Senate Standing Committee on Local Government

The Senate Committee on Local Government will come to order. Good morning. Thank you for joining us for this meeting. The Senate welcomes the public in person, and we are holding our Committee hearings here in the state capitol. We have only three Bills on today's agenda, so I ask all Members of the Committee be present in room 112 so we can establish our quorum and begin our hearing.

These items are being considered under Senate Rule 29.10. These Bills were substantially amended, so the Senate Rules Committee has referred them to us to hear those changes. Looking in our crystal ball, we expect at least one more hearing after this one for additional measures that were substantially amended. Does not appear - we do not have a quorum, so we will operate as a Subcommittee. Bill presentations - okay, we have an author here today. Welcome, Senator Newman. Go ahead, get started. And we have Bill SB 347.

Yes, ma'am. Thank you, Madam Chair and Members. Thank you for the opportunity to present SB 347, which will help 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.

As you're aware, the state has fully committed to the ambitious and aggressive goal of moving beyond gasoline powered automobiles with Executive Order N7920 and the Advanced Clean Cars II rules requiring that new vehicles sold in California be zero emission by the year 2035. To support the expanded number of new zero emission vehicles, which will number literally in the millions. 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 California Air Resources Board, that the state's hydrogen fueling network will also need to be expanded by roughly 700% in order to support the projected number of vehicles using hydrogen as a fuel source, particularly heavy duty trucks moving freight, a use case which EV technology is unlikely to fully cover in the near term.

In order to have a chance at successfully meeting those goals, we'll need to take proactive steps to address the administrative barriers that have made building zero emission vehicle infrastructure in California such an onerous and costly process to date. This includes addressing the chronic delays often 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 across jurisdictions, and which often only become apparent well into the permitting process, steps toward compliance can often impede a station's development, with some delays extending as long as several years.

SB 347 will help streamline the construction of new EV charging and hydrogen fueling stations by exempting these particular uses from the Subdivision Map Act. Such a change would be fully in line with previous similar exemptions, which were 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 to prospective private developers and investors that California remains fully committed to meeting its transportation decarbonization goals. With me to testify today is Faith Conley on behalf of one such developer of zero emissions infrastructure, the Air Products Corporation. I am respectfully asking for your aye vote today.

Okay. Thank you. Okay. We ask anyone who is in support, please identify yourself and your organization.

Thank you.

You have two minutes for your testimony.

I don't even need that long. Thank you. Madam Chair and Members, Faith Conley with the Weideman Group, on behalf of Air Products, I want to thank you for your time today. I want to thank the consultant for his work on this Bill. Air Products has announced spending roughly a large portion of $15 billion in California. To get new energy projects up by 2027, including a lot of hydrogen fueling stations. So we feel SB 347 will enhance this effort and push us toward that - closer to that 2027 goal. And so we request your aye vote today.

Good morning, Madam Chair and Senators. Rosanna Carvacho Elliott here on behalf of the California Hydrogen Coalition, also in support. Thank you.

Thank you.

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

Thank you. Any other witnesses in support? Seeing none. Do we have any opposition witnesses? Anybody wishing to speak in opposition? Seeing none. Colleague. I don't have a. Colleague. Would you like make any questions, comments? You have the floor.

Thank you for bringing this forward. I will support the Bill. I'll move the Bill when necessary, but I don't think that I have an opportunity just yet. But I do just appreciate the work that you're doing, and I also understand taking massive amendments on the other house, so thank you for being patient.

Okay, that's it. We can't take a vote right now and motion. So we'll take it up as soon as we get to quorum. Thank you. Any final remarks?

Senator Wahab basically closed for me, so thank you.

Okay. Okay.

I'll move SB 347 by Senator Newman.

Okay. We will stop to establish quorum.

[Roll Call]. You have a quorum.

Okay, motion we can move.

Yeah, I'll move SB 347.

Okay.

Motion is that the Assembly amendments be concurred in. [Roll Call]. Four to zero.

Are we gonna leave it on call. Okay. We're just in recess waiting for an author here.

Good morning, Assembly Member. We now have Assembly Member Haney to present. AB 3068.

Thank you, Madam Chair and Members. AB 3068, the Office to Housing Conversion act, will accelerate adaptive reuse projects of historic office buildings.

This bill is in direct response to the crisis of California's empty downtown business districts and the need to convert underutilized office buildings within prime locations near jobs, transit businesses into new housing tailbar downtowns that build more housing.

AB 3068 will create a pathway for by right approval of office conversion projects, ensuring more predictability and fewer barriers to an already difficult building process.

I want to thank you and your staff for working so closely with us and the amendments that are in this bill reflect an agreement between labor groups and ensure that projects under this bill are subject to fair and rigorous labor standards.

And again, I want to thank you so much and your staff for working so closely with us to get this right. With me in support today is Cindy Heitzman from the California Preservation Foundation.

Thank you. Good morning. You have two minutes.

Thank you. Good morning, Committee Members. I'm here today as a cosponsor of AB 3068 in partnership with YIMB Action. AB 3068 is a forward thinking bill designed to streamline and facilitate adaptive reuse projects across California. It achieves these goals through streamlined review process, which also includes a process for review of historic resources.

The bill also allows local governments to adopt specific ordinances for adaptive reuse, but ensures that a developer has a right to use AB 3068 streamlined provisions.

It provides a path for financial incentives, including certain impact fee exclusions and adaptive reuse incentive funds, and also provides a path for using incentives for historic rehabilitation projects, such as federal and state historic Tax Credits, Mills act, and use of the California Historical Building Code.

It has requirements for residential use affordability allows additional residential mixed use on adjacent properties, reduces parking requirements, removing one of the significant barriers to development, and includes labor standards. Adaptive reuse is a powerful way to repurpose existing structures, including historic buildings, into much needed housing in Los Angeles.

The adaptive reuse ordinance has created over 12,000 housing units since 1999, and a study by the Los Angeles Central City Association estimates that converting just five to 10% of the city's 155 million office space could add another 8,000 to 16,000 units.

In addition to housing benefits, adaptive reuse is also a strategy for sustainability, economic recovery and preserving community identity. By repurposing existing buildings, we significantly reduce the environmental impact associated with demolition and new construction. This reduces waste, reduces resource consumption and carbon emissions.

It not only conserves our environment, but also revitalizes underutilized spaces, creating jobs and attracting local investments. AB 3068 offers a balanced approach to addressing California's urgent need for housing while preserving the state's cultural and architectural heritage by facilitating adaptive.

Thank you. Will, too. I want to thank you.

You could wrap it up, please.

Thank you. Any more lead witnesses in support? Seeing none other support witnesses.

Thank you, Madam Chair. I'll be very brief. Keith Dunn with the State Building Construction Trades Council. We appreciate the author's efforts to bring.

Some consistency to this with the labor standards, and this is housing's obviously a crisis within the State of California, so anything we can do to make it easier to build housing with those standards, we great, greatly support. We're here asking for your vote. Thank you.

Okay. Thank you very much. Anyone else in support of SB 3068? Seeing none. Anyone in opposition, please come forward.

Good morning, Members. Mark Stivers of the California Housing Partnership. And my apologies to the author that we haven't been able to submit a letter yet. We've known about the amendments for less than 24 hours and the hearing for less than 1 hour. We are very appreciative of the effort to support streamlined adaptive reuse. There's no argument there.

But the recent amendments do add a skilled and trained wage requirement, and the Rand Corporation did a study of affordable housing in LA, and a similar PLA requirement increased costs by 15%.

We are worried that the skilled and trained labor requirement in this Bill will cost more than the financial benefits of the streamlining, in which case it won't be of much effect in achieving bill's goals. So with that, we are opposed unless amended, and we thank you for your consideration.

Thank you.

Good morning, Chair and Members. Marina Espinoza with the California Housing Consortium. We're also opposed unless amended. Thank you. Thank you.

Anyone else? Okay, bring it here to Dais. Questions? Comments?

Thank you. Just as a Bay Area Member, I really do appreciate what you're doing I know that this is kind of a big endeavor. I'm looking forward to seeing more housing, hopefully affordable housing, as a priority, and I'll move the bill.

Thank you.

Yes, Senator Seyarto.

Some of the concerns I had before I still have regarding the conversion and using these types of properties.

I am all for reusing, building the adaptive reuse process, but it is a process, and I want to make sure what is included in the streamlining process, because I want to make sure that we're streamlining, not shortcutting, because when you're going from an adaptive reuse of an industrial or a commercial building or offices, then you are not going to a high occupancy living quarters.

Much different in terms of how smoke moves through a building, how fire escapes are used, how people egress and, you know, their ability to get in and out of the building in an emergency. And those, I don't want those caught up in this streamlined process because there are environmental concerns.

When you're taking a historic building and you're turning it into a residential building, burn rates and the structural elements that are in it, those have to be stuff. They have to be looked at. And if they're caught up in a streamlined process that eliminates that part, that's a concern.

The other concern I have, and maybe you can address it, is the enormous cost of doing that. Now, I realize there's an environmental savings when you're, you don't have to rebuild a building, and I'm good with that part.

But, you know, those conversions cost a fortune because you do have to redo a lot of stuff that's in it, including the wiring, the AC units, all of that stuff has to be redone.

And we're adding costs with the prevailing wage requirements and the skilled and trained workforce, although I would argue that there's lots of skilled and trained workers that aren't necessarily union and they could be used, but that's what you want to do, that's fine.

How are we going to contain costs on these so that these don't wind up costing people even more than if we would just start from scratch and build from dirt?

Well, I appreciate both of those questions, and certainly that we've really grappled with both of the points you've made, which are very well taken. We obviously have a lot of these buildings right now. Many of them are older, many of them now are underutilized or empty.

And so we're trying to figure out the best use, and many of them will need to be torn down completely, although many of them have historic value as well. And so we don't want to do that. They add tremendous value to our downtowns in terms of their historic value and architectural value.

So we want to strike a balance here. This won't be available to many types of buildings because of all of the things that you've just laid out.

But we want to make sure that where there is the possibility, either because we can make, help make it financially feasible or it can work in terms of the nature of the building itself, that we are getting some of the barriers out of the way to help make that possible.

And so these are some of the things that folks who are doing these projects brought forward that would be helpful. I will say on your first point that all of the health and safety and building codes, whether local or state, will still apply. And certainly those are some of what make these projects so complex and expensive.

But there are a set of buildings that are still feasible on this. And we want to make sure for at least some of the types of approval, not the building health and safety aspects of it, that we can get out of our own way and make these possible as quickly as we can.

This also includes an investment incentive Fund which would help finance some of the affordable housing units, and that will help with some of the aspects of tax incentives. But there's a lot more work that we have to do on this. And I appreciate those questions.

And certainly there's a larger conversation about how do we make sure we use these buildings better while also protecting health and safety.

What exactly is being streamlined? Are we exempting CEQA? What are we doing?

It's similar to the streamlining provisions under AB 2011, which streamline some of the requirements around the actual change of use, but not any of the building health and safety codes.

A lot of what you're talking about is the city process or the agency process, whoever's in charge of these buildings. And when you're talking about that process taking too much time, too much stuff, they're actually trying to apply those health codes and all those other things. And so it's very, you know, you have this muddled streamlining process.

You don't know what's streamlined and what's not.

And if they're starting to take legal action, using your Bill to do it because they're not going fast enough, well, I would say we need them to go fast, but only they need to go slow enough to be able to get and make sure that these buildings are safe to be inhabited.

And that's my, my biggest concern is streamlining for a lot of things. Yeah, I get it. This one concerns me a lot because of all the things that shouldn't be as streamlined. It would be one of these just because of the life. Life safety part of it.

So anyway, I appreciate you working on your bill so much and bringing it here today. And with that, I'll turn it back to Chair. Thank you.

Okay. All right. Any more questions, comments? No. All right, I think we need a motion.

Yeah, I already moved it.

You already moved it? Okay, then let's vote.

Motion is that the measure be returned to the Senate Floor for consideration? [Roll Call]

Thank you very much. Okay, then we have. Yeah, Assemblymember Baines, please come forward. Good morning. All right, welcome. Assemblymember Baines will be presenting AB 892. Go ahead.

Thank you so much. Thank you, chair and members. AB 892 is a district bill which clarifies that the Kern County Hospital Authority and the Kern Medical Center Foundation follow best practices established by the Accounting Standards Board and requires the authority to produce and publish an annual audit report.

This bill also applies the California Public Records Act to the foundation. Kern County was authorized to create the Kern County Hospital Authority by enabling legislation passed in 2014 and 2015. The change was critical to ensure the long-term financial health of Kern's only public hospital.

While this new governance structure has created many new opportunities, it also has created some new challenges. Ensuring the long-term health of Kern Medical is of particular importance to me, as it is the hospital where I completed all of my clinical rotations during medical school in addition to my residency.

It made me the Doctor that I am today. I know how important Kern Medical is to the most underserved residents in Kern. county. The hospital has a Medi-Cal caseload north of 70%, and it is also our region's only level two trauma center, with the closest trauma center being in Fresno, which is 2 hours away.

Losing Kern Medical would mean losing lives, and as a closure, Madera Community Hospital has shown us the San Joaquin Valley cannot afford to lose a single hospital, clinic, or Doctor.

I introduced AB 892 last year as an opportunity to bring together SEIU 521 and Kern Medical to engage in a consensus-building dialogue about the future of the hospital.

It took us nearly two years, but those conversations have resulted in the agreement that is in print today, which ensures financial transparency, accountability, and best practices are followed by one of the most healthcare assets in my district. Kern Medical and the foundation are neutral on the Bill and SEIU remains in support.

I want to thank both stakeholders for agreeing to participate in this process. With me today in support of the Bill is Beth Malinowski, on behalf of SEIU California.

Thank you very much. We have two minutes. Go ahead.

Good morning, Madam Chair and members. Beth Malnowski of SEIU California, sponsors of AB 892. As noted, SEIU represents roughly 1600 workers at KCHA, healthcare workers, including physician residents. As noted, the authority is absolutely critical to the health of Kern County and the surrounding counties that they serve.

In the years since the authority was established and the board seated, we at Su have started to see where improvements could be made. And it was with that in mind that we had the opportunity last year to approach Member Doctor Baines to this Bill, AB 892, and start a conversation, as she noted.

We knew we could do better for this community. We're grateful fo assemblymember and for the staff that have worked tirelessly with us. And as noted, the bill as introduced and as many of you saw in hearings last summer, was much broader than the bill before you today.

The good news is discussions that started in Sacramento last summer led to local improvements on some matters, including the application of MMBA to a unit of outpatient healthcare workers.

As we reflected on where positive change has been seen, took into consideration potential opaqueness of the earlier all entities language included in the deduced Bill, which before you today is a far narrow bill focused on financial transparency.

Specifically, it addresses provisions of CPRA and making sure they are applied not only to the records of KCHA, the authority, but also the medical foundation, making sure both KCHA and the foundation are maintaining financial records in keeping with GASB and FASB, two kind of accounting standards boards, completing annual audits over at the authority that's inclusive of the foundation that is seen as a component unit in this case, and making sure those audits are made public.

Again, just want to acknowledge healthcare workers are incredibly committed to the quality care there, knowing that greater financial transparency will improve financial practice with the authority and ultimately help patient care. Lastly, I do want to acknowledge that this bill only modernizes enabling statute ruling specifically to this authority.

And while do the relationship of the authority and the nonprofit foundation argues for the application of CPRA to the foundation, we in no way are looking to or should we be interpreting this bill to make any sort of general policy or stance on the application of CPRA more broadly to nonprofits.

Just want to be clear about that in my closing and respectfully ask for your aye vote today. Thank you.

Thank you any others in support of AB 892? Okay, anyone in opposition to AB 892? Seeing none. We'll bring the questions or comments here from our members. Yes, Senator.

So I just want to say that I do appreciate your work on this. I also understand the need, especially for a safety net hospital in a more rural area. We have safety net hospital in my district, and it always seems to be in the red.

And, you know, they say that they changed leadership, but it's sometimes the same type of people. And I just want to highlight that as a person who does support nonprofits, I would never support this effort when it is about other nonprofits.

And the reason for that is because there's a lot of community nonprofits that are way too small, that could not comply, wouldn't even really necessarily understand exactly what this is requiring of them.

So in regards to a state, you know, facilitated hospital and so forth, where lives are important, and obviously, the cash flow is very much linked to the stability of that hospital, fully support it. But I just want to make sure that we are not going to be expanding it. So I appreciate your comments there.

Happy to move the Bill.

Thank you. I do have a question related to that. If you could just talk a little bit more about subjecting a private nonprofit to the Public Records Act and just further thoughts, what triggered it? Why do you think that's so important?

I want to be clear that this in no way do I attend exactly what Senator Wahab said to set a statewide precedent with this bill for all nonprofits. I want to make that very, very clear. The current hospital authority and its foundation represent a very unique operating structure that is shared by very few other organizations.

In current law, we do see some limited examples of the CPRA being applied to the foundation that supports the Alameda Hospital Authority, as well as nonprofits that operate charter schools and partners with transportation agencies. So in all of these cases, those are unique circumstances that have led to the application of the CPRA.

That is also the case with this bill where Kern County Hospital authority was created by special statute in 2014, and the foundation already existed from before when the hospital was operated by the county. So the Kern Medical Foundation itself does not oppose this bill and was involved in the negotiation and drafting of this bill as well.

And I'm happy, Senator, to add in some more specifics. In terms of the Kern County Hospital authority, the foundation, and the treatment of public dollars, and why, we just think it is in the best interest of the community to make sure that CPRA is being applied equally across both entities.

So in particular, we see actually significant funds, both from Department of Healthcare Services, our state's Medicaid agency, are moving between these two entities, as well as CHFFA grants that, as folks are aware, can be incredibly important locally to addressing facility needs.

We are aware of at least one case where traffic grant funds were given a number of years ago to help support improvements on the pediatric side of care, including the establishment, I believe, of a pediatric ER.

From the best of our knowledge, locally, it's unclear kind of how those dollars have been utilized because the project has still not been completed, even though the funds were allocated many years ago.

So this is one example I can offer you as to why we think it's important that CPRA is being applied not just to the authority, but also to the foundation.

Okay, thank you. Any other questions or comments? Seeing none. Motion by Senator Wahab. Did you want to say?

Motion is that the measure be returned to the Senate Floor for consideration. [Roll Call] Four to one.

Close the vote. Thank you. Thank you very much, Assemblymember. Okay, we have. That's it. So we go back. Go back to. We're going to go back to SB 347. Okay. One. Yes. Item one, SB 347, we'll finish on the roll. Votes.

Motion that the Assembly amendments be concurred in with the Chair voting aye. [Roll Call]. Five to zero.

Close the roll. We go on to item two, AB. Oh, that one's done. Okay, we'll go to item three, AB 3068.

Motion is that the measure be returned to the Senate Floor for consideration. Current vote is three to one, with the Chair voting aye. [Roll Call]. Four to one. Close the roll.

Close the roll. And that's it. That's it. Okay. All right. Thank you to everybody who participated today in public testimony. You're also welcome to submit your questions, or comments or suggestions in writing to the Senate Local Government Committee. They are very important to us. We want to include them in our testimony and our official records. With that, we have concluded the agenda. Senate Committee local government is adjourned. Thank you.