Assembly Standing Committee on Local Government

Good morning, everyone. Welcome to the Local Government Committee hearing of June 26. We're going to start with some housekeeping items. First, I'd like to remind the public that for this and future hearings, testimony will be in person as we no longer use a motor ready telephone service.

We also accept written testimony through the position letter portal on the Committee's website, and I also would like to go to some ground rules for appropriate conduct. The Assembly has experienced a number of disruptions to Committee and floor proceedings in the last few years.

Conduct that disrupts the, disturbs or otherwise impedes the orderly conduct of the hearing is prohibited. Such conduct may include talking or making loud noises from the audience, uttering loud, threatening or abusive language, speaking longer than the allotted time, extended discussion on matters not related to the subject of the hearing or the Bill.

Any other disruptive acts are also going to be considered. And to address the disruptive contact, we'll take the following steps. If an individual disrupts our hearing process, I will direct them to stop and warn them that continuous disruptionary removal from the capitol building.

I will also document on the record the individual involved in the nature of the disruption conduct. I may temporarily recess the hearing. If the conduct does not stop, I will request the assistance of the sergeants in escorting individuals from the capitol building. We have 15 items on the agenda.

One of these items is a proposed consent item, item number 15, SB 1514 by Senate local government Committee. We will hear other bills in the order shown on our agenda. Unless otherwise noted. We will take up to two primary witnesses in support and up to two primary witnesses in opposition.

These witnesses will each have three minutes to provide their testimony. All subsequent witnesses should say their name, their organization and their position on the Bill. We don't have a quorum yet, so we'll be conducting this as a Subcommitee. And I see Senator Black spear item number one on the agenda, I believe. Whenever you're ready.

Thank you, Chair. Thank you, colleagues. I'm pleased to present today SB 7, which will make minor changes to the minimum standards for the Regional Housing Needs Allocation, or RHNA, development process. These changes are based on findings from the Department of Housing and Community Development, HCD, for the RHNA evaluation.

California is facing an unprecedented housing shortage due to decades of underproduction of housing. According to HCD, California needs to build 1.2 million affordable homes over the next decade to meet its housing needs. The most extreme impact of this shortage has been the growth of homelessness in the state.

Between 2010 and 2023, homelessness increased approximately 47%, currently more than 180,000 people are unhoused and in need of housing. SB 7, among other things, will require councils of government or COGs to specifically solicit participation from people with special housing needs, including people who are unhoused in the development of the RHNA methodology.

Additionally, SB 7 will simplify steps in the process and align statute closer to how it is currently being applied. Overall, these changes will strengthen the RHNA process and clarify existing statute. My witness from the Inner-City Law Center is sick and will not be able to make it today. And with that, I respectfully ask for your aye vote.

Thank you, Senator. Anybody in the room that wants to add on support for the record? Seeing no one, are there any primary witnesses in opposition? Non-primary witnesses that want to be added on the record in opposition? Seeing none, I take it back to the Committee. No questions at all. And I don't have any questions either. Would you like to close?

I respectfully ask for your aye vote.

Thank you, Senator. Thank you for presenting your bill today. I actually participated in the CEHD six-cycle RHNA process, and we did have a lot of questions on how that those numbers were allocated. I believe that this will provide more transparency, and I will be supporting your bill today. We don't have quorum yet.

Once we do, we'll ask for a motion, but my support for the bill is there for you. Thank you.

Thank you very much.

Thank you.

I also have item number six, if you wanted me to do that one.

Please continue. I don't see anybody else here. Yes.

Okay. And let me just, if you don't mind, Chair, request that if Executive Director of the California Compost Composition is in Compost Coalition is in the room to invite him to come forward. Neil Edgar, if he does come, he can come forward here.

Thank you. Proceed.

Okay. Thank you very much, Chair and colleagues. This is SB 1045, and what it does is it requires the Office of Planning and Research, otherwise known as OPR, to develop a model ordinance for siting compost facilities and requiring locals to consider this advisory.

Developing this much-needed organic waste infrastructure is critical to having us meet our SB 1383 targets, which we are far from achieving. In order to meet these targets, CalRecycle estimates that the state needs approximately 50 to 100 new or expanded organic waste recycling facilities right now.

One obstacle to getting these facilities up and running is the time-consuming and complicated process to get them sited. This is similar to homeless serving housing, also very difficult to get sited.

To address this issue, a technical advisory developed by OPR on best practices for facilitating the siting of compost facilities and requiring locals to consider the advisory will help tremendously. And then I would like to invite again my sponsor, Neil Edgar, Executive Director of the California Compost Coalition, to come forward.

Not seeing the primary?

Oh, he is.

Right outside. We'll wait a couple of minutes. Yeah.

Thank you for the help. I don't know if he expected this to come up right away because it's number six.

Yeah, we understand.

And we jumped the line.

We'll wait for him. I think he's coming. Yes.

Thank you for your patience.

Oh, absolutely. Not a problem. Please. When you're ready, sir.

Good morning.

Good morning, Chair Carillo and Members. I'm Neil Edgar. I'm the Executive Director of the California Compost Coalition. Our members are predominantly service providers from municipalities throughout California who process yard trimmings and increasingly, food materials to meet the lofty climate goals of SB 1383. CalRecycle has predicted the state needs to double our expected or existing composting capacity.

Since 1980 or since SB 1383 has been passed in 2016, we've opened about a dozen new facilities, only two of which are permitted to take food materials, which requires a higher bar for permitting. In my day job, I permit and develop composting facilities.

Having permitted 44 facilities in 23 counties in California, I can tell you the firsthand challenges of getting them on the ground and operating. This bill is intended to resolve one of the key hurdles we're facing in moving forward with critical infrastructure.

By providing model zoning ordinance language, local governments have every incentive to plan for and permit organic waste facilities in the interest of meeting SB 1383 requirements. I just don't believe they have the right tools to resolve the issues that delay numerous projects. This bill will help provide some of those tools.

Agri-Man, one of our members, spent 12 years to complete two zone text amendments in Ventura County to expand an existing facility, largely because the zoning ordinance did not explicitly allow commercial composting operations on agriculturally zoned land.

Closing the loop on organic materials will require, in part, that compost be returned to that very agricultural land, and local solutions are important to limiting transportation impacts. I thank you and I thank Senator Blakespear for bringing SB 1045 forward.

Thank you, sir. Any other that want to be added on the record, please state your name, organization, and position on the bill.

Ethan Nagler on behalf of the City of Rancho Cucamonga in support.

Good morning. Lindsay Gullahorn with Capital Advocacy on behalf of the Resource Recovery Coalition of California in support.

Chris Grogan on behalf of Republic Services in support.

John Kennedy with the Rural County Representatives of California in support. Thank you.

Thank you. Any primary witnesses in opposition? Non-primary witnesses in opposition? Seeing none, take it back to the Committee. Assembly Member Pacheco. No questions. I don't have any questions either. Would you like to close?

I respectfully ask for your aye vote. Thank you.

Thank you for presenting your bill to facilitate the appropriate siting of composing facilities, I will vote an aye once we get a quorum and a motion. Thank you for presenting both of your bills. Thank you, Senator.

Thank you very much.

Thank you.

With that, we are waiting for authors to come over to local government. We're going to be taking a pause on the hearing until we get another author to come in to present. Thank you. Good to present. Could I jump out of order?

I did. And you had a long Bill, Josh. Mine is a short Bill. Yours took a long time.

We're gonna go back to item number seven, SB 1111, by Senator Min. Senator, when you're ready, please and thank you.

Thank you, Mister chair Committee Member. Before I start, just want to note that I will be committing to accept the proposed Assembly Election Committee amendments. I want to thank them and your staff for assistance.

SB 1111 would require government officials to abstain from voting on a contract made by that official's governmental entity when their child has a direct financial interest or other benefit from the outcome of that public contract decision.

Government officials obviously have the responsibility of potentially handing out many millions of dollars in taxpayer dollars in contracts and approving these on behalf of taxpayers. As such, we must hold government officials to the highest possible standards in order to avoid conflicts of interest or perceptions of impropriety when conducting the people's business.

In late 2023, news surfaced that an Orange County supervisor in the area I represent had awarded Covid-19 relief funding to an organization led by his daughter without disclosing that relationship to the public. That organization had failed to complete required audits, and a number of concerns were raised in the media.

But despite those concerns, the organization continued to receive public funds. While existing law does not expressly forbid state and local officials from awarding public contracts to their adult children, it is my view that public officials should not be using their positions to enrich themselves, directly or indirectly or their family members.

So SB 1111 would clearly prohibit public officials from voting on public contracts that benefit their adult children, extending the remote interest definition to adult children and providing penalties should public officials violate this law. I think this is a common sense Bill. I have no witnesses. I respectfully ask your aye vote.

Thank you, Senator. Anybody in the room that wants to add any support, please come forward. See no one. Are there any primary witnesses in opposition? Non primary witnesses. They want to go on the record seeing no one take it back to the Committee. Assemblymember Pacheco, any questions? Comments? Would you like to close?

I respectfully ask your aye vote.

Thank you. We'll do that when we get a quorum and a motion. I just want to thank you and your staff for working with the elections Committee and this Committee on this bill. The amendments today reflect the agreement that was reached in the elections Committee which you agreed to with these amendments. I will be supporting your Bill.

Once again, we get a quorum. Thank you.

Thank you, Mister chair.

And we're going to go back to file order. I thought I saw Senator Becker here he is. That is item number three on the agenda, SB 721. When you are ready, Senator.

Sure.

Thank you chair and Members, thanks for a chance to present SB 721. This is the Student Housing Development Act, and I want to start by thanking Committee staff for their hard work on this bill. I will be accepting the Committee amendments. Thank you, chair.

SB 721 will help incentivize the creation of more student housing by clarifying that jurisdictions can receive up to 25% of credit in any RHNA income category for suite-style student housing during the 7th RHNA cycle.

The Committee amendments will provide a definition for suite style housing, require units have a ratio of beds to bathrooms that does not exceed five to one, and require basic hability standards to ensure students are not living in unsuitable conditions.

California is facing extreme student housing crisis as you know, according to a 2020 UCLA study, one in five community college students, one in 10 CSU students, and one in 20 UC students are experiencing homelessness.

Currently, local jurisdictions and schools are not as encouraged to create more suite style housing, in part because jurisdictions cannot count those towards meeting their arena numbers. We need to create more development incentives for more student housing to address this crisis by adding sweet style housing to the annual progress report.

Local jurisdictions can use this as a tool to meet their existing arena needs and provide housing for California's growing student population. Our witness from YIMBY law had to cancel, so I don't witness today, but happy to answer any questions.

Thank you for that, Senator. Anybody else in the audience that wants to add on in support? Say your name, organization and position on the bill?

Chair Members Nick Romo with Cruz Strategies on behalf of Stanford University, I'd like to thank the author for this Bill. We strongly support this Bill. Clarifying that jurisdictions can add this sweet style housing will certainly alleviate the student housing crisis in the state. Thank you so much.

Thank you. Any primary witnesses in opposition? Seeing none. Anybody else that wants to bet it on opposition? For the record? Seeing none. Take it back to Assemblymember Pacheco. Any comments? Questions? No? Would you like to close Senator

Thank you for your consideration and appreciate the opportunity to bring this bill up late in the process, but an important one once we got HCDs memo on changes arena that involve this area. So thank you.

Thank you for presenting the bill. And just to clarify, after our discussion yesterday on the ratio of beds to bedrooms, we have come to an agreement that five beds, one bedroom is reasonable. And you agree to that?

With that change and your acceptance of all the Committee Adams I will be voting aye once we get a quorum and a motion to proceed. Thank you, Senator. Okay, thank you. See Senator Laird ready. That's item five on the agenda, SB 977. Senator.

Thank you very much, Mister chair and Member. It is a pleasure to be here to present Senate Bill 977. It would establish an independent redistricting Commission for San Luis Obispo County for the five county supervisorial seats.

I have with me in a minute my witness, who is a Member of the Board of Supervisors of San Luis Obispo County, and there was a particularly egregious redistricting in the last cycle. He will tell you more details, but I will just say he is a four term supervisor.

And when he was running free election, he represented the entire coast in the north half of the county and he had two thirds new constituents and went deep into ag land. It was really designed to redistrict him out. It was a lean to the other way politically, but he won reelection by 12 votes.

And so what we're really trying to do here is what has been done for other counties legislatively, which is have a Commission, just as we have it, for our districts that will independently take a look and draw fair districts. The ones that have been adopted thus far have been for much bigger counties.

And so this one is slightly different, just to try to ameliorate itself with the size of the county. And it is supported by the Board of Supervisors. It's also supported by AFSCME, the League of Women Voters of California. It has no registered opposition.

It passed off the Senate Floor 31-8, and is passed out of the Elections Committee in your house already. And so at the appropriate time, when you have a quorum, I respectfully request an aye vote. But let me introduce my witness, Supervisor Bruce Gibson.

And even though he's here on behalf of San Luis Obispo county in his spare time, he is President of the Association of Counties for the state. So thank you, Mister chair.

Thank you, Mister Chairman. Thank you, Senator Laird, it's a pleasure to address you today. Let me add to Senator's comments about my double digit win in the most recent reelection. The gerrymander was in fact so egregious that it brought an unprecedented number of county residents out into our public conversation.

These are residents of all political stripes, and they were overwhelmingly opposed to the gerrymander. That gerrymander was corrected through court action, but lasting damage remains, and that damage takes two forms. One of them is confusion.

I continually get comments as to who is my supervisor, and it really relates to the kind of thing that happened in a minor scale in redistricting, the Senate, where gaps and overlaps occurred.

But in this gerrymander, there were nearly 100,000 residents of San Luis Obispo county who were shifted between districts of presidential years or midterm years, and it caused mass confusion.

It also, damage also takes the form of a breach of trust, and that's reflected in the lingering anger that a majority of our Board of Supervisors could cause this much damage to our electoral process. We're seeing growing sentiment that independent redistricting is certainly necessary. Eight counties have it already.

SB 977 proposes to come in consistent with the approach that those counties took, and state election code with specific amendments that customize this to the size of San Luis Obispo County.

In our current situation, as I'm sure you share my feeling, that fair elections are the bedrock of our democracy and fair districts are the bedrock of fair elections.

Our county needs a citizens redistricting Commission in order to ensure fair districts as it's presented today, gives us the tools that will be as much as possible free from partisan manipulation, truly represents our county's voters and their communities, and will go a long way to restoring trust in our local government.

I'm happy to answer any questions you may have, and with that, I respectfully ask for your aye vote. Thank you.

Thank you. Is there anyone else in the room that wants to vet it on in support? For the record, seeing no one. What about any primary witnesses in opposition? Seeing no one. I take this back to the Committee. Assembly Member Pacheco, any questions? Senator? I don't have any questions either. Would you like to close?

Yes. Just one additional fact, and this redistricting put some San Luis Obispo residents in the position that they would vote for supervisor three times in four years, and it put others in a position that they would not vote at all for supervisor for six or eight years.

So it's that craziness that we are trying to correct with this. And when you have a quorum at the appropriate time, I would respectfully request an aye vote.

Thank you, Senator. Thank you for bringing this bill forward to promote more independence in the redistricting process. Once we get a quorum and a motion. I'll be voting aye. Thank you. And I see Senator Caballero. And that is item number nine, SB 1123. Senator, when you're ready.

Good morning, Mr. Chair and Members, I'm pleased to present SB 1123, which builds upon work that I did last year to streamline the process for communities to build small scale, more affordable, infill home ownership projects, which is what the goal of this bill and previous bills.

I appreciate the Committee's work and will be accepting the Committee's technical amendments. The high cost of housing construction and regulatory delay has contributed to the state's affordability crisis because supply simply has not kept pace with demand. This construction gridlock continues to drive up housing costs and drive down California's home ownership rates.

This affordability crisis has become so extreme that homes now cost more than 8.5 times the average family salary versus only 2.5 times in the early 1970s. Just like housing affordability has driven home ownership rates down for communities of color, local planning rules have also created barriers to home ownership.

Many communities throughout the state have enacted policies that restrict denser development in single family neighborhoods, which prevents the construction of smaller starter home working families can afford. And that's really how I got into what became possible for me to buy a house, was bought a home with a zero-lot line construction, smaller, smaller yards.

It gave me the opportunity to build up some equity so I could, when my family grew, move if I wanted to. The American dream of home ownership is now out of reach for many California families, especially families of color.

To address these issues, last year I introduced SB 684 to streamline the subdivision of parcels for the construction of small scale home ownership projects of up to 10 units. This is the exact same bill that Speaker Rivas ran in 2020. His bill was held in Assembly appropes. My bill, SB 684, was passed by the Legislature and signed by the Governor.

Over the course of the fall, I heard from stakeholders the need to include technical and clarifying changes, so SB 1123 incorporates the feedback that we received to improve implementation of SB 684.

Specifically, this bill will clarify the definition of habitable square feet related to housing size, allow housing units to be part of a tenancy in common, to be held tenancy in common, and clarify that when local government chooses to permit the construction of accessory dwelling units, they do not count towards the project 10 unit cap.

Additionally, SB 1123 reestablishes the subdivision and project, streamlining benefits for small projects of 10 units or less on vacant parcels zoned for single family residential development. Again, this is infill. The bill has been edited significantly so that infill really means infill. You can't go out to open land and do these kinds of projects.

There has to be housing in the area, in the three corners of the lot. I remain committed to unlocking opportunities to build smaller homes on small lots to increase homeownership projects in single family neighborhoods which have a history of excluding low income and communities of color.

But to ensure the appropriate guardrails in place, I've included that a local government may impose the same height standards on a project being built on a single family parcel that would, that's consistent with the neighborhood.

And the Assembly Housing Committee worked with me on amendments to provide additional safeguards or guardrails, including a more detailed definition of what constitutes a vacant single family parcel that would be eligible for streamlined subdivisions. These guardrails will unlock new development opportunities but ensure they're consistent with the surrounding community.

With me to testify and support is Eric Payne from the Central Valley Urban Institute and Francesc Martí with California YIMBY.

Thank you, Senator. I'm going to step out of the room momentarily. I'm going to handle the gavel to Assemblymember Pacheco.

Good morning. Good morning. So you may proceed.

Perfect. Thank you so much. So distinguished Members of the Assembly Local Government Committee. My name is Francesco Marti, and I represent California YIMBY, an organization dedicated to ensuring abundant, secure, and affordable housing for all Californians. I stand before you today to express our strong support for SB 1123, authored by Senator Caballero.

1123 builds on the progress made by SB 684, extending its applicability to vacant parcels in single family zones. Access to affordable home ownership, especially in high opportunity neighborhoods, has generational impacts. The lack of such opportunities perpetuates the legacy of discriminatory housing policies and continues to segregate neighborhoods by race and class.

California's severe housing shortage disproportionately affects low income families and communities of color. In 2020, the average cost of a home was 8.5 times family's annual salary, 8.5 times.

With African American and Latino homeownership rates significantly lower than those of white Californians. SB 1123 addresses these challenges head on by facilitating the construction of smaller, more affordable homes in high opportunity neighborhoods. This bill is about building communities. It's about fostering diversity, about promoting economic mobility for all Californians.

The changes proposed in SB 1123 will make small homes faster, easier, and less expensive to build increasing affordable homeownership opportunities for families that have been left behind and left out of the California dream. On behalf of California YIMBY, I urge you to vote aye on SB 1123.

Let's work together to create a California that welcomes everybody where every person has the chance to live in a safe, affordable home in a thriving community. Thank you for your time and consideration.

Good morning, Members. Madam Chair of the Committee, my name is Eric Payne, and I'm the Executive Director of the Central Valley Urban Institute. We're a regional nonprofit that serves the needs of low income families of color across the Central Valley, expanding from Kern County all the way to Stockton.

As an organization led by and serving people of color, I'm here today as a proud co-sponsor of SB 1123. California faces a housing affordability crisis that has slammed the door shut on home ownership for millions.

This essential legislation alone will not fix our housing production crisis, but it will expedite more homes that are lower cost and more accessible to first time home buyers by enabling production of single family homes, or townhomes, on lots that are smaller and less expensive. California's median lot size is 8300 square feet.

Research has found that land costs make up more than half of the price of a home in places like LA, San Diego, Salinas, San Jose, and San Francisco. The math driving AB 1123 is simple. A home that comes with less land will cost less. Many families want and can afford a large home with a large backyard.

These families have plenty of options in today's market, but too many can't buy a home at all because affordable options don't exist. Many families, and I would argue many more families of color, would love to buy a home with less land. If made, that can make the American dream of home ownership possible for them.

SB 1123 does just that, making these types of homes much more common, creating increased choice for diverse families.

And my organization is deeply invested in this topic because while home ownership is the way in which most Americans build intergenerational wealth, only four in 10 black and Latino Californians own their own home, compared to the six in 10 white Californians.

That's one of the main reasons why, for every dollar of wealth held by a white family, black and Latino families have about 16 cents. And I just know we can do better.

Home ownership is a broadly shared value in California, and AB 1123 represents one important step in creating the important, admittedly technical, steps needed to actually produce lower costs for sale housing and making that shared value a reality.

There are no silver bullets when it comes to addressing California's housing and home ownership crisis, but AB 1123 creates an important tool for building affordable homes and building wealth for everyday Californians. Thank you for your consideration of this important measure, and I respectfully request your aye vote.

Thank you. Are there any witnesses in support? Please state your name, organization and your position.

Good morning, Madam Chair. Michael Gunning, Lighthouse Public Affairs here in support. On behalf of Felsteed Spur, United Way LA, Habitat for Humanity California, Build Casa we urge your support. Thank you.

Thank you. And are there any witnesses in opposition? Did you want to sit up here?

No. Hi. Ethan Nagler. On behalf of the Town of Hillsborough, we don't have an official position. However, we have concerns regarding the inclusion of single family residential zoning provisions. We've been working with the author's office and bill sponsors and appreciate the engagement and look forward to continued discussions. Thank you very much.

Thank you. And are there any other witnesses that would like to step forward in opposition? Seeing none. Senator, would you like to close?

I wish I could say that this is a silver bullet for providing homeownership opportunities for new first time homebuyers, but it's not. It is a very modest attempt to take vacant land, or land that is, well, vacant and create a little bit of density so that the homes are more reasonably priced.

And so I respectfully ask for your aye vote today.

Thank you, Senator. And once we establish quorum, we will take a vote. And on behalf of the chair and including myself, thank you for accepting the Committee Amendments. I will be voting aye, and along with the Chair and the motion is do pass, as amended, to the Appropriations Committee.

Well, once we get a vote, I mean a quorum. Thank you so much. I appreciate it.

Thank you. Thank you. Thank you. Thank you so much. Thank you. Thank you. Thank you so much. Thank you for making it. I really appreciate it.

Next up on the agenda is Senator Wiener. Are you ready to present Senate Bill 925? You may proceed whenever you're ready.

Great. Thank you very much Assemblymember. I guess it's just you and me. So I'm here to present Senate Bill 925, and I want to start out by thanking the Committee for working with us. I'm happy to accept the Committee amendments.

I do want to know and want the record to reflect that the chair and I have agreed to continue to work together on refining a couple of the amendments.

Specifically, number one, the amendment to Section E 1H, perceived versus actual race for consistent reporting, and number two, section F, regarding the public information campaign to align with other reporting requirements. So there's no disagreement here. We just agreed to continue to work on refining those two provisions.

But apart from that, we were agreeing to accept the amendments. SB 925 is designed to allow San Francisco to foster a thriving street vending scene while at the same time addressing the fencing of stolen goods on our streets, a practice that fuels retail theft and that badly undermines legitimate street vending.

And you will hear today about the impacts that these criminal operations have on legitimate street vendors who are just trying to earn a living.

Specifically, the bill allows the San Francisco Board of Supervisors to adopt a list of commonly stolen goods that are sold on our streets and to require a permit for anyone selling those commonly stolen goods.

If someone then sells these commonly stolen goods on the street without a permit, police would be able to enforce, initially via citation and after two citations via a potential misdemeanor. The misdemeanor is designed to avoid immigration consequences.

The new criminal offenses in the bill do not apply to the vast majority of street vendors, including anyone selling with a permit, anyone selling even goods on the list if they have a permit, and anyone selling prepared foods with or without a permit. In 2018, the Legislature passed SB 946, establishing the Safe Sidewalk Vending Act.

I voted for that bill, and I continue to support it. The measure decriminalized sidewalk vending and established an administrative penalty system to replace the former criminal system. This law effectively barred law enforcement from conducting inspections or enforcing against violations. Based on local or state laws governing street vending.

SB 946 has had many benefits for the street vending economy, ensuring vendors can sell goods to the public, activate public spaces, earn a living, and making sure that local governments are not able to simply destroy the local street vending economy.

However, a limited number of bad actors in San Francisco have taken advantage of highly capable and sophisticated criminal networks to facilitate these fencing operations. A lack of law enforcement tools has left San Francisco unable to halt these criminal operations, many of which are tied to larger, organized retail theft rings permitted.

Street vendors in these areas are facing conditions that make it much harder for them to operate and thrive. These criminal operations lead to harassment and intimidation on our streets, even violence, causing legitimate street vendors to be fearful. Administrative enforcement has been incredibly hard and not very successful.

Indeed, workers in the San Francisco Public Works Department have been assaulted and at one point began wearing bulletproof vests to do that administrative enforcement. The situation became so severe that San Francisco took the extraordinary and unfortunate step of issuing a moratorium on all street vending in certain parts of the mission late last year.

A moratorium benefits no one. San Francisco's vibrant culture of street vending supports many families and showcases our community's beautiful diversity. But that cultural richness is threatened when bad actors are allowed to openly sell stolen goods on our streets.

SB 925 is a very narrow response that will allow San Francisco to foster street vending and public safety, and I respectfully ask for an aye vote with me today, and I want to note that this bill has broad support within the mission community.

We have a list, as you've seen, of mission community organizations with whom we worked on this bill, and we delayed introducing it earlier in the year because we wanted to take more time to work with the community, which we have done.

Here today to testify is Rodrigo Lopez, the President of the Mission Street Vendors Association, who will be testifying via an interpreter and thank you to the Committee for that Dispensation, and Santiago Lerma from the San Francisco Department of Emergency Management. Thank you.

You may proceed.

Thank you. Thank you all today for the opportunity to speak in front of you. My name is Santiago Lerma, Mission Street Crisis Coordinator with the Department of Emergency Management in San Francisco and in my previous capacity as a legislative aide for the supervisor who represents the mission district. I'm the original author of Article 5.9.

Additionally, I've lived in the Mission for almost 15 years. I come to speak in support of this surgically crafted bill narrowly designed for San Francisco's unique street fencing problem. In 2018, Governor Brown signed into law SB 946, which restricted any law enforcement agency from enforcing street vending regulations throughout the state.

In 2021, as we emerged from the pandemic, we began to see an influx of street vending on Mission street and a large increase in the sale of stolen goods on the sidewalk.

Street vending has always been solidly embedded in the DNA of the mission, where to this day, most of Latinx folks who live in San Francisco reside most of the mission's legacy vendors sold artisan goods from their home countries and other items that added to the vibrancy and culture of the neighborhood.

It also provided an important economic opportunity for newcomers and people trying to make a little extra money to live in this very expensive city.

By the summer of 2021, the Mission corridor, which is 1 mile long and bounded by two subway stations, or BART, became crowded and chaotic, with people selling and buying stolen toiletries, unrefrigerated meat, clothes, and even high-end kitchen appliances, most with the security tags still on them and often brought to the mission in large boxes bearing the names of some of the area's largest retailers.

Many of these folks arrive in the mission via BART and bus from other cities in the region. I have lived in the mission for nearly 15 years and have never observed the street in such a condition.

Because the police issued peddler's license were no longer valid, it was soon clear that we needed a way to regulate what was being sold on the street. The Board of Supervisors then enacted Article 5.9, which designated public works as the primary enforcement agency.

It was quickly discovered that public works would require a police escort as inspectors began getting threatened, verbally abused, and in some cases, assaulted. Public works has even issued bulletproof vests to their inspectors to help secure their safety.

The large amount of cash on the street also began fueling drug markets as we saw an unprecedented level of open air drug use and overdoses in the mission, something never before seen in the mission, which is mostly a neighborhood full of children, families and many senior citizens.

As conditions on the street deteriorated, sadly, it was not only our families who experienced chaotic and dangerous streets. Our permitted vendors, many who have been sailing on the street for decades, lost their locations, taken by fencers and often extorted and threatened by members of this organized and sophisticated criminal enterprise.

When I myself am present on the street to coordinate interdepartmental enforcement, I must conceal my identity and change my clothes often to avoid being spotted by the lookouts and followed home where I live with my family just a few blocks away.

In 2023, the city was forced to issue a temporary vending ban on mission street because of the overwhelming and uncontrollable amount of stolen goods being sold on the street.

Even with this ban in place, the sale of stolen goods continues to be a major problem on the street because we simply do not have the resources to be in all places along the corridor as sometimes dozens and even hundreds of people arrive every day in the mission via public transportation to sell stolen goods from all over the Bay Area.

When we look to our neighboring cities throughout California to see how they address similar.

I'm sorry, we're gonna have to wrap it up so that way we could hear the other witness. Thank you. You may proceed.

Buenos Dias, Senor Comite Rodrigo Lopez, El Presidente La socacion Mission street vendors, San Francisco Tiena Ora unacrisis the Queen, Bienna Robados aveses son Desenas Osientos, the Personas Casalinian, Las Cayes Vendiendo, Los Viennas, Yeso Provoca Peleas, yotros problemas, Nosotros Como vendorosados emo sido Atacados, cuando Las conditiones and Las Cayes and Peoran esophect senesitone De Multiplex, Departmentos De La sudat parapoderga antisar, Alos Vendadores Publicas, LA seguridat irregular De Los Malos actores, Conla Ventisincos, peramos, quinos, Condiciones generales, Ilasutocion, Camuchos, Andosotros and frantamos and Las San Francisco Nosotros Membras De La Emo, Segido, Lareglas and Mejoram parano vender De Manero, Segura and Las Cayo.

San Francisco Imantinarnos, Aflotes, Nesitamos, Elapoyo, paragarantisar, unentorno seguro. Then Parano Exito, Elixito De La pecanias, Impressas e La Comunid. Gracias.

Good morning. Chair and Members of this Committee, my name is Rodrigo Lopez, and I have the honor of being the President of the Mission Street Vendors Association. Our organization represents over 116 permanent street vendors in San Francisco's Mission district. Street vendors are a vital part of the cultural vibrancy of many neighborhoods throughout the state and country.

We are part of the fabric that makes our city's destinations of travel and culture. For me and the Members of the Association, that area is San Francisco's Mission district. The San Francisco. San Francisco has a crisis right now of those who sell stolen goods.

Sometimes it's dozens or hundreds of people that line the streets selling stolen goods, and it attracts fights and other problems. We as permanent vendors have gotten attacked. When conditions on the street get bad, it impacts those of us who fight to make a legitimate living every day.

The reality is that not being able to sell on the streets has affected us a lot. As you know, there are bans in parts of the city while the city is phasing back vending in the mission district.

It takes a coordinated team of multiple city departments and clouding police, public works, and us, the vendors to ensure community safety and regulate the actions of bad actors. With SB 925, we hope it will help us improve the overall conditions and situation that many of us are confronted with on the streets of San Francisco.

We, the Members of the Association, have followed the rules and we support the legislation. We want the conditions in our neighborhood to improve so that our Members can get back safely to selling on the streets of San Francisco and stay afloat.

We need support to ensure a safe and structured environment for our success, the success of small businesses, and the success of our community at large. Thank you for your time.

Thank you. Are there any other witnesses in the room that would like to rise? Please state your name, position your organization and position.

Rhiannon Baylord, UC Law San Francisco, formerly known as UC Hastings Law, located in the Tenderloin neighborhood of San Francisco, in strong support.

Good morning, Madam Chair Members Karen Lange, on behalf of San Francisco Mayor London Breed and strong supporter of the Bill, I want to thank your Committee and author for moving this forward today. Thank you.

Esan Looper, Director of community organizing for the Tenderloin Community Benefit District and Wild support.

My name is Alma Castellanos, Director of a nonprofit in San Francisco, Gletsha, who supports SB 925 as we work with small businesses and the Mission street vendors.

Bueno Dia Minombre, Sana Hernandez.

Anybody in witnesses in opposition to the measure? Primary witnesses seeing none. Anybody else in the room that wants to go on the record for opposition? Seeing none? I take it back to the Committee, and I see Assemblymember Kalra.

Thank you, Mister chair, and thank you, Senator, for bringing this forward. You know, typically, I'm cautious about criminal justice and adding certain types of penalties or potential jail time, what have you. But I also know the situation that you, my colleague to my right that you all are facing is unique. I've been there.

I've seen it over the many years. I've seen so many wonderful vendors that are there. I know that they're going through a very difficult time, as was mentioned. And I also appreciate some of the Committee amendments. I think it's the sunset report back, the public info campaign. I think that gives me a better sense of comfort.

But I also want to thank you for recognizing that something different has to be done, because I know it's been such a huge challenge on some of those streets. Whereas, as you mentioned, as was mentioned, a lot of the vendors that have been there, in some cases for many, many years, have been pushed out.

And we definitely want to give them, especially if they're doing things the right way. We want to honor them as well and make sure they have the ability to support their families after so many years of hard work. And so I'll be supporting this, and I look forward to kind of updates as it goes forward.

Thank you, Assemblymember Haney.

Thank you to my colleague from San Francisco for bringing this forward and to all of the members of the community who are here from San Francisco who have been a part of this.

One of the things that I'm very grateful for in the way that this has come forward is that the community has been so deeply involved with coming up with the solutions that will work for our neighborhoods. I know that small businesses and community organizations have been a part of drafting this as, as a way forward.

And as my colleague from San Jose said, we have so many small businesses who are struggling to stay afloat in San Francisco.

It is very expensive to operate a business anywhere in California, but especially in San Francisco, because of rents, because of all the things that we do, also to ensure high standards when it comes to labor, when it comes to health, when it comes to the environment. And all of that has to be respected and valued.

And it's very difficult to do that if there are folks who are right outside or right down the street who are doing none of that and not paying taxes and in some cases with stolen goods and in ways that really make it difficult for not only our small businesses but our neighborhoods to be able to thrive at a time where we are still trying to come back from a very challenging time through the pandemic.

So I appreciate the Committee amendments. I'm in very strong support of this. I live on Market Street. I live in the Tenderloin. I know there are folks from the Tenderloin who are here from the Mission district.

And so I do hope that we are able to, with the support of this law and my colleagues here, able to make some changes that support our neighborhoods that I know are struggling and also support the people who, you know, are trying to sell goods and who are trying to make it themselves.

This is not about going after or punishing any sort of people. People are trying to make ends meet, you know, and so let's figure out how to support them as well and give them legal avenues to do that. And thank you, Senator Wiener, for your leadership and for bringing this forward.

And would love to, if I'm not already, be added as a co author and at the appropriate time, we'll move the bill.

Thank you, Assembly Member Haney. Before we proceed with the honor comments, we just establish a quorum. Madam Secretary, can you please call the roll?

[Roll Call]

Thank you. We do have a quorum. Now. Any other Committee Member that wants to have comments or questions for the Senator? Seeing? None. Senator, would you like to close?

Primero Quero Agradeceles, Los Vendadores que Vinierona, Sacramento parades, tapasando en Las caese De La Mision. Gracias. I wanted to thank the street vendors, who are very busy people trying to make ends meet and support their families for taking the time to travel to Sacramento to tell the Committee what is happening on the ground in San Francisco.

As chair of the Rosso, who is here today, we'll recall earlier in the year, I was prepared to advance a different version of this bill. And I ultimately, as I expressed to her at the time, decided to pull back because we weren't ready and we were going to have internal dissension within San Francisco and within the mission.

And that's the last thing that I wanted to be a part of. And so we took multiple months, and I want to thank Supervisor Ronan and Mayor Breed and their staffs for working intensively with stakeholders, particularly in the mission and with the.

The street vendors, to come up with a bill that's balanced, that will allow us to address these very, very real safety issues that are impacting the vendors themselves in a way that is not going back to the way it was before, where the police could just go in and really undermine street vending.

Street vending is part of the DNA of San Francisco. It makes our city better. I support it, my constituents support it, and this Bill will help us to help that entire ecosystem thrive. And I respectfully ask for an aye vote

And I respectfully ask for an aye vote before I make my closing statement. Tambien. It's also part of the culture, and we respect everybody's culture. We welcome everybody's culture. And with that, I thank you, Senator winner, for your work and the work of your staff on this bill.

The problems of San Francisco, the problem that San Francisco is experiencing with retail theft and the resale of selling items on the street is troubling. I appreciate the conversations we have had about this issue and your careful consideration of the legislation at hand. Thank you.

We understand the challenge in finding the right balance so that in San Francisco so that San Francisco has more tools to curtail these activities while ensuring that vendors are not unjustly targeted. Thank you for doing that.

Again, I appreciate your willingness to work with the Committee on Amendments and your commitment to take the Committee's amendments in the Public Safety Committee as well. I also look forward to continuing to work with you on further refinements so that the bill is crafted to meet its intent without creating unintended consequences.

The motion, do we have a motion? We have a first and a second. The motion is to pass to the Public Safety Committee. Secretary, please call the roll.

The motion is do pass to public safety. [Roll Call]

Thank you, colleagues.

Thank you.

The votes on call. We'll leave the roll open for the members to add on. Thank you, Senator.

Thank you.

The Bill is out, by the way, but we'll just leave it all open for the other Committee Members. And I see Senator Newman, item number two on the agenda, SB 347, by Senator Newman.

Thank you and good morning. Mister Chair and members, thank you for the opportunity to present SB 347, a pragmatic measure which will streamline the deployment of new zero-emission vehicle infrastructure in California by exempting electric vehicle charging and hydrogen fueling stations from California's Subdivision Map Act.

Before I begin, I'd like to thank the Chair and your staff for their work on this bill and accept the Committee's amendments to ensure accurate terminology, and clarify that an exemption applies only if the project is subject to other local discretionary approval.

As you're all aware, the state has fully committed to the ambitious and aggressive goal of moving beyond gasoline-powered automobiles with Executive Order N 7920 and the Advanced Clean Cars Rule requiring that all new vehicles sold in California be zero emission by the year 2035.

To support the literally millions of new vehicles, the California Energy Commission estimates that the state will need an additional 1.2 million chargers over the next decade.

And according to data from the Air Resources Board, the state's hydrogen fueling network will also need to expand by roughly seven times in order to support the projected number of fuel cell vehicles on our roads by that time.

In order to have a chance at successfully meeting California's goals, we'll need to take proactive steps to address the administrative barriers that have made building zer0-emission vehicle infrastructure in California such an onerous and costly process to date.

This includes addressing delays caused by the Subdivision Map Act, which allows local officials to impose various requirements as a condition of a parcel sale or lease.

Because these requirements can vary substantially between jurisdictions and often only become apparent well into the permitting process in a given jurisdiction, compliance can often impede a station's development, with some delays extending to as long as several years.

SB 347 will help streamline the construction of new EV charging and hydrogen fueling stations by exempting these uses from the Subdivision Map Act. Such a change would be fully in line with previous exemptions granted to support the development of other clean energy projects to include wind, solar, biogas, and grid battery storage.

By removing unnecessary red tape, SB 347 will help speed up the development of publicly funded zero-emissions infrastructure while sending a strong market signal to private developers that California remains fully committed to meeting its transportation decarbonization goals. With me to testify today is Dana Kennedy. On behalf of one such major infrastructure developer, Air Products.

I am respectfully asking for your aye vote today.

Thank you, Mister Chair and Members, or Madam Chair and Members, you stole all my talking points, so I'm going to be really brief. Faith Conley actually filling in for sure. It's okay. The amenable, Dana today with Weideman Group on behalf of Air Products.

Air Products is proud to support California's goal of getting selling all fuel, low-carbon fuel vehicles in the state by 2035. In fact, we have committed to working in California to include the state's energy goals in a recent announcement of $50 billion, $15 billion investment in California on various energy projects as well as globally.

So, we're proud here to be here today and support SB 347. We believe it's a very important step toward hitting that 2035 goal. But also we believe that the adoption of fuel cell vehicles is paramount to helping California reach that ZEV goal.

And the Subdivision Map Act has proven to actually be a pretty veritable source of delays in reaching that goal and placing these hydrogen fueling station as well as electrical vehicle charging stations. As Senator Newman said, there have been several bills in the past to include certain exemptions of Subdivision Map Act.

I do want to make a really important note that this does not take the place of very important abiding by certain environmental regulations, health and safety regulations.

The amendment we're taking in committee today is very important to maintaining the safety and health of the public, and I think it's a really important fact that various local governments are neutral on this bill. So, with that, I would ask for your aye vote.

Good morning. Steve Wallauch on behalf of the Center for Transportation and the Environment. CTE is a member-based, nonprofit organization that fosters collaborative efforts process to advance clean, sustainable transportation and energy technologies. Their members include vehicle manufacturers, technology companies, fuel cell manufacturers, energy suppliers, transit agencies, and universities.

CTE and its partners work to develop fuel cell and battery electric buses, trucks, and cargo handling equipment. They also work with their partners to site and build hydrogen fueling and charging infrastructure. SB 347 would provide a limited exemption to the Map Act.

This will assist in streamlining the development and fueling facilities and help control costs and maintain project timelines. We urge your support for this bill and here to answer any questions.

Thank you. Any other witnesses in support?

Good morning. Teresa Cooke on behalf of the California Hydrogen Coalition, California Hydrogen Business Council in strong support. Thank you.

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

Thank you. Do we have any witnesses in opposition? Seeing none. Bring it back to the Committee for questions, comments. We have a motion and a second. Would you like to close, Senator?

Thank you. Thank you. This is a commonsense measure. The clock is ticking against our goals, especially against the aggressive timelines that we've imposed. This will be very helpful in helping the state, state, and all the effective agencies and participants in decarbonizing California's transportation system to meet those goals. I respectfully ask for an aye vote.

Thank you. And the chair says to also thank you, Senator, for your work and your work on the staff of the Committee on this bill. And with the amendments, he will be recommending an aye vote. Madam Secretary, please call the roll. Do pass as amended.

Motion is do pass as amended. [Roll call]

Thank you, members.

The bill is out, and we will keep the roll open for add-ons. Thank you.

Yes. Good to see you.

Okay. Senator Durazo, you are next. We're just trying to figure out the order here.

Yay.

You may proceed when you're reay.

I was worried somebody else was going to walk in. Okay, ready? Shall I proceed? Okay. Thank you. Madam Chair and members, I'm here to present our bill, SB 1325. It simplifies the public contracting process for state and local agencies by creating an authorizing statute for best-value procurement.

Best value procurement differs from other models, such as the lowest responsible bidder, by allowing factors in addition to price to be evaluated and scored within the bid process. For example, in Los Angeles, LA Metro is advancing incredible benefits for our community by applying a form of best-value procurement to billions of dollars' worth of contracts.

In 2018, LA Metro committed to implementing a manufacturing careers policy to create good jobs and advance equity through the agency's purchases of manufactured transit equipment. This policy will support tens of thousands of us jobs as LA Metro replaces its entire fleet.

The Legislature has authorized the use of best value on an ad hoc basis for specific entities and contexts. This causes confusion and administrative burden.

The ad hoc contracting authority, which is often done in very different sectors sections of state code, makes it difficult for agencies to understand whether or not they have the authority to adopt best value procurement models. Some agencies have explicit permission to utilize best-value procurement, while others do not. Some have authorization, but only under specific circumstances.

This bill empowers cities, the state, and public agencies to use our public dollars to create quality products and high paid jobs while advancing access for all Californians. Today, I have with me Emily Gartenberg with Jobs to Move America and Sara Flocks from the California Labor Federation. Thank you, Madam Chair.

Thank you, Madam Chair. And thank you, Senator. My name is Emily Gartenberg with the nonprofit Jobs to Move America, and I'm honored to speak in support of SB 1325 with you here today. Best-value procurement allows agencies to evaluate and score important factors like environmental and community benefits in addition to price within the bid process.

But as Senator Durazo mentioned, currently best-value procurement is authorized on a very confusing and patchwork basis throughout state code. And this really causes a lot of confusion for agencies who have indicated that they do want to use best-value procurement but are nervous that they do not have the authorization to do so.

Also, many agencies are unsure if they will be able to do best-value procurement this year and unable to do it next year as their authorizations expire, which really just causes a lot of confusion and consternation among state agencies, local agencies, and among the bidders who want to have some degree of knowledge of what they're going to be able to look forward to in coming years as they pursue public bids.

SB 1325 removes this confusion by authorizing public entities to adopt best-value procurement on contracts over $250,000. And to continue to highlight the example of LA Metro that Senator Durazo raised, the Manufacturing Careers Policy, which is La Metro's version of a best-value procurement policy, has had really radical and really exciting impacts on La County and on LA County's working people.

Notably, this policy has directly led to the creation of hundreds of good union jobs in two different electric bus manufacturing facilities in LA County in Lancaster, California.

This policy led to a car check agreement between the electric bus manufacturer BYD, also now known as Ride and Smart Local 105, as well as the development of a first-in-the-nation apprenticeship program for electric bus manufacturing and targeted career pathways for individuals facing barriers to employment.

Passing SB 1325 paves the way to leverage our procurement power to create quality jobs for Californians. Thank you.

Madam Chair, members, Sara Flocks, California Labor Federation in strong support. We'd like to thank the author for her years of work on this issue, which is making sure that all of the public dollars that we spend create good union jobs.

The Federal Infrastructure and Clean Energy and CHIPS Acts bills are going to bring, over the next years, $180 billion to California. A lot of that is going to be in procurement. We have a once-in-a-lifetime opportunity to rebuild manufacturing with good union jobs in the state.

And procurement is the tool that the state has to make sure that manufacturing is here and that it is creating those good union jobs that help us address the affordability crisis that Californians are facing and growing income inequality.

This bill is a small step forward, but it is a critical step because it is opening up the possibility for best value procurement and for ensuring that we have good labor standards on all of the public dollars that are spent. We urge your support. Thank you.

Thank you. Are there any other witnesses in support? Please come forward.

Madam Chair and members. Bob Reeb with Reeb Government Relations on behalf of Water Replenishment District in support.

Fatima Iqbal Zubair with California Environmental Voters in support.

Good morning. Marcus Detwiler with the California Special Districts Association and support. Thank you.

Thank you. Do we have any witnesses in opposition? Seeing none. Open it to Committee. Mister Kalra.

Thank you, Madam Chair. And thank you, Senator, for being this forward. I'd like to move the bill and is there a second? Senator Durazo, thank you for your continued work in this space.

I think that back in the day when it used to be lowest bidder, the lowest responsible bidder, and the reality is that quite oftentimes we find that cheapest is certainly not the best value. And we want to make sure that we're using taxpayer resources responsibly.

And that means getting the best value for that tax dollar, which is something different than the cheapest thing you can get. And so, this is very, this is certainly a commonsense measure, and I appreciate your work in this space. And I just want to thank you.

Thank you.

Any other comments? No, Madam Chair. Senator, would you like to close?

I just want to thank you all for the work that you do watching out for our communities. And this is another opportunity we're in this. Coming from LA, it's a seismic shift here in the opportunities that we have before us, and so it's up to us to create those better jobs.

But it's also not mandating anything specific other than you have the authority to use best value. And that's what this is all about. So, appreciate everybody and ask for an aye vote.

Thank you. Chair Carrillo wanted to be sure I thought you thank you for presenting your Bill, and he has recommended an aye recommendation. And I would also like to add that I admire you as an author and the thoughtful work that you bring forward. So, thank you so much. Madam Secretary, please call the roll.

The motion is do pass to Appropriation. [Roll call]

We are at 5-0. The bill is out, and we will leave the roll open. Thank you.

Thank you, colleagues.

Senator Archuletta.

Senator Archuleta, SB 1418.

May I? Well, good morning, Madam Vice Chair and Committee Members. I am so proud to present my bill with you all today and thank you to all the Committee members for what you do and your patience all day long with us. Senate Bill 1418 is regarding hydrogen fueling stations.

I would like to start by thanking the Chair and everyone in the Committee working with my staff on this bill, and note that I'm very happy to accept the Committee's suggested amendments as outlined on page five of the Committee analysis.

As Chair myself of the Select Committee of Hydrogen Energy, it has come to my attention that a pivotal component in our transition towards cleaner, more sustainable mode of transportation, hydrogen fueling stations are at times not being built or unnecessarily delayed due to an overly burdensome permitting process. And that is the issue, the burden permitting process.

Senate Bill 1413 addresses this important issue as hydrogen has shown great potential towards decarbonizing our transportation sector. Senate Bill 1418 transcends simple local ordinances or municipal concerns and rather addresses a statewide imperative.

This bill recognizes the vital need for consistent standards across all jurisdictions to facilitate the prompt and cost-effective deployment of these critical zero emission fueling stations. Senate Bill 1418 underscores our legislative commitment to fostering zero emission vehicle infrastructure while mitigating barriers to the installation of hydrogen fueling stations.

Senate Bill 1418 brings parity to the electric vehicle permitting process by streamlining the administrative approval process for hydrogen fueling stations in the same way that we do for charging stations. Specifically, Senate Bill 1418 mandates that cities and counties must adopt an ordinance and checklist that creates an expedited streamlined permitting process for hydrogen fueling stations.

This directive is designed to expedite procedures and ensure that citizens have access to clean energy options without unnecessary administrative burdens and hurdles. While Senate Bill 1418 streamlines the permitting process, health and safety remains top priority.

My previous bill, Senate Bill 1291, which passed and was signed by the Governor, ensured hydrogen fueling station permits adhere to stringent health, safety and performance standards. Senate Bill 1418 keeps these core components in place.

Furthermore, to address fiscal and procedural concerns, Senate Bill 1418 phases in its requirements so that most cities and counties in the state will not have to develop an ordinance until September of 2028, well after GO-Biz releases its model ordinance and checklist for hydrogen fueling stations and permitting.

In conclusion, California has more fuel cell, electric vehicle and hydrogen stations necessary to fuel them than any other state in the nation.

We are truly looking out for our constituent. And with California's recent success in securing substantial federal funding for clean renewable hydrogen incentives through the Alliance for Renewable Clean Hydrogen Energy Systems, also known as ARCHES, the timely passage of Senate Bill 1418 is essential to take full advantage of these federal dollars to expedite the development and deployment of hydrogen infrastructure, in turn facilitating our state's transition to a cleaner transportation future.

Senate Bill 1418 represents a pivotal step towards realizing our environmental stewardship obligations and advancing our sustainable transportation objectives. For these reasons, I respectfully ask for your aye vote. And today, in support with me is Teresa Cooke, representing the California Hydrogen Coalition, who can also assist in answering any technical questions.

Thank you, Senator. Good morning Members. Teresa Cooke, on behalf of the California Hydrogen Coalition, very happy to be here today. I want to thank the author again for bringing forward this important bill, easing and expediting hydrogen fueling infrastructure. Unbeknownst to many, California is one of the top three hydrogen-producing states.

We have more than 100 years experience safely making, moving and using hydrogen, and are excited for the role it will play decarbonizing energy and transportation. Nothing in 1418 upends a project's need to meet health and safety requirements. Rather, it provides upfront transparency of these needs and provides a predictable process for the permitting of these projects.

California has the very worst ratio of hydrogen fueling stations to vehicles on the road. Our climate allies in Germany, Japan and elsewhere have far more stations in place per vehicle. California, frankly, is very far behind, and yet we have the most aggressive, statutorily binding climate and transportation goals.

And so for these reasons, 1418 is going to go a long way to right this wrong, and we would appreciate your aye vote today. Thank you.

Thank you. Do we have any other witnesses in support? Please come forward.

Thank you, Madam Vice Chair. Jack Yanos, on behalf of the California Fuels and Convenience Alliance, in support.

Dan Cha, on behalf of the California Chamber of Commerce, in support.

Thank you. Okay, time for witnesses in opposition to testify. Please come forward.

Good morning. Damon Conklin with the League of California Cities. I always try to avoid arguing and debating Theresa Cook and the good Senator, but unfortunately with this particular Bill, we do have some structural problems with it.

We basically calcini, you know, we support transportation's decarbonization efforts in the transportation space, and we often align ourselves with hydrogen fuel cell partnerships overall goals, especially when we're looking to decarbonize our public fleets for the medium and heavy size duty space.

We feel that fuel cell is actually a much superior not only vehicle, but the the infrastructure for scaling is preferable than electrification. However, the proliferation of EV's is not because of state legislation usurping local permitting review.

It was because of the private sector really leaning in and investing in the space, in the vehicles being manufactured infrastructure to support it, government grants to encourage this growth. This particular bill, some 1418, is predicated on this false premise that local permitting process represents the barrier. What are the barriers?

The cost to construct, produce, storage, compression, dispense, end users paying four times at the pump than gasoline. Also, the state continues to place what we believe is its thumb on the scale, unfairly in favoring electric vehicles. It should be technology neutral and support hydrogen.

Caltrans has in this budget that's just being passed a half $1.0 billion to electrify over 2100 vehicles for their medium to heavy duty fleets. CEC is proposing to reallocate shell returned grants to EV infrastructure, not hydrogen. We're opposed to that, but what is the State of hydrogen?

As of April of this year, we have 55 hydrogen stations. We have 18 that are being permitted, two in the construction, four being proposed, with more being withdrawn than actually being submitted in the last 60 days. So why propose a statewide policy that when we currently have this dearth of permits in the chute?

And so the analysis notes that the 2023 annual hydrogen evaluation, I think released in December, so it's only seven months old, pointed to barriers as being site selection, securing lands, utility connection timelines. But when noting the local permitting as a potential barrier, it cites 1291, premised on the narrative that local permitting is the barrier.

So there's no, there hasn't been any actual specific. There might be anecdotal, there might be a bad actor, and that's a difficult conversation that we may have with one of our Members. But it's not this widespread issue. We're proposing, as we did in the Senate, a more targeted, incremental approach.

We're looking at having the provisions of 1418 apply to applications within 5 miles of a state highway, transit corridor or freeway. Let's look at that for a few years to see how that helps the market. This is where the applications are not rule permitting authorities that will never see an application across their desk.

So for those reasons, we respectfully ask that the Bill be amended. Thank you.

Thank you. Do we have any other witnesses in opposition? Please come forward.

Good morning. Kendra Harris with the Climate Center and representing the Center for Biological Diversity in opposition to the Bill. Thank you.

Thank you. Seeing no other opposition, bring it to the Committee for questions. Comments? Yes. Pacheco.

Yes to Senator. Thank you for being involved in this area. Hydrogen is important, but I do would love to hear from you as to your perspective with respect to what the opposition just mentioned right now. What is your input as to what they've just said?

Well, I think what we have to understand for just a minute, imagine California with this treasure chest of energy, and we've got to use everything we possibly can. The Governor has set down these goals that we've got to be zero emission. But if we don't include hydrogen and it's all electric, it's not going to work.

And, Assemblymember, you and I both share our districts, and I can cite Foothill Transit. They just bought 39 buses, fuel cell batteries. Hydrogen. City of Montebello is committed to get 19 buses. As hydrogen starts to evolve, of course, we have to catch up.

And so one day free enterprise will say, I'm going to put a fueling station in this city or this city. And if you read the analysis, we're only right now talking about cities with 250,000 or more. I don't have a city in my district with 250,000 or more.

So the cities below, which are contract cities and some of the others, that won't take effect until 2028. So there's plenty of time. And so we're talking about what has happened.

Those that have had the infrastructure created in the cities, they've reported back that the municipality has asked for sidewalks and lighting and trees and this, that and the other, an expenditure in the amount of $500,000 before they even did anything.

So we've analyzed it that if we open the doors for hydrogen, obviously the Federal Government agrees with California because we just got a grant of $1.5 billion for the arches. And that means that it's going to come. We're going to have our boats, we're going to have trains, we're going to have cars, our vehicles, buses.

It's going to be in the future. So all we're doing is saying, let's get the paperwork ready, and cities that want to participate, let's put that ordinance together, and those cities that feel that it's not there because there's no customer, then fine. You know, when somebody knocks in the door, the ordinance should be ready to go.

That's what it is. But, you know, we're not talking about manufacturing and production. That's not this bill. This bill is only paperwork and that I've talked with every city manager in my district, and I know they're all for it. And the City of Industry in our district is now. You don't have the City of Industry.

City of Industry in my district, they're already starting to look at the infrastructure, and they're joining venture with the company that was just before us a few minutes ago with Senator Newman. So slowly but surely, it's happening. If we want clean energy, hydrogen is the way to go.

And I've said this time and time again, if I had a drop of gasoline on this desk and put a drop of hydrogen on this spot and I lit a mist, this would burn right through. The hydrogen would dissipate. It's safe. It's a good way for ourselves to look at the future and be part of it.

So with that, I urge the aye vote.

I'd like to add another. And I know what the opposition is saying is about the permitting process, that it's.

Yeah, they've said a lot more than the permitting process.

Yeah, I know. That was one of the issues that was brought up. Would you like to respond? Maybe your witness would like to respond to that.

Yes, please.

Thank you. Assemblywoman. I have to tell you, Damon, half of what you said, I absolutely agree with. He and I are, you know, on the same page on a lot of the issues related to hydrogen.

I think what's worth mentioning is that the cities are not without resources and counties are not without resources when it comes to figuring out how to streamline the permitting of these projects or what should be on a recommended checklist for these stations upfront.

So to the Senator's point, it is a paper exercise that is not solely on their shoulders to do the deep work on trying to figure out what some of those requirements are. There is support there.

Damon's recommendation of having permitted benefits within 5 miles of a highway or a freeway kind of brings me back to the good old days of the Schwarzenegger hydrogen highway.

So we all remember that he was a big proponent of the technology far before it was ready, you know, circa 2008, and the concept there was that we would locate hydrogen fueling stations along major highway corridors.

And we learned a lesson in that exercise, that the way that these vehicles are driven and the people who drive them, these fueling stations, need to be in our community, in our neighborhood, not necessarily along freeway corridors.

And so I'm afraid that putting a five mile limit on the permitting, when that's not exactly the utilization practice that the market is doing today, would take a lot of the benefit of this Bill out of the situation. I do think it's worth mentioning. You know, Damon, Damon is right.

Permitting is not the only problem plaguing the hydrogen community, by any means, but it is one of them. And I think it is time that this Legislature consider a holistic approach to what we want to do with hydrogen. We are working on the cost issue tied into California's hydrogen hub.

We have overlooked the fact that Honda, one of the largest auto manufacturers in the globe, is bringing its fuel cell vehicle back to market in California. Senator Newman had a bill making the siting of stations a lot easier. You know, the shell returned monies.

I got to tell you, we are very anxious for the CEC to put those monies back on the street because there are a lot of developers that would be very anxious to. To utilize that money and build some stations. So my two cent, thank you for the opportunity.

Thank you. I really appreciate your response. I don't know if the opposition wants to mention anything that was just testified right now.

You know, it's a love fest up here because, you know, everything Teresa said, I don't necessarily disagree. I support, again, we're in a partnership and I think have aligned end goals here. Framing local jurisdictions as the barrier to the full development of this industry is just a false premise. There are 400 now 83 cities throughout the state.

A multitude of them are never going to see this application. And going through the costly process of adopting an ordinance, reviewing the analysis, going through the permitting, developing a permitting checklist and so forth, it's not free, it's not cheap.

In addition to all of the other state edicts that come out of Sacramento to the various cities and counties and special districts throughout the state without costs, associated cities are doing much like the state, doing more with less.

And with regard to housing, public safety, transportation, it's just one more edict that is not necessary for a lot of cities and permitting authorities.

I would say that let's do this in a targeted, incremental approach, instead of a one size fits all, regardless of the city's ability, their size, their staffing, so do it in a more thoughtful way. We don't disagree with the end result. We want to see the growth of hydrogen.

We just don't think this Bill, if enacted and signed, will result in a different trajectory. Line.

Thank you. And thank you for answering my questions. I will be supporting the Bill today. I'm glad it's a love fest and hopefully this means more conversations can happen. But I do like that it doesn't. It's for cities that are over 250,000 in population. I don't have any cities within my Assembly District that are over 250,000.

Largest city in my district is Downey with 114,000 residents. So again, thank you to the author for bringing this Bill forward and look forward to more conversations between both sides. And if there's anything to fix this Bill, hopefully it gets even more refined and looking forward to seeing it on the Assembly floor. So thank you very much.

Any other Committee Members that want to have questions or comments? Seeing none, would you like to close?

Yes, Mister chair, thank you. We heard that the future is hydrogen, but we have to be ready and this is what it's all about. And as a former Member of contract cities and working with independent cities and our city managers, they would all work together.

And I would imagine that one city that puts together the ordinance, they're going to share that ordinance with another city and another city. So it's not going to be so punitive from one to the other. It's going to be working together. And I see this because we're all trying to do the same thing.

And this is why I think this is the part that the Federal Government is looking to California to move forward. And this is why I ask for your aye vote. And thank you.

Thank you, Senator. I'll just make a comment. As many of you know, that I'm very supportive of hydrogen. And I do believe that we need to take a holistic approach. As you said, I believe that without hydrogen, the state won't be able to meet the 2045 goals. Very aggressive goals. The wheelchair is not there yet.

One of my concerns is that by putting these stations just along a five mile radius from highways, it will leave communities behind. Just like the electric vehicle infrastructure has left a lot of communities behind, whether it be in 1.2 billion or 1.5 billion.

It's still a sizable amount of money that we should be able to take advantage of. And I believe that California is way ahead of other states as far as being environmentally friendly. We will continue to work on that.

With that, I thank you for your work and the work of your staff on this Bill for accepting the Committee amendments. And you accept those amendments right with us. I will be voting aye. Due to timing, these amendments will be taken in transportation Committee. As we know, you need a motion and a second before we proceed. Second?

We have a motion in 2 seconds. Madam Chair. Secretary, please call the room.

The motion is do pass to transportation amendments taken in transportation [Roll Call]

The deal is out. We're going to leave the roll open for the minute, ma'am. Thank you. And I see Senator Menjivar here in the room. And that is agenda item number 10, SB 1193.

Thank you, Mister Chair. Committee Members. I will be accepting the Committee amends. This bill some of you have heard from transportation, has gone through a long and windy path, but very excited that it's been able to continue on that path. And I'm just here to ensure that you all help me get to that finish line.

To phase- to ban, not phase to ban leaded aviation fuel, one of the remaining materials that still has lead in it that is impacting your communities. My communities.

Unfortunately, California has a lot of airports in the 1 through 10 list of most polluting airports in the United States, with one of my airports being the number two worst one in California and the seventh one worse in the United States.

Now, through all the policy committees, what this bill will officially do is that by 2031, January 1, after the expiration of the most recent FAA Reauthorization Act, after that expires, we will ban the sale of aviation fuel here in California.

We will follow suit of what Santa Clara County did already a couple years ago, and ensure that we're bringing protection for kids who are around airports that use this fuel, that these are the smaller piston engine aircrafts, these are not commercial flights, these are not commercial airplanes that will be impacted by this as they use a different kind of kind of fuel.

This bill came out of a cry out of my district to ensure that we address the air pollution that we're seeing in that area, which I'm pretty sure other members see in their district, to ensure that we're protecting our community. With the Committee of Members, we are providing an ability to ensure that it doesn't contradict with FAA grants to airports.

So thank you for the Committee for helping us put that kind of reassurance back in the bill to make sure that we're not stripping away funding from the airports and ensure that we make them as successful as possible. And ensure that once, by seven years from now, we will have unleaded fuel available for them.

And they won't fuel a thing in the transition. It's a drop in replacement. While some of the gas will be a little bit more on the maintenance side. Pilots will save a little bit of money because of the maintenance, and this is just the right thing to do. We're giving enough time for the industry to transition over.

Since I started this bill with a start line of 2026, we've amended enough years to add for it to be a smooth transition. So I will stop there, Mister Chair, and then turn over to my witnesses for testimony.

Good morning, everyone, and thank you so much for this opportunity to be here with you today. Senator Menjivar, on behalf of all the minority communities, thank you for introducing the song overdue bill on unleaded Afghans. My name is Maria Reyes, and I lived in Cassel Community for over 52 years in an area called Salsipuedes.

Get out if you can. My home is less than 1 mile from Reid Airport, and my neighborhood is densely overcrowded. Our local elementary school shares a schoolyard fence with Reid Airport, and we have approximately 21 schools and daycare centers within this 1.5 miles radius.

Most of my neighbors no hablo inglés, work in construction, or in the fast food industry. Survival is a daily struggle. This struggle includes raising our children and working for a better future, a future free of racial discrimination. Racial discrimination thrives in communities like Cassel, Pacoima, and the Long Beach areas.

A troubling issue to our health is the Avgas led emissions. These are dangerous to our health, and yet no one has taken the responsibility for the neurological and physical impairment done to our families by this leaded fuel. In 2021, Cassel Community rallied, and we won action by the Santa Clara County. The county stopped selling leaded fuel.

However, this is not enough. We are asking for social and racial justice to eliminate this health issue. As parents, we all want to protect our children. If your children lived in my community, would you be willing to wait till 2031? Our families are not statistics.

We are human beings who deserve to be treated with dignity, respect, and inclusion. So, on behalf of all our communities, we're asking you to please work with us to pass SB 1193 and to end this public health injustice. Thank you.

My name is Jerett Yan, and I'm a Deputy County Counsel with the County of Santa Clara, which is the owner and operator of Reid Hillview Airport, one of the busiest General aviation airports in the state in San Jose and San Martin Airport, a small rural airport.

I'm here today to express the county's strong support for SB 1193 and to share with you some of our experiences in working to protect our communities from lead exposure from General Aviation. We know that lead exposure from General Aviation is a critical danger to our children.

The county completed a study in 2021 that found strong correlations between General Aviation activity at retail view airport and elevated blood lead levels in the children in the surrounding neighborhood.

The findings of this study are consistent with findings of other studies from across the country and the US EPA's 2023 finding that led emissions from General aviation endangered public health and safety. We also know that General Aviation airports can operate safely without the sale of leaded avgas.

In 2022, the county ceased the sale of leaded avgas at its airports and there have been negligible impacts on airport operations and no safety incidents related to the absence of leaded avgas at our airports. We also know that the alternatives are here today.

In 2023 alone, the county sold over 272,000 gallons of unleaded avgas at our airports and we're currently finalizing a contract with or to secure a supply of a 100 octane unleaded aviation gasoline that the FAA has approved for use by virtually the entire piston engine fleet.

The time to- communities have suffered for decades from leaded avgas exposure and the time to end is now. With that, I respectfully request your aye vote for SB 1193.

Thank you very much. Anybody in the room that wants to add on support, please state your name, organization and position on the bill.

Good morning Mister Chair and Members Karen Lang on behalf of the City of Los Angeles in support.

Good morning Leticia Reyes with Crew Strategies on behalf of the City of San Jose in support.

Good afternoon Chair and Members. Ross Buckley on behalf of South Coast Air Quality Management District in support.

Hello, Fatima Iqbal-Zubair with California Environmental Voters in support also saying support for CleanEarth4Kids, North Equity and Justice, California Nurses for Environmental Health & Justice, NCCA, Eco-Sustainability Peeps, Facts, Grandparents In Action, Sonoma Safe Ag Safe Schools, Center for Environmental Health, Activist San Diego, SQL, MOMS Advocating Sustainability, and get the let out Long Beach. Thank you.

Good morning. Whitney Francis, on behalf of the Western Center on Law & Poverty and the California League of United Latin American Citizens proud co sponsors of SB 1193 in strong support.

Sofia Rafikova with the Coalition for Clean Air, also proud co sponsor of this bill in strong support.

Alan Abbs, Bay Area Air Quality Management District in support.

Peter Ortiz, San Jose Council Member representing the Cassell Community, a neighborhood disproportionately impacted by the use of leaded fuel by the Reid Hillview Airport, in support. Thank you.

Hi, Lauren Wesche. On behalf of the California Airports Council and the Association of California Airports, I want to thank the author, her staff and Committee for the recent amendments. And with that we will move ourselves from an opposed to a neutral position.

Jared Yoshiki, on behalf of the Aircraft Owners and Pilots Association and also representing the Vertical Aviation International, the National Business Aviation Association, the National Air Transportation Association, the Experimental Aircraft Association, we also want to thank the author and her staff for removing the amendments, for taking some amendments that allowed us to move to neutral as well. Thank you so much.

My name is Gilbert Reyes and I'm also supporting this SB 93 okay. 1193, I'm sorry. From San Jose, California, from Cassel Community. Thank you.

My name is Raquel Welch. I'm a native San Josean and my home is in Cassel neighborhood, one block away from Reid Hillview Airport. And unfortunately, my family and myself, my children, grandchildren, we all have lead in our blood. So I strongly support this bill. Thank you.

Thank you. Any primary witnesses in opposition?

Thank you, Chair. Thank you, Committee. And I'm going to do us all a favor and not read from my somewhat lengthier prepared remarks and quickly address a couple concerns. My name is Siddarth Nag. On behalf of California Rural Counties RCRC, we've been opposed to this bill for two reasons.

One, out of concern that our counties and our county airports, the authorities that we work with, are able to, in the way that county Santa Clara has been able to successfully make a switch to their 94 unleaded fuel formulation that they're currently using and attempts to get to 100 octane standard.

Unleaded standard that are rural counties which exist in a little bit of a different part of the supply chain and aren't always at the front of the line and aren't always able to necessarily get the same contracts in the same way, are able to do that.

And to that end, I want to greatly thank the Senator and her staff for continually working with the entirety of the opposition. As you've heard, some have moved to neutral. They've been very willing to hear us out and address some of those concerns. We remain in opposition at this time.

Further evaluating the amendments proposed, largely on the question of whether the amendments as proposed by the Committee is proposed to be accepted by the author, do or don't allow our airports, in the rare circumstance where there is a gap between when their grant assurance expires, let's say near 2030 or right afterwards.

And the potential, we all cross our fingers that this isn't the case. Non existence of 100 octane unleaded fuel. Now we know that several of the fuels manufacturers are moving hard to make that happen. They have great economic incentive to do so. As mentioned, the fuel is not just as not something that.

An unleaded version of the fuel is not just something that is beneficial to communities around the airports, but they are. It is a better version of the fuel for the airport workers themselves and the pilots that use the fuel. So we're all on the same page.

That existence and use of an unleaded fuel is a switch we all want to make, or the switch to the use of that fuel is something that we'd all want to do. The question has always been whether that fuel exists at this time and whether it's commercially available and viable for rural airports to access that fuel.

In addition to evaluating that, I do want to mention one analogy that has been described in this bill is for why we in California might make the move in state statute to ban unleaded fuel. And that analogy has been made to the switch.

Sorry, the ban in unleaded automobile fuel in the early nineties, California, in 1992, its Air Resources Board in 1992 under an administrative action, moved to ban unleaded gasoline. And that was more than 20 years after the automobile manufacturers of America started to fit their engines to accept an unleaded version of that fuel formulation, unleaded.

And more than 10 years after unleaded fuel was commercially available. Yeah, stations. What we are seeking to achieve is an orderly process in which the fuel is available, commercially viable or commercially there for our airports to make contract so that we can make the switch much in the same way California did with automobile unleaded fuel. Thank you.

Thank you.

Anybody else in the room that wants to go on the record? Opposition. State your name, organization and position on the bill.

Zachary Leary with the Western States Petroleum Association want to thank the author and her staff for the conversations we've had. We remain opposed unless amended. We've submitted amendments to the author's office.

I think that would ensure alignment with the Federal Government if there are future date changes and look forward to the ongoing conversations should it get out of Committee here today. Thanks.

Thank you Mister Chair. Jack Yanos, on behalf of California Fuels and Convenience Alliance also opposed unless amended. Thank you.

Thank you. And with that, take it back to the Committee Members. Any questions, comments on the bill? Assemblymember Waldron?

So I was just wondering, as I read this, we all agree on, you know, getting the better fuels available, but I represent a very highly rural area, and we're concerned about, you know, in the future emergency response and some of the transportation uses of these type of airplane. So what would happen?

Would they be grounded if we didn't have the fuel available or, you know, what do we see as the potential issue at that point?

Assembly Members, my previous version of this bill had an opt out approach that should we, should we have not had unleaded fuel Commission available, counties would have been able to opt out, and I had to take an amendment in a previous Assembly Committee to remove that provision.

So I thought about, hey, I want to make sure this bill is successful, and if we don't meet that, I want counties to be able to opt out. That was taken out. I am more than willing to find a different kind of opt out, but I had to take that amendment to get it out of Committee.

So willing to continue to work with the opposition on it in a way that adheres to what previous committees have wanted and finding a middle ground to that because I don't want airports to not be successful in this transition. The thing that I keep saying everywhere is that I'm just not looking for another kind of 2035 we're going to remove emissions from X, Y and Z.

Like, I want an actual plan to actually be able to. I have been told, I have been said that, hey, I'm going to be here in the Legislature before this bill is implemented, that I have the ability to come back and change it in two different ways.

If for some reason the Federal Government FAA says, hey, it's commercially available in 2028, then I'm going to come back and say, hey, I want to have my bill be implemented sooner.

If it's 2029 and we really have no means of unleaded fuel, I would have to come back and then push it out or put in an opt out version. Again, I'm not trying to have rural counties not have the ability to bring in the necessary resources right when it comes to fuel, I mean, food and so forth.

So I am committing to come back. If we get closer to, once we get closer to 2031 and there's nothing available. Again, I had an opt out approach before had to be taken out. So I am very mindful of that.

Would an opt out measure be helpful to the rural counties?

Yes. Our proposed amendments create what's effectively a structural opt out where there wouldn't have to be a discretionary action taken by the local elected body, the local legislative body, the mechanism that the Senator described that was previously in her bill, it functioned as an effective opt out in some ways.

Local government associations weren't directly consulted on it, and so there were some concerns when we engaged with regard to that language about how that vote would take place and so forth, which is why I believe the previous Assembly Policy Committee chose to go the different route by further amending the bill and then asking the Senator to address the problem of federal preemption vis a vis grant assurances.

There, I believe, are a few different ways we could create a pretty simple and direct opt out provision that would be even simpler than what the Senator had to consider in her house, which I'm happy to discuss.

I just want to make sure, Mister Chair, that none of that is considered a jailbreak since I had to take those amendments in previous.

Vice Chair Waldron, do you have a follow up question?

No, I just know how that is when Committee.

Assemblymember Kalra.

Thank you Mister Chair. And I'm sorry I missed much the presentation running around today, but I'm very grateful, Senator, for bringing this bill forward. I know that we've had a lot of advocacy over the years in San Jose and Santa Clara County.

We have our San Jose councilmember here who's been a great advocate for the community in terms of the impact of our retail view airport right in the middle of our city.

And there was a very extensive study that was done that was released in 2021 in our county that showed the dramatic impacts of, to surrounding neighborhoods in terms of blood lead levels when you have leaded fuel.

And so I'm grateful that we've had the opportunity to go through that process in our county where they prohibit the sale of leaded gas at our two county airports, retail view and San Martin. It certainly demonstrates that it can be done.

And I think with this legislation you're talking about almost seven years before it would be fully implemented. And so I'm hopeful.

I think whether it's in an urban or a rural community, I think communities should be safe from lead entering into their environment, whether it's the water stream, the dirt, what have you, the soil, because that has generational impact on our communities.

And so again, just grateful that you've taken leadership on this particular issue and love to be added as a co author.

And if there hasn't been a motion, I'd like to move the bill. Thank you.

Thank you Assemblymember.

Thank you. Zach, is there something you want to add? I think I see you coming to want to say something with the opt out. Remove your opposition.

Yeah. The amendments that we submitted would essentially align with the Federal Government going forward if there were future date changes at the federal level, I think gets to the same end, but it would just not need to come back to the Legislature. It would be in compliance with any future federal changes to that 2030 date if they do push it out, say, 2030.

Thank you. Any other Committee Members comments? So would you be willing to continue those conversations? Looks like you'll be okay to the opt out if that were to be an option?

I'd like to go back to the 100 different amendments taken in this bill to adhere to a lot of the opposition, which I think are very valid. Very valid. 100%. I just want to, again, you know, I don't think I can make the decision.

I would have to reach out to the previous Assembly Chair on the amendments that I took and so forth. So I don't, I can't commit to anything right on that. Now I do commit. You know, we've been working with WiSPA. We've been working with the rural counties.

You've heard that we've been meeting day in and day out to find a place that is common ground. But I also don't want to weaken the bill where some proposed amendments are just an indefinite pushback. I don't want an indefinite pushback. That's why my previous version was a yearly opt out.

And I also want to note that there are two companies, well, one company that already said they have 100 unleaded fuel octane available. And in seven years, we can't imagine that there won't be more companies coming forward. Right.

This is why we've expanded the years, because we know companies are going to step up and say, hey, we need to have this available by 2031. The Federal Government, and I'll use this as my close as well, the Federal Government has put a goal for 2030. It's not set in stone. It's just a goal.

And I want to make sure that we are sending a message that, hey, Federal Government, you set a goal, but California wants it by 2031. And I think, I am 100% confident that we will have that. But I've made that commitment.

You will be here, most of you will be here when I'm here, is that I can come back by 2027-2028 and reevaluate what it looks like.

Okay. And that was your closing statement? Okay. I believe we have a motion and a second with that. I want to thank you for your work and the work of your staff on this bill and this issue. We will be adopting the amendments today that we understand will remove some of the opposite.

I encourage you to continue working with stakeholders if that's a possibility that. Continue to address the concerns with the bill and request that you continue working with the Committee moving forward. The motion is due pass as amended to Appropriations Committee. Secretary, please call the roll.

Motion due pass as amended Appropriation. [Roll Call]

The bill is set with fives here. We leave the roll open. Not seeing any other authors in the room. We still have 1234 items, three items on the agenda. We can please have authors come in. We can do the add ons. Yes, Madam Secretary. We are going to start with one item on consent calendar.

Senator Padilla, give us a minute. We're going through the consent item and other add-ons. Thank you for being here.

Consent calendar, SB 1514, due pass, recommended consent.

We do need a motion, though. First and second, please call the roll.

[Roll call]

The vote is 6-0 to the consent calendar item. That bill is out, but we'll leave the roll open for others to add on. We're going to continue with the agenda since Senator Padilla is here. Item number seven on the agenda, SB 1072. Senator, when you're ready.

Thank you. Mister Chairman and Members, I am pleased to present SB 1072, the refund remedy for Prop. 218.

SB 1072 would clarify existing law that if a court determines that a fee are charged for property-related service, including water, sewer, and refuse collection violates Prop. 218. The remedy for this violation would be a credit towards the amount of the fee or charge attributable to the violation.

Today, retail water and wastewater agencies throughout the state are facing legal challenges to their service fee structures. Three of these legal challenges affect my district, but the threat exists up and down the state.

These challenges are currently under appellate review in many cases, and in one in particular, and the clarification for the remedies in these cases is needed in the law in the event that it is resolved in such a fashion and to address and protect the solvency of water agencies and the water rates for ordinary payers.

High water users often are the plaintiffs in these lawsuits and allege that they were overcharged by water agencies, that lower water users should have paid more, and that the high water users should get a refund. Let's be clear. We are not talking about billing errors because those are explicitly excluded from the bill.

We're not talking about fees or charges where refunds are provided for in statute. What we are talking about is a fundamental disagreement in the methodology justifying the service charge, and challengers are seeking a refund for this overcharge. Public water districts often do not have no other revenue source other than the rates structures that they charge.

Public agencies hire economists and engineers to provide notice to the public of proposed rates. In order to abide by the provisions of Prop. 218, a public agency sets its charges to merely recover costs annually and receives no profit. So, any refunds to past high water users would need to be funded by raising rates on all future ratepayers.

SB 1072 would clarify that if a court determines an excess fee has been charged, the agency must credit any over a payment amount against the overall costs of providing the service going forward. This is a matter of equity. This bill ensures that the lower water users are not subsidizing those on the higher end.

It's a critical protection for public agencies as they address fee challenges. We must also safeguard equitable approaches to setting water rates while we provide our agencies with the flexibility they need to operate, and SB 1072 achieves that by providing for a prospective remedy for these specific types of challenges.

This bill has the support of ACWA, California Special Districts Association, California State Association of Counties, Municipal Utilities Association, and agencies, public agencies of all sizes, up and down the state because of the recognition that without legislative clarification, they too will encounter the same issues that many of the agencies and providers in my district face today.

I am pleased to be joined by Claire Collins, a partner at Hanson Bridget and special counsel to the Otay Water District, and Moira Topp, representing the City of San Diego.

Thank you, Mister Chairman and Members of the Committee. I'm Claire Collins. I'm a partner at the law firm of Hanson Bridget, where I'm also the chair of the Public Revenue Group. I'm also Special counsel to Otay Water District, which is a co-sponsor of this bill with the City of San Diego.

Water, wastewater and solid waste are essential public services that are primarily provided by public agencies, which cannot make a profit when setting their service charges. They estimate the total revenue required to provide that service throughout the coming year, and then they divide their costs proportionately among their users based on their customer type and their amount of use.

The hallmark of the system under Prop. 218 is that each user pays their proportionate fair share of the overall cost of service, and subsidies are prohibited. Public agencies provide notice of proposed rates to all users. They prepare detailed engineering and financial studies, and they hold public hearings before adopting their rates.

That gives the public the opportunity to comment on and protest proposed rates before they are imposed. A pre-adoption protest is a challenger's first remedy and the only one required by the Constitution.

But after rates have been adopted, agencies have increasingly been subjected to lawsuits from high water users claiming that they are paying more than their fair share. They demand refunds in litigation, which, if awarded, would require that public agencies raise their future rates in order to pay back prior water users.

In some cases, this could be as much as a 40% increase in rates for the following year. As a result, everyone's charges would go up in the future in order to pay back users from the past. There is no reported case that provides for a refund, though, and Prop. 218 does allow for the Legislature to make law implementing Prop. 218.

An approach that clearly provides for future offsets instead of a refund, is what is proposed in this bill, and it closely mirrors a law that already exists, Government Code 66016, which is with, I'm sorry. Which is with respect to capacity fees, which is the other primary form of revenues that water and wastewater agencies collect.

In this way, the aggrieved ratepayers retain a remedy, public service providers retain predictability with respect to their revenues, and we ensure that low water users are not subsidizing high water users. And for that reason, we urge your aye vote, and we're happy to answer any questions.

Thank you, Mister Chairman and Members. Moira Topp on behalf of the City of San Diego, we are a co-sponsor, and as the Senator mentioned, we are one of the agencies that is facing litigation in a significant cost assessment if that, if the litigation continues in the fashion, it's headed right now.

I don't have a whole lot to add. My colleague and the Senator certainly provided a thorough outline of the bill and the concerns that we have with current law.

But I would say that this odd circumstance where we would be required to charge future ratepayers to pay for potential refunds to past ratepayers creates this vicious cycle that makes no sense. And honestly, it could potentially require us to raise rates on those future ratepayers.

And again, getting into this vicious cycle of rate pay, of increased rates, which I don't think anybody really wants to see. So, we think this is a bill that balances the interests of future and past ratepayers.

And we think it, going forward, we think it's an important measure to safeguard ratepayers as well as the General Fund for our city and other cities throughout California. And we respectfully ask for your aye vote.

Thank you for that. Anybody else in the room that wants to add on, please state your name, organization, and position on the bill.

Baltazar Cornejo with Brownstein, on behalf of Otay Water District in support.

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

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

Hello. Keeley Morris with Edelstein, Gilbert, Robson, and Smith, on behalf of the California Municipal Utilities Association, in support.

Hello, Chair and members, Kristin Olsen-Cate, representing the San Diego County Water Authority, in support.

Cyrus Avers for the Coachella Valley Water District, in support.

Melissa Sparks-Kranz with the League of California Cities and on behalf of the Association of California Water Agencies in support.

Kasha Hunt with Nossaman and I'm here on behalf of Olivenhain Municipal Water District and Padre Dam Municipal Water District in support.

Good morning, Mister Chairman. Bob Reeb with Reeb Government Relations on behalf of Desert Water Agency, El Dorado Irrigation District, Palmdale Water District, Rowland Water District, and Walnut Valley Water District in support.

Thank you. Are there any primary witnesses in opposition of this measure? You can go ahead and have a seat if you like.

I am Scott Kaufman with the Howard Jarvis Taxpayers Association. There is a constitutional problem here. It can be explained in the critical difference between damages and refunds. This bill confuses them. Damages may be set or limited by statute. Refunds may not. Refunds are constitutional.

If a water district has overcharged its customers and is found to have done that in a court of law, which is the situation here, they need to pay that money back. That's the very constitutional guarantee of Prop. 218. Proposition 218 is not a statute. It is in our constitution.

It therefore cannot be amended by statute as SB 1072 attempts to do. In fact, the essence of this bill is also a legal argument being made right now in the Fourth District Court of Appeal. That is not a coincidence. We should let the Court of Appeal do its job, not legislate over its work interpreting the California Constitution.

Judges take their position very seriously and have no intention of crafting remedies that would bankrupt the water agency. Respect the work that belongs in the Judicial Branch, not this one. Lastly, the ostensible worries behind this bill are exaggerated. It has long been established that refunds only go back one year. That's Government Code 911.2.

Most water agencies comply with constitutional law. We should be commending them instead of giving special pardons to those who do not. They are supposed to be held accountable. That's why the people passed Proposition 218. And I ask for your no vote. Thank you.

Thank you. Is there anyone else in the room that wants to add an opposition? Seeing none. Committee Members comments, questions for what's in front of us? Seeing none. Would you like to close, Senator?

I thank the Chairman and the Committee, I would just reiterate that there, there's plenty of room for debate and disagreement about the status of the law and the question presented. I'd be very interested in getting some cases.