United States. She has let us know that regularly. And then maybe a last question, because I can see the chair sort of looking in my direction, and that is you are starting from scratch.

Imagine that you were close to the only person in your division when you were appointed. Now, how, with all the goals that we've been talking about, do you do the administrative stuff of standing up to staff, making sure you have people in the right places, make sure that you can meet the timeframes that are existing here. How's that going? Because you're an attorney, but unfortunately, in this case, you're going to become an administrator in some ways.

Thank you for that question, Senator. Yes, I was employee one or employee zero, depending on how you want to count it. And we've been building this staff. I'm very glad that we've built a leadership team. We have an operations manager, a chief economist, a Division Chief. We're on boarding two former prosecutors to be enforcement attorneys and assistant district attorneys attorney and a deputy District Attorney. We'll eventually have a staff of 10.

And in this transition period I've gotten great support from again, CEC colleagues, but also CARB, CDTFA, other state agencies have been incredibly gracious, even loaning us people to do work sort of on secondment until we could staff up. And so we have had to hit the ground running and that's been a challenge. And my family has been very supportive in that process and I'm glad that. I'm no longer

One of them is pointing himself out.

Yeah. And so we are growing, we are hiring, and we're looking forward to building.

And then I'd make a final comment and that is a lot of this was couched in terms of your regulatory or even potentially prosecutorial duties, but a lot of this is about educating the public and stakeholders about what you're finding. And I think it's very important that happened in the process, not just because we read about a citation or penalty, it's the public. A lot of this came from the public asking why. And so we have to figure out a way that we answer that question. So thank you. Thank you for indulging me, Mister chair, and I really appreciate the exchange.

Thank you so much.

Thank you, Senator Laird. We're going to go to Senator Eggman and Senator Jones.

Thank you very much and nice to see you again. So we talked a little bit about this idea around informing the public and how do we make things more transparent, and what does that mean for the average person who doesn't even know that we've set up this new agency? And so I generally work in the area of mental health.

And so we passed something a couple years ago called the Care Act, where as the Governor would say, it brings in all arms of government to be able to assist a client. It's the judge, it's the public defender, it's a supporter, it's a family Member in the county. So when you talked about this agency being bringing in all the arms of government, how do you see all those working together and who's the client?

So I just want to agree and thank you for the discussion we had about the need to inform the public. And I think it's something we're giving a lot of thought to. We've done some public communications around a public letter in September and then policy proposals in January, but we need to do even more of that. And so I mentioned a whole of government approach.

I mean, I think working with CEC, with Air Resources Board as well, with CDTFA, we need force multipliers and it needs to be a whole of government approach. And, you know, I think it's important to recognize that working with industry is part of this as well. We, I think Senator Lehrer talked about how you communicate this with, with my children. We've talked a good amount. And one of the things that my son Henry talked about is unfair profits. Well, okay. Are they making unfair profits?

And I think the idea is business needs a profit incentive, and it has to be a profit incentive that's consistent with return on investment in other states or in other regions, taking into account California specific taxes or costs or what have you. So we need to be in a, in a trust but verify relationship with industry where we're getting good data from them and we're having a Frank conversation and responsible conversation about how to protect Californians. And then we have to work with other government agencies in a whole of government approach.

Who's the client?

The client is the public.

Okay. And are you going to use all those force multipliers to help get the information out about what we're doing?

Yeah, absolutely.

Do you see that as the divisions role?

I see that as, as the division's role, working with the CEC, working with partners, but I think we have to be in control of what we're communicating. I think, yes, working with partners to get the message out, but also working with partners to find solutions.

What more besides a letter? I think that's a great idea because again, the dashboards, I mean, the average public doesn't know that we even have a dashboard to go on to look and to do any of that.

Yeah, I think we need to make the dashboard more accessible, have a simpler URL and maybe have some simpler graphics so folks can understand it. It's a little bit of a policy wonky thing, which is fine with me, but I think it's harder for John Q. Public to glance at. So maybe it needs to be a little bit more like the AAA website in that way. And we also need to look for other ways to communicate.

We're hiring a community engagement role, a dedicated role to interface with the public because we understand how important it is.

And that's going to be something that, that I do, the Division Chief, that our enforcement attorneys, you know, everyone in the division, I think, understands that our client is the public and that, you know, we may not have a magic wand in terms of gas prices, but what we can do is show folks what's happening in the market and why, and provide reassurance that we're on the job, providing oversight for the market so that these aren't unfair prices or the result of market manipulation.

So maybe the first step is just introducing the division to the public. Public? Like there's somebody here looking out for you. We'll be back with more.

Absolutely.

Okay. Thank you.

Thank you.

I'll just make a few comments. I share many of the same concerns and questions that Senator Grove raised, and I do want to acknowledge, though, your background and your resume, it's very impressive, especially as an antitrust attorney and prosecutor. I think that's a very important role in our economy here in the United States of America, certainly in California as well. And I hope that the Federal Government will even expand that oversight into corporations, because as companies get bigger and bigger, that constrains the free market.

And I'm very much a free market person because I believe the market, if we allow it to do what it's supposed to do, it usually will solve its own problems. And a lot of the problems with the free market is when government gets involved and tries to move or control or constrain or even incentivize a part of the market. I really do appreciate your answers to Senator Grove regarding that you're coming at this with an open mind and that you don't have a predetermined outcome.

My problem with that, not for you personally. I'm separating you. The person from the position in this statement is I don't think the Governor has that same attitude. I think the Governor has been very clear in his broad statements about this idea, the Bill, specifically the Department, that he does have a predetermined outcome. I think he's been very good at grabbing the headlines and putting on the appearance that he's going to solve this problem for Californians of these gas spikes and the oil company profits.

I don't think this Department is set up properly to do that. I don't think you will have the tools to do what you need to do here. And part of my conflict here is if the oil companies are abusing Californians, I'll go as far as to say that I would want to know that and find that out. So my concerns are not to you personally as the person. My concerns are to you, to the position and the Department and to the Governor.

And you're welcome to respond. That was very General. Most of my concerns were asked and answered by Senator Grove.

But thank you so much for those comments, Senator. And I look forward to further engagement, maybe on some of those questions, particularly about how small companies get squeezed out and how some of these big players really don't allow for competition to really flourish. And that's something that DPMO is going to be focused on and look forward to engaging with you further.

And I'll make a commitment to you that I will keep an open mind enough to hopefully you'll be able to win me over in the next couple of years.

Thanks so much.

Thank you so much. Senator Jones. Mister Director, just I have some comments and some questions as well. So I think, you know, my belief is under promise over deliver. We had some conversation about that and I think it's really critical to be able to understand that you are just getting started in the office. You said that you're employee number one and you are literally still staffing up. I think there was some grand announcements about day one. You're going to be able to bring down gas prices.

I'm being a little flip, but grand announcement, it takes time to better do the job. I think it's important with the Committee, you have vacant positions you're still filling. Walk us through. Please don't exceed two minutes. But if you don't mind taking a little bit of time on those positions that you still have to fill because you're a little hamstrung because you're still staffing up and building the agency.

Yeah, so we have, as I said, two former prosecutors coming on board. And so that's two of our enforcement positions. We need to fill another one to two attorney positions as well. The community engagement position is one which we also need to fill in some of this. There's, don't want to get into too much. There is some bureaucratic red tape that we struggle with, but we're working through that as best we can. And then we need a deputy economist and an analyst supporting our economics team.

So we're going to have an investigations and analysis branch and an economics branch. And both of those, you know, are about, you know, are not quite 40% full. And so we need to get to close to full staffing by the end of the summer. I really do like that phrase, you know, under, under promise and over deliver. And I think that in this space, we have to surface the facts before we can sort of deliver solutions.

And we need to use the data and follow those facts. And so I think it may be hard. Gosh, I personally get frustrated when I see gas prices go up. And I'm sure people on the street are frustrated as well. And if you're running a small business, that cost either gets, you know, you either have to take that into Europe and take it there or pass it on to your customers. That has an effect all through our economy.

So I would love to be able to offer fast solutions, but we have to get the data first and then follow the data to what the solutions need to be.

Yeah, 100%. That's why I wanted to go down that road, because it's important. Right. I think you're going to have one of the most aggressive accountability offices in America, but it takes time to better build that operation.

It absolutely does.

I want to talk about authority, and I know that. And this is where some of the comments may come in. And you're welcome to be able to comment back. I think the other piece is the State of California continues to build your agency looking at where the authority lies.

And if we take a look at the California Energy Commission, and I'll just be super candid, and I'll have a direct conversation with Chair Hochschild here when he's up for confirmation, we get this bureaucratic response about where they think their authority lies. Very frustrating. And if we're getting a bureaucratic response, I can't imagine what the public is getting. If I could just be so candid.

And it took a week for response, which I want to put on the record here today and look forward to having the chair coming in for confirmation. And what I'll say is I think the authority on maintenance plan maintenance is critical and getting a better understanding about when refineries are online versus offline, and especially during peak periods. Obviously, employee safety within those refineries, priority number one.

But being able to have, I think sunshine is the best medicine in getting a better understanding when and why they would go offline. And I think there needs to be some discussion and potential additional authority granted to the CEC to allow them to have that. I don't know if you want to comment on that. That is a comment of mine, at least in our initial review, but wanted to see if you wanted to comment on that. And again, I want to be very clear. You are a division and not the CEC.

I would repeat my comments earlier, you know, defer to the CEC on their own, you know, view of their statutory authority, but I think express additional explicit authority would potentially be very helpful in this space. As to Chair Hochschild, I have the utmost respect for his work and his leadership in terms of an array of issues, in terms of the energy transformation in California. At the same time, I think we all see the gas prices go up and folks want very prompt response.

And so I appreciate that. A lot of my colleagues at the Energy Commission, I can't identify a single thing that DPMO has asked for that we haven't gotten responsive 100%.

Don't take my comments as being crunchy with the CEC, with the exception of the response time and the substance of the response, because I think that they know. So that's where my crunchiness lies. I'm grateful to the commissioners and to the chair personally. I'd like to talk about storage.

I think the other area of challenge is if we are truly wanting to be able to look at flattening the spike, we have to be able to look at additional storage within the state and so that there is supply. Supply for you name it, 30 days, 60 days, et cetera. And ensuring that the CEC has the authority to be able to mandate additional in state supply to be able to flatten the spikes.

I think that's another issue that we're going to need to be able to take up when we have the chair here, ensuring that the CEC has that authority. And I think that's a bit squishy at the moment and potentially needing some legislative assistance. But Mister Director, I'll turn it over to you if you care to comment on that, at least on the issue of needing relief. You need to have that supply in state to be able to immediately go in, into those peak periods.

But please, Mister Director, I absolutely agree on the supply and demand. I think you'll see this in the Meg workshop. There's an inventory level below which price spikes start to happen. And so DPMO's perspective is we need to set a realistic and a pragmatic requirement above that, and the specifics need to be worked out. And I think the CEC is surveying currently what storage capacity is already there. I think there's a very good chance that we have enough or close to enough already in private hands.

And so we need to figure out how we can work with our private partners to make it work. And there may be the need to build some more, but I'm not sure that that's, that's the case. So hopefully we'll have more information soon.

Yeah. And I think that absolutely it's going to be important. So, and again, I think there's two questions here. Right. One, the authority question, does CEC have the authority? And then two, what are the best tools to be able to flatten the spikes? Right. And I think, again, your opinion, needing additional storage capacity, especially during peak periods. .

Yes, and an obligation to have gasoline and gasoline blending components in those storage facilities.

100% no, I appreciate that. My last question. So walk us through the remainder of the year where you're at now with staffing and where you think you're going to be come January 1.

We're hoping to be 80% staffed by later this year. There are some HR wheels that turn slowly, but, but I think 80% staff is a good goal. If we could get to 100% under promise, over deliver is the goal there. So that's our hope. And I think there's two functions that we have that are core to what we do. One is market oversight.

We're looking at the spot market trades, we're looking at industry data, we're looking at what market participants are doing, and then we're also looking at the market doing some of these public proposals. Our investigative work and the work in market oversight is largely going to be out of the public view because investigations sort of need to happen confidentially. So some of that work will continue apace, but isn't necessarily going to be known publicly on any specific timetable.

Nice job. Mister Director, very much appreciate the time. If there's any additional comments, questions, please.

Just a quick follow up question on the staffing, because I didn't see it in the background, I may have missed it. And I do appreciate your comments regarding leadership and staffing up. How many staff Members are approved for this Department? And then have you managed a size of staff that big before? What's the, you know, tell me your background on managing a staff of close to or what size of staffs you've managed.

Sure. So 10 positions are authorized that work that we're working to fill. And so at the moment, we have three of those filled. And hopefully we'll have five soon. Hopefully actually six soon, and then in the coming months, up to 80%. And hopefully above that, I would point to my experience as a prosecutor working on a team with four or five attorneys, three or four paralegal support staff. This size of an office is pretty similar to what a prosecution team would look like.

Also, in both the California Attorney General's Office and at the US Department of Justice, I was on hiring committees and had a role to play in selecting who we were going to onboard and why. And so looking for people with that passion for public service who are willing to put in the work and who just care deeply about these issues, I think is really important both to serving the public well and having the right sort of esprit De Corps that we're looking for. Thank you.

All right, thank you, Mister Director. What we're going to do is open it up for each of you who would like to be able to comment. Thank you for your patience. We'd like to be able to welcome anyone and everyone, if you could please come forward. We're looking for those who are in support. If you don't mind giving us your first and last name along with your organization. You have 30 seconds. Welcome. It's good to see you.

Kim Stone. Stone advocacy on behalf of Consumer Watchdog in support of the nomination. Thank you and good luck.

Good to see you, Miss Stone. Thank you so much. I'd like to be able to see if anyone else would like to be able to stand and come forward to the podium in support. Looking for those who are in support. Welcome.

Hi, my name is Stephen King. I'm with Environment California. We're in support of this nomination. We believe it's important for the state to monitor and hold the petroleum industry accountable and to ensure that consumers are treated fairly.

Thank you. Thank you, Mister King. Appreciate that. We'd like to see if anyone else who would be interested in speaking, if they can please come forward at this time. All right, we're now going to look at those who may be in opposition. Those who are in opposition, if you could please rise and come forward to the podium. First and last name. We're going to do a last call.

All right, let's bring it back to Committee to be able to see if there's any additional questions or comments from Committee. I'll just make one 30 second comment. Mister Director, I just want to say, super impressed at the ability to sit down with you at the vision for the agency. And this is, be candid. There's nothing easy about propping up a new wing like you're doing right now, and especially in such a politically charged environment. Grateful for your leadership and so happy that you're here.

And it's very cool to be able to have your family here as well. Is there a motion to be able to approve? We have a motion by Senator Eggman. Thank you so much. Madam Secretary, can you please call the roll?

[Roll Call]

That is a 31. We're going to keep that on call and we are not going to adjourn quite yet as we're going to have the Vice Chair come back. So that is on call. Thank you so much, Mister Director. Grateful.

Thank you. Grateful for those closing comments.

So much. Thank you so much. Nice to meet you. It's good to see you. Thank you. So, ladies and gentlemen, a Committee. Each of the Committee Members who are here are up on each of the votes. You are more than welcome to be able to. To head on out on this busy week. We are going to recess the Committee. We're going to hang here. The sergeants are going to be calling Michael, if you don't mind checking in on Vice Chair Grove.

And then we'll keep the roll open for now. We're going to recess here for just a couple minutes. I'm going to bring him back. We have one open item that is the potential confirmation of Director Mowder, currently on call. A 31 vote. 31 vote. Madam Secretary, can you please call the absent Members?

[Roll Call]

That's a 3-2 vote. Final vote. The motion passes. All right, thank you so much, each and every one of you, for the work today. We're going to be adjourning. We will not be meeting next week. We'll be back with you two weeks from today. Thank you so much. Virgin.