Assembly Budget Subcommittee No. 4 on Climate Crisis, Resources, Energy, and Transportation

Good morning. All right, and welcome to Assembly Budget Sub 4. I first want to note that this hearing will focus on CARB, California Air Resources Board, with some proposals from the California Energy Commission and the Office of Energy Infrastructure Safety.

This includes a high level overview of the Cap and Trade spending plan and the Zero Emission Vehicle spending plan. The bulk of the energy proposals, including Prop 4, have been moved to the April 9th hearing. Additionally, the Department of Conservation will not be joining us today, as was originally noted in the daily file.

We have six presentations planned today and nine other proposals that we'll only hear if requested by Members of this Committee. After all the items are heard, we'll take public comment. Each member of the public will have one minute to speak. I welcome my colleagues here today.

And we're ready to begin. So if CARB representatives and the other panelists will approach and introduce yourselves before you speak. And with this cast of thousands, I know you'll fight over who gets to start. Not gonna be much of a fight. There we go. Try it now.

Good morning. There we go. Brandon Merritt, Department of Finance. Good morning. So this first agenda item is for the Regulatory Fee Authority trailer bill. CARB requests statutory authority to assess and collect fees from emitters of toxic air contaminants and other pollutants to recover CARB's reasonable costs in developing, implementing, and enforcing its statutory authority to regulate these harmful pollutants.

As specified in the proposed language, the fees established would be limited to CARB's reasonable costs incurred in regulating entities such as for development, implementation, and enforcement of regulations. The statute does not grant CARB the authority to establish a fee to directly decrease pollution. Just as a note. Thank you. That's my introductory statement on this proposal.

Great. We'll hear from the CARB representative.

Good morning. Richard Boyd, I'm the chief of the transportation and talking.

Could you pull that microphone a lot closer. Right up there nice and tight to you. Even tighter. There you go.

Yeah. I'm the chief of the Transportation and Toxics Division at CARB. As Brandon mentioned, the fee is designed to support our reasonable costs for implementing and enforcing, you know, the regulations. One thing I'd like to point out is in developing these fees, we do go through a robust public process in implementing those fees.

It starts with, you know, typically action on developing or amending a regulation. During that process, we work with stakeholders, we look at compliance scenarios, and we understand what our actual costs are for implementing those regulations. And then the fees are based exactly on that particular activity.

And then after our board adopts the fee, we do go through a process where we have to work with, you know, CalEPA, Department of Finance to develop a BCP in order to get the authority to actually collect and expend those those fees. And during that BCP process is where we actually are quite specific about positions that are involved, costs that are involved, and exactly, you know, where those funds are going to go.

Since LAO has a very clear recommendation on this, I'm going to make a couple of comments before we get into the LAO's recommendation. My first question for you is are you the one that drew the short straw to have to come here today to talk about this proposal?

Obviously, this is a very broad granting of authority to CARB without much specificity in terms of where you want to focus, et cetera. So this is a broad request, and I'm certain that there are many there'll be many concerns raised at this hearing and concerns raised in the future weeks and months about this proposal. So I want to start on a positive, which is I appreciate that CARB is trying to find a way to match the expenditures to try to deal with the enforcement of pollution with the people who are engaging in the activity causing the pollution.

That concept is an appropriate economic principle that tries to accurately match the cost of producing a product with the price of that product. So I commend CARB for re-embracing that concept and bringing that up and the Department of Finance and the executive branch altogether. But from a political standpoint, there will, I think, have to be various limitations, safeguards, other things that Legislature is going to want to want to put on rather than just grant this carte blanche authority out there.

But I didn't want that to I didn't want the focus on the limitations that perhaps the Legislature would want to put on this kind of authority to have us overlook that CARB is doing the right thing by trying to make sure that the fees are being appropriately charged to the people who are the polluters causing the problem problem. And with that, we'll turn to LAO for your comments.

Helen... Oh, Helen Kerstein with the Legislative Analyst Office. So we are recommending rejecting this proposal. Really, I think the core thing to understand about the rationale for that is that we think this authority that's being asked for is very broad. In general for most departments and in most cases when there's interest in having a fee, the department comes forward and requests a fee for a specific program or purpose.

That's usually narrow enough that we know this is the program, this is what they want to fund, and this is the, often this is the amount. This case is different. The department is coming forward and asking for authority to raise fees for any activities within an entire division of code. And that's the main division that really governs CARB's activities related to air pollution.

Related to, it also covers various activities related to GHG reduction. Certainly important activities, but it's very broad because it could cover not only existing programs that are within that division, but to the extent the Legislature or CARB develops new kinds of activities within that, that would fall within that division, they would also have this fee authority.

So we think it's very, very broad language. We also think one of the things that makes this especially broad is that CARB already has very broad authority to establish regulations to meet our very ambitious climate goals, our standards for air pollution.

And so when paired with this fee authority, they could create new regulations, basically new programs from regulation, and then impose fees to carry out those programs. So I think that's very broad. In terms of our rationale for recommending rejection, there are a couple different pieces.

One is we don't think that they've adequately justified the need for this kind of breadth. So, for example, why a narrower proposal wouldn't be adequate. Certainly, polluter pays is a very important principle and one that we think is valuable, but they could do that for a more narrowly crafted proposal. We also think it's hard for the Legislature to really evaluate this because it is so broad. So you don't know how it's going to be applied in the future. And that makes it really hard to weigh the pros and cons.

And then finally, we think that setting fees, like setting taxes, is a core responsibility and role for the Legislature. It's part of the power of the purse that you all have. And so we think the Legislature should be pretty cautious in delegating it, particularly in such a broad way. So we note that the administration has said, well, there's this public process. They have the board. Again, that's not the Legislature, that's not the elected representatives.

And then we also think that even though you would be appropriating the funds that are raised through this, that's also not a good substitute. Because in some cases, for example, the regulation would already be crafted, the fee would already have been levied, then you'd merely be asked to decide whether or not the positions are acceptable.

So we don't think that's really an adequate substitute either. So again, we're recommending rejecting the proposal. We think that there could be need for additional resources for CARB, but in that case, CARB should come forward with a more narrowly crafted proposal that would be aimed at those specific programs or activities.

Thank you. We have one more person that's joined us. Do you want to add to this robust debate?

My name is David Garcia, Legislative Director for CARB. Just thought I would come up here to help my colleague. I'm not sure he realized he was going to be championing this for the entire agency. To respond to some of what the LAO said, a lot of which was actually incorrect.

We would not be able to levy fees until we'd gone through the BCP process and the Legislature actually approved the fee. If we tried to collect a fee before the Legislature approved a BCP and you didn't agree with what we were doing, we would be stuck in a situation where we would then have to refund all of the money that we had collected, which would be highly inefficient. So there's no way we would ever do that.

The other point is that the Legislature does introduce roughly, on average, 450 bills every year that impact CARB. Now, not all of those get to the governor's desk and are signed, but most of those bills also do not include a funding mechanism. And as you pointed out, we really do want to move to the polluters pay model for the work that we do rather than the California driver or the California taxpayers pay model.

Since most bills that are introduced that impact CARB do not contain fee authority, this is one way where we can ensure that the work that the Legislature wants us to do is able to be paid for by a fee without each individual bill needing to also include that fee authority. But again, the Legislature completely retains oversight because we couldn't collect or implement a fee until after a BCP was approved.

So you're saying every individual... So you're asking for authority to recommend a fee to the Legislature?

That's essentially what this does. It says, okay, CARB, in the course of developing a regulation, you can propose a fee, but the Legislature has to appropriate money. We can't just take money and start spending it.

There's a difference between appropriating money and levying the fee fee.

Well, and as I pointed out, if you don't approve the BCP, CARB would have to refund any monies we collected, which is why we would never collect any money until after a BCP was approved.

You certainly didn't make that clear in your proposal, number one. But there is a slight difference between saying you're going to propose a fee versus you're going to create a fee and then we have to authorize the expenditure of the funds. So let's be really 100% clear here.

So if, if we took your proposal as it is, right. You would create the, you know, we come up with some magic thing we want you to do, right? We want you to regulate, you know, the design of something and you say, hey, this is going to cost X amount and this is the fee that should be charged. Then what's the next step? Do you start collecting that fee?

No. So the next step would be for us to go through the multi-year regulatory process to develop what the program looks like...

You go through the multi-step process.

So then once we determine, at the end of that process, the board approves a final program, that would then allow us to say, okay, this is what the program looks like. This is how much a fee would look like. Now we're going to write a BCP to ask the Legislature for permission to get the number of positions we need or spend the kind of money we would need to spend.

We'd have the fee in place, everyone would know what it is, but we wouldn't collect it until after the Legislature approved it because we wouldn't want to be stuck in a situation where the Legislature said, we don't like this, we're not going to approve it, refund everyone's money.

I know you don't want to be stuck in a situation, but I'm trying to talk about what legally is going to be the situation. Legally, the board approves the fee. Is the fee a legal fee at that moment?

Yes.

All right, it is. So you have a legal fee. Now we have to trust that you wouldn't collect the fee until the BCP gets approved, which is very different than saying that's not a fee yet. It is a fee, it's legally a fee. Is that correct ,at that point in time? I want to try to clarify this before we get into our robust questions that I can feel the energy of my colleagues coming on here. Right.

Let me see if I can help with a little clarity there. Excuse me. So part of the regulatory process when it comes to, like, having the board approve the fee is we have to set a particular compliance date for when that fee collection would, you know, would begin.

And so when we look at compliance dates, whether it be for complying with a particular emission standard or even the fee in this case, we forward look, we look perspectively in terms of like, when's a practical time to actually have that compliance date come online, since as part of this process that we know that we're going to have to go through the BCP process and we're going to have to wait for the Legislature to opine on it and actually vote and have it signed by the, the governor.

We would post that deadline far enough out for that process to complete before we even found ourselves in a position of having to collect the fee. And so under that particular approach, it wouldn't be the situation where even though the board had adopted that particular, or, you know, made that particular assessment, where we would be actually be able to legally, actually go out and collect it, because that compliance date hasn't yet.

But this proposal in front of us would legally give CARB the right to make that a legal fee because they are the ones that would determine what, how far out that implementation date would be, correct?

Yes, we would.

All right, so we're giving the authority for the actual creation of and the implementation of the fee to CARB. We're getting assurances. Oh, CARB would never do that until the BCP gets approved. But that's different than saying you don't actually, you're not actually, you don't actually have the legal authority to implement the fee.

You would have the legal authority, broadly based, to implement the fee. And again, because we have at least a couple people here that weren't here when I said it earlier, I commend you for being, you know, trying to match fees with, with the polluters, you know, causing the problem. So that's good for us.

And the Legislature too often ask agencies to do things and we don't give them the, the revenue that they need to be able to do that. But our job has to be to, you know, pay attention to both what the fee is and what the revenue is and whether that is.

And that's where there's, there's this concern about it being so. I want to again compliment you. I don't think you were here when I made those comments, but very much appreciate CARB reminding us that we have this responsibility to try to make sure we match the funding with the responsibility that we give an agency. But as LAO says, this is as broad a request as certainly been heard in a long time, I think, here with regard to that. Now I'll unleash the torrents. One, and two.

Before we get into our commentary or full questions, can we do one quick clarifying question because they referencing BCP, which is a budget change proposal. Can we just hear really quickly before we all talk about how that actually gets approved by the Legislature. Just that process. Real quick, before we get into, would that be okay?

Sure. Why don't we let LAO do that?

Absolutely. So typically, what would happen is the governor would propose proposals. Often it happens in the January budget, includes a variety of BCPs. They can also come out in April or May. They typically go through this process that we're engaged in right here, where the subcommittees of both houses would consider those BCPs, they'd make recommendations, ultimately the full committee and each house would either adopt or not adopt those budget change proposals. So it does go through a significant process.

I think one thing to note, though, is, if I may, Chair, is that I don't think that that's even, you know, whether or not, you know, the legalities. I think that that's not really an adequate substitute either. And I think one thing is it puts the Legislature in a pretty tough position.

So CARB has already written the regulation. They've spent years developing it. It's on the books. And then the Legislature is given a BCP among sometimes hundreds or many hundreds of BCPs to look at and says, okay, we've already adopted this regulation. Here, we need 10 people to implement it.

That I think it kind of puts the onus on the Legislature, makes it very difficult to say, hey, hey, hey, we don't want to do that. Instead of putting the Legislature really in the front seat of making the decisions about, are these fees that you're comfortable with or not? Do you want to change them? You don't really have an ability to easily adjust them at that point or change the structure because it's kind of up or down. It's already been passed. So... Sorry.

Let's go to Assembly Member Rogers.

No, I appreciate this, and I just wanted to start with just telling you what I just saw was you came up to the table, said the LAO was wrong, but then you didn't actually disagree with what she said. You wanted us to assume the intent when she's arguing what the, what the language actually says. I just wanted to start there, that there's a disconnect here. We are looking at what the language says. I just wanted to make sure that it was acknowledged that I didn't hear anywhere you were wrong. I just wanted to start there.

What I want to better understand why you can't just propose these fees in a budget, in a BCP, in a budget hearing, prior to making the rules, prior to actually passing them and having them be legal fees. I understand that your intent is not to collect because you might have to refund the money, but legally, my understanding from it is that those are in place. So the process seems backwards to me needlessly.

And I'd have a hard time going back to my constituents and explaining to them exactly what this budget change means for them on the ground. Who's going to be taxed? What's that... What fee is it going to be? How much is it going to cost them? I wouldn't have any ability to tell them any of that based on this process. But go ahead.

Yeah, maybe a little background would help about typically how the regulatory process normally works. So absent the ability to assess a fee as part of that regulatory development process, we have requirements under the Health and Safety Code that we're to develop emission control regulations.

So we already have that authority that's been granted to us and we have an obligation to proceed looking at what those regulations might be, the source categories that might need to be regulated, and what the need and appropriate degree of control might need to be.

Our funding comes primarily from the Air Pollution Control Fund in the Motor Vehicle Account. And so when we develop regulations currently, we simply draw down our cost to develop, implement, and enforce those regulations from those two primary accounts. Those two accounts right now are overburdened.

And so if we took the approach where we were developing the regulations first... So typically the approach is we develop those regulations, we draw down from those accounts, and then we don't have any resources coming in on the back end to address the structural deficits that exist in those accounts, in those accounts.

So that's, that's the current process that we use. We're trying to shift that model in order to help relieve the burden on those particular accounts by coming up with fees that tie directly to the costs associated with implementing and enforcing those regulations.

So if I may add, Chair, if it's okay. So I think one of the things to consider is there's no reason why, if when there's a BCP that comes forward, why CARB can't come forward with or say it wants to do some specific activity or specific regulation, it could come forward with a BCP or with another just separate trailer bill for that specific program that it wants to assess a fee on.

There's no reason why that can't come forward as part of the budget process or the policy process if there's a desire to raise those fees. Again, polluter pays, we think, is an important principle. Certainly there are some, you know, reasons to make sure that we're addressing fund condition issues, but we still don't really understand why this process, why sort of the traditional process of a more program specific fee wouldn't be adequate.

Yeah. And I think, I think that, and I'll turn it over to other folks for questions. I think that that's one of the confluence of how much broad authority CARB has, especially when I think about things like cap and trade. You have very broad authority within the funding that we provide for cap and trade to do programs.

Coupling that with also the ability to do the fees on your own feels like it's taking us too far out of the process for an agency that, while I appreciate the work that you do, is a lightning rod. We do hear from constituents all the time about programs that you're trying to stand up.

And it, it does, the way that you've presented this and constructed this, does feel like there isn't enough accountability or ties for the Legislature to have over some of the work that you're doing. So I'm open to other models for funding, but I think, as written, I'd have a hard time with this language.

I want to point this out again, have two other Members that have already arrived. We have six items. I'm sure this is, we're animated enough about this item. We could really go for a long time about this. The goal of today is to make it clear what our concerns are, and that's as far as we're going to be able to get. And then we're going to have to work. They're going to hear what our concerns are, and then we're going to have to work to try to develop this.

So if people will try to focus on what are the concerns so that we can. And one concern that's already been made multiple times is this is too broad of authority. So we don't, we don't need to hammer that, you know, completely. Also, for the benefit of the colleagues coming in, I want to reemphasize something that I've now said twice. But so pardon me for everybody else, but we do have a problem. We're drawing down the Motor Vehicle Account into a deficit.

And we, you know, we just, if we just keep giving CARB, you know, enforce this regulation, enforce this regulation, and they keep drawing that down. Matching the revenue from the polluter with the activity of the polluter is, from an economic standpoint, the appropriate way normally to do this. Whether we do it with this broad of authority, but CARB is at least opening up that conversation.

That is probably a healthy conversation for us to have. Assembly Member Lackey then Assembly Member Wilson and then Assembly Member Petrie-Norris. I always want to call our Assembly Member Cottie, but it's Assembly Member Petrie-Norris. So that's where we have here on this. All right. Go ahead, Assembly Member Lackey.

Well, thank you. I have a little different frustration. This seems to me to be a very imbalanced proposal because it doesn't take into account affordability, which is a big concern with the majority of people living in this state. For example, if you examine the numbers, inflation has increased 23.4% since 2019.

How much do you think gas prices have increased since 2019? I'll help you out. 47%. Almost double. My question would be, first, and this is a really significant question, is how much will your new regulation for the Low Carbon Fuel Standard increase the price of gallon of gas?

And while he's coming up, I need to remind you that in my, the district that I represent, we have, at least a part of it, over 60% of the community commutes, and they commute over almost 80 miles. And the average value of each car is about $5,000.

And the average income in my district is about $50,000, as opposed to the average in the state being $70,000. So affordability is a really big deal, and they spent a lot of money and a lot of their budget on gas. So help me understand this affordability piece because it's a big deal.

I'm going to jump in here. LCSF and the whole affordability question is a legitimate and big question. CARB's proposal in front of us here isn't with LCSF and sort of that. It is a legitimate issue for us to always ask the question, are the fees making things, you know, so unaffordable that it's messing up the economic activity of Americans, I mean, of Californians. So I think that that's legitimate. And so I certainly want to let them answer the question. But I want to make it clear they're probably not here ready to go into the whole LCSF and all of that.

But the affordability piece deserves to be acknowledged.

I acknowledge that. Affordability of all fees so that they need to pay attention to the affordability of their fees.

This opens up their ability to impose more, and that's why I'm concerned about it, too.

All right, good. Anybody want to begin? Give us a, give us a shot there. Right?

Thank you, Assembly Member Bennett. Matt Botill, division chief of the California Air Resources Board. I do want to reinforce what the Chair mentioned, which is the agenda item today with respect to CARB's fee authority is an independent from the question of the Low Carbon Fuel Standard. That is a different regulation that is not tied to this proposal on fee authority. So I think that is an important distinction and I appreciate you making that distinction.

I would argue it's still part of the affordability package.

Understand. And a few weeks ago, our chair, Liane Randolph, testified in front of the Joint Legislative Climate Change Committee and spoke to this issue. Affordability is important to our agency. And in her testimony pointed out that when we look at the trajectory of fuel costs in California over the last few decades, we actually see as a result of improving fuel economy, improving diversification of the energy supply, alternative fuel choices, that the overall transportation costs, the amount of money that people pay to go the same distance, has actually gone down.

And so we see that trend going forward into the future as people have more options, as the fuel supplies diversify through the programs that we have, and as people look for lower cost ways to travel. So we do care as an agency about affordability and we look at it from the broad perspective of how much does it cost to go a mile.

I would just remind you that many, many of the constituents I represent are living in significantly rural regions and those other options are not available to them. So that's something to consider.

Thank you.

But my final question is what was the impetus for changing the 20 year decal system to a new, more complex, costly, and cumbersome tracking system? I don't understand what was wrong with that system? The refrigeration units, transport refrigeration units.

Yeah, we moved to a sticker system to make it easier to enforce and also easier for facilities to actually identifying compliant versus non-compliant equipment. That's one of the things that the fee is intended to support. So right now we don't have the authority or ability to get out those labels right now. And so it is causing some compliance challenges out there in the, in the field.

But, but the previous system that we had, which, which you know, we thought was a good, good idea at the time, just created a lot of enforcement and compliance challenges and also some confusion out there in the field in terms of what unit was complying, being able to identify those things, you know, you know, by inspection versus a number. And so the sticker was meant to improve that process all the way around just to make it more efficient.

From my perspective as a prior enforcement person, I will tell you that I think that this new proposal makes it even more difficult to get compliance and to monitor compliance. So that's just my statement, and I'm ready to pass the torch.

Thank you. Thank you very much. Assembly Member Wilson.

Thank you, Mr. Chair. I appreciate it. And this is an important topic amongst others. And so I'm also set on Housing, so you see me run back and forth. So just letting you know right now, between the two. I mean, I agree with the LAO in the terms of, you know, the Legislature has spent a lot of time delegating too much of our legislative control. And this is so broad in language, it would, it would be that. And so I don't support.

I think that we should consider though, as a body that when we're putting forth legislation that impacts you all in this way, that will cause a significant impact on your budget, given the fact that it's based on an account that is drawing down, that we have to then tie the consideration of that policy to what the consumer impact is real time and authorize the ability for you guys to do a fee real time.

And I do think we need to go backwards and encourage a review of the impact that our policies have had and then allow for additional budget increases or regulating to be able to do a fee related to that specific policy so that you guys can secure the funds that you need to be able to do the work that you do, which I think is vitally important to ensure that we have clean air, clean water, all those good things for the state. But absolutely, this, I think, is way too broad.

And I don't think there's even an ability to narrow at this time because I fundamentally believe, when we're creating policy, legislators should take the time to think about the impact of that on not only the budget but the fees that will be generated which will impact the people paying. Right. Which will impact consumers. And so I think that we should not be entertaining this in any form, even narrowed, and should really force, if possible, as we consider policy, think about consumer impact.

Thank you. Assembly Member Petrie-Norris.

Thank you, Mr. Chair. And I'll be brief. I'll just align my comments with those concerns raised by some of my colleagues. I think that this is overly broad. It feels like you're asking us for a blank check. It's a delegation of effectively taxation powers from elected officials in the Legislature to CARB. I agree with the LAO's recommendation that this is a proposal that we should reject.

So far, she gets a star for the shortest comments. And that's what we're trying to reinforce here. Yes, sir. Department of Finance.

Brandon Merritt, Department of Finance. I'm hoping I can make an allegory here that will maybe lower the heat a little bit. I like to think of this as similar to the Cost of Implementation Account. That is an enabling statute that requires CARB to then go through its individual regulatory processes to implement a fee.

The Cost of Implementation Account was initially created for CARB to recover its costs related to the mandates associated with AB 32 and all of the expenditures related to that very large, as we know, program. So this is similar to that in that this is a statute. It is not a fee unto itself.

It is a statute that says, CARB, you can go and recover the costs that had been mandated to you by the Legislature, both in the past and in the future. So again, it bears repeating, this unto itself is not a fee. This is a statute that allows CARB to then go through its individual regulatory processes to recover its costs related to the regulations and other expenditures that the Legislature mandates that CARB undertake.

If I may. Yes, it's not a fee in and of itself. It's authorizing the creation of an infinite number of fees with absolutely no legislative oversight and absolutely no, nothing, no guardrails around cost effectiveness or evaluation. And I would just say, I think that the reason that this item perhaps has gotten so many of us maybe fired up unexpectedly is that I, to echo some of Assembly Member Lackey's concerns, we're in a moment where Californians, even if it's a little, you know, it feels like a little bit, right.

It's just a little cut time and time and time again, Californians, whether it's California companies or California consumers, this is not sustainable. And so we need to take a step back and I think rethink about the way that we are implementing legislation and the way that we are achieving our climate goals. And so I think that this proposal before us does not reflect certainly my sense of where we need to be, particularly in this moment.

I would just close, I don't know, by responding that again, CARB cannot levy fees if there are no costs in the first place for which it needs to recover those costs. And that is the point at which the Legislature does have the oversight to go, yes, you can go spend this money for X program, and you now have the statute and the trailer bill authority to implement a fee to recover those costs that we are telling you to do.

That's your, that, again, we can go back and forth with rebuttals here, but I'm going to mention this. You said let's lower the heat here. I think this isn't very much heat, quite frankly. You know, this is this is a pretty normal, given the broad request of authority, it's a pretty normal thing.

And the reason I say that is because what's important here is that we just identify the issues and concerns we have so that we have the proper negotiation back and forth. So we're not blindly coming to you guys six weeks from now saying, hey, we're trying to modify this thing and you haven't heard what our concerns are.

So the important thing is let's just get our concerns out. These don't have to be attacks either way. They don't have to be. But it is good for you to give us a rebuttal that helps us think through what kind of proposals we might want to make in exchange for that. Assembly Member Connolly, I hope that you can beat Assembly Member Petrie-Norris time limit that she already did, right?

Yeah. No, and it can't state it any better. I mean, really, you've heard the concerns. I'm not going to restate them, primarily over breadth. So I was kind of walking in a little bit late, caught that one of the concepts you're trying to push is polluter pays. That's pretty broad. One that we buy into. However, can you actually provide any examples on which entities this provision is referring to?

One of the regulations that would be immediately impacted is the transport refrigeration unit regulation. That is one where the board has already taken action. We have developed fees for that. That's in statute right now, and it's in the regulation right now.

It did go through the implementation BCP process where we looked at what the material costs were going to be, what the personnel costs were going to be, and the Legislature did approve, approve that. So that was back in fiscal year 23-24. We did not implement those fees right away. There were two things that came up there.

One, we need to wait for federal authorization action to take place. And then also we also did incur a lawsuit from the California Trucking Association that also caused us to pause on those fees. The fees in that particular regulation are $15 a year per facility and per unit.

Any other examples?

The, the other regulation that we have where we have some fees is the commercial harbor craft regulation. And so again, we did do an implementation BCP for that regulation as well that was also approved by the Legislature and signed by the governor. The vessel, the fees there are approximately $1,200 per vessel per year.

So can you elaborate on how an actual reasonable cost would be determined?

Yeah, certainly. So when we're working with stakeholders to develop, excuse me, develop the regulation, we look at what the possible compliance options would be. There's lots of negotiation that goes back and forth between us and industry, us and community groups and environmental justice groups.

We look at a variety of scenarios because we're trying to find things that are workable for industry, things that they could actually, actually do while trying to meet the objectives. You know, we do have the governor's executive order out there to try to move toward a zero emission framework, you know, by 2030-2035.

And then once we go to that particular, you know, process, there's ample time to comment both informally and then, you know, formally when it gets to go in front of our board for final consideration, you know, consideration. And then after we have the board's action, you know, so we know by the time we get to the board, we know what the regulation is going to look like in terms of what, what we're going to propose.

We don't know what action the board's going to take or what changes they may make to the regulation at that particular point. But we're able to look at like, given the compliance options that folks are likely to, to take because we give them a menu of options, here's what it's actually going to cost us to implement that.

Here's what it's going to cost us to actually go out and enforce that. And so we look at the actual resources that are needed. You know, if there's, if there's equipment like the labels, you know, that are needed, we understand those costs. If there's things we need to do with any sort of a supporting IT systems, you know, we look at those particular costs, and that's what feeds into the, you know, into the fee.

And so by the time it gets to the, to the board, there's been like ample resolution of what that fee is going to be for that particular, you know, source category. And there's also been ample, you know, time for everybody, you know, to comment on the appropriate degree of that fee.

And then just to tag on real quickly, we also have to do economic impact analyses as a part of our rulemaking process. And then we worked really hard with Legislative Counsel to ensure that this trailer bill language was keyed with a majority vote so that the Prop 26 nexus would remain in place. Meaning there's already a voter initiated proposition out there that governs what reasonable means and we would be bound by that.

All right, well, let's leave it there for now. Given the time. Yeah, but just again, I think you've heard the concerns, and there's going to be a lot more discussion. Thanks.

Yeah. Mr. Garcia, I just want to follow up. You know, you came up pointing out that LAO was wrong, and I just want to ask you as a leg director, where do in the language does it say that CARB may not collect the revenue?

Sorry, when I said wrong, what I meant was the part where she said there would be no legislative oversight, we still would be required to come to this committee with a BCP.

Does it say anywhere in the language that CARB may not collect the revenue until the BCP is removed?

And that's not the part that I was saying was wrong. I apologize. I realized that came out because I came up hot.

Yeah, you also did, you also did say that CARB would not be allowed to collect the revenue until then. But really, CARB just wouldn't collect revenue.

Yeah, we wouldn't because we would have to refund it if this committee said no.

All right, great. So we have just for, just for everybody's benefit, we've used up more than 30, a third of our time on item one, and our two items, I just have to tell you. Item 3 and 4, we thought we'll move them to the middle of the meeting because we know sometimes people can't get here right on time.

Those are the meaty ones that we really, you know, probably have need to put some discussion time into. So if people keep that in mind as we move forward, I appreciate it. Thank you very much, everybody. CARB, we look forward to working with you to try to implement the policy that they didn't bring up, Mr. Connolly.

But Assembly Member Connolly. But I did, which is the concept of polluter pays is a concept that is one that we should embrace, number one. And number two, in many places, you starve the regulatory agency so that they can't enforce the rule, and then you don't get the benefits of the rule in the first place.

We have to find a way to deal with cost of living and the agency having the resources they need so that we get the benefits that we need in terms of air quality. So thank you very much. And we're going to go on to issue two, expanded resources for Carbon Capture, Removal, Utilization, and Storage Program. And we'll let you guys, whoever wants to begin, bring that nice and close, please.

Yep, of course. And speaking of starving a regulatory agency, thank you for having me. Matt Botill, division chief of the Industrial Strategies. Once again, I am here to speak to CARB's request on SB 905 for resources to implement SB 905. So just real quickly I'll do my opening remarks and then happy to answer questions.

For those of you that may not be aware, SB 905 in part requires that CARB establish a CCUS program to evaluate CCUS and CDR. This is carbon capture, utilization, and storage and carbon dioxide removal technologies. Develop monitoring and reporting schedules for these projects and ensure that they include strategies to protect air quality, public health, minimize pollution, and minimize environmental risks.

CARB is also required under SB 905 to adopt financial responsibility regulations, establish a streamlined permit application for the projects, develop centralized public database of projects, and collaborate with the California Geologic Survey, the Natural Resources Agency, and other agencies in the implementation of its program.

This is a critical strategy for our climate, for achieving our climate goals, which were identified in the 2022 Scoping Plan, which were enacted in legislation in AB 1279, which include achieving carbon neutrality and reducing greenhouse gas emissions 85% below 1990 levels by 2045.

CCUS is a process by which large amounts of CO2 are captured, compressed, transported, and either utilized in products or sequestered. CCUS projects are often paired with large greenhouse gas emitting facilities such as energy, manufacturing, or fuel production facilities.

CDR, or carbon dioxide removal, is a broader term that includes approaches like direct air capture, carbon mineralization, or natural and working lands carbon sequestration. These approaches are not designed to be attached to any specific source of CO2. Rather....

I'm going to interrupt you. We don't need to go too much into the carbon capture side of this thing. I think everybody can get themselves educated in terms of that. I think the focus here is on the number of positions that you're asking for and, you know, the fact the fixed term versus that. So I think I'd like to have you justify, focus on the on the terms and not the carbon capture tax.

Sure, happy to. I was asked to differentiate between direct air capture and CCUS, so I will jump to it then. So, in terms of CARB's resource request, in terms of CARB's resource request, we in 2023 had originally requested as part of SB 905 adoption, the permanent positions that we have in front of you, as well as the contract funding we have in front of you today.

So that was part of our original request when SB 905 was adopted. In the Budget Act of 2023, rather than giving us the complement of positions that we had requested as part of the legislation, the Legislature instead authorized limited term positions, nine limited term positions and 3.6 million for three years in funding.

So we're here today requesting that the Legislature authorize the permanent positions that we had originally requested as part of the adoption of SB 905. We have tried over the last year and a half to recruit, hire, retain the limited term positions that were originally authorized in the Budget Act of 2023 unsuccessfully. And so we're here asking for the permanent positions to be able to move forward on this important program. And I'm happy to answer questions on kind of what's transpired or kind of going forward.

Thank you. And I recognize the first part talking about carbon capture was at the request of us that you do that. But we don't have time any longer for that. So, Department of Finance, anything?

Nothing further to add.

Good. LAO?

We haven't raised any concerns.

Great. Okay. So I want to dive right into it. Hopefully my colleagues here will hear these questions and, and we don't have to. But there are two fundamental issues here. One, CARB's contention, and it's been raised before this meeting even, is that you have difficulty filling these positions because they're part time positions and people don't want to take part time positions.

Yet you have another, we have another example in this report of you have agency with lots of part time positions and those are filled. So it makes me wonder, is it really the fact that they're part time positions or is it that CARB maybe is not as interested or focused or whatever in terms of actually carrying out the mission that's, that's mandated here with this?

And the second part of, of that is that you have had three people working full time, which is our calculations, about 3,000 hours of man hours. And the only work product we see out of that are two hearings, one of them held just recently, February 27th. What have these three people been doing for 3,000 hours?

Those are the two questions that would help us collectively figure out whether we want to support this request for 18 full time positions. And I hope that that is maybe sort of on the minds of the others, that at least this answer will be heard carefully by my colleagues so we don't repeat this part of it.

Sure. And happy to take those. So in terms of SB 905 and the need for movement on SB 905, we absolutely, as an agency, want to move forward with the rulemaking process called for in SB 905 and implement SB 905 as directed by the Legislature. Any assertions otherwise are just factually incorrect. This has been a challenge from a resource limitation standpoint.

But we, both in the adoption of the scoping plan and in the work that we've done in our various different programs, have worked to try and advance carbon capture, utilization, and storage and carbon dioxide removal approaches here in California, because we readily acknowledge that those are critical to meeting our climate targets.

So from the resource utilization standpoint, what I do want to say is that, yes, in the BCP, we had indicated that we have three of the limited term positions of the nine filled. The history here as a manager has been a little trying. I'll just tell you what's happened over the last year. We have...

When we were authorized the limited term positions, we moved forward to repost our recruitments for those positions. We had originally posted them as permanent. But when the decision by the Legislature came through to authorize those as limited term, we had to go back out, restart the recruitment process again.

We were able to hire a number of staff in the initial recruitment. One staff, one manager, and and then subsequently a staffer and then subsequently another staffer. Those three positions now are now vacant again. And this goes to challenges in retaining staffers in and managers in the limited term classification. Let me give you a practical example.

905 calls for us to develop regulations. Rulemaking experience in California, knowledge of the Administrative Procedures Act and the regulatory process is a pretty specialized skill. Most people that have that skill are already within state government. They're in permanent positions. They have done the work before.

And that is a skill that has some broad applicability to state government positions. If they see a limited term position, they would look at that position and say why would I take this position if I'm already in a permanent position? And I lose some of the benefits of that permanent position. So there's this challenge in these regulatory positions to be able to fail retain.

I'm going to interrupt you real quick. And is that different in the other agency that has the low vacancy rate with lots of limited term positions?

So in terms of the the other agencies, I can't speak to their specific strategies, but I can't speak to, with respect to SB 905 work, is that in addition to regulatory expertise, this is work that requires specialized knowledge in carbon capture utilization and storage technologies and direct air capture technologies.

There is significant growing interest and deployment of these approaches in the private sector in response to the signals that California has sent about the need for this technology, the work that's been going on in other countries, and more recently nationally. So that has been a competitive field to hire from. So you have these two effects of needing specialized regulatory experience and specialized experience with respect to technical abilities that makes it difficult to recruit for and retain employees when they see that potential...

Could you address the 3,000 hours, three people, 3,000 hours, two meetings.

Happy to. So the staff have not just been sitting on their laurels. The staff that I mentioned, some of which were management staff working to try and recruit and hire actual technical staff to fill out the work. In addition, they've also been working on the contracts that are necessary to support the overall rulemaking process and the work to implement SB 905. So what we have done over the course of the last year, we've been working closely with our contractors at the national labs to start the technology review of CCS and CDR technologies that's well underway.

We've been working with the foundation of California Community Colleges. That's another contractor that we have to look at ways to support community benefits associated with these projects. And then we've also been working with the national labs to evaluate permit requirements that are necessary for the permit regulation and permit portal. So they've been doing a lot of pre-rulemaking require work with the contractors.

And for the benefit of of my colleagues, I'm going to rip through these four questions that are at the bottom that staff has prepared just so that you know I'm doing those. I know these are important questions to the environmental justice community. What's CARB's timeline? There's been lots of concerns as to whether CARB is dragging their feet on this or not. What's CARB's timeline for conducting the community protection rulemaking per the code?

So if the Legislature authorizes additional resources, not additional, sorry, permanent resources for SB 905, we would work to start initiating that rulemaking later this year and into next year to be able to meet the requirements of SB 905.

If we do not have the positions authorized through the budget change proposal process, we are faced with a situation where these limited term positions expire next year. It's going to be very difficult for us to hire staff with positions that expire and then initiate a rulemaking that we cannot complete.

Got it. And then one of the big issues, you know, it requires projects to deal with the CO pollutant problem. So what are the strategies? What strategies could projects implement to limit the CO pollutant admissions? I realize that's a challenging request on the part of the Legislature.

So what we have been able to do, as I mentioned earlier, is initiate a series of contracts of, one of which with the national labs to look at CCUS and CDR technologies and look at potential CO pollutant missions associated with those. And we look forward to, as part of initiating that rulemaking process, have this discussion as part of the regulatory process.

What does CARB believe, I mean, does CARB believe you need additional permitting authority to fully implement 39741?

We have a suite of responsibilities under SB 905, and we look forward to being able to implement those responsibilities according to the legislative direction.

How about the local air districts? What role do they have?

So the local air districts have an important role here. Projects that are proposed and developed in local air district authority must meet those air district requirements for best available control technology or best available retrofit control technology on those projects. And so they have a very important permitting role over these projects to ensure that they control for and minimize any environmental impacts, including air pollution.

And going back to my first question about your time limit, you told us when you would initiate, if you get this funding authority, when would you be finished?

So when we get finished, in my mind, is completely dependent on the level of feedback that we receive through the rulemaking process and the scope of that feedback. We know we need to do community engagement on these rulemaking efforts. We know there's a lot of questions about the technologies and about the benefits and potential community impacts.

And so I'm hesitant to give you a when this will be done because we want to start that public process and get that feedback and then identify a realistic date. Ideally, we could move this forward in a year or two, but again, that's, that's going to be very dependent on the rulemaking process and that public input.

I'd like to summarize an overview here. And that is we, we want carbon capture to start to take place. It's one of the things that we need to do to deal with the climate change issues. There is a concern that the carbon capture effort will actually increase particulate pollution in disadvantaged neighborhoods.

And this bill is an attempt to try to, this rulemaking is an attempt to try to address that. And I would offer that's not an easy challenge that we're throwing at CARB. And so I just want to recognize that's the tension that we have out there.

How do you increase carbon capture, which potentially means using more energy in a particular community, and deal with that extra energy being used? You might decrease the carbon being emitted in the community, but the community might be more concerned about the particulate matter and et cetera. How do we handle that? I'd love to ask more questions about that and deal with that very interesting issue, but we won't be doing that now. I think Assembly Member Petrie-Norris has a question.

Quickly. So just echoing, first, the Chair's comments, I think we all, or at least I certainly think this is an incredibly important initiative for us to implement. And I'm also sympathetic to, I imagine CARBs sense that we keep asking you to do more things, but we don't always have more money to do more things.

That being said, if my math is right in the budget, in 2017-2018, CARB had 1418 positions. The governor's proposal would grow that staff from that point to 2,120. So that's like an increase of more than 700 staff over the course of the last six budget cycles. That's like a 50% growth.

So particularly given that we are likely to be facing a very challenging budget year, did CARB evaluate whether there was an opportunity to allocate existing resources more efficiently or allocate resources that are perhaps focused on lower priority issue areas before putting forward this proposal?

And I think that's frankly less important in the context of this trailer bill and more important in the context of, I think, the way that we're going to need to be thinking about budget as we confront some challenging, challenging things coming from the federal government.

Sure. So I appreciate the question. I will say, you know, from my vantage point, I oversee a division, which is one of multiples with thin CARB, and I focus on how do we achieve our carbon neutrality and climate objectives within that division and have seen over successive legislative cycles as the Legislature has adopted new legislation helping to tackle the climate challenge, which deeply gratitude, appreciate from the Legislature because that is what we are trying to do.

It does come with additional demands on staff and on programs to be able to meet those legislative requirements. Now, that being said, we have faced a number of headwinds over the last year as well, where the agency as a whole has been asked to find budgetary savings, eliminating vacant positions, find operational savings as well.

And so when I incorporate that into my overall management of our division, we look at where can we eliminate vacancies or eliminate expenditures and operating expenses. And it is very difficult to go into programs that were just authorized by the Legislature and say we're going to cut back there and not move forward with those legislative priorities.

And so that means that some of our other kind of more established programs are the ones that usually suffer from those cuts. And that in turn makes it more difficult to shift even more staff into the legislative priorities, if that makes sense.

Any any other Member questions or comments? Thank you very much. We look forward to working with CARB as you try to meet your challenge. Assembly Member Rogers We will move on to issue three, which is another one of our important topics front of us. Great. It's dynamic duo. Okay.

Brandon Merritt, Department of Finance. I'll kick this off so the Governor's Budget for the Cap and Trade spinning plan estimated 2024-25 auction revenues of approximately 4.1 billion, which is a decrease of approximately 6 million compared to estimates at the 2024 Budget Act.

So I will note, strong interest earnings from the state money investment Fund continue to surpass projections. Specifically, the Governor's Budget projected projects interest earnings for the current current year to be 650 million, which is 250 million above projections at the time of the 2024 Budget Act.

The Governor's Budget estimates budget year so 25-26 auction revenues of approximately 4.2 billion. So the Governor's Budget proposes 2025-26 budget year discretionary expenditures of $1.8 billion, which follows 98% of the same spending plan that was approved at the 2024 Budget Act. The only change is a transfer of 81.2 million to the motor vehicle account.

The discretionary spending plan for fiscal years 26-27 through 2028-29 is the same as what was approved at the 2024 Budget Act. And so I will note the February 2025 auction revenues came in at approximately 851 million, which is 260 million less than the 1.02 roughly $1.0 billion that was estimated for each auction at Governor's Budget.

So the Department of Finance continues to review and consider changes to the current year and budget year cap and trade budget as part of its preparation for the May revision. Thank you.

Thank you, LAO.

So I have a few comments on this. So as you heard, for the most part, this spending plan or the proposal this year is consistent with the spending plan that the Legislature approved last year. And as you may recall, the Legislature kind of programmed out most of the anticipated GGRF for the next few years. So we think it probably makes sense to largely stick with that plan unless there have been big changes or differences in priorities.

We would note that really the main change, and it was highlighted, I believe by Finance is is there are actually two shifts related to supporting the mba the motor vehicle account, which as we heard, I know, and as this Committee is well aware, is having some structural challenges.

So one of them is actually a shift From GGRF to Prop 4 and I know this has been one that a number of Members have raised some concerns about about the additionality of Prop 4 and then that helps free up money which along with other GGRF would then go to support the motor vehicle crops.

So just wanted to clarify that we think that, that there's some trade offs there. Right. So it's helpful to support the motor vehicle account on a near term basis that helps you support those activities that the MVA funds without raising fees in the near term or changing service levels. So that's a good thing.

But of course there's some concerns about the additionality of the Prop 4 funds. And also it takes GGRF away that you can't spend on other priorities or should revenues be lower than anticipated, cause problems. So that that kind of leads me to the sort of what's happening with ggrf.

As you heard, the last few auctions have been lower than projected. Somewhat, somewhat offset by the higher interest rate or interest earnings, but still lower than projected. So we're based on our sort of estimates. We think that the current year we're probably okay.

But should we continue to see these sort of somewhat lower revenues, we think there's some chance that the budget year amounts that were programmed and anticipated might no longer be feasible. And there may be some adjustments, modest adjustments, but adjustments that might be necessary.

So we think the Legislature is just going to want to monitor what's happening with dgrf, what's happening with the General Fund too. Because GGRF can be sometimes a solution that I know different people have different perspectives on, but has been used in the past in some cases for General Fund savings as well.

So monitor those and then really meet with your priorities. If your priorities are, you know, consistent with this, then go forward. But if you have concerns with for example the MBA or Prop 4 Fund shifts, you, you could make some modifications.

Thank you Members. Questions? Comments? Assemblymember Rogers

Yeah, not really a question. It seems reasonable to me, just more of a comment. I know we're talking about the reauthorization for cap and trade, which is one of the things that I've heard from folks could explain the reduction in the auction is the lack of certainty around the program and it would be great to have the Governor continue to put his support out there.

I know that that was a significant issue during the last auction was him tweeting or saying to a reporter that this wasn't really a priority to him as they were doing the auction and ahead of the May one that might help give some certainty to folks and hopefully bring those revenue numbers back up.

Any other comments or questions, Senate Member Connolly?

Yeah, maybe just to follow up on that, I mean, are there any plans to amend the GGRF spending plan? Given a lot of new challenges this. Year, the wildfires, et cetera, where do things stand kind of with that planning?

I'll take this. So, Brandon Merritt, Department of Finance that is those conversations that are going into our may revision considerations as we kind of see the reality of the auctions coming in and looking at updated Fund condition statements for the GGRF Fund. So that's currently playing a role.

Can't speak to it right now, but that is something we keep in mind as we continue developing that mayor vision proposal.

So I have a couple things that I'd like to get on the radar screen of the Department of Finance as you're looking at revisions as we move forward. Following up to Senatemember Connolly, I think we've entered into a new era in terms of wildfires in California.

When you have the largest wildfire in the history of the state being the Thomas Fire in December of 2017 and now six years later, the Thomas Fire is only the eighth largest wildfire. So in six years we've had the eight largest wildfires, I think we have to recognize things have changed.

We don't have a wildfire threat of the old days, which was significant, but it's now astronomically greater. So I am going to be looking to communicate with the Administration and my colleagues in the Assembly, budget, staff, etc.

To try to focus on one aspect of this wildfire, and that is to decrease the losses that we are expected to experience in the future. If we don't decrease losses in the future, home insurance rates will become so astronomical that it will have a serious impact on the quality of life and the economic vitality of California.

So I'm hoping that we can have a partnership in trying to identify what those specific steps are and what funding we need to modify in Prop 4, in GGRF funding and General Fund in all three of those categories, I think there are things that we can do.

But just like in other times when we've said, hey, something's urgent, we have to develop a vaccine for Covid, we threw resources, we threw technology at it, we went after it. We were able to accomplish something. That's really what we need. We almost need a Marshall Plan level of investment.

We need a got to get to the moon level of urgency. And we just have to say five years from now we're going to be in much better shape than we are now in terms of avoiding another situation that we've just had. So just want to put it out there.

I know that you guys are going to be working hard and if you'll take that back to the Administration, it's a collaborative request and we'll be working at it from our end. But that's one of the goals of these hearings is to try to make sure we surface everything so that we have good, healthy conversations for the rest of spring. With that, I'm just going to ask a few specific questions. This is, these aren't questions.

It's just for my information, I don't understand the programs as much much as I would like to. And so if you could give me just, you know, very, very quick answers on a couple of things here. And we have CARB here, emerging opportunities for ZEVs. zero, here we go. Cap and trades.

I'm going to ask my CARB counterparts if there's specific of overviews they can give you.

Great. Okay. Yeah, well it's also going to be our next next item, but you're on my list here, so. All right, great.

Hi, my name is Michelle Buffington. I'm the interim Division Chief for the fiscal service division at CARB. I think that your question was some details about the emerging opportunities, right?

Funding. Yeah. What.

So that is typically those that funding goes to medium duty heavy duty technologies and off road equipment. We funded things from. We've been funding demos and pilots at CARB for a decade and a half now.

So those the types of projects that we Fund in the emerging opportunities bin are the technologies that lead to commercial technologies that we then are able to regulate and put into place.

So for example, some of the initial investments we've made were things like zero emission transit buses and school buses back in the early 2000s, early 1990s that have now led to commercial product. We've invested in the first class eight trucks that came to the market. Those are now commercially available here in the state.

And as we continue to receive funding in that Bin, we continue to promote and support demonstration infill demonstrations of technologies that will help us get to our climate change and air quality goals. Things like locomotives, zero motion locomotives, commercial harbor craft and others.

Thank you. Would you stay up here? Do we have CEC representatives here to answer any questions?

We do have a CEC representative with us.

He's on his way.

You're also stuck with me for the next agenda item as well, so I will stay.

I realize that I'm just going to ask these questions because I've got them in this part of this and you'll stay for the next item. But the demand side, grid support, 75 million that was allocated there and then another 75 million. Can you just give me a quick update on the robustness of that program?

Oh, I apologize. I'm here for the zero emission vehicle infrastructure components of that carbon trade plan. I don't know that we have.

Yeah, okay, great. We'll cover that April 9th. zero, we got somebody here. We won't cover that April 9th. We'll cover that right now.

Good morning. Damien Mimnaugh, Energy Commission. Yeah, so there's the $75 million appropriation in this year and another one projected for the coming year. That program provides essentially an insurance policy for the state. It decreases energy demand during periods of electricity emergencies to reduce and minimize the likelihood of blackouts.

So how robust is it? Who are we getting to sign up? Do we have enough people? We have over subscription for this. I'm just trying to get a feel for that. I know what it does.

So enrolling in the program are a variety of folks. So we have everyone from working through utilities for everyday people who are connecting their thermostats, for instance, to create what are called virtual power plants. And we have businesses that are enrolled that move to other source of generation or decrease their electricity use during those periods of time.

And the way the program works is it provides incentives, financial incentives during those periods.

Do you have more people asking for the incentives than we have allocation that we have money for or do we have, or do we have a fairly even match or do we have not enough people asking for the allocations?

I think it's a very robust pipeline and we're working through a, planning to do a workshop in spring to help increase that pipeline of folks who are able to participate.

But bottom line is if you had a lot more money, would you be able to subscribe a lot more people into the spot program?

Well, I don't think you'd find an administrator here that would say if he didn't, if more money was appropriate, a program couldn't be more robust. But in General, I think the Governor's Budget proposes adequate resources for the program for this coming heat season.

There's unmet opportunity here.

We're planning to use the resources that are in the Governor's Budget for this coming heat season.

But if we had more money, there's. If you had, if you had more money, there is the budget, there is unmet opportunity there.

I mean with additional funding in any given year, we could plan for more participation. I think one of the challenges we.

Trying to give him money and he's making it really, really vague and hard, isn't he? Right. All right, great. Thank you. I understand you've got reasons for the vagueness in terms of your answer. All right, I think that's it in terms of this, the Community Air Protection program for CARB. All right, anybody have that? There we go.

Thank you. And that'll be my last question in panel four. Get ready. We've got $250 million going across the board. You know, over and over again, substantial funding. Can you talk to me about the program some what's going on with it?

Absolutely. I'm Deldi Reyes. I'm the Director of the Office of Community Our Protection of the California Air Resources Board. Our program through AB617 has been in place since 2017. And in 2018 we selected the first 10 communities.

We now have 19 communities that represent about 10% of the population that's identified as disadvantaged in the the State of California.

And through that program, which gets at the heart of attempting to improve air quality in the hardest hit places in the state, we work together with air districts and communities to identify the biggest priorities that will help improve air quality. And that funding, the $250 million annually, is instrumental to that continued effort.

We have made commitments to these communities to complete the actions in these local plans, we call them SERPs, Community Emission Reduction Plans. Air districts rely on that funding to operate their share of the program, which is very substantial. They interface directly with the communities. They're responsible for implementing the strategies in those plans.

There's hundreds of them and we are starting to see success and results. It's a long term effort because it requires collaboration on many, many levels. And it also takes time to put these projects in place on the ground.

We also rely heavily on of that $250 million funding for community air grants, which is the smallest portion of the funding, but also prepares communities to participate in the process of community air protection. We're actually getting ready in the final stages of making awards to a number of recipients that this year.

So you're funding 19 communities, which represents 10% of the disadvantaged communities that are out there. And is all of the money going to those 19 or some money going to the other 90% of the disadvantaged communities, just not as much?

Absolutely, yes. Districts are required to spend the incentives portion of the funding you just referenced to 250 million in disadvantaged communities throughout their jurisdictions.

But what the Community Air Protection Program does is also require them to also focus on the communities that are formally selected for the program, and the districts have a good record of meeting the requirements to target Low income populations and income populations.

That's helpful. All right, we're going to go on to issue four unless we have any other questions, right?

Brandon Merritt, Department of Finance so just as a quick summary and then I'd like to kick it over to my CARB counterpart, Michelle the ZEV 1.0 and 2.0 packages initially totaled $10 billion.

But due to subsequent General Fund solutions and other budget adjustments in 23-24 and 24-25 budget acts, this amount had been reduced to 9.2 billion at the enactment of the 2024 budget.

So this amount as of Governor's Budget has been further reduced to 8.7 billion due to the elimination of the 25-26 appropriation of $500 million for Prop 98 ZEV school bus funds, which started out in the ZEV 1.0 and 2.0 packages with $1.5 billion Prop 98 funds.

So however, the 2024 Budget act eliminated the 2425 Prop 98 ZEV School bus appropriation of 500 million and the 25 Governor's Budget also eliminates its 2526 Prop 98 appropriation of 500 million, leaving only the 22-23 Prop 98 appropriation of 500 million.

So started out at 1.5 billion of Prop 98, now down to 500 million over since the beginning of this program five years ago. So with that I'd like to kick it over.

So I have about a minute to 30 seconds of opening remarks to kind of paste this for us. Okay, so thank you again for having me again, Michelle Buffington, Interim Chief of the Fiscal Services Division at CARB. This year's proposal demonstrates California's continued leadership in addressing climate change and supporting the state's equity goals.

The proposal maintains much of the investments, as my colleague from DOF was mentioning, in zero emission technologies committed to prior year's zero emission vehicle packages with a focus on investing in communities that have been disproportionately impacted by pollution.

The budget upholds CARB's innovative equity work that brings much needed resources into communities to empower them to advocate for air quality solutions, provides funding to implement clean mobility options for communities, and continues efforts to transition high priority sectors to cleaner technologies.

Before I give an overview of the current budget proposal for 2025, I'd like to give a brief update on the status of CARB's portion of the ZEV package to date I'm pleased to report that the funding appropriated to CARB during the first four years of the ZEV package, about 96% of those funds have been fully encumbered and are actively being developed into projects on the ground.

So for fiscal year 2025, the proposed budget maintains many of the commitments made in the ZEV acceleration package. With 250 million proposed for CARB programs. The proposed investments in zero emission vehicles in this year's budget include $100 million to support sustainable community based transportation equity projects that expand clean transportation options and reduce vehicle miles traveled.

These locally driven projects respond directly to critical mobility needs identified by community based organizations working on the front lines in historically underserved communities. The funds can be used to support existing CARB programs or projects like the Clean Mobility Options, the Sustainable Transportation Equity Project, Clean mobility in schools, as well as community planning and capacity building grants.

CARB estimates that this proposed allocation will result in the deployment of roughly 13000 emission vehicles and equipment, three large scale community projects and 40 planning and community capacity building projects.

The proposal also includes $48 million for zero emission drainage trucks which supports the goals set in the Governor's Executive Order N79, 20 to transition 100% of our Drayage trucks to zero emission by 2035.

CARB estimates that this proposed allocation will support the deployment of approximately 2800 emission Drayage trucks providing much needed air quality benefits to the frontline communities near ports and warehouses. 47 million is proposed to be invested in the emerging opportunities in which I already had described for you.

And there's $20 million in the proposed budget to maximize emission reductions from vessels subject to CARB's commercial harbor craft regulation. This investment will support cleaner technology for commercial passenger fishing vessels, excursion and research vessels, as well as public and private ferries. So with that I will close.

And just say again that this budget proposal demonstrates that California is standing firm to its commitments to address climate change and we will continue to take action to improve air quality, particularly in our most disproportionate, disproportionately impacted communities. Thank you.

That was 31 seconds.

I'll do better the next time.

Yeah, there no problem. All right. LAO. Anybody else? Anybody else? Right. And Lao. All right. No panelists. Questions? Member Lackey

I know I sound like a broken record on this affordability thing, but it's a bit really big deal where I live and I know you've indicated that there's this 8 $1.0 billion investment in trying to make something more affordable, if I understand that correctly. But how would that impact the total mandate for zero emission vehicles? Because where I live, most people can't afford those.

So I think I understand your question and maybe I'll start by mentioning that we do have consumer focused incentive programs for Low income and disadvantaged communities. And so if you right now. So if you recall, we had the clean vehicle rebate program back in the day that really funded getting zero emission technologies in the light duty space.

Widely adopted. We have since over the last three years transitioned into a much more focused incentive structure where we are focusing that those dollars on our consumers to those who are in most in need, whether they're Low income or in disadvantaged communities.

So that is one way that we're working on focusing on those who need the incentive dollars in order to make the transition. We also have been working fairly hard in the medium and heavy duty space to also be finding ways to support small businesses and independent owner operators.

And so we have programs that are in place that we've been able to support with your support to the, to those, to those types of businesses.

Okay, thank you, Senator Rogers.

Thank you so much. I'm curious just if you're seeing an impact in the market just from having these types of programs out there. I know in Santa Rosa when I was on the City Council, we were able to electrify about half of our bus fleet.

And at the time when we started that there was really only two different companies that were able to meet that need. And one of them now I think is going through bankruptcy. And so there's some uncertainty.

But are you seeing these programs not just impact the climate side of the equation, but also the investment really helping small businesses to enter into a space that we want them to enter into.

So that is absolutely what we are hoping for. We are working on monitoring and figuring out how to best track that in a quantitative way. But we do begin, we have been focusing quite a bit again on small businesses, small transits, in order to get them into place.

I think you see a balance CARB approaches specifically balance with carrots and sticks. Right. Regulations and incentives.

And so in places where we can be bold on regulation, we make those moves, but recognize that maybe not everybody can move at the same pace and continue to provide incentives to support so that we can make sure that everybody is able to make the transition.

Yeah, no, I appreciate that and I, you know, I hear from folks in our community as they're seeing these regulations come out that they just don't have access to certain types of equipment that meet what the regulations are. And I know that you're working on that.

But I'm also interested in sort of the business opportunities that are presented by having regulations in place and who's moving in to fill that space.

I'm sorry, as soon as you started to reiterate your question, I realized I didn't answer it. So I would be able to follow up in writing with. We have done a lot of analysis on how the market has changed. Like manufacturers coming into the space, third party players coming into the space.

I don't have those numbers off the top of my head, but I will say that we have absolutely. Since just for as an example, our HVIP program, which is the Truck and Bus Clean Voucher Incentive program, as that is funded more robustly, we do see more players coming into the market.

Sometimes they're small OEMs, sometimes they're larger OEMs. But as the funding comes in for those programs, we do see an increase. As we see that increase, then we can begin to consider that regulatory part to it.

So I understand that there, like the bus space has been kind of tenuous the last couple of years with manufacturers coming in and out, but as we continue to provide that support, that sends a very clear signal to manufacturers and businesses that we are in that this is what the state is interested in and priorities.

Yeah. Actually, the one that I'm hearing the most about right now is cherry pickers or the. The bucket trucks. Yes. So hopefully somebody fills that space.

We pause for a moment of technical difficulty. Assemblymember Connolly.

Thank you. Chair. Had a few questions on the Clean Cars for All program. Great. I and many others would submit this has been an effective program. In fact, it's helped reduce 98,700 metric tons of car carbon dioxide emissions since. And 211.1 tons of oxides of nitrogen reductions.

However, at this time many local or some local air district based Clean Cars for All programs will likely run out of funding this year. Does the Administration have any plans to allocate additional funding to ensure that this important program can continue to retire high polluting vehicles?

I will maybe refer to my colleague at DoF, but I also want to thank you for looking at the. I think you got those numbers from the investment. Yes, thank you. Appreciate hearing those

Yeah. Brandon Merritt, Department of Finance I think the only thing we can speak to is to refer to the Governor's Budget as to plans for the program. And as of right now there's no further funding included in the Governor's Budget.

Yeah. In fact, it looks like there wouldn't be any new funds until 2728. What steps has car been taken to identify alternative sources of funding so that we can reopen these particularly district Clean Cars for All programs? Is there any funding available at other programs or agencies that we can move around to keep keep this vital Clean Cars for All program open?

So I think that maybe there are two kind of high level responses to that. The first is that if the air districts and their local programs run out of funding, their constituents are still completely able to apply for the statewide Clean Cars for All Program. And so they are.

Those, those disadvantaged communities and Low income individuals are not going to, they will still have access to funding. It just won't necessarily be through the district program. I will say that we are looking, we have been asked to find other ways to support the Clean Cars for All program.

We did move during our board hearing last this past year moved $14 million to support one of the district programs so that they could continue to receive support. And we're also continuing to look for other ways to do that.

But we have to recognize that even if we can come up with solutions with what we have within our hands right now, that those are really one time solutions. So there's not. We at CARB have not been able to identify an ongoing source of support for that program other than what we receive in annual appropriations.

Let me ask another aspect of this. So right now I think it's the DCAP The Driving Clean Assistance Program. Can you explain the rationale for why DCAP is looking to expand into areas already served by Clean Cars for All? What is the value for this brand new program to be duplicating the work the air districts are doing?

When would rather DCAP focus its attention on the parts of the state than actually have not had a program?

Sure. So I think you pointed out pretty detailed there that the currently Clean Cars for All, I believe serves six. There are six air districts that participate, five air districts that participate, which means there is a large swath of the state where applicants do not have access to the program.

So the statewide program was really meant to help get those individuals who are not residing in these air districts access to. To the Clean Cars for All Program. We recognize, however, that. That the air districts rightfully have some of those have the programs because they have many of the disadvantaged communities in those areas.

And so we wanted to make sure that there was equal opportunity for them to continue accessing the statewide. The statewide program is fairly new compared to the district programs. The district programs have, I think, been in operation since 20162017.

And the statewide program, which I will point out when you mentioned dcap, the statewide program is one component of the DCAP program. The DCAP program includes our Clean Cars Statewide Clean Cars for All. It includes financing assistance which can be leveraged by all of the districts and any. Anyone within residents within the state.

And the Zero Emission Assurance Program, the ZAP program. So those are all the components of dcap. So back. But I want to maybe just go back a little bit to the statewide. So the statewide is fairly new. We have just started the rollout of it.

We're beginning to see the demand and understand we are working actively with the air districts to make sure that moving forward we can continue to balance any appropriations we get to meet the demand, whether it's at the regional level or at the statewide level.

Do you agree there's a risk of duplication in some sense?

I don't believe that there is a risk of duplication. I think. I think that we have. There is a significant portion of the state that has not had access to this program for a long period of time.

And so you would expect the demand to be very high here at the beginnings of that and that we would continue to work with our air districts to make sure that moving forward, as the programs reach some sort of equilibrium, that we would be able to ensure that there is not duplication.

All right, let's keep talking. Final question. The agenda states that CARB has recently announced a settlement agreement that could be used to appropriate roughly $130 million for the hybrid and zero emission truck and bus voucher Incentive Project HVIP. Does the Administration have any plans to use $130 million for HVIP?

I'm not. The settlement is not yet final and so I'm not really at liberty to talk about how the funding would be used. It's still pending. The decision is still pending with the court. Courts.

Is that it? Is that it? Assembly Member. Great. Thank you. I would. I think I reflect quite a few Assembly Members positions on this, but I'd like to see additional funding to help the transition from medium and heavy duty trucks and buses to zero emission alternatives. They are the source of diesel pollution and the particulate matter.

They impact disadvantaged communities a lot. They're a big problem at the ports where they're concentrated. A lot of things there. Then on top of that, we've used our HVIP funding already. We've had our clean fleets advanced clean fleets regulations cut back and we're going to need more incentives.

So I would like to advocate for a modification between now and May in the Governor's Budget in terms of funding for incentive programs to protect and keep this transition moving forward and trying to move from these diesel fleets. But no competitive HIVP or core incentive funds are proposed for the next three years.

I hope we can change that as we move forward. So with that comment, I also think that E bikes are really catching on and I think they could be at a significant transformation in terms of mobility in California.

That's why I have a preparation proposal for bike highways linking city to city so people could start to commute with E bikes. We have the climate in much of California where people could commute literally year round or for much of the year.

And E bikes would be a far more cost effective way for disadvantaged people to join in the electric revolution as we move forward. So we have a pilot program, $3 million in the E Bike program. How much does CARB still have to offer as incentives for the program? And have they learned anything? Do we have anybody from CARB that can answer that question?

Well, I can certainly try and we've learned a lot. I will tell you. So we did launch $3 million in funding in December of 2024 as you were mentioning. The program administrator is currently processing 1500 applications from the first window and we expect to have all the money from that window redeemed by the end of this month.

So we're pretty excited about having moved that $3 million. We are in the planning stages to release another $2 million for E bikes that would. I think it's 2.5 million that will launch sometime in the beginning here of 2025.

And part of what we're going to be doing there is onboarding some more community based organizations to help with the outreach. That's been a pretty key component to the E Bike program.

I will say that There is also $21 million of additional available for the E Bike program that we will need to go back out for another solicitation which we anticipate doing again this year in order to find to make sure that we have an appropriate third party administrator in place, whether it's the same one or someone new to your question on lessons learned.

We've learned a lot about the application process. So we used a tool that was supposed to help with online traffic so that whenever the program opened up the website didn't shut down because it would have. Because it would have been overwhelmed with everybody who was trying to apply. That program didn't work very well.

And so we're looking for some other alternatives, technology solutions to help smooth the queue when the program opens up. Some interested applicants also reported issues like accessibility issues such as Internet connection and web browser functionality.

So to help kind of mitigate those accessibility issues, we're recommending to allow applicants a time to join the queue and then having a random selection once they're in the queue.

So it's not like you when you're, you're going for your Christmas presents for your grandkids and you get to the Walmart seven days in advance to get that special Black Friday deal. We're trying to make it so that you don't have to be in that kind of queue.

In addition, CARB found that 60% of the applicants who were successful in applying completed the application process successfully and that was were able to get through the process. And this is due to some applicants not qualifying or applicants not being responsive after they filled out the initial application. We also learned a lot on outreach and education.

There was extremely high demand for this program and our CBOs or outreach partners reported that almost none of the applicants they worked with received a voucher. That is in part because there was such a high demand.

So we're working that we would think are considering using a CBO set aside so that when CBOs have done the effort and made the outreach that their applicants that they bring in do have an opportunity to compete for those vouchers. And then I think that's really.

Those are really kind of the high level main lessons that we've learned so far.

When there's such huge demand, why do we need outreach at all?

I think that when you're thinking about who, again, who we want the program to serve and you're thinking about Low income and disadvantaged communities, that we really do need that extra outreach because it's not just they don't have the same level of access to information that others do that other communities do also.

They have this assistance to get through the application process. Right. So we want to be able to make sure that we're providing equitable support to them.

I can appreciate that. But the program is already only for Low income people.

Right, right.

So you say we want to make sure we reach low income people.

Well, I think that the demand is in part high because we have CBOs out there talking to their communities. If we didn't have them, I think the demand might be lower.

How much in the way of resources are we spending on outreach that's cutting into just fundamentally trends. We've got more people wanting these bikes, more Low income people wanting these bikes than we, than we can meet. And we're doing outreach to try to get more Low income people when we have enough Low income people.

So I don't have the number specifically in front of me and I appreciate the question. My initial reaction is that it's less than 1% of the funding that we have coming in for E bikes is being spent on CBO outreach. But I will be happy to follow up in writing.

And I, and I don't disagree that CBO, the right trusted CBOs, could help us penetrate into communities because we're really trying to create a culture here of lots of people using these.

So I just, I'm just trying to understand as much as anything and I'd love to have at some point in time from you a report on how much funding could we use. How much funding? You know, how much demand is out there, you know, what is the shortage? I'd love to have the specifics on that.

So if sometime you could, you know, reach out to my office with that information. Information. I'd appreciate it. The couple other quick questions here.

A number of years ago, Governor Brown indicated that labor and CARB should work together on how the training vehicles for their apprenticeship programs, those big heavy duty vehicles that they use, are impacted by the in use off road diesel fuel fleet regulations. Can you give us an update on the Committee as to the.

Could you update this Committee onto the conversations there? These Are they're not used very much. All right. There's a high cost to replace them. So just for the benefit of the public, I'm not asking the question very clearly and for my colleagues here, but you have some of these older diesel bulldozers, etc.

That are used to train apprentices, but they are not used very often. And so the cost to replace them is be a high cost given how little are you using them? We said sit down with labor. Labor saying, hey, should we really have to replace these when we're not having that much error impact?

Their resource board obviously wants to minimize the impact. Seems like we should be able to work this one out, but it hasn't gotten worked out. What's the update?

Yeah, thanks for the question. I'm Kim Heroy-Rogalski, I'm abranch chief in CARB's Mobile Source Control Division. And the program you're talking about, the end use off road diesel rule, is actually one of the ones in my branch.

And so yeah, we are aware of that issue and we have talked numerous times over the years with folks representing these apprenticeship programs. And the regulation does include a special provision to give such apprenticeship programs more time.

So stepping back, what the NUS off road REG does is require fleets of construction equipment to report their stuff and then gradually clean over, turn over to cleaner equipment over time.

So by being designated as a small fleet, even, even if they own lots and lots of equipment, such apprenticeship programs already get more time to turn over their fleet. We do think it's important that they remain in the program for a couple reasons.

One is just the emission reductions we really don't want, like tier zero equipment is just like 100 times dirtier than modern equipment. So it is really filthy and it exposes the operators and other people to toxic diesel particulate matter. So it's bad stuff.

So we really want to keep, keep them in the program, but we think the REG gives them existing flexibility. And we have talked to a number of different training program reps over the years and we're happy to talk to them further. The REG does include a lot of different flexibility provisions, like Low use provisions and stuff.

And so if individuals aren't getting to the right person, I'd be happy to help them get to the right person to help them navigate compliance. The other reason that we think it's really, really a good idea to include these programs in the regulation is that of course these apprentices are training to be the operators of the future.

Right. And when they're out there operating equipment in California is Largely new equipment which comes new with selective catalytic reduction systems, diesel particulate filters which have specific maintenance requirements.

And so the folks that are, you know, young people that are learning to operate this equipment should be training on equipment that has those systems so they can effectively use the equipment that they're asked to work on once they're out in the, in the workforce and have a job.

Great, thank you. And this is for CEC and how have you adopted regulations to implement AB 2061 consistent with the deadline of January 1, 2024 to adopt report reporting standards and the January 1, 2025 deadline to assess the uptime reliability of state and repair funded chargers?

Yeah, thank you for the question. We're still working on those regulations pursuant to AB 2061. So we started on those after it was passed. Subsequently AB 126 made some modifications. So we issued a second staff report to incorporate that as well. We're getting pretty close to releasing it last year. Just working out one issue on utilization data and session data with industry. That was a real pain point for them.

Towards the end of last year with the New Federal Administration and a lot of the headwinds facing industry, we've taken the last couple months to really look at our regulations and see where we find the right balance of holding the industry accountable to sufficient uptime, but also supporting the industry.

So we've been having those conversations over the last couple months since late November, December of last year and, and hoping to move the regulation to the Office of Administrative Law in Q2 of this year. So. So we're getting really close on getting that done.

You feel fairly confident you'll meet the Q2 deadline?

It could be late Q2 to be quite honest. We need to revise some stuff potentially so we're moving as fast as we can. But Q2 is what we're targeting for Office of Administrative Law.

I'm going to turn to my colleagues. Anything. Anything else from anybody? Right. The. You had the second draft in 2024, right?

Yes, correct. Let me. I think it was April of 2024. Right.

And the feds have already adopted. Right. So it just feels like. Feels like we're not using taxpayer dollars well here, waiting this long.

Yeah, it's taking a little bit longer than we would have liked. We're trying to go far with this regulation. So looking at uptime and also some other metrics to collect data and get a really good view of what's happening.

I will note that we've already, since 2022 started adding provisions in our terms and contract for the grants we issued requiring uptime and reporting on it as well. So we've taken those actions really where we can through our contracts. But the regulatory process has taken a little bit longer than we would have liked as well.

So I just want to big picture this. You know, if, you know, we had these mandates of January of 2024 and then January 1st of 2025, if in April of 2024 we had the second draft of the regulations, not the first draft, the second draft of the regulations.

And here we are almost at 12 months later and the second draft is not out and isn't likely to be out until late Q2, which would be, you know, that's, that's a long time between the second draft and this, right?

Yeah, that's right. So when we issued the second draft after AB 126 added some different nuances to the uptime regulation, we did the issue the second draft report in April. We had an open period for public comments and held a workshop and then started revising documents as well.

Again, there was a sticking point on some utilization session data where industry really feels like that is very proprietary and business sensitive. We feel like it does add value to some of the work, but we also see where they're coming from as well. So that's been an ongoing conversation. Agreed.

It has taken longer and I think we're pretty close towards the end of last year and with a lot of the federal actions, we just want to make sure we do support the private industry. So they keep making investments in California.

From the, from a public standpoint, these chargers, I mean, for us to put taxpayer dollars into creating an incentive for an electric charger and having the electric charger then not work, which is far happening far too often.

And then for us to, for us as a Legislature to say, hey, we need CEC to get out there and make sure that these dollars when they go out, they're, they're going to be for reliable chargers. And to have this long, I just want to say it, it feels pretty disappointing.

Yeah, I just do want to highlight real quick though. So starting in 2022, for the contracts that we achieved, the money that is given to us by this body that we're implementing, we have been having requirements since 2022.

So while the regulation that that action has not gone through, we have started including that in our terms and conditions. And so it does take a bit of time from when we award a grant for them to then get built and energized.

There's, you know, obviously A lot of things that happen with like utility interconnection and permitting and whatnot. We are. Those chargers are now coming online and we are seeing the initial data we're getting from those terms and contracts is that those are highly reliable. I will concede those are brand new chargers. You expect them to be reliable.

We're going to keep monitoring that going forward for those as well. And those will need to meet that 97% uptime.

How different are our regulations going to be from the Fed's? I mean, the Fed's regulation is 97% reliability. How far off of that are we going to be?

Yeah, so our second draft, draft report had the 97% uptime for DC fast chargers and level two is also for light duty and medium duty, heavy duty infrastructure. We actually tried to go further. We introduced something that was a novel concept.

I think the first one is when we proposed something we're calling the successful charge attempt rate or scar. And that was novel. Feds hadn't done that. But what we were looking at and really the uptime. Right. It's an important metric. I view that as a flaw. Like the charger should be up, it should work.

But then even beyond that, you run into issues that could be a payment method not working properly. There could be a failure in interoperability because you have different charging networks, different hardware and software, different vehicles, makes and models by different OEMs. Sometimes the failure is that they're not talking to one another.

So we actually said we want to measure that as well. We want a successful charge attempt rate or scar. So that was something fairly novel that we developed that did deviate from what the feds had put in place.

Appreciate you doing that just for the benefit of everybody here and the public and anybody watching and stuff. These requirements came from this Committee in 2022. This wasn't CEC saying, hey, we have to do Right. So that's why I feel more passionate about defending the effort of the Legislature. We said, hey, in 2022, these are the requirements.

We need to have this. We push this. It's one of those, you know, many trade offs that we make with the Administration. You know, we want this and the Administration wants that and we compromise.

And so I think it's important for us to always point out when we feel like we're not getting back what we've, you know, fought for in, in terms of, you know, from 2022 to now. It's pretty long. Yeah, I appreciate that.

I certainly do.

Yeah, thank you. Thank you very much. All right. We're ready to move on to issue five. All right, thank you. Yeah, it's a good system. I can kick it off if you want. That way you can keep following up.

Department of Finance, Brandon Merritt, California Air Resources Board requests $2.3 million ongoing funding from the Air Pollution Control Fund for 10 permanent positions to complete the regulatory process to authorize the use of motor vehicles with up to 15% ethanol blending and conduct ongoing program implementation enabling the use of E15 fuels in California.

This request is one element of CARB's efforts to respond to Governor Gavin Newsom's October 2024 letter requesting that CARB expedite the evaluation of E15 for use in the state. And I will kick it over to good CARB.

Thanks, Chair Bennett. In the interest of time, I will defer to questions. Again, just for the record, Matthew Botill, Division Chief of the Industrial Strategy division, the California Air Resources Board. Great.

All right, so we're recommending that the Legislature approve this funding on a limited term basis, on a two year limited term basis rather than an ongoing basis. I know this is everyone's favorite topic, limited term versus ongoing.

It has been a challenge, but we do think that there's some uncertainty here, and that's why we think the limited term fits better. One is the department's still in the process. That's before the regulatory process. It's a process that's a multimedia evaluation that they're required under statute to conduct.

And so once they conduct that, they'll determine whether they want to move forward with regulations and whether those are merited. So we think because of that, it's premature to authorize not only funding for the regulations, but also for implementation at this point.

And the second thing is, we think there's some uncertainty in terms of ongoing workload, in part that exactly who you would want and how many people you'd want could differ in terms of regulatory development versus implementation and enforcement. So we think, you know, sort of doing just the limited term makes sense.

We know it can be hard, but partly this is a challenge that we know you all face, and maybe this is a larger issue beyond this one. But, you know, often there's pushback about, zero, limited term positions. But how else is the Legislature supposed to respond when there really is limited term workload or uncertain workload?

And so we think, you know, on net, we think that the balance in this case suggest that two year limited term would be more preferable, but recognize that this is a really challenging type of issue for the Legislature, just given the way that we've structured our budget process.

So my question for CARB is you made the case that when you have technical experience, that's really important. How important is technical experience in this by comparison to our the last example?

Yeah, thanks for the question, Jer. So what, what we've been asked to do by the Governor in terms of prioritizing E15 and being able to move this forward does require that we work through that multimedia evaluation and ultimately consider regulatory changes to California's fuel rigs to allow for E15 to be used in California.

And then there are also needs post rulemaking as part of the rulemaking and following the rulemaking around emissions modeling, around designing an enforcement program, and in terms of being able to process additional ethanol fuel pathways in our Low carbon fuel standard program. So let's say the Legislature authorizes limited term positions for this rulemaking work.

I don't see that actually meeting the ask to prioritize E15 and being able to do the rulemaking process.

As I mentioned in my earlier remarks, what we would be asking to happen here would be to be able to have staff with regulatory experience to shift over from their existing responsibilities, take on a position within carp to do E15 rulemaking and move quickly.

I can't train new junior staff in regulatory processes and move forward on a rulemaking quickly just simply is not feasible. So. So to answer your question, I don't see it working here.

But the classic value of a Committee hearing like this is for LAO to make that point and for you to have the opportunity to respond to that point and for us to hear that and try to digest us as it goes forward.

Yeah, I just would like to say, first of all, I'm very excited about this. There's allotted funding because I tell you. That we have a bipartisan, a bicameral group called the Problem Solvers Caucus that. I happen to be part of and. We have AB30 being proposed to actually.

Support this use of E15 fuels in California because I think it has the. Potential to actually help reduce the cost of fuel fuels. So affordability is addressed and also the cleanliness is also improved. And so this seems to be a. Common sense solution that I'm very, very excited to support and I hope it is ongoing.

Questions from other Members.

Just a comment as well. I do want to see this moving forward and I think that you made a persuasive argument about why we'd have a trade off between efficiency and the permanency. And so I'm comfortable with the permanent position moving forward. And I know we'll have more discussions about that as it keeps moving.

Great. I also want to echo my colleague's comments also being a Member of Problem Solvers, very excited about this Bill as well and hopefully seeing it go all the way through. Thank you.

Quick question. If the Legislature approves permanent staff and ultimately CARB's regulatory process decides to maintain E10, what would happen to the permanent staff?

Yeah. So from our perspective, we have been working through the multimedia evaluation. The initial findings are showing that it is unlikely to have any significant additional impacts on air quality. And so, you know, we see that as an indicator of the ability, if we were given the permanent staff, to move forward on a rulemaking process.

We still have to finish the multimedia evaluation and work through the California Environmental Policy Committee. And so that process will be taking place this year. If the Legislature were to authorize the permanent resources, we would begin the recruitment and hiring starting in following the Budget act approval.

If there were any issues associated with E15 that we see coming up through the rulemaking process or through the evaluation by the Mineral Policy Committee, we could come back to this Committee and ask for an adjustment on the resources. Understand that's a concern the Legislature.

It's certainly not the intent to procure resources and then not move forward on this. And recognize that would be a follow up conversation with the Legislature.

Hi. Apologies if I missed this. When is this work expected to be complete?

Sure. So we are, pursuant to the governor's directive, prioritizing the multimedia evaluation. Now we are looking to move that forward this year. In our bcp, we identified the ability to start the rulemaking process once we have the resources in the upcoming fiscal year. So we would do the hiring, we would initiate the rulemaking.

I think you all know that the APA process has a number of steps that we have to follow, including conducting an environmental analysis and economic analysis, drafting preliminary regulatory text, getting that in front of our board.

So that process will take place over the next fiscal year with the hopes that we can bring a regulation to our board in mid-2026.

Okay, great. With that, why don't we move? Chair, do you have any questions on issue five? He's all over the place.

I'm good. We'll go on. All right. Issue six, permanent regulatory staff.

All right. Hello again. Are you ready for me? I am.

Go ahead and introduce yourself again, please.

I will. And I know we're a little tight on time. I have about four minutes of remarks. You're fine. Okay. Okay. So thank you, Chair Bennett, and Members again, my name is Kim Horoy Rogowski and I'm a Branch Chief and CARB's Mobile Source Control Division. I'm here today to discuss two budget change proposals.

The first for the zero emission Airport Shuttle rule and Advanced Clean Fleets or ACF rule and the second for the zero emission Forklift rule. So let's start with ACF and Airport Shuttle. And just as background, these rules require certain truck fleets to purchase an increasing percentage of zero emission trucks for ACF and Airport Shuttle.

CARB is requesting 5.8 million from the air Pollution Control Fund and Authorization to convert 32.5 limited term positions to permanent. ACF is a key measure in California's federally mandated State Implementation Plan or sip.

The ACF and Airport Shuttle rules are needed to bring the South Coast San Joaquin Valley and other parts of the state state into compliance with the Clean Air Act's ozone standards. And the rules are projected to significantly cut statewide emissions and present over 2,500 cardiopulmonary deaths. They're also a critical part of our climate strategy as well.

ACF and Airport Shuttle also contribute to the goals in Governor Newsom's EO N7920 to 10 to transition heavy duty trucks to zero emissions. Okay, so as you may have heard, CARB withdrew the ACF waiver request from US EPA due to the Trump administration's stated opposition.

However, California does have the waiver for the Airport Shuttle rule and the state and local government element of ACF does not require a waiver. So CARB is committed to achieving the emission reductions needed to attain the federal standards, meet our state targets and improve public health.

The withdrawn ACF waiver does make this more challenging, but we are up for the challenge. CARB will use the requested positions to implement Airport Shuttle and the part of ACF that does not require a waiver, as well as to craft and implement alternative actions to allow California to continue making progress.

This could include potential changes to the ACF rule or alternative means. The requested positions support three key lines of reporting and compliance assistance, outreach and processing exemption extension applications. And this work is long term, spanning into the next decade and beyond.

Because of this, permanent positions are the most effective way to successfully achieve these emission reductions and continue the state's momentum towards ZE trucks.

So CARB received authority for these 32.5 limited term positions for three years in 2324 and we're now requesting permanent positions this fiscal year because most of these positions will end their two year term sometime in fiscal year 2526.

So this puts CARB at risk of losing existing subject matter experts that we've just hired and trained up and worse, of being unable to meet our emission reduction commitments. Okay, so now let's turn to the zero emission forklift rule which was adopted last year.

The rule was designed to reduce emissions by phasing out most propane and gas forklifts and prohibiting the addition of new combustion forklifts. For the forklift rule we're requesting three and a half million from the Air Pollution Control Fund for 17 permanent positions like ACF. The forklift rule is a SIP commitment with significant emission reductions.

It also aligns with EON 7920 directing CARB to move to ZE equipment in off road sector by 2035. Okay, what about authorization? Well, while CARB has not yet sought authorization from EPA for the forklift rule and we won't be enforcing on private entities at this time, we will be encouraging compliance.

Initial actions like making fact sheets and the online reporting system available will allow fleets to voluntarily comply and reduce their emissions. And I know this has been a big topic today, but we are requesting permanent positions because the forklift rules phase out, requirements extend through 2038.

So this clearly isn't something that can just be finished up in the next two years. And thank you. I'd be happy to answer any questions.

Thank you. And I'm going to ask the ZEV representative to come back up also. But mostly I want to get this question asked and particularly while Mr. Lackey is still in the room and that is this.

You know, we talk about the mandate for zero emissions vehicles and I, my understanding is plug in hybrids that still will be gasoline powered qualify for the Governor's 20350 emission vehicle mandate. Is that correct?

Can you ask a second question while I figure out the answer to that one? I'm not certain. I believe that the mandate for the ZEV Executive, the zero emission, the Executive order N7920 is 100% sales of. Are you talking about light duty or are you talking about light duty?

Light duty is 100% sale zero emission sales by 2035. And I believe that that is pure ZEV by 2035. But the mix up until then includes HEVs. But let me, let me double check.

On that if you'll double check on that.

Because my understanding, I've been, I've been given conflicting information on that and I'd like to make sure we clarify that for the public, for everybody, because I think it makes a big difference to my colleagues that you know, it's one thing to ask somebody to buy a plug in hybrid that still is gasoline powered, which is a very different kind of vehicle than a complete 100% elect, all electric or.

Yeah. So again, there's conflicting information out there, so we'll we'll count on you to get us that. I wanted to ask that early because once we finish this program, everybody's going to rush out of here. So thanks for waiting for that. We're ready to go to LAO with your presentation, and then we'll go to comments and I think we'll have

Thank you, Mr. Chair. So I think the real challenge with these proposals is the fact that we don't have all the federal waivers that ideally we would have, right? So clearly there are some significant benefits to these regulations. The problem is, absent those waivers, many of the provision, many of the pieces that are targeted, we won't be able to enforce.

And so given that, it's unclear whether they'll have the effectiveness that was discussed in terms of reducing emissions. And there are significant resources that are being proposed again, some of which are currently temporary and would be made ongoing, some of which are new resources to implement these regulations, 50 positions, $9 million a year.

So, you know, there's an opportunity cost those those resources could be used elsewhere. So we think that it's worth the Legislature really giving careful consideration to. Are these still is this still the path you want to take?

It's especially hard because, as we sort of heard before, there are currently some cuts being made at CARP and other departments as part of the vacancy reductions in state operations savings. So we're augmenting some places, including to do some new regulations that we can't enforce. Meanwhile, we're cutting some other places.

We don't exactly know where those are, but maybe they're higher, maybe they're lower priorities for the Legislature. It's really hard to tell.

So we're recommending that the Department report both on some other alternative options that could be considered for meeting the goals, maybe given that we might not be able to move forward as much as we'd like on these regulations.

And then also, I know it's probably I know we won't get it today, but some additional information, I think sooner rather than later on the vacancy reductions. I know this has been an issue that Committee's discussed before would be really helpful as well.

And then, of course, the Legislature, we think, should direct resources at whatever your priorities are, given that landscape that you're faced with, which is a challenging one.

Assemblymember Petrie-Norris

So building on the observations from the Legislative Analyst Office, I guess two things. I think it's really important for us to acknowledge that we are having these conversations in the midst of what is very likely to be an incredibly challenging budget year.

Recognizing that some of these proposals perhaps were developed prior to understanding just how challenging that would be, it seems completely insane for us to be suggesting that we spend millions and millions of dollars to implement a policy that we most certainly are not going to get a waiver to actually implement.

So I think we've got to, like, look at reality as we're developing these proposals. And I guess beyond that, I don't really, I don't understand and I don't think most Californians would understand why it would take us 17 people and three and a half $1.0 million to implement one rule.

And maybe I need to get better educated about the rulemaking process and what's involved. But I think the bottom line is we are not going to have the luxury of dedicating that much money and that many resources to one role going forward. We are going to be looking at some very, very tough choices in this budget year.

And so I think that as we go through these conversations, I would really hope that agencies come with that orientation because otherwise it feels like we're kind of just wasting time. Thanks.

Don't beat around the bush. Tell us what you think about this. Right. All right. Other comments. Well, I certainly think that the Department of Finance should be hearing that we have substantial concerns, 50 positions, $9 million, and a very shaky possibility of, in some cases, we know for certain we're not going to get authority.

And in others, and then combining that with I think the thing that the LAO points out is the vacancy reductions. So we need to have pretty robust ongoing conversations between now and the May revise, because we won't have time for those kind of conversations. We won't have much time for those conversations after the May revise.

But and better for us to have those so we don't get crosswise on this particular thing, because I think you have LAO with some pretty strong advice.

You have Members of this Committee with some pretty strong feelings about this, including myself, and so hope you'll take that back and that we can get to a more appropriate spot on this particular issue. Right. All right. If there's nothing else.

Chair Bennet, may I possibly respond briefly on that? So totally hear you. It's a terrible budget year and you have to make tough decisions.

But I did want to clarify that there's sort of a long history of CARB adopting programs and then asking for waivers or authorization and there being a long period of time where we just don't hear from the feds. And that's the case even during very friendly administrations.

Like for example, the in use off road rule that I was talking about before it was adopted during the Obama years and it took over six years for the feds to sort of get to giving us the authorization.

So in the meantime, that's a rule that requires people to report their equipment and label it and start gradually turning it over and learn about the rule and think about fleet averages. So during those six years we didn't just wait and do nothing.

We were building the reporting system and setting up the infrastructure to be able to implement that rule. And it's a similar effort that we're hoping to undertake for the zero emission forklift rule as well. And you're right, like it's very unlikely we're going to ask for authorization and get it within the next three years. Right.

But that's not forever. And this program stretches out like I said, till 2038. So I just wanted to clarify.

That's a good point. And again, that's exactly what these Committee hearings are for, is for us to hear that this is not just about the short term denial of a program approval. If we in the long run get approval, we need to be ready to take advantage of.

Is not easy to be a regulatory agency and you have this mandate to try to get the AIR better. We think of where our air was at 1.0 in time and yet you have these challenges that we throw at you. So we appreciate you adding that to the mix in terms of the conversation.

But we look forward to having some more conversation. Thanks. Take care.

Actually, I could add. I can answer the question now.

Absolutely.

Okay. The Executive order is silent on the mix of what 100% SEV sales look like. But the regulation is very clear that in 2035 up to 20% of the sales can be PHEVs. And that is a legally binding regulation. So I just want to make sure that that's.

That I've said both up to 2035, 20% PHEV.

And that is a PHEV with a range of 50 miles.

After 2035, I don't believe the regular.

I don't know the answer to that part. I got your 2035, which is the target that was set in the Executive order.

My question is after 2035, what's the definition of Zev? So we will get back to you on that. Thank you. Thank you very. And so until 2035 the definition is not just 100%, it's correct. It can be plug in hybrids. Correct. Great. All righty. We are ready to move to public Comment and watch out for the stampede.

Is it on? Oh, there it goes. Good morning, Chair and Members. Katie Valenzuela, on behalf of the Center on Race, Poverty and the Environment. While I have a lot to say about item three, I'm going to stick my comments to item two.

As a key stakeholder to negotiating SB905, we do not and have never opposed CARB getting the money the Legislature thinks is appropriate to implement that Bill. Our concern is that since they're not implementing that Bill, projects are moving forward with none of the protections you put in place established under any regulation.

So we really want to thank you and your staff for taking time to discuss and we support the language in your agenda to basically say we won't have any new projects move forward until the framework is in place, which we hope is very soon. Thank you.

Thank you.

Mr. Chair. Members Brendan Twohig, on behalf of the California Air Pollution Control Officers Association. With more than $1.0 billion over the next several years to backfill programs that may have merit but don't have meaningful public health and climate benefits, we think the five year GGRF expenditure plan actually falls short.

We would strongly encourage you to invest in programs that are, you know, prioritize programs that are cost effective at both getting greenhouse gas reductions and also public health benefits, namely air district run programs like the AB617 Community Air Protection program. We're asking that that be increased to 300 million for incentives and also 60 million for implementation.

And then also the farmer program which is zeroed out, only got 2 million in funding last year and that gets helps get clean up dirty diesel engines. And we ask for 200 million per year over the next five years. Thank you. And just clean cars for all and Wood smoke reduction too. Thank you.

Thank you. Good morning, Alan Abbs with the Bay Area Air Quality Management District. I'd like to echo my counterpart part from CAPCOA and also mention that as the CARB representative said at the time, we've gone from 10 original communities in AB617 to 19 now. However, the funding has remained the same. So supportive of a higher AB617 amount.

I'd like to talk a little bit about clean cars for all and thank Assemblymember Connolly for his questions. The Bay Area Air District has run out of funding for clean cars for all right right now and it's not efficient for us to have a waiting list and then have people go through the process, tell them they're not eligible because we don't have money, but then refer them to someone else's.

Program so that they can start from scratch and try to get money through that program. So we really support the Legislature looking at ways to keep that clean cars for all program funded for the air districts that currently run very successful programs. Thank you.

Thank you.

Mr. Chair, Chris Shimoda with the California Trucking Association. On issue one, we agree with alleged analysts that the authority to set charges and fees is a fundamental power delegated by the state's constitution to the Legislature. And we urge you not to cede that authority to the agency.

With regards to polluter pays, I do want to flag for the Committee. As noted in Mr. Boyd's presentation, CARB already sought to impose fees on refrigerated trailers carrying everyday groceries for Californians struggling to get by with cost of living. Those fees would have applied to both the newest cleanest CARB certified TRUs as well as zero emission TRUs.

They sought to impose the fees on both. And so for those reasons, we urge the Legislature to reject the proposed trailer and retain both its taxation authority as well as its legislative oversight role over the agency. Thank you. Thank you.

Thank you. Good afternoon. Morning. Still Julie Malinowski Ball. On behalf of the California Electric Transportation Coalition, we submitted a letter to the Committee with a whole bunch of other industry representatives speaking at issue number four in the ZEV budget package.

So the details are in that letter, but I want to highlight the need for funding HVIP this year. You know, nascent industry, hard to decarbonize. Leaving that program was $0 going forward. We don't think is the right way to go if we're going to meet our clean air goals and then clean cars for all.

We appreciate the discussion, the conversation and the, you know, the note in the agenda. We have to figure that out. We can't leave those five air districts without any funding for their program. So we would support funding for that. Thank you. Thank you.

Good morning. For another couple of minutes. Chair Members Colin Suarez of the Western Propane Gas Association. Thanks. Today I'm going to be commenting on two items for the first, the CARB fee authority trailer Bill. Again, to reiterate what my colleague Mr. Shimoda said, the polluter pays is a bit of a misnomer.

The language in that actual trailer Bill says including but not limited to, which opens up regulation to anyone touched by CARB, which means any business or individual who is attempting to comply could potentially be subject to that fee authority. The language would explicitly allow it. Secondly, the fees don't appear out of thin air.

Any fees that we have to eat as industries regulated will eventually in some way make it to consumers. Considering we keep talking about affordability, I'm really appreciative of the comments from the dais on that front. Thirdly, enforcement. One person's reasonable enforcement is another person's unreasonable enforcement.

Creating an authority for whatever enforcement that the agency feels necessary to defend its regulations puts the onus onto us, the regulated entities, to defend ourselves, potentially even in court, in order to defend our rights.

Thank you very. Thank you very much. That's your one minute.

Still. Good morning, Chair Bennett. Members, my name is Mike Mielke with Peninsula Clean Energy, or PCE. I'm here to comment on issue four and how state dollars are being spent on EV charging. We must accelerate efforts to support the millions of EVs needed to reach our transportation's emissions targets.

A key area of focus we think should be on multifamily housing. Cal evip, which is the largest public investment in light duty EV charging installs, does not adequately serve multifamily housing. PCE has had great success working with building owners to install Level 1 and power managed Level 2 chargers at parking stalls in these structures.

Level 1 costs roughly 20% as much as Level 2 and doesn't require very time consuming service upgrades. To date, Cal EVIP has denied eligibility to Level one and any charging and assigned part parking spaces for program funding.

As a Subcommitee overseeing ZEV investments, we respectfully request that you work with the CEC to broaden the approach in charging installs at multifamily buildings to include level one and assigned spaces. Thank you. Thank you.

Hi, my name is Ellen Brittingham. I'm here on behalf of San Diego Community Power. We're a community choice aggregator. We're the second largest in the state. We want to express our support for funding the Distributed Electricity Backup Asset or DIVA program in the GGRF spending plan. We believe this is an essential program for ratepayer affordability in California.

DBA can help by supporting the acquisition of additional clean customer resources which can be enrolled in virtual power plants. CCAs like ours in San Diego are at the forefront of building these virtual power plants.

VPPs or virtual power plants enable customers to participate in automated dispatch which can, among other things, reduce demand during peak hours when electricity is most expensive. Expensive, therefore mitigating costs and benefiting all customers. So with that, we want to thank you for letting us share our support.

Thank you.

Good afternoon Chair Bennett and Members. I'm Megan Cleveland with the Nature Conservancy on issue three. There are three brief comments that we'd like to make. First, if adjustments to the FY2025 26 GDRF expenditure plan expenditures are needed, we urge the Legislature to maintain the 70 million in GDRF preparations in that year for natural resources priorities.

Second, we urge the Legislature to reject the proposed Fund shift in the Governor's Budget of 32 million from GGIRF to Prop 4. When the Legislature and voters approved Prop 4, these funds were designed to be additional and build on prior investments.

And then finally, as the Legislature revisits the GGRAF continuous appropriations as part of cap and trade program authorization which we urge the Legislature to continuously appropriate 25% of GGRF expenditures to nature based climate solutions and natural working lands that play a critical role in reaching California's climate goals. Thank you.

Thank you. Hi, Good afternoon, Chair and Committee Members. I'm Molly Corcoran with Axiom Advisors. First, on behalf of 1.5 a direct air capture company in support of Item 2, experience expanded resources for Carbon Capture Removal Utilization and Storage Program SB905 funding. Really look forward to seeing the funding approved as laid out in the BCP.

Second, on behalf of Growth in regard to item 5E15 fuel specification, as many Members of the Committee pointed out today, look forward to that being funded as well. Again highlighting the cost to consumers at the pump decreasing from the E3 fuel specification and the increase in air emission improvements. Thank you.

Thank you. Thank you, Mr. Chair. Members, Virgil Welch, on behalf of the California Carbon Solutions Coalition. We're a business labor coalition working to deploy CCS and CDR technologies in California. Very much support the proposal on the budget for the expanded resources for 905. As you heard, that's a very important program.

However, have significant concerns about statutory changes associated as discussed in the staff report with the provision of those resources. 905 is clear about not being a replacement for project permitting. There are existing permitting processes, as you know, at the local level that projects are subject to. So we'd like to see those resources go so CARB can implement the program in its entirety. Thank you. Thank you.

Good afternoon, Mr. Chair. Mr. Connolly, Taylor Triffo with Consortium Conway. We'd like to express opposition on item one on behalf of a variety of agricultural associations, the Association of Equipment Manufacturers, California Grocer Association, Cal Broadband and US Telecom.

For the reasons identified by the Leo and on item three, on behalf of the food and agricultural sector, we request GGRF resources to five key programs that collectively are highly efficient, benefit low income communities, high pollution and underserved communities.

They're the Farmer program for tractor turnover, safer for drinking water replacement, FPIP for the food processing sector, alternative ag waste management and the livestock methane emission reduction programs. Thank you.

Thank you, Mr. Chair. Mr. Connolly. Beth Olhasso, on behalf of the Agricultural Energy Consumers Association, echo the GGRF comments my colleague just made want to highlight the livestock methane reduction program specifically. It's really the bang for the GGRF buck.

To date projects have reduced 3 million metric tons annually with what we have invested and it leverages close to $3 for every $1 the state invests. So when you're looking for emissions reductions and really the point of ggrf, dairy livestock methane reduction is the key. We can keep this program going with $75 million annually and urge your support. Thank you.

Thank you. Good afternoon, Mr. Chair. Mr. Connolly, Tricia Geringer with Agricultural Council of California. Also echo opposition to issue one, the trailer Bill and echo Ms. Trafo, the two prior speakers before me in the five programs urging GGRF funds for a really critical single significant programs that reduce greenhouse gas emissions in the food and ag sector.