Senate Budget and Fiscal Review Subcommittee No. 2 on Resources, Environmental Protection and Energy

Resources, Environmental Protection and Energy will come to order. Okay. No quorum needed. I have a few opening remarks and then we will hear from the Department of Finance. Today we're going to hear about the Governor's May Revision Proposals in these areas of Resources, Environmental Protection and Energy.

We do know, of course, this year's budget will be a tough one. Even after early actions, we still have an estimated $27 billion plus shortfall.

We're going to hear proposals to make up that shortfall through cuts and delays in our area in Budget Sub 2, as well as fund shifts to other special funds, and particularly the Greenhouse Gas Reduction Fund.

I will note from the offset and we will hear this, I'm sure, as we go on that I think there's reasonably concern about new and novel uses of GGRF that are being proposed here by the Administration.

The May Revision shifts a number of programs, including 20 million for Regional Forest and for our capacity, some 50 million for Oil Well Plug and Abandonment, $75 million for the Salton Sea, but more specifically, other categories that we'll go into that have a more tenuous connection to reducing greenhouse gases that the May Revise also poses shift 1.3 billion into GGRF for transit programs.

This in addition to the continuous appropriations to High Speed Rail, funded at $1 billion this budget year, and the TIRCP program funded at $400 million to this budget year. So I want to be clear.

All these programs are very worthy and important programs, but I am concerned if we're not prioritizing emissions reduction programs for GGRF that that is going to come back to bite us if we, when we work on renewal of this program. This is really our money to fund greenhouse gas reductions, and we need to keep the focus on that.

And in this time of budget difficulty, we'll need to prioritize the most effective programs to maximize the impact of our state dollars in reaching our ambitious climate goals.

So I look forward to hearing more from the Administration today about the proposals from the LAO, about, in their comments and discussion from my colleagues as we begin our budget discussions regarding the May Revision. And with that, I'd love to call up the Department of Finance to begin to present. Go ahead.

Good morning, Chair Members. Sergio Aguilar, Department of Finance. I'm going to start off with just providing a kind of high-level overview of the current budget picture and then go into some of the specifics of what's included within the May Revision, both on the General Fund solutions side and then some key budget change proposals, and trailer bill also in the May Revision.

So in January, the budget projected a shortfall for the end of the 24-25 fiscal year of roughly $38 billion. But conditions since then have worsened for a total of $7 billion and without action, the estimated total shortfall for the budget year would be $45 billion.

But last month the Legislature did enact an early action, a package acknowledging the importance to to begin to close the shortfall by $17.3 billion, which still within the budget window leaves a shortfall of $27.6 billion. At the same time, even with these solutions, Administration still projects multibillion dollar shortfall also within the 25-26 fiscal year.

And the Governor does believe it is important to solve the estimated shortfall for two fiscal years, not just one, in order to put the state in a more sustainable path for those future years. So the May Revision proposes an additional set of solutions that would also close the second year's shortfall by an estimated $28.4 billion.

Now, it goes without saying this is not an easy task and by definition many hard choices have to be made. And as the Governor also alluded to in the press conference, there are a number of proposals in the May Revision that he would even prefer not to put forward.

But many of these involve programs that both the Legislature and the Governor have worked closely together to advance in the past few years.

But given the scope of the shortfall, these are the kinds of measures the Governor believes has to be put forward for consideration in order to bring the budget back into balance, not just for this coming year, but also for the next fiscal year as well.

So the May Revision proposes or represents the beginning of the process and discussions and negotiations on a final budget agreement. But the Administration does stand ready to work with the Legislature over the next coming weeks as these discussions continue, and also to hear other alternatives proposed by the Legislature.

So the '21 and 2022 budget acts allocated approximately $54 billion over a five year period to advance the state's climate agenda. And with this May Revision, the budget does maintain 45 billion, or 83% of these investments over an eight year period.

And approximately $33 billion of this funding has already been appropriated to departments, with the remaining 12 billion set to be appropriated over the next fiscal years. And the budget does continue to prioritize equity and investments in priority populations that face disproportionate impact from pollution and the climate crisis.

And we also do continue to seek and leverage federal funding. And as of the end of April, the State of California, or California as a whole, is estimated to get about $15.9 billion in additional federal funding through the Inflation Reduction Act and the Infrastructure Investments and Jobs Act for climate-related programs.

Now the May Revision proposes a combination of measures that includes an additional approximately $7.2 billion in General Fund solutions for climate related programs, 3.6 billion being reductions and 3.6 billion being shifts to the Greenhouse Gas Reduction Fund.

The May Revision includes a comprehensive cap and trade expenditure plan that allocates the discretionary cap and trade revenues over the next four years to primarily support shifts from the General Fund. And the May Revision also includes a revaluation of the Governor's Budget cap and trade shifts to reprioritize program expenditures.

And this holistic approach of allocating cap and trade over the next few years helps address a significant budget deficit, both in the budget year and also in the out years, and also helps protect many of the commitments that we have made with the Legislature on these priority climate programs over the last several years.

The May Revision also includes an additional 540 million in non-climate natural resources environmental protection related programs and this includes 234 in reductions, 234 million introductions, 300 million in revenue borrowing and then an additional 6 million in fund shifts not related to GGRF.

The May Revision also includes a few erosions and one proposed to highlight is the Beverage Container Recycling Fund loan that was proposed at Governor's board budget that is pulled back in the May Revision. So no longer moving forward with that proposed loan, just acknowledging the condition of the Fund.

The administration's General framework when looking at climate and natural resources related programs and solutions, first we identified what programs still had money and what fiscal year. So we analyzed the status of all the previously appropriated programs.

And just one thing to note is much of the climate funding that has been included in the climate budgets, the multi-year climate budgets, much of it has already been encumbered and really isn't available for solutions. And so we just looked at the scope of what's remaining.

We also looked at potential availability to shift to other funds, including DGRF. We looked at the previous reductions and shifts that were made in last year's budget, given that last year's budget already included several solutions and several shifts to cap and trade.

So that was considered as we were looking at new potential MR solutions, of course, looking at prioritizing equity and investments in party populations facing harm from pollution and climate crisis, and then also just looking at what programs align with some of the highest climate priorities of the Administration.

And then lastly, where some of that 15.9 billion in federal investments could potentially offset at a high level some of the potential loss in General Fund, just from the larger climate program perspective. And ultimately there are many tough choices that Administration had to make in order to put together a balanced budget to meet our constitutional mandate.

And so with that, I'm actually going to turn over to my colleague Stephen Benson, who's going to go into a little bit more detail on some of the proposed changes in the May Revision.

Thank you, Stephen Benson with the Department of Finance. I'll just do a summary of key solutions as well as some key new investments that are for proposing the May Revision. So, starting with the climate category packages for zero emission vehicles, the 21-22 Budget Act committed $10 billion over five years in investments for the state's ZEV agenda.

The May Revision maintains 9.7 billion, or 96% of these investments and includes a General Fund reduction of 383 million across four programs, a delay of 99 million within GGRF for ZEV fueling infrastructure, and a GGRF reduction and delay for the Zero Emission Transit Capital Program.

For water and drought, the 2021 to '22 Budget Acts committed 8.7 billion over five years in investments to support water and drought resilience throughout California.

The May Revision maintains 6.6 billion, or 76% of these investments and includes a General Fund reduction of 673 million and a $586 million shift from General Fund to GGRF across various programs. For Wildfire and Forest Resilience, the 21-22 Budget Act committed 2.8 billion for Wildfire and Forest Resilience.

The May Revision maintains 2.6 billion, or 93% of these investments and includes General Fund reductions of 44.1 million across five programs, 30 million in Fund shifts to GGRF across two programs, and 128 million in delays to GGRF across three programs. For extreme heat, the 2021 and 2022 Climate budgets committed $649 million for extreme heat.

The May Revision maintains 268 million, or 41% of these investments and includes a General Fund reduction of 2 million for green schoolyards and a $93.8 million GGRF reduction for extreme heat and community resilience and urban greening programs. For nature-based solutions, the 2021 and 2022 Budget Acts committed $1.6 billion for nature-based solutions.

The May Revision maintains 1.4 billion, or 88%, and includes a General Fund reduction of 25 million across two programs and 232 million in fund shifts to the GGRF across four programs. For coastal resilience, the 2021 and 2022 Budget Acts committed 1.3 billion for coastal resilience.

The May Revision maintains 653 million, or 50% of these investments and includes a General Fund reduction of 6.7 million for sea level rise adaptation in state parks, a shift of 27.5 million ocean protection funding to GGRF and a delay of 36.8 million GGRF for SB 1 implementation. For community resilience, the 2021 to 2022 Budget act committed 1.9 billion for community resilience investments to to advance climate resilience and low-income and underrepresented communities.

The May Revision maintains 1.2 billion, or 67% of these investments and includes a shift of 14.4 million to GGRF for the California Climate Action Corps and Environmental Justice Action Grants Program. In agriculture, the 2021 and 2022 Budget Acts allocated 1.1 billion for sustainable agricultural programs to adapt to climate change and reduce carbon emissions.

The May Revision maintains $1 billion, or 89% of these investments and includes a $10.6 million reduction and a delay of GGRF for the Livestock Methane Reduction Program. For energy, the 2021 and 2022 budget acts committed 7.9 billion over five years in state clean energy investments.

Additionally, SB 846 includes $1 billion over three years to fund activities under the Clean Energy Reliability Investment Plan. The May Revision maintains 5.5 billion, or 69% of the original energy investments and fully funds CERIP. The May Revision includes $1.6 billion in additional General Fund reductions, partially offset by $539 million of additional GGRF compared to the Governor's Budget.

Additionally, $900 million of the CERIP investment or initiative is proposed to be funded using GGRF in future years instead of General Fund. And then switching to some non-climate package related solutions, the May Revision includes a one-time shift of Greenhouse Gas Reduction Fund to the Timber Regulation and Forest Restoration Fund.

So the May Revision proposes to reduce the $200 million Greenhouse Gas Reduction Fund that's appropriated to CAL FIRE annually by $120 million for one year in 2024 and 25, and proposes to backfill that with $120 million from the Timber Regulation and Forest Restoration Fund.

So the total amount of funding for the wildfire activities will remain at $200 million, but it switches 120 of that from GGRF to TRF, as we call it, and then uses that $120 million of GGRF in turn to cover other General Fund expenditures as part of the overall cap and trade expense plan.

There's also an APCF loan in the May Revision. It proposes a $300 million loan from the Air Pollution Control Fund to the General Fund to assist in closing the projected shortfall and ensuring the submission of a balanced budget plan. The balance in the Fund primarily consists of various fines and settlements. Regarding the Habitat Conservation Fund, the May Revision proposes trailer bill language to accelerate the sunset date for General Fund transfers to the Habitat Conservation Fund, as well as budget bill language to revert 45 million in existing transfers back to the General Fund. For outdoor equity grants, the 2021 and 22 Budget Acts allocated $115 million for outdoor equity grant programs established by Chapter 675, statutes of 2019, which is AB 209. The May Revision includes a reduction of $50 million for this program, which maintains 60 million, or 44% which has already been awarded. For Loan Loss Reserve Program the May Revision includes a General Fund reduction of $175 million in 2022 or 23-24, $150 million in 2024-25, $175 million in 2025-26 for a total reduction of $500 million. This change eliminates funding for this program. Regarding cleanup and vulnerable communities initiative trailer bill language, the May Revision includes a General Fund reduction of 268.5 million, including 136 million in 2023-24, 85 million in 2025-26 and 47.5 million in 2026-27. The May Revision also includes a fund shift of 108 million to GGRF. 175 million was proposed for delay at the Governor's Budget.

This overall, this will all maintain 231.5 million, or 46% of the total allocation for this program. And finally, I'm going to summarize a couple of the key May Revision BCPs, like new proposals.

So first off, for fruit flies, the May Revision includes a request of approximately $25 million one-time General Fund and $28.8 million one-time Federal Trust Fund authority in 2024 to 25 to continue effectively responding to the unprecedented presence of invasive fruit flies.

This additional funding is essential to swiftly eradicate these invasive pests to prevent them from establishing in California and irrevocably altering the state's agriculture industry. Related to the Leviathan Mine, the May Revision includes a request for $3.7 million one-time General Fund in 2024-25.

Of that amount, 3.5 million will fund critical performance, efficiency and safety improvements to the aging pond water treatment system and the Leviathan Mine Superfund site.

At the Leviathan Mine Superfund site. $200,000 will allow the Department of General Services to effectuate a possible transfer of title for the site from the state to Atlantic Richfield Company, which has expressed an interest in obtaining the title to the site and diligent efforts are being made by the State Water Board, Lahontan Regional Water Board and the Atlantic Richfield Company to finalize an agreement.

The May Revision also includes a reversion of approximately $5.2 million for the Leviathan Creek Diversion Channel Relining Project. If the possible transfer of ownership of the state is realized, potential future liability for the state will be significantly reduced because the state will no longer be property owner.

In regards to hazardous waste control account, the generation and handling fee shortfall solution the May Revision includes a net zero, or sorry, a net increase of $750,000 in 2024-25 and $500,000 ongoing, which includes a decrease of $4.6 million to the hazardous waste control account and an increase of 5.3 million to other funds to address the generation and handling fee revenue shortfall.

These dollars would provide improved oversight of waste generation, increased fee payer compliance for generated waste, and more consistent adherence to statutory exemptions from the fee. Trailer bill language will accompany this proposal to clarify the statute to more closely align with the originating intent found in SB 158, support oversight and compliance efforts, clarify the fee calculation and clarify how exemptions are used in the future.

Additionally, the Administration proposes to forgive a $15 million loan made tp the Toxic Substances Control Account to the Hazardous Waste Control Account authorized by the 2023 Budget Act. Regarding climate accountability chaptered legislations SB 253 and SB 261, the May Revision requests $8.4 million Greenhouse Gas Reduction Fund and 28 positions in 2024-25, 12.3 million GGRF and an additional 12 positions in 2025-26 and 13.9 million from two newly established funds and an additional two positions.

This is helpful. I know we have some time issues here with some folks, so maybe we can wrap it up.

Okay, I will cover the last couple of them much more quickly. For offshore wind, the May Revision includes an holistic overall package of $16 million that represents the administration's attempt at prioritizing the most critical activities to get done in the next three years for offshore wind.

So that's a proposal that's before you. For the Science Center Phase 3, the May Revsion includes $2.9 million General Fund in the first year, 3.7 million ongoing for facility maintenance and utilities to cover the Science Center's legal obligations for maintaining that facility.

For CAL FIRE, there's a five firefighter hand crew proposal in the May Revision that includes $46.8 million in the first year and 226 positions. It's phased in over five years.

With the final year and ongoing, the amount becomes 44.5 million 234 positions these crews helped provide vegetation management, hazardous fuels reduction projects and wildland suppression. And the final sort of key proposal is the California Lifeline Program.

The May Revision includes an augmentation of $31 million from the Universal Lifeline Fund to account for an expected increase of customers that were previously enrolled in the expiring federal affordable connectivity program, along with administering the CPU's foster youth line program.

Okay, great.

That completes our overview.

Thank you. Let's turn it over to the LAO, please.

Good afternoon. Rachel Ehlers with the LAO. I will give some very brief kind of overall budget comments and then regarding the specific topics before you. So, as we know, the state continues to face a pretty significant budget problem and revenue shortfall. We also have numerous priorities, including pursuing ambitious climate goals and responding to serious climate change impacts.

So we view our job as your budget advisors is really trying to help you continue to pursue these goals, but also meet your constitutional obligation to pass a balanced budget. So that's the context of our comments here today and our work with you over the next few weeks.

Comments reflect our preliminary assessment of the May Revision, which obviously was just released, so we are still working our way through it. We plan to put out our first publication by the end of this week on the overall budget, our initial comments, and then release our multi-year assessment at some point next week.

So, reflecting recent revenue weaknesses, the updated Department of Finance revenue estimates reflect a roughly $10 billion reduction compared to January. That's still above our estimates, but it's much closer. So we're still below the Department of Finance by roughly $10 billion. But it's really in the ballpark at this point.

We think this is a reasonable place to start in building your budget, these revenue estimates upon which the May Revision is built. We do think there's still considerable downside risk. So one of the key questions for you as you're adopting your budget is how much downside risk are you comfortable with?

And knowing that if revenues do come in lower, that will require some mid-year budget adjustments, either turning to your reserves or finding additional solutions. But we do think it's a reasonable starting place. In the context of this significant shortfall in state revenues, based on our initial review, we do think there are several positive features to the overall architecture of the May Revision, as well as then within the resources budget. Overall, we find that the May Revision does put the state on better fiscal footing, or would put the state on better fiscal footing. It reduces the reliance on reserves.

So it kind of keeps more of that tool in your tool chest, if you will, for future uncertainty, also pulls back on more of the one-time spending, which, as we've discussed, is kind of a use-it-or-lose-it tool.

You either take it back or it gets spent, and that isn't a tool available for you in the future. If you're facing budget problems, it starts to address the multi-year problem as well, although there are remaining deficits in the out year forecast under the Department of Finance's estimates.

So overall, we think this approach makes it more likely that the state will be able to preserve more of its core ongoing programs and commitments as the years go through.

One of the key features within the budget items that you will discuss here today is that the May Revision proposes converting many of the proposals that in January were delays to future years to instead be reductions. It also reduces some of that planned out year spending.

And you may recall those were both recommendations we had for you back in February, that it's easy, easier to reduce funding that hasn't yet gone out the door than funding that has, as well as less disruptive than making cuts to ongoing program. Certainly you could revisit that in the future if revenues do come in higher than expected.

But we think starting with a more kind of realistic baseline makes sense and puts you in a better position to address your out year budget situation. There are also, within the May Revision, some additional reductions to current year and prior year one-time spending, as we've discussed.

That makes sense to do now because that tool won't be available in the future. But overall, one message we want to reiterate for you is that this is not the only package of solutions available to you. You have other options.

The overall architecture and framework makes sense to us, but if there are specific programs that are priorities for you as a Legislature, you have other options for finding solutions.

You may recall that back in February, based on information on spending we got from the Administration, we estimated there was about $1.0 billion in unspent funding from current year and prior year appropriations that had not been kind of retracted at that point. Now, some of that is part of the May Revision.

Some of that likely has been spent now, but we still do think there are likely quite a bit of funding that has been appropriated but not yet gone out the door. We're working with the Administration to try and get an update on that information for you as soon as we can, but none of these will be easy.

We need to stipulate that. But we do think that based on what your highest priorities are, there is a different package of solutions that you can pursue and still meet the overall architecture. So you could consider alternatives both if some of these proposals don't meet your priorities, but also if some of them raise serious concerns for you.

In our initial review, for example, one of the proposals in the overall budget is to reduce state operations by 7.95% across all departments. We think this would be very challenging to achieve as well as potentially very disruptive to program delivery.

So that's an example of a type of solution that may not yield the savings that is built into the Ma Revision, you may want to take a closer look at to the degree that doesn't yield the solution you need, you would need to find alternatives to hold the whole package together.

And then finally, one of the key factors, as the Department of Finance presented in the package, is this approach of shifting funding from the General Fund to the Greenhouse Gas Reduction Fund. The strategy overall has a lot of merit in that it can allow the state to continue with its planned activities while reducing General Fund commitments.

But again, you have options here in selecting what are your highest priority activities for sustaining, whether it be from GGRF or from the General Fund. I think our overarching recommendation would be look across the programs, figure out what your highest priorities are for continuing, and then find the funding source that makes the most sense to do that.

One area of caution we'll raise again, as we have earlier, is the reliance on the GGRF for out years. That's even more higher magnitude. In the May Revision, it counts on $1.8 billion in discretionary funds for each of the next three years after the budget year.

This has been a historically somewhat volatile funding source, especially as we get closer to the statutory sunset date of the program. So not only are we uncertain about how much revenue we will have available from GGRF a few years from now, we're also uncertain what your highest priorities will be or what the state's highest priorities will be.

So we would exercise caution in committing significant amounts of out year GGRF at this point until we know more about what the state's priorities will be as well as what the revenues are. And with that, Mister Chair, happy to answer any questions.

Thank you. I'd like to offer the first question to Senator Allen. I know he's got some.

Thank you, Mister Chair. Really appreciate all the presentation and there's so much to absorb. We had a good briefing in caucus yesterday, but I think it continues to be a concern in the number of cuts that have been made in this sub area. But I also recognize the very difficulties of our broader budget.

I wanted to ask just one very particular question about the Habitat Conservation Fund. I don't know if you're the right folks or someone else here, but I know it's been proposed to, it's been set for elimination. It was voter, it was approved by voter approval. It was created by voter approval back in 1990.

There had been an agreement made, I think, early in my time in the Senate when the Governor and the Legislature agreed to extend the annual General Fund transfer to the Habitat Conservation Fund, at least until 2030. So just wanted to get a better understanding of, you know, the thought process as to why. I mean, understanding it.

There's a massive set of financial challenges, but of course, a lot of things are not getting eliminated. You know, what's the thought process of this being not maintained as a priority, particularly given the fact that we're about to list several species as endangered. So let me throw that out there to start with.

Yeah. Sergio Aguilar, Department of Finance. So, you know, just kind of acknowledgement there are many really tough cuts in this budget, and this is definitely one of those tough reductions. There is an ongoing budget deficit.

You know, I know our budget specifically solves budget year and budget year one, but we're also trying to solve the, you know, as much of as we can in terms of some of the additional out years. So this is one of those that does provide also, you know, other out year relief was that reduction.

But acknowledging, you know, this, this has been an important program that has yield a lot of benefits since it began. And so it's really just, you know, a cut that is based off of the current fiscal condition. But we are, of course, you know, open to having ongoing conversations with the Legislature and also hear other potential alternatives.

The last thing I'll note is that the piece that is reduced is the General Fund transfer, but the Prop 99 will still get transferred into the Fund. So there will still be funding that go into Habitat Conservation Fund.

It won't be, you know, the 30 million that goes in now, but there will still be some amount that gets transferred every year from the Prop 99 allocation that goes into the Fund.

Okay. One of the questions that's come up is just the extent to which this might require a higher threshold vote, like a four fifth vote, given the fact that it amends an existing Proposition in a way that wasn't expressly permitted by the statutory language. And I think that like a four fifth threshold.

So could you give us your thinking on that?

That is also our understanding that the four fifth. Wow.

That's 32 in the Senate. All right. Gosh. Well, if everyone supports. Where are you on this one, Mister Dahle?

I might have some power, finally.

All right, all right, all right. Well, let me. Thank you. Thank you. I'll have some more questions later, probably.

While we're on that topic, I'll ask you for myself and then I'll give, I have a lot to questions asked, but I'll give my colleagues some opportunities as well. The freezes to the grants that would be awarded at the May 23 meeting. The Wildlife Conservation Board has publicly noticed for weeks some of these are very complicated grant landowner that terms have been negotiated. You've got expiration dates coming up. We're talking about millions of matching funds. And as you've heard in this Committee before, a great concern about the freeze that Department of Finance has placed on spending which would impact all these programs. So what is the plan? Can we release some of those dollars? And is that freeze going to have to apply here?

Yes, I think first I'll start by noting is the freeze was enacted in the early action, so it's approved by the Legislature in early action. And the conditions of the freeze were also in early action. They'll approve by the Legislature. And so specifically to the May WCB board meeting, for the General Fund that applies to the freeze, the approach is that those will be conditionally awarded, but they wouldn't be encumbered until after the budget is enacted. That way, you know, we can make sure that they are potential options still on the table, which was the goal of the parees, which was enacted in their early action budget Bill.

Okay, so conditionally adopted is the plan and then funded after the budget gets signed.

If it doesn't get reduced as a solution, yes.

Yeah. Okay.

Josh, just real quick. So sorry, you mentioned something about transferring from Prop 99 monies. Is that. Can you tell us just this quick question about how much gets transferred under the plan?

So it varies on your basis because it's based off of tobacco tax revenue. Yeah, but you know, it's.

Right.

Yeah, it has gone up and down. I think right now it's close, you know, 10 ish million. And so the General Fund side is about 20, which gets to the 30. So it kind of hovers between like 9 and 11, but right now it's like, at 10. Okay, thank you. Senator Blakespear.

Yeah, it's on the same topic. Yeah. So I wanted to offer my comments in support of my colleagues who have just brought this up. And just so that everybody's clear what we're talking about, it's Issue number 7 with the title of Habitat Conservation Fund General Fund Transfer Sunset.

So it reverts 45 million in the year 2023-24 and then 20 million ongoing for the next four years. And I think it's just important to remember how vital this program is. We've conserved more than a million acres using this program.

And it was created in 1990 by the voters, and then it was extended out to 2030 intentionally. And it was also, it's important to note just the importance of this. It was actually our current Governor's father who led a mountain lion foundation that was a primary proponent of the ballot measure in 1990.

And we're just on the verge of having the state list mountain lions as endangered across a wide swath of the state. So, you know, the historic perspective of this and the current importance of it.

And then I'll just also point to a press release that is less than a month old from the office of Governor Gavin Newsom saying with historic targets, California will use millions of acres of land to fight the climate crisis.

And then talking about in this press release that the state has unveiled 81 targets for nature-based solutions that will help California achieve its world leading climate goals, including reaching carbon neutrality by 2045. So habitat conservation is just so critical for all of our state goals. And I'm highly concerned about this being essentially nearly zeroed out.

So I want to affiliate my comments with my colleagues who've already said that, and just make sure that we're thinking about this particular program in a context, a broader context of it's not just preserving habitat for mountain lions, which is very important, but it's also this entire Committee's focus on our climate goals and our carbon reduction goals.

The nature based solutions are so important, and we just need to not lose sight of that. So those are my comments. Chair, thank you so much.

Thank you, Senator Dahle.

So I just will real quick touch on that, since everybody else has talked about it.

I said on the Sierra Nevada Conservancy Board for seven years, not only is their partners with those funds flow through those conservancies, but the private investment, too, that doesn't get calculated into the amount of conservation work that gets done is probably, in my mind even three or four times more than what the amount the state puts in.

So that's something to take into consideration when we look at those funds. But I want to change gears a little bit here for a second, if I could. I want to talk about the GGRF funds that are going to be backfilling the General Fund.

And something that I've been very focused on over the years that I've been here is the fact that we use the GGRF Fund for a lot of things that really aren't reducing greenhouse gas.

And I'll give you an example, there was, I think it was a Bill in EQ a few years back that took greenhouse gas monies and put it towards water infrastructure. And there was a, and I think we had a debate about how do you get reduction in carbon with doing this water infrastructure that was put out there.

And somehow it got through. And my friends in the environment just walked away and didn't really focus on the fact that it really didn't have anything to do with greenhouse. So on these proposals I went through here and where it says reduction, it's reduction.

And where there's a cost shift, it's more than likely coming from the GGRF Fund. So what's the smell test to, are these really reducing greenhouse gases or are these just an offset to the General Fund of programs that the Governor wants to prioritize?

Thank you, Senator Dahle, for the question. Christian Beltran with the Department of Finance.

So consistent with the Governor's Budget in the fall and kind of carrying that forward to now, really the administration's approach is really to kind of use GGRF to stay true to the commitments that we made with the Legislature in the past, whether it's through climate resilience and other purposes and other climate-focused themes.

It is not prohibited from a constitutional perspective. And it's consistent with a lot of the statutory goals that are set forth for GGRF and the funds within GGRF, which is focusing in disadvantaged communities and other kind of key factors of when we decide to invest these funds.

So that's kind of like the overall approach that we're using as part of the May Revision.

So you didn't really directly answer my question, though.

I mean, disadvantaged communities, and I agree with, I'm not attacking or I'm not criticizing that these aren't well intentioned programs, but I am concerned, the fact that we are somebody that pumps a gallon of gas into their car and is expecting the carbon to reduce, that the offset is going to drilling water wells in disadvantaged communities.

That's really not what was sold to the voters under AB 32 and the extensions of all these climate programs. And unfortunately, everybody, that gas is $7 a gallon in some places in California and they're paying for stuff that is not reducing, not focused.

Are these going to, I looked through and I was questioning some and maybe I should went through and highlighted them, but I mean, how are you making sure that they meet that climate goal that we're trying to meet and not just cost shifting from the General Fund because we don't have money in the General Fund right now?

So just to kind of reemphasize, I think, a couple of points. First and foremost, you know, we're really faced with a tough budget decision. And so budget climate, excuse me.

And having said that, the GGRF discretionary pot of money has been used in many circumstances in previous budget cycles where we are faced with difficult budget decisions to Fund other climate-focused programs.

And having said that, with the President set in place from the previous budget acts, the Administration felt it was appropriate to continue to look at certain programs across the climate spectrum to see if we could Fund it from the GGRF.

Now, whether or not it reduces GGRF greenhouse gas directly, you know, that is another question that is coming up in many conversations and is completely understood and heard. However, given the precedent that has been set and given the current budget climate that we're faced with, we felt that this was an appropriate approach for the May Revision.

Thank you.

I'll take a tack on that. I mentioned this at the beginning of the hearing as well. We see that transit is taking up a significant portion of the at GGRF. The May Revision includes $1.3 billion shift to GGRF for the transit programs.

So that's in addition to the continuous and discretionary spending for high speed rail, which is funded at $1.0 billion for the budget year. And the TIRCP was funded $400 million for the budget year. So just wondering, why did the Administration not propose using other special funds in transportation to backfill transit programs rather than GGRF?

I'll start with a few comments, Chair Becker, and then I'll turn it over to my colleague if they would like to add any context. Just a quick comment. Rather, we really aren't the experts in terms of the transportation side of our shop.

And so to the extent that there's other funding sources in the transportation realm that are eligible to Fund these particular programs, we would have to defer the questions to them. However, these transportation programs have historically been funded previously by GGRF, such as TIRCP and other particular transportation programs.

And so we felt that it was fit to continue to kind of plus up those programs utilizing GGRF funds to the best we can in order to kind of help offset the General Fund pressure.

Yeah, I'll just add, I know transit's heard in different budget Subcommitee on the Senate side. I think they heard that this morning and they attended that hearing. We didn't have our transit team come to this hearing, but we could definitely follow up if there's kind of any questions from our transit side.

So am I right, though, just to level some of the numbers that that would be $2.7 billion for transit in GGRF?

Are you talking across the multi-year, Chair Becker?

Yes. Is that the two years, basically, I think?

Well, it would be more than that because high speed rail is a. Yeah, so that's, so I guess on an annual basis, what are you, because it's already 1.4 billion on an annual basis, and so this is an additional 1.3 billion over two years, is that right?

That is our understanding, but we can definitely follow up and just verify and validate that with your staff if you'd like. Yeah.

So it'd still work out to over 2 billion the next two years on transit programs. Okay. Yeah. Will be good to follow up and see when you sync up with the transit folks, if there's other funds available, not GGRF for that. The May Revision cuts to Equitable Building Decarb Program by 139 million.

How will this cut impact the amount of projects and households served?

We're going to do some musical chairs and let our energy team come up and answer that specific program.

I'll note while they're coming up, we do have a goal of 3 million climate friendly homes by 2037,000,000 by 2035, as well as 6 million heat pumps deployed by 2030. With the heat pump, you do get air conditioning as well as I now have in my home.

So this is my advertisement for while we're waiting for heat pumps. Okay. The question was specifically around the 139 million for equitable building decarbonization program and how will that impact the amount of projects and households served?

Hope this one is turned on. Thank you. Damien Mimnaugh, Chief Financial Officer at the Energy Commission. Thanks for the question. So the mayor vision does propose a change in funding for the equitable building DCARB program.

It retains half $1.0 billion in the program compared to the 922 million the 2223 budget agreement, which is a considerable amount. With those funds, combined with about $600 million in federal funds, the Commission will be putting together a statewide incentive program as well as a direct install program to support building d CARB efforts.

Do you think we'll continue to be on track to meet these goals?

The goals that you set in terms of the metrics? I have to get back to you on how the dollars shift those metrics so I can do that.

Okay. Okay. I mean, do you have a sense of every, say, 100 million, how many households we hope to serve or anything like that?

Not off the top of my head, but we'll put that in there.

Okay. That would be good to know. I do want to mention up front, and then I'll let me open up to my colleagues again for a moment when I think we should all be particularly sensitive to areas where we may be losing out on federal funds if we don't invest here.

And I want to, I guess, note a couple of areas. One area is related to carbon removal, such as the $3.5 billion for regional direct air capture hubs. At the federal level, we've kind of whittled the carbon removal funds down to 20 million.

So will that be sufficient to leverage these federal funds and are we at risk, certainly, of losing out on federal funds for carbon removal innovation?

I'll take that one again. So the carbon removal innovation support program is projected, is now budgeted to receive $20 million in 2025/26. To the extent that there's opportunities for federal funds available at that time, the CEC would look forward to using those dollars to leverage federal funds.

Right? That's not the question I'm asking. The question I'm asking is do we risk losing by cutting down to 20 million. For example, if we were increased, is there increased federal funds that would be available if we invested more in this area? But that's my understanding for sure. Certainly.

Gotcha. So the question is, does the change in funding put at risk the state's ability to draw down federal funds? Yeah, I think that has to do a lot with some of the timing, at which point when the DOE will make those funds available. In some cases, the DOE has moved quickly.

In some cases, the DOE has, I should say, Department of Energy has moved less quickly than perhaps you would have hoped. And so I think the question really has to do with when those dollars will be available. Some of those answers are available to us from DOE at times that we like, and sometimes information is forthcoming.

So I think one of the difficult answer is we don't know yet. That's partly because of information that has yet to be released by the DOE.

Well, I understand that sometimes it is a timing issue, but in this case, we do know that there's this program out there, and my understanding is if we were to put more money forward, we would be positioned to receive more money.

It's really, you know, this is not one of those areas where there's a lot of ambiguity about that. I don't believe so. I guess that's really the question is, you know, do we risk, by making a cut in that area, do we risk leveraging additional federal funds? It sounds like.

You know, I will have to look back at the opportunities available. Right now. If the cadence is such that the funds that are planned to be available in 2526 would meet the DOE's requirements, then the answer would be no.

But we'll have to check and see when exactly these funds, the specific funds you're referring to, would be available. And we can get back to you on that one.

Yeah, right. And again, I think it's not just that timing sequence here to the amount that we're putting on the table. We're not putting on the table, as the case might be, with this, with this cut. So we should like to continue to follow that one and hear back from you.

But that's our concern, or certain one concern that I have about putting that money at risk. Great. I have other stuff to go into my colleagues for a moment. Senator Blakespear.

Yes, thank you. Yes, thank you. I wanted to talk about water a little bit. I'm reading The Dreamt Land by Mark Arax, and so water is much on my mind, and the combination of the decreases in last year's budget, the 2024 January budget proposal.

And now this May revision has the Administration proposing to cut approximately $2 billion for water, water supply and quality projects and programs. And so I'm wondering, you know, water is a top priority for the state across many different types of water management.

And I wanted to see if there are any proposals potentially for a bond related to water or other things that you could add, as you know, how we're going to deal with this just really important resource with a proposal for this $2 billion cut.

Yes, Sergio Aguilar, Department of Finance. So the revision does not include any assumptions for a bond? We're aware that there's various bonds moving forward within the Legislature, but the May revision does not include any assumptions related to that.

But I will note, though, in terms of water from the 21/2022 multi year packages, we have been able to preserve 76% of that, and that's $6.6 billion. And so that is very significant amount of investment just starting from 2021 to now, 2024.

So even with these reductions, this is a pretty historic level of investment that we still have been able to maintain. And one of, like the areas, too, that we've actually done more money in is water.

As an addition to $6.6 billion, there's been flood investments that were put together in last year's budget, new flood investments in this year's budget, acknowledging public safety elements to it. And so water has actually been one of the areas where there's actually been new money when we're making reductions in a lot of other areas.

And so we definitely acknowledge water is and remains a priority, which is why we protect it a lot. And then we've also have had new investments in addition to these 6 billion that we've invested.

Okay, thank you.

Well, I'll certainly echo if these cuts do go through, and I understand we put a lot of money out there, but that's also because there's a lot of need that the Administration would support a climate bond which would include some of these areas. That would certainly be my hope.

I know you can't personally commit to that at the moment, but that's certainly our hope for the Administration in lieu of some of these projects, because we know it's possible. Right. There is a bond being discussed at this time. I will ask you about the safe drinking water.

I want to understand again the GGRF implications here because the May revision shifts, 352 million, we got very important cause drinking water not generally tied to greenhouse grass reductions, but 352 million to GGRF is that in addition to the 130 million already appropriated on an annual year for continuous appropriations for safe drinking water.

Bidlong Wing, Department of Finance the $130 million from GGRF to the Safe and Affordable Drinking Water Fund for the safeware program are separate from this General Fund shift of General funds to the GGRF.

We are scheduling or proposing $322.5 million of GGRF in 2024/25 and $30 million GGRF in 2025/26 and that comes from $152.5 million General Fund in 2023/24. That amount is fully shifted to GGRF in 2024 and 25. And the Governor's Budget proposed $200 million General Fund in 2024/25.

That has been $170 million of that has been shifted to GGRF in the same year, with 30 million shifted to GGRF in 2025/26.

So how are the types of projects going to differ in that 352 million versus the 130 million continuous appropriations?

Zero, go ahead. Go ahead. There we go. Hi, Joe Karkoske, State Water Resources Control Board. I head up our division of financial assistance. So basically, we would follow the priorities that the Legislature outlined with the original General Fund appropriations for drinking water is to prioritize small disadvantaged communities. So we'd continue to do that.

And right now, we have about $1.0 billion or so of pending applications, so close to 300 or so projects from small disadvantaged communities. So we'd find Fund those in a priority order.

And then on the wastewater side, the priorities for septic to sewer projects, and those are usually very big dollar projects, so we would continue to prioritize those. On the small community wastewater side, there are about $1.8 billion in pending funding applications from small communities, primarily.

How are disadvantaged communities defined? Does that include rural communities as well?

Yeah. So disadvantaged communities have a median household income of 80% or less than the statewide median household income. So I think that's probably around $60,000 or so now. Yes.

Okay. Well, we'll have to obviously come back to that and certainly very worthy project that been supported by the Legislature. I guess the question is, really, does it belong in the GGRF Fund or really elsewhere, but certainly important. Okay.

I did have a question around the ZEV package in this community from CARB or CC or the Department of Finance. So one area that, you know, certainly could understand, shifting some of the Zev package into GGRF, as transportation is the leading source of greenhouse gas emissions in our state.

Unfortunately, those programs are not prioritized for 2425 is my understanding. So they kind of shifted even in a GGRF. But out of the budget year. So how can we do not prioritizing those projects to meet our goals?

Brandon Merritt, Department of Finance I just was wondering if you could specify which ones you're looking at in particular.

Yeah, I think broadly, I can go back and look at the detail, but I think it's broadly the ZEV programs are shifted out of 24/25.

So Chair Becker, I believe you're referring to the Governor's Budget original proposal to move 600 million from budget year into the out years. And essentially the purpose of that shift was to open up 600 million roughly of available discretionary funds to invest in other programs.

And then in addition to that there's some other funds that are being proposed as being reduced for the CEC programs. So we were going from that 10 billion number to the 9.6 billion number.

So those particular programs are being proposed as reductions, essentially due to the fact that those are the only programs in the zev world that are still have some kind of General Fund balance. Other previous programs that the Air Resources Board specific to the vehicle incentive programs are funded now by GGRF.

And so therefore as part of the overall budget kind of approach of trying to find General Fund solutions and savings, we focused on reducing those CEC programs in order to achieve that goal.

But I'm looking at Zev programs shifted $385 million to 25/26 $299,000,26/27 $387million to 27/28. Right.

But we're not prioritizing for 24/25. Correct. We try to, again, I think prioritize diversifying the amount of available resources for other programs and maintaining commitments. So maybe my colleague joining me at the table can also provide some additional context.

Hello, Steve Wells, Department of Finance. And I can just add to that the reason there's so much that's shifted out of 24/25 is that for most of the zev programs they're working with a pretty large balance that was appropriated in 22/23 and 23/24.

So we saw that as an opportunity as we, you know, as those balances are being, you know, they've been in many cases awarded, but they haven't actually been liquidated. So as those balances liquidate, that can get us through the 24/25 year.

Sure.

So thank you, Mister Chairman. So I'm looking at the General Fund though, and it's a straight reduction for the fueling infrastructure grants, the equitable at home charging the trucks, and it's about, if you total those up out of the General Fund, it's about 380 million.

So, which I know we got to do what we got to do.

But are the mandates so most of these folks that are trying to meet the criteria that CARB has been given through Executive orders and through follow up legislation, are they going to relax those mandates due to the fact that we don't have the resources to move the infrastructure side of it into place?

No, that's not part of the May revision to provide any kind of authority or statutory changes to step back on our current commitments and goals.

So just for the Members, we're basically saying to the businesses out there, hey, we're not going to relax the regulation side of it, but we're not going to help you with the funding side of it, which is what they have always had the carrot out there.

Now you're taking the carrot away, and the stick is still available with no funding.

David Evans, Department of Finance so the reductions that you're seeing. So, for instance, the Zell fueling Infrastructure grant program, that program was awarded General Fund and GGRF dollars in the 2023 budget act. And so the proposal that is included in the May revision as the General Fund Dollars were being committed or awarded, we're scoring as a solution.

So we're basically swapping out funds that were already appropriated. GDRF dollars are already, that they already had. And so instead of them using their General Fund dollars, they would use their GDRF dollars. And then that way we can score a reduction for the, that way we can apply a General Fund solution.

Slow down.

So overall, their balance included both General Fund and GGRF already. So before, prior to any Fund shifts that are talked about in Governor's Budget or may revise, so they had a total balance. Some of those funds have not yet been committed. So that allowed us to take a reduction to the General Fund.

And in the cases where if that General Fund, if they had committed that General Fund, they have uncommitted GGRF that can substitute for it the total amount. So those four programs that we're talking about here are about $2 billion, and the combined reduction that we're talking about here leaves about 85% of the funding still available.

So while it's a haircut, there's still quite a decent amount of funding left in those.

Right. I understand what you're doing. Basically, funds that weren't committed but were promised are not. And so that's how you balance. I got it.

But at the end of the day, I sit on the Transportation Committee and we're talking about all the, I'm mainly concerned about the drags, trucks and the ports issues, and they're counting on this money to get the infrastructure put in.

No matter if it's this year, next year, or the following year, there's a plan put in place to get it done. And when you reduce it with ongoing budgets and there's regulatory processes set in place as well. So they have to meet these mandates and were promised funds.

So I think it was, to be honest, we need to tell them, hey, in the out years we might not get there. So for me as somebody that if I was running a business, I want to know, am I going to, am I stuck now?

Am I going to just have to eat it at the end or are we going to do something? And thats what I think we need to be honest about. We dont ever reduce regulation here. We continue to march on, but we cut the funds.

We promise the funds to get there so people go im in to save the environment.

As long as this, the state is here to help me get to where we need to go, then all of a sudden the state is no longer there and you're stuck still with the mandate to reduce your GHD or whatever it is, and there's no funds available. You're stuck.

You still have the requirement, but you don't have the money. So I think we need to be honest about it. In the out years, the General Fund is not participating, period, even though this year it's a wash because the money hasn't been out.

I know it doesn't matter right now, but it will matter in three years when somebody's trying to put these things together.

And I think we need to be honest with the people who have come to these committees who have been told, hey, the state's here, we're going to lead the world in the environment and we're going to be your partner.

And now, right now we're telling them basically we're not going to be your partner in three years, but we're going to hold you to the law that says you're going to reduce your carbon footprint. That's wrong. We need to fix that.

All right. I have three other topics I want to touch on. I'm going to step out one moment for another call and I'll hand it off at some point for full. You can continue that conversation. I did want to touch on three areas. One is just back to the federal Fund question.

Now that it's been a couple months since we discussed this and there's other areas now being cut, where are you seeing the greatest potential for federal funds, particularly in the energy area from Ira.

In terms of the federal funding for energy specific. Yeah. Especially from the Inflation Reduction act or anything that may have come. I'm going to turn to my colleagues probably behind me, and do some musical chairs. Mister chair.

Hello again, Damien Mimnaugh with the Energy Commission. The May revision does include a BCP for $390 million in federal expenditure authority for six programs. And I'll list them down right now. That's preferred.

Yes, sir. Say it again.

This is the list me revision does include a budget change proposal for $390 million in federal funding for CEC, for funding that we've received through the IRA and IIJ. Sure. Yeah. So it's $289 million for home energy performance based rebates. Those are rebates to homeowners for whole house retrofits.

And that's Ira formula funds, $10 million for energy efficiency training for contractors. And those are Ira formula funds, $17 million to support the adoption of the latest model energy building codes. Those are IRA formula funds, about $7 million for a revolving loan fund for energy efficiency.

Those are IIJ formula funds, about $5 million for an energy efficiency and conservation block grant. Excuse me. Those are IIJ formula funds, and about $60 million in reimbursement authority for CEC to work with Caltrans for upgrades of zero emission vehicle fueling infrastructure.

Very good. We'd love to get a copy of that. That's helpful. Thank you. I want to talk about offshore, and for that, I want to talk about broadband, because that is another area where there's a lot of federal funding.

And I found myself, after our last hearing on this, probably a little more confused than I was at the beginning of the hearing about our strategy for broadband.

So I was hoping, and if we have folks here from the CPUC directly, maybe in addition to the Department of Finance, is just, again, at a high level, just trying to understand how many people in the state do not have broadband access today.

And then when we've spent this $6 billion or whatever it is now between the federal and state money, how many people will not have broadband at the end of that?

It was working for David. There we go. Okay. Good afternoon, Chair Becker. Thank you for being here. Thank you, Members, for the opportunity to be here. Rachel Peterson, Executive Director of the California Public Utilities Commission.

I think part of the challenge with answering your question, Senator, is that definitions of unserved and underserved differ across both state and federal regulations and law. And so the other part, and the other complicating factor is that it's an iterative, progressive process.

So the investments that we make via federal funding account, which are coming this year, will transform some, a number of households from unserved to served. It'll also create networks whereby other households can go from underserved to served.

That'll be an entire, that'll be a scope of progress that then our other federal program, BEAD, will enter into and additionally move households from both unserved and underserved to served. So there's kind of a large trajectory going on. And quantifying it is difficult.

But I am joined by our broadband deputy here, Maria Ellis, who knows the technical elements of unserved, underserved and the trajectory better than I do.

Thank you, Senators, for having me here today. I'm Maria Ellis, Deputy Director for Broadband at the California Public Utilities Commission. In terms of the total unserved, as Executive Director Peterson mentioned, there are, it really depends on the program and how you are defining it.

Each the Federal Government defines has a specific definition for what, how they determine an unserved location. And based on that federal definition, the BEAD program has identified what we feel is Low but is roughly 450,000. Let me rephrase that. 306 unserved locations and another 154,000 underserved locations.

306,000 unserved and 150,000 unserved.

More or less, yes, roughly speaking. And so that's by their definition. And that definition includes a mix of technologies, latency speeds. And so it really depends on how you're slicing and dicing that technology speeds and latency.

Whereas the federal funding account has almost, by its definition, which is whether you have reliable wireline cable technology, that definition, you're looking at around almost a million in California alone. So 996. A little over 996,000. So those are two very different numbers, but they're really based on the state's definition of what is unserved.

The state count was 900?

And the state's definition is, again, based on specific technology types. So it's more binary. There's no underserved in that count. It's all unserved.

996. And so how these programs fit together, I would say that, you know, at the end of the day, the state is committed and has a really bold vision of reaching every single last one of these locations across, regardless of how they're defined and what we have seen, based on just on the federal funding account and the demand and the applications that have come in for that program, we really do see that every last penny of that is very much needed in order to serve one, to hit as many of those locations as possible.

And also, it has to be done in tandem and orchestrated with the bead funding, which is forthcoming.

Yeah. And I understand that there may be different definitions.

I just think that we need to be clear on which definition we are using and how we are defining success and what metrics that we are using for this program, because this is probably the last major influx of funding we're going to get for a while in this area. So how are you defining success?

What are your goals by the end of this money being spent?

It is just as Maria pointed out, it would be to accomplish service to all the unserved and underserved locations as defined by those specific programs.

But you think that's doable with the current trajectory we're on?

I think that we are going to not necessarily achieve it all the way with this current round of funding, but I think we're going to get a lot closer than we have been in the past.

We're seeing a lot of new entrants into this space through the technical assistance grants and the FFA grant applications that we've got coming in the door. And so I think we're about to see a real change in the broadband marketplace in California.

Is that new technologies, you mean, does that include like, fixed wireless or other new technologies as well? Is that what you mean? Mean?

I mean what I was saying by new entrants. What I meant there was the new public entities that are coming into the marketplace in order to serve the communities that haven't been served. So we have local governments, tribes, new special districts that have come in and are applying for FFA funds.

As far as technologies, FFA is a fiber focused program. I think we spoke about this before. BEAD is a technology neutral, more broader technology neutral program and fixed wireless eligible within BEAD.

Yeah, I will ask my team to set up a follow up. I mean, I certainly, I think you just speak for myself and we'll see what happens in negotiations. I certainly don't feel comfortable. I know there's, I'm not sure if there's any specific changes in the revision.

I know we had initially, I think 46, say again, there's 200 delay in this revision and in the January proposal. There's still some additional positions that are requested. Right? Yeah, I know.

For myself, I just, I need to get a clearer picture of the goals and the metrics and how we are going to get there, like how all these intermediaries factor in how they are. How does that get us to the goal? And are we measuring against the 996,000 are we measuring against the 456,000?

But how are we, by what timeframe are we going to measure and say, ok, here's what we've achieved, and we'll be able to say what we achieved with this program because it's just an extraordinary amount of money. This is really opportunity.

So I won't belabor it here at this point, but I'll just say this is somewhat helpful, but I understand there's sort of different metrics and I'm certainly going to just from my own standpoint, request a follow up so I can understand this better.

Are we using the federal funds first, by the way, because there's a limited window for federal funds. Are we using the federal funds first and saving our General fundalis?

Yes, we are, Senator, yes.

Okay. That is part of the plan. Okay. That's good. I think that was clear initially. Okay. Anything else on BEAD? We want to ask there, too.

We're happy to have the follow up with your office.

Okay, thank you. I appreciate that. Let's see. I have one thing I have to get to for a bit. Maybe I'll just start on offshore wind, and if anyone wants to pick up, maybe Senator Dahle would want to pick up on this one. How will the, if we can get the right folks here.

There was a reduction from offshore wind infrastructure, and the question initially is, do you anticipate funding the same number of projects just at a lower level or fewer projects? We know that from the AB 525 report that launching offshore wind industry requires many work streams coming together.

And Kaiser is proposing its first major transmission upgrade to access Humboldt offshore wind. We also know Humboldt got, I think, $400 million in funding for their port. But I know we're considering implementation of central procurement for offshore wind. That was one of our big initiatives last year. Ports are the third leg of the stool.

So does this cut put the offshore wind strategy at risk for cutting money to the port or infrastructure in General?

I'm sorry, did I cut you off?

No, go ahead. Okay.

Damien Mimnaugh with the Energy Commission again. So the proposed budget would leave about $9 million available for the program. So with that, we would look forward to funding the highest priority projects as soon as possible. That includes construction of staging floating platforms, foundations, and then looking forward to operations and maintenance.

Okay. Yeah, my understanding is that those are going to require a considerable amount of money. Also something being considered an, a climate bond, which we'd love to see passed. So I guess really specific to the question, do you see finding the same number of projects at a lower level or fewer projects?

I think it would most likely be fewer projects, given the scale of the projects. However, we'd have to. Under the current program, we'd be looking at a competitive solicitation. And so that would be something that would be considered as part of the award process.

Okay, great. Let me follow up on that.

Yeah. So is the competitive process private money?

It would be an award of public funds. Of the General Fund award available to the.

Out of the 9 million.

Correct? Yes.

Great. I know it might get touched on by my colleague here. There was a piece that was proposed, I think maybe additional money or money added back in around one - two permanent positions, to process, consolidated permits.

There's a lot of work that obviously has to happen in a number of agencies, as we've talked about in this Subcommitee about collaboration among different agencies. So maybe you tell us a little about the expertise required for some of these positions and whether may revise will have sufficient funding to work on these projects. Is that clear?

Thank you. Senator, I think you're speaking about the Coastal Commission portion of the joint PCB here. That was exactly. Yes. Thank you. Yeah. So the Coastal Commission would be receiving 5.3 million under this proposal for 2024, and then two permanent positions, plus 1.5 million in 2425 for planning and management.

And so the type of expertise we would be bringing in is largely permitting staff, with some technical experts included. There's a lot of. The Coastal Commission has authority both in federal waters, state waters, and then we'll be doing consolidated permits on the onshore components of offshore wind. So it's a very large permitting load.

So I think this funding would provide three years of staffing to get us, really, a solid footing towards that permitting goal. And for the record, I apologize. I'm Kate Huckleberry, Executive Director of the Coastal Commission. My apologies.

Well, so my colleagues may have some follow up for you. I have to go attend to one measure. I'm going to hand the gavel over to.

So I just wanted. Hello. Nice to see you. Thank you all for coming. I just wanted to ask about. In previous conversations, the Coastal Commission has said that there's not enough funding to staff positions to process housing permits. So I wanted to understand how especially multifamily housing permits and maybe more complicated permits in the coastal zone.

So I wanted to just understand this funding request and staffing for it versus other priorities the Coastal Commission has and the state has. If you could fill that in a little bit.

Thank you, Senator Blakespear. Those are both priorities for the Coastal Commission. So this offshore wind proposal is a need that we have to continue permitting for offshore wind. There are also needs to work on housing, and we do have one proposal, a small one right now, for per 423 implementation. That would include a position.

So we're working on that as well. They're definitely both important priorities for the Commission.

Okay, thank you.

Maybe a quick follow up on the offshore wind. I've been opposed to. Obviously, it's no secret I've been opposed to offshore wind and the manner that we're going about it. So this is basically seed money to the Coastal Commission to do the permitting process on the coast. Right.

The actual, last year, they told us we were going to have, under SB 386, I think it is, 286. We were going to have General Fund monies help build this stuff. And so I'm confused of what the plan is here moving forward, so maybe somebody could help me.

I know there's a few $1.0 million here to go to the Coastal Commission to, I guess, plan. Maybe you can help me out here.

Yes. Happy to. Thank you. Lizzie Urie, Department of Finance. So, the May revision presents a $16 million General Fund package for various offshore wind energy activities at the Coastal Commission, State Lands Commission, and Ocean Protection Council Fund activities over the next three years. So we were very mindful of the state's fiscal constraints.

We looked at all the offshore wind activities holistically. So we really tried to present a strategic package to address these workload needs over the next three years.

So what's the plan between now and 2035, when we have all electric cars in California and we're going to be relying on this offshore wind, where's the resources come to build, build offshore wind projects? Like, actually put the infrastructure out there? This is the planning part of it. Is there any thought on that?

We will continue to evaluate offshore wind resource needs. Again, this proposal is really just the initial three years of funding needed to continue the important work at these departments. However we plan to reconsider additional funding in future budget cycles.

Okay. Anybody else want to give a shot? Okay. Any further questions on offshore wind? Okay, Senator Blakespear, do you have, what do we do? Are you, are you done with all the Committee questions that you have? Okay. So with that, thank you all for coming. Good to see you again.

We're going to move into the public comment part of to those wishing to address the board under, or the Committee under public comment. You have hopefully less than two minutes. We would like to get through this soon, but you may start.

Thank you. Bill McGavern with the Coalition for Clean Air. Just two quick points. One is the air pollution control Fund should be used to control air pollution. This is money that comes from fines and penalties paid by those who violate our air pollution laws. And they're dirtying the air.

So the money that they pay should be used to clean up the air. California has the worst air pollution in the whole country. California's are not breathing clean air. We're in violation of federal standards under the Clean Air Act and the Federal Government can sanction us for that.

So what is EPA going to think if they see that California is raiding money that is supposed to be dedicated to controlling air pollution and instead is diverting that money for other purposes? And that's money that can be spent to reinvigorate the ZEV programs for clean cars for all, for clean trucks, buses and off road equipment.

Secondly, the greenhouse gas reduction Fund. We need to, as you, Senator Dolley and chair Becker have pointed out, we need to prioritize reducing transportation emissions and that includes our important Zev programs, as I've mentioned, for clean cars, buses, trucks, off road equipment and the infrastructure to support.

Wrap it up. I love to hear from the public, but we have a line clear out the door, so. Okay. Thank you.

Thank you, Mister chair and Members Jennifer Fearing. First, on behalf of the Monterey Bay Aquarium, we're happy to see the first half of the funds promised by AB 13 of last year to give OPC those funds ahead of offshore wind development to do scientific research and robust consultation with tribes and impacted communities.

We urge the full 6 million to be in the final budget package and we're very keen to see the implementing language to make sure it meets with the objectives that the aquarium, Assemblymember Addis and Senator Laird and others have with AB 80, which is currently pending in the Senate.

Secondly, National Wildlife Federation and the San Diego Humane Society join a number of Senators, thank you, all of you, in opposing the Administration proposal to eliminate the General Fund support for the Habitat Conservation Fund six years ahead of the sunset date that was negotiated with the Legislature in 2019. Thank you again for speaking up about that one.

And lastly, on behalf of a number of organizations that are part of a 170 organization coalition that are pushing for a equitable, robust climate bond, we urge that the Legislature and the Governor come together quickly and soon in order to put such a bond before voters this fall. Thank you.

Thank you. Next witness.

Good afternoon. Kim Delfino, on behalf of Audubon California, Defenders of Wildlife, Cal Trout, California Native Plant Society, and the Power of Nature Coalition, four points. One is the shift of funding from GGRF to the timber tax revenue. We would like to make sure that the reporting requirements under SB 901 and that GGRF money follows that money. So we are getting reporting back on the benefits of those investments to fire projects.

Secondly, we strongly support the GGRF Fund shift for the Wildlife Conservation Board, for the Salton Sea, and for the Department of Fish and Wildlife's wetlands program, I would echo the comments that have already been made very ably by the Senators here opposing the Habitat Conservation Fund sunset this year and also the rescission of $45 million.

That would be most of the HCF that's currently in there right now. That's a huge cut. It seems kind of four fifths. And, I mean, why are we doing this? We tried, they tried it in 2020 and it didn't go anywhere. So thank you very much for your comments on that.

And finally, to echo the comments that were already made by Miss Fearing the budget this year is bad, the budget next year is probably going to be worse, and the budget after that, that is going to be even worse if we're going to be making our climate goals, our natural working lands, nature based solution goals, our energy goals, all the goals we've set.

We need ongoing and dedicated funding. We have used bonds in the past to bridge the gap, and we would urge the passage of a strong climate bond now. Thank you.

Thank you. Next witness.

Good afternoon, Mister chair, Senator Blakespear. Beth Olhasso, on behalf of Water Reuse, California here disappointed to see another $100 million get cut from water recycling. That makes it 70% of all the funds that we originally allocated, and there's no money left at the state board for grants for water recycling.

As you know, it's really critical to help meet our water supply goals to invest in new water recycling projects. We hope that we understand the budget situation, but we hope that the Committee can get behind significant funding in the climate bond for water recycling. It keeps ratepayer costs down.

These projects, you know, are critical and we're just trying to protect ratepayer costs. So really urge some continued support for water recycling. Thank you.

Thank you.

Good afternoon, my name is Kendra Harris. The climate center, we know it's a tough budget cycle, but the may revise shifts an additional 3.6 billion of climate and clean air investments to the greenhouse gas reduction Fund over the next five years. In the past, finance wouldn't commit to out year Fund for good reason.

There's a lot of uncertainty in predicting revenues in that program, even a couple years out. And the farther forward the Legislature can bring those expenditures, the more likely they are to happen. And let's be clear, cuts to critical clean air and climate programs have real immediate human consequences, especially to pollution burden communities of color.

We should also not be cutting the act of transportation program when the Legislature could shift money from the state highway account, which is well funded and has been done in the past. And we face an affordability crisis in California. And helping residents move to clean, cheaper, safe energy is critical.

This will ensure that Californians and their children have a thriving future. And we also support robust climate bond. Thank you.

Thank you.

Brendan Twohig on behalf of the California Air Pollution Control Officers Association, which is the air Pollution control officers from all 35 local air districts, we appreciate the continued funding and prioritization of the AB 617 community air Protection program. Unfortunately, the farmer program is still zeroed out.

And we encourage you to make a meaningful investment in this efficient, cost effective program that provides significant public health benefits as well as climate benefits. And I also want to highlight that much of those health benefits are in disadvantaged communities. Thank you.

Thank you Mister chair. Senator Blakespear. Good afternoon. Louie Brown today on a coalition of agricultural clients. First, just echo what Mister Twohig just said about the farmer program and the importance of that program. Two other quick issues in support of the governor's proposal for additional funding for fruit fly eradication.

If those monies aren't available, we'll lose federal funds and potentially have significant international ramifications if we were to lose the status as being fruit fly free. Finally, ask that the budget Subcommitee reject the recent BCP from the Department of Pesticide Regulations for additional five staff Members for bills that were signed last year.

Their January BCP is a 43% budget increase and 117 staff people. We think that within those staff people they can find the need, the resources to implement the bills from last year. Thank you.

Thank you. Thank you very much Mister Chairman and Senator Blakespear. My name is Dan Jacobson with Environment California speaking in support of offshore wind. I wanted to make a couple of points. First is important to restore the full $45 million for the ports and for the funding.

I know there was back and forth on that, but as has been said, if we don't have the ports up and ready to go, we can't get the turbines out into the water. We can't get the clean energy in the back and forth there.

The second is ensuring the $6 million for the OPC to be able to do the scientific studies. We don't want to be slowed down because we don't have the information that we need. And the final is making sure that the Coastal Commission has the staff that they need to be able to do that.

The recent BCP we saw that. We think that's a move in the right direction. We think that's smart. The letter that we'll be submitting today is supported by the building trades, by the California Association of Port Authorities, by various environmental groups and environmental justice groups. So thank you for your time. Thank you.

Nicole Hutchinson, on behalf of Calstart urging you today to protect investments in medium and heavy duty zero emission vehicle and infrastructure investments which have largely been zeroed out this fiscal year. And in the case of Zev infrastructure, hundreds of millions is also being clawed back.

As you noted today, these programs are critical for achieving the state's air quality and climate goals and create jobs. So I strongly urge you to restore this important funding. Thanks.

Thank you. Good afternoon. Chair Dahle, Senator Blakespear, Nico Molina, on behalf of the California Forestry Association in support of item number 3540, which would permanently Fund five CAL FIRE firefighter hand crews. These crews play an essential role in the state's wildfire prevention and suppression efforts. CAL FIRE urges the Legislature to approve this approval. Thank you.

Good afternoon. Tracy Ryan with the Rural County Representatives of California in opposition to the governor's proposal to eliminate the broadband loan loss Reserve program. This program already was reduced in early action by $150 million. We represent 37 municipalities that have been waiting three years for this funding, and we are in the application process now.

We are awaiting awards at this moment. So we urge the Legislature to reinstate the funding. Thank you.

Thank you.

Good afternoon. Doctor Jeff Boehm with the Marine Mammal center and representing 12 network Members from San Diego up to the Oregon border and in opposition to the cut of $2 million in annual ongoing funding to that network.

The funding has been in place for the entire network since 2015, originally as a crisis intervention, then ensuring resiliency of the network and finally presenting a frontline for disease surveillance. We strongly urge the Committee to oppose the cut in this funding. Thank you.

Thank you.

Hi Ashta Sharma on behalf of Leadership Council for Justice and Accountability, we urge the Legislature to restore and protect funding for the programs that support environmental justice communities. In particular, the May revise included an additional cut of 130 million to the CEC's equitable building decarbonization program.

The funding should be restored to the 639 million from the January budget proposal. We also recommend restoring the following originally allocated to these SGC programs 200 million for transformative climate communities, 9.8 million for regional climate collaboratives and 160 million for community resilience centers.

We appreciate the May revise's continued commitment to drinking water and wastewater needs and the Salton Sea, and we continue to ask for multi benefit infrastructure for the Salton Sea. We also urge the Legislature not to Fund false climate change solutions like CDFA's Dairy Digester and Research Development program which pollutes environmental justice communities.

Thank you for the opportunity to comment.

Thank you.

Good afternoon. Abby Alvarez with the Pesticide Action Network, Californians for Pesticide Reform and the California Food and Farming Network. First, we're in support of the funding for recently chaptered AB 652. We also want to comment on the governor's Milfee proposal.

We've submitted a series of proposed amendments in writing and want to uplift the need for enforceable commitments to complete, not just start pesticide reevaluations and even more important, to mitigate within a specified timeline. We want to align the budget with the amendments made in AB 20113.

Lastly, the California Food and Farming Network wants to oppose cuts to to the California Nutrition Incentive program, the farm to Community hub program and the California underserved and small producer program. Thank you.

Thank you.

Good afternoon. Rebecca Marcus speaking on behalf of California certified organic farmers and the Community alliance with Family farmers. While acknowledging this year's budget deficit, we are disappointed by the additional cuts made to critical disaster relief for the majority of California's farms.

CAF and CCOF urge budget revisions to restore 17.9 million to CDFA's CUSP program, the California underserved and small producer program, as well as 14.4 million to CDFA's farm to Community food hub program for essential supply chain infrastructure resources.

Also, on behalf of the California Climate and Agriculture Network, I ask you to move the proposed DGRF shift for state water for the state water efficiency energy program, also known as sweep, from FY 2627 to FY 2425.

Farmers had applications ready to submit when the solicitation opened briefly last December, only to be told within a few weeks that the money was going to be reverted back to the General Fund. They shouldn't have to wait another three years. Thank you.

Thank you.

Good afternoon. My name is Tom Knox of Valley Clean Air Now. Low income working families in California pay the highest percentage of their monthly income on gasoline to drive farther and farther to well paying jobs. Jobs as outlined in the SB 1 x hearing in the last week or two. There is a solution in California.

There's a proven program, clean cars for all, to replace these old, dirty, inefficient cars with affordable zevs. We urge the Legislature to look for solutions to use existing funds to keep this program open for the next two years when we can find a long term funding solution. Thank you.

Thank you Mister Chairman and Members, Michael Boccadoro, West Coast Advisors. I wanted to speak briefly on dairy methane reduction programs.

We're supportive of the $24 million shift from the General Fund to GGRF for the dairy plus program that's necessary and the bare minimum that's needed to ensure 55 million additional dollars in federal funds remain available to the state.

We are concerned about the entire loss of funding for the DDRP program, dairy digester program, as well as the alternative manure management program.

Both of those programs are highly cost effective and if there's ever a year when we're shifting a lot of GGRF funding to non climate related programs, funding those that are highly cost effective becomes critically important. And then finally, Mister Becker's $25 million that was in the budget last year for enteric methane reductions.

We're just a few weeks away from having our first enteric feed additive approved by FDA. The federal leverage has taken eight years. Farmers are ready to implement those methane reductions on their farms. That program funding $25 million is critical as we go forward. Thank you. Thank you.

Good afternoon. Alchemy Graham on behalf of the California Transit Association, first we'd like to thank the Legislature for its commitment to protecting the 5.1 billion in SB 125 funding from the fiscal year 2324 budget and the early action budget agreement.

We're also grateful to see these TIRCP and zero emission transit capital program funds maintained in the governor's may revise, and we respectfully urge the Legislature to support maintenance of these investments as currently proposed.

These funds are critical in keeping public transit across the state afloat and allow transit agencies to stay in compliance with the state environmental and transit mandates and objectives. With a different hat on, I'm also here on behalf of the California City Transportation initiative, we represent the departments of Transportation and Public works departments of California's eight largest cities.

While we fully understand the gravity of the current budget outlook, we're disheartened to see the total proposed $600 million cut to the ATP. This program is essential in supporting cities active transportation projects and pushing the state one large step closer to delivering on climate, mobility, public health and equity objectives.

For that reason, we respectfully urge the Committee to support restoring the proposed 600 million in reduced funding for the ATP in the fiscal year 2425 budget. Thank you.

Good afternoon, Senators. Theresa Cook, on behalf of Equinor, one of the Central coast offshore wind developers, I speak today in regard to the reduction in ports funding for the Assembly of these Very large turbines. This is a really time sensitive, currently critical appropriation that was granted in 2022.

It's important for us to stay on our development timeline to have that readiness available for us as we are doing the upfront work to get these turbines in the water. So to that end, we request a reinstatement of the $20 million reduction. Thank you.

Thank you.

Good afternoon, Members. Ross Buckley on behalf of Ventura County Transportation Commission, Santa Clara Valley Transportation Authority and omnitrans, we want to thank the sub committee for your efforts to provide $5.1 billion to transit last year.

Urge that you approve the Fund shift from General Fund to greenhouse gas reduction Fund for TRCP and approve the zero emission transit capital program to maintain the 5.1 billion for transit agencies. These dollars are critical for the agencies that we represent.

Shifting topics also on behalf of South Coast Air Quality Management District, we are appreciative of the AB 617 program funding being provided in the cap and trade expenditure plan for address, implementation and incentives, especially given the May revised revenue update.

However, we request the continued prioritization of AB 617 funds, which provide targeted support for disadvantaged communities in terms of improving air quality and protecting public health. Currently, AB 617 program is severely underfunded and we don't have the resources to support those existing communities, particularly in the south coast region.

We have two thirds of the state's EJ communities and those are the ones that are harmed the most by the reduction in resources. To help address this, we respectfully ask the AB 617 program funding restored to last year's levels. Thank you. Thank you.

Good afternoon. Jordan Curley on behalf of American Clean Power here to support offshore wind and to ask you to not cut $20 million right now from our ports at a critical juncture for infrastructure building without ports, offshore wind doesn't happen. This is really critical funding that is needed now.

Would like to note, though, that we do support the need for continued staffing and permitting needs and timelines. And so just thank you for your time and urge you to reinstate that 20. Thank you.

Good afternoon. Sylvia Solis here on behalf of the south, excuse me, San Joaquin Valley Air Pollution Control District. We are happy to see the funding for AB 617. However, we are disappointed in the proposed elimination of funding for the farmer program.

In a recent report, the Lao identified that program as one of the most cost effective ones to achieve criteria pollutant reductions and greenhouse gas emission reductions in one of the most disadvantaged parts of the state, the San Joaquin Valley. We ask that meaningful amount of funding be restored to this program.

I'm also here on behalf of advanced energy. United AEU asked that the Committee reject the proposed reductions to the Clean Energy Reliability Programs and ZeV program programs. The demand side grid support and residential solar and storage programs have helped reduce peak loads and reduce blackouts. The DEBA program will also help further this goal.

We asked the Committee to maintain funding for the fueling infrastructure grants, drayage trucks and infrastructure, clean trucks, buses and off road equipment and zef school bus programs. Thank you.

Thank you.

Good afternoon, chair, and good afternoon, Senator Blakespear. Karen Stout here on behalf of the Santa Clara Valley Water District. We continue to be concerned about the cuts to water affordability in the state budget. Particularly, we are concerned with the continued cuts to water recycling programs as well.

We also see that the proposed climate bond amounts won't make up for the amount of money that's being cut. So we're continuing to be concerned about our water affordability efforts. We're also concerned about cuts to dam safety as well as recycled water funding.

Additionally, we are concerned about the earf shift, which cuts essential public services like flood protection. We were heartened to see that there are investments in sea level rise, but we continue to be concerned about the adequate funding for those programs. We urge you to reconsider the cuts and thank you so much.

Thank you. Thank you, Senators Eric Thronson, on behalf of Sacramento Regional Transit District, North County Transit District, Sun Line Transit Agency, and Livermore Amador Valley Transit Authority, we acknowledge the difficult budget time and greatly appreciate your efforts to honor your commitments to transit.

Those funds are absolutely essential to the continued safe, efficient and reliable operations of our systems. We request that you support the governor's proposal to shift the SB 125 funding from the General Fund to the GGRF so that our transit systems can provide the match necessary to bring home significant federal dollars and continue to invest in their zero emission vehicle transition.

Specifically, SAC RT is using the funds to match over $100 million in federal funds. Sunline is expecting over $35 million, and NCTD risks losing $53 million on a recent federal award for one specific project without these matching funds. Thank you again for your support of transit. Thank you.

Good afternoon, Senators. On behalf of the...Samantha Samuelsen, on behalf of the building decarbonization Coalition, we are disappointed to see further cuts for funding for building decarb in the governor's revise, and we request the state maintain funding for the California Energy Commission's equitable building decarbonization program.

The EBD program is the first of its kind program that helps Low income Californians access comprehensive home retrofits to improve indoor air quality, health comfort and energy affordability, all while furthering California's climate climate goals.

And then on behalf of Ceres, I'm here to thank the Governor for his proposed funding for SB 253 and SB 261 implementation and urge you all to consider maintaining that funding in the final budget.

Thank you. Thank you.

Good afternoon. Tasha Newman on behalf of the California Council of Land Trusts and the California Association of Resource Conservation Districts, we're here today to support the proposed Fund shift from General Fund to GGRF for the Wildlife Conservation Board that would protect $213 million of critical funding for projects which are already in the pipeline.

We are also here to express concern about potential cuts to the Habitat Conservation Fund, which not only funds WCB but also state conservancies and, I believe, state parks.

We would also like to express our concern for a cut to the Department of Conservation's climate Smart Land management program, which is a cut of $7 million, which has already been approved for grants. And the process for the grants has been ongoing for the past several months.

And the grant awards were just made and kind of coincide with the budget freeze letter that was sent. So we would very much like to protect that funding. It will be for resource conservation districts and tribal organizations and their partners. So we believe that that's critical to maintain. Thank you.

Thank you. I'll take that over. Thank you. Senator Dahle good afternoon. Abigail Smith on behalf of the California State Parks foundation, I'm here to talk about two programs that don't require a lot of funding but were cut and have a really big impact, the first being the state Parks library Parks pass partnership between state parks and the state library that provide free passes at public libraries for Low income folks to be able to enjoy state parks.

It's a very cheap program, only costs a couple of $1.0 million. It unfortunately is slated to be cut and it's been wildly successful over the three years that it's been implemented. And the second program is the $6.7 million proposed cut in the May revise to the state park sea level rise adaptation planning money.

This is over half of the 11.5 million that state parks receive for climate adaptation planning in the entire nature based solutions budget over the three year package. So they did not receive a lot and over half of that is being cut. It's really critical that we can restore those small programs that have a big impact. Thank you.

Good afternoon Mister chair and Senators, Rosanna Carvacho Elliott here on behalf of the California Groundwater Coalition in respectful opposition to some additional cuts proposed in the May revise, there's an additional $100 million proposed to be cut from water recycling and groundwater cleanup.

This is in addition to the almost 175 million proposed in the January budget, bringing the cuts to 275 million for water recycling and groundwater cleanup. Very important programs. And in addition, the May revise also proposes to cut additional money from PFAS cleanup.

And as I think everybody knows, PFAS is a huge issue throughout the state for our groundwater basins. And at the end of the day, someone has to pay for this cleanup because the state is passing mandates on what the MCL has to be for prefer PFAS.

And without state support to help with the cost of that cleanup, it is going to fall on water rate payers. And so the total between the May revise and the January budget in cuts to PFAS cleanup is $130 million. So a lot of money there that again will end up on the backs of ratepayers.

And I know there's been a lot of discussion about electric rate payers, but these are water rate payers as well. And then lastly, the proposed cuts to SGMA implementation of about 1.4 million is also very concerning. As a groundwater Association, we want sustainable groundwater and without SGMA being implemented, you know, that's just not going to happen statewide.

So thank you very much.

Hello Committee Members, I'm Fatima Iqbal-Zubair from California environmental voters here to just reiterate that the Legislature needs to reject further cuts to the climate budget.

Protecting the climate is about protecting equity and lowering the energy costs for Low income households and communities, whether it be their car with clean cars for all homes with equitable building d car programs or utility financial assistance payment programs.

Another priority for us is ending oil and gas subsidies, especially through larger programs like the water's edge election or research and development, which can potentially redirect billions in funding for the state's climate goals and presents a viable alternative source of revenue.

So we urge you to prioritize and pass a comprehensive, intersexual climate budget that invests in resilience, environmental justice and clean energy we need to see more clean energy investments in the Assembly's climate bond in order to meet our clean energy goals.

We must also prioritize environmental justice priority programs in a climate bond which have overwhelmingly been cut in the budget. But we are really excited and grateful to see SB 253 and 261, the two climate disclosure laws, fully funded in the budget. So we urge you to keep that funding.

The Legislature has been supportive of funding implementation of these laws and yeah, we just want you to continue to have strong support for this. Thank you.

Hello, Kristin Gorey on behalf of the mid Peninsula Regional Open Space District, East Bay Regional parks district, the Land Trust of Santa Cruz County, save the Redwoods League, and the Sempervirens Fund, we would like to thank the Legislature and Administration for the Fund shifts to GGRF for the Wildlife Conservation Board allocations in the May revision, but urge the Legislature to restore funding to the state coastal conservancy in the budget.

Funding for coastal resilience has been cut by 392 million, which would drastically slow down our progress in building a climate resilient coastline, preparing for sea level rise, and reaching our 30 by 30 goals. By putting the funding back, we will be getting ourselves back years on implementing projects on the ground.

While we acknowledge that some budget cuts are needed, this is not the place to make them. The restoration of these funds in last year's budget was a huge step in the right direction, and we urge you to not take a step back.

Additionally, on behalf of the California Habitat Conservation Planning Coalition in opposition to the early sunset of General Fund allocations to support the Habitat Conservation Fund. Thank you.

Appreciate everyone who testified. I want to thank my colleagues for filling in here for me as well. If you did not get your comment, you can do it in writing on our website. Comments are important to us and we want to include testimony in the official record.

Thank you to all the Department of Finance and Lao folks who participated here today. We've concluded the agenda and Senate Budget Subcommitee two is adjourned.