Assembly Standing Committee on Appropriations

Hello, everyone. Yes, we know how to do math up here in the Appropriations Committee. We've reached quorum, so that's good. Okay. Good afternoon. Welcome to the March 19, 2025 Assembly Appropriations Committee hearing. We have eight bills to consider this afternoon as part of our. It's not. Yes, morning, it's afternoon.

As part of our regular order hearing, we encourage the public to provide written testimony before the hearing by visiting the Committee [email protected] Please note that any written testimony submitted to the Committee is considered public comment and may be read into the record or reprinted. The hearing room is open for attendance.

All are encouraged to watch the hearing from its live stream. It's riveting on the Assembly's website. We will accept public comment on any Bill placed on the suspense file by the Committee today and for which the author waived presentation before the close of the regular order hearing.

Testimony on any such Bill will be limited to a statement of name, organization, if any in position on the Bill. The Committee will allow no more than 40 minutes of testimony in total.

As you came into the hearing room today, the sergeants directed your attention to the rules for public attendance and participation which were posted outside the door. I encourage Members of the public who are in attendance to be aware and observe those rules.

Please be aware that violations of these rules or other violations of General courtesy or decorum may subject you to removal of our or other enforcement processes. Okay. Would love to welcome Vice Chair and new Committee Members. Welcome new and returning Members to the first Appropriations Committee hearing of the 2025. 2020 succession.

I would also like to recognize our returning Vice Chair, Assembly Member Sanchez. Madam Vice Chair, would you like to make any comments?

Thank you so much, Chair. I look forward to working with each and every one of you. So many new faces. And I look forward to getting the work done as the year goes on. Thank you.

Thank you, Madam Vice Chair. And with that, I'd like to establish a quorum. If one is present, Madam Secretary.

[Roll Call]

Before we go to the rules, our first official order of business is the adoption of the Committee rules. The rules were distributed to the Members of the Committee. These rules were distributed to the Members of the Committee. Yeah. Do we have a motion on the Committee rules? We have a motion. And a second. I see our Vice Chair has a question.

So I want to preface by saying. There are a lot of great changes in these Committee rules we were going through though, however, and I see that it removes the 24 hours made available to the public. I just want to clarify that we. Will have the best faith effort in. Making sure that the public is made aware of all the bills going forward.

Yes, we will get that out the day before which we are going to strive our hardest to be within the 24 hour window. Sometimes it might be 23, sometimes it might be 22. The staff have a lot coming at them, but we're going to try our hardest to give as much time time as possible.

Thank you, Chair.

Great. Okay, so we have a motion, A second. Madam Secretary, please call the roll. Wicks.

[Roll Call]

Great. 11 to 0 rules are adopted. We'll let folks add on. Let's see. First up, we have ascended. Member Harabedian, please come up. You are presenting AB 238.

Thank you, Madam Chair. Good afternoon to the Committee Members. I'm honored to be the first bill that you guys hear. I have a PowerPoint and a 15 minute presentation. So we get... I'm just kidding. Good afternoon. I'd like to thank the Chair first and Committee staff for all the work that they did on this critical bill.

AB 238 provides crucial safety net for LA County wildfire survivors. Under this bill, borrowers can request an initial forbearance on their mortgage payments for up to 180 days with the option to extend for additional relief if needed for up to one year maximum.

Costs include a one time expenditure exceeding 150,000 for the Department of Financial Protection and Innovation to hire a financial institutions examiner and update IT systems to enforce state mortgage forbearance. I appreciate the opportunity to speak with you today and to present this critical bill for wildfire survivors. Thank you.

Thank you. Do we have any folks expressing support in the room?

Good afternoon, Madam Chair and Members. Robert Herrell, Executive Director of the Consumer Federation of California in strong support. Important measure for wildlife survivors. Thank you.

Great. Any folks wish to express opposition? You can begin.

All right. Thank you, Madam Chair and Members of the Committee. My name is Vanessa Lugo, and I am the, I'm with the California Bankers Association. I appreciate the opportunity to talk about a bill that is trying to address the financial hardship caused by the recent LA wildfires by requiring up to a year mortgage forbearance to those who lost their homes in those fires.

While we offer our heartfelt sympathies to those who experience loss due to the wildfires, we also have significant concerns with the current version of the measure that need to be resolved in order to avoid unintended ramifications and market disruption. The moment this measure was introduced, banks and financial institutions were already outreaching and working proactively and constructively with customers to minimize the adverse financial effects of the the crisis.

Early on, both federal and state chartered banks joined forces with the Governor's Office to provide mortgage relief to those impacted, 90 days forbearance of their mortgage payments without reporting to credit reporting agencies and the opportunity for additional relief. While we fully support the intent of this measure to provide relief to borrowers in need, the bill as amended brings us no level of comfort.

First, AB 238 needs to consider the different needs of investors in the mortgage market and work alongside existing programs that help homeowners after disasters. These programs are provided by groups like Fannie Mae, Freddie Mac, the Federal Housing Administration, the Department of Veterans Affairs, and the USDA Rural Housing Service.

These programs look at each homeowner's financial situation individually, understanding that everyone's circumstances are different after a disaster. By using these well established rules in AB 238, the bill would provide better and more consistent help following successful strategies from past disaster recovery efforts.

Second, we're also worried that the current version of the bill could unintentionally create rules that clash with the guidelines and contract investors must follow. In these amendments we've suggested, we ask that AB 238 be changed to make it clear that a mortgage servicer who follows the loss assistance programs for federally backed loans and treats non-federally backed loans the same way should be considered in compliance with the law.

The bill in its current form does not address this concern, instead places a servicer in the difficult situation to decide which law to follow. To be clear, the industry has been engaged and proactive with the author, sending several drafts from practitioners who would implement this law to address the author's concerns. Unfortunately, the current version of the measure hasn't substantively evolved in a meaningful way that...

If you could wrap up.

Addresses our concerns. Nonetheless, we remain committed to working with the author in attempt to achieve a reasonable compromise. Thank you.

Thank you.

Hi. Indira McDonald on behalf of the California Mortgage Bankers Association to also express concerns. California MBA member servicers have also been actively engaged since the devastating fires, working to serve the borrowers and provide that relief.

Recent amendments to allow the servicers to have check ins with the borrowers and seek documentation fails to address our fundamental concern, specifically the secondary mortgage market legal issues we raised in our letter and in policy committee have not been addressed as necessary to resolve compliance conflicts with investor guidelines and avoid market stability risks.

The bill imposes a one size fits all forbearance requirement without adopting our requested amendments to clarify servicers may be allowed to maintain their contractual servicing agreements with GSEs, with federal agencies, and private investors when investor agreements do not align with the state mandated forbearance in the bill.

As noted in the fiscal analysis related to costs, DFPI examiner costs are anticipated because the bill creates state forbearance rules that may differ from the investor guidance. Providing regulatory oversight will be challenging if servicers are forced to provide forbearance outside the terms of federal agencies and private investor loan servicing agreements.

To address the regulatory costs and and our concerns, we urge the author to adopt our requested amendments to align the bill with GSE guidelines and clarify that mortgage servicer may offer borrowers forbearance loss mitigation consistent with their contractual obligations.

Rejecting the amendments may make compliance unclear and investors may challenge servicers legally for providing forbearance outside the terms of the agreements. This will lead to legal challenges that would impact the effects of the law and create additional uncertainty in the mortgage lending market, driving up costs for both the state and for consumers as well. And our amendments avoid these costs. So we do look forward to continued conversations, and we appreciate you working with us as we go forward.

Thank you. Anyone else in the room wish to express opposition? Just name, organization, and position please.

Good afternoon, Madam Chair. Kris Anderson on behalf of the California Chamber of Commerce. Don't have a position but do have concerns and align our comments with those of the witnesses. Thank you.

Thank you. We will bring it back to the dais. Assembly Member Hadwick.

Hi. I spoke earlier already. Thank you... I represent District 1 in North State. We are plagued by fires. We've had millions of acres burned in the last decade, and I have constituents call me every day asking why we didn't have... Okay. Sorry. Oh, there we go. Sorry.

Okay, so I represent District 1 and we've had millions of acres burn the last decade in our district. And I have constituents calling me every day, fire victims that have lost their homes, lost their land, lost their livelihood and ask why a special session hasn't been given to them for their fires. They ask why 130 executive orders haven't been passed for them. And so to me, this is an equity issue. I will be abstaining. I feel for the victims of fire. It's something you can't unsee, you can't unfeel it. It's absolutely devastating.

But I really feel like this is unfair to the past fire victims because we haven't, you know... Mortgage lenders have programs that let them have a few months or have that support. But this is something that, as a state, I don't think is fair, that we, I want to make sure that as we move forward, we're treating all of our, all of our citizens the same, no matter where they are in the state. So thank you.

Thank you. Any other questions? Comments? Would you like to close?

Thank you, Madam Chair. Just respectfully ask for an aye vote. Thank you.

Thank you. AB 238 will be put on the suspense file. We will be taking a suspense file at the end of this hearing today. Oh, and you have another. Yeah. You have three bills before us today. Great.

I do.

Would you like to do AB493 next? Sure.

Great. Thank you, Madam Chair. And hello again. Thank you again to the chair and to the Committee staff for the work on this Bill as well. Assembly Bill 493 seeks to protect homeowners by eliminating an exemption on post loss insurance payouts, making sure that homeowners receive interest on their insurance payouts which can help them rebuild their lives and their homes. The cost of this measure is minor and it is for DFPI to ensure compliance by financial institutions.

I'd like to thank Governor Newsom for his partnership on this critical measure. And thank you again for hearing this Bill.

Thank you. Assemblymember. Anyone else in the room wish to express support? Any opposition?

Indira McDonald on behalf of the California Mortgage Bankers Association, not in opposition, but we have expressed some concerns to the author and the Governor's office regarding making conforming changes with the Residential Mortgage Lending act and to take into account the unique nature of these hazard insurance proceeds.

We are not submitting a letter at this time and we're optimistic we can work something out with the author. So forward to conversations.

Thank you. Any additional comments from the audience? No. Okay. Questions from the dais. Any Members have questions or comments? Do you accept the amendments?

I do.

Okay, great. Would you like to close?

Respectfully ask for an aye vote.

Great. And that Bill. Oh, do. Sorry, do we have a motion? Motion and a second. Great. That is out on a roll call. Great. And now we will move to AB597.

Thank you, Chair. AB597 is a Bill that strengthens consumer protections for Californians after disasters. These protections are already implemented in many states, including Kentucky, Florida and Texas. The spill has minor and absorbable costs to the Department of Insurance to update informational materials and enforce new contract terms.

I have with me representatives from the California Department of Insurance, if you'd like to hear from them. If not, they're here to answer questions. And I would respectfully ask for your aye vote. Thank you.

Thank you.

You'll each have two minutes.

Josephine Figueroa, Deputy Commissioner and Legislative Director for the Department of Insurance under the leadership of Insurance Commissioner Ricardo Lara. Just real quickly, as a proud sponsor of AB597 Insurance Commissioner Lara would like to thank Assembly and for his leadership and authoring this important measure that will protect Californians from price gouging and unfair. Practices by public adjusters.

And yes, we're here to answer any. Technical questions you may have. And on behalf of Insurance Commissioner Cadolar, we ask for an aye vote.

Thank you. Okay. Anyone else wish to express support in the room? Anyone wish to express opposition, either as a main witness or an add on? Me too. Okay, we'll bring it back to the Committee. Any questions? We have a motion and a second. Any questions? Okay. Do you accept the amendments?

I do.

Great. Okay. Would you like to close?

Respectfully ask for an aye vote. Thank you very much.

Great. That Bill is out on an A roll call. Thank you, Madam Chair. Thank you, Assembly Member. And now I believe we have Assembly Member Schultz is here with us. And you will be presenting AB 306.

Yes, Madam Chair.

Maybe one of you right here. Perfect. All right. Madam Chair, you ready for me?

I am ready.

Outstanding. Thank you, Madam Chair. And Members of the Appropriations Committee, I'm pleased to present Assembly Bill 306 on behalf of myself and our co authors and of course, our joint authority Speaker Robert Revis.

Assembly Bill 306 imposes a six year moratorium on new updates to the state building code that would affect residential construction and would temporarily prohibit local governments from making new modifications to those standards, except for emergency changes necessary to protect health and safety.

My presentation will not be 15 minutes as Assemblymember Harbidians wasn't, But I did want to add a couple pieces of critical information here. The problem that Assembly Bill 306 seeks to solve is the fact that California has a multimillion unit housing deficit.

This mismatch of supply and demand has resulted in a longstanding housing crisis that we are all very acquainted with. Our home prices are nearly double the national average. And now we have to talk about the building standards process. It's a triennial proposal, Triennial code proposal and adoption process with intervening codes adopted every 18 months.

Now, California's building codes are some of the most energy efficient in the country, if not the world, and are protective of health and life in our great state. But the cumulative impact of ever more aggressive building code updates has measurably increased the cost of new housing construction.

We have some industry stakeholders here today and they can further elaborate, but it's important to note that stakeholders estimate the upfront cost increases of code changes made in just the last 15 years fall in the range of 50 to $100,000 per per single family unit. And that does not include further cost pressures from any local modifications.

Now, according to the Committee analysis, the financial costs of Assembly Bill 306 are, I would categorize, relatively small and manageable. But it is important to note that the benefits of this bill outweigh the costs.

The pause proposed by AB306 will bring more certainty to the home construction industry and help stem further construction cost increases from for new homes and apartments.

Pausing further changes in the code will allow the current contractor workforce and local building officials to absorb the latest code requirements and have certainty that they will be in place for the next six year period and they will not have to, within that time, take the time to relearn and reconfigure their practices as they currently do every 18 to 36 months.

The last thing I want to close on, Madam Chair, are a couple points that I think need to be said because there has been some questions that our office has received. The pause is not in perpetuity. It is for six years. The pause only affects residential building standards and not commercial building standards.

While AB 306 will provide relief to people rebuilding their homes and apartments after the devastating Los Angeles wildfires, it also offers a solution, a statewide solution to a state wide problem which was in existence even prior to these devastating wildfires.

Our office and our Joint Author's office pledge to work with the opposition as we have in the last week on possible future amendments to deal with the concerns raised here today. And with that, I'd like to turn it over to two witnesses in support of AB306.

We have Silvio Ferrari on behalf of the California Building Industry Association and Marina Espinosa with the California Housing Consortium. Thank you, Madam Chair.

Thank you. You'll each have two minutes.

Good afternoon, Madam Chair and Members. Marina Espinosa with the California Housing Consortium CHC is in strong support of AB306. In order to make affordable housing projects feasible, developers have to navigate a very complex financing environment which often leads to delays and increased project costs.

On top of that, various state and local regulatory requirements, including building code requirements, contribute to the high cost of development. State and local building code requirements are often imposed without a holistic review that analyzes their aggregate impact on the cost of housing construction.

AB306 would ensure that affordable housing developers can rely on the project costs they originally budgeted and secured funding for without the risk of those costs increasing due to building code changes. We are in a housing crisis and it's critical that we do everything we can to control the high cost of building housing.

Temporarily pausing additional changes to the building code is one way to do that. I strongly urge you to support AB306. Thank you. Thank you, Madam Chair.

Madam Chair. Members, Sylvia Ferrari, on behalf of the California Building Industry Association, also here in strong support. I think what you have before you today is truly one of the few bills that actually can be scribed as a bill about affordability. What is so detrimental, I think, about the code development process is very few people understand it.

Very few people even understand that it's taking place and it is updated every 18 months. We have never had a code update that did not result in more cost to housing, not once. So that in itself is adding cost to the everyday home buyer, everyday renter.

Each 18 months, when you as hard as we work to try to hold those costs down, there's always more and every 18 months they become worse. And when you step back and look at it, as the author said, over a period of time, we're talking tens of thousands of dollars that have been added.

This is really a bill just for a period of time to try to hold those costs steady. If we don't, everyone who is trying to rebuild in LA and beyond is only going to see those cost increases go up and up and up as they are trying to rebuild. So this is a bill about affordability.

Would urge your Aye vote.

Thank any additional folks in the room wish to express support, please Step up to the mic. Name, organization and position.

Chair Members of the Committee, Jordan Prana Carvajad on behalf of California YIMBY. We appreciate the recent amendments on the bill. We're going to keep talking to the author and Committee staff about the measure. Thank you so much.

Hi Ali Sapirman on behalf of the Housing Action Coalition with a support if amended position with comments aligned with California YIMBY. We've had great conversations and we look forward to having those finalized.

Catherine Charles on behalf of Housing California and support.

Stephen Stanza with Brownstein on behalf of the Bay Area Council in, A support if amended position following comments. Of California EMB and Housing Action Coalition. Look forward to continuing to work with the author.

Alex Shores with Brownstein on behalf of the California Council for Affordable Housing and support. Thank you.

Thank you. Any opposition to the bill? Primary witnesses in opposition. Feel free to step up here.

Good afternoon Madam Chair Members. I see I'm the only brave soul here. Ed Manning with KP Public affairs and I'm representing the International Code Council. We did not have a position in the first policy Committee but got a letter in to this Committee.

International Code Council for those of you who don't know, is a nonprofit public benefit corporation, about 60,000 Members. Our Members are engineers, architects, public building officials, fire officials and folks with contractors, home builders and others across spectrum in the United States and internationally. And my client develops the International Residential Building Code adopted in California. A couple things.

First, there's a big difference between the triennial process, which is a very methodical, thorough process involving stakeholders over a three year period to update the codes and some of the interim codes and reach codes that have been mentioned.

Second, I in my letter footnoted it with studies included peer reviewed studies that show all the benefits to homeowners from cost reductions for things like insurance.

The important things the codes do which are not covered by this bill, including earthquake risk and other types of risks which add to benefits for insurers, benefits for the insured and cost savings for homeowners.

It also the bill doesn't speak to tech to technological updates which are being done more and more that give the use of technology in the building of structures and residences. Moreover, sometimes compliance options that will actually reduce costs, not all code provisions. The residential code is about this thick. It falls into a lot of different places.

Not all of the codes add expenses. Some reduce and some are critically important for the upgrade of the standards of homes. This bill is a bit of a chainsaw approach to the codes. It's a six year total freeze except everything essentially for home hardening and emergency health and safety. That is not the right way to go.

This bill deserves a lot more scrutiny and a lot more thought about what types of code updates make sense, what are cost effective, what are critical for home buyers, for safety, for insurers.

So we are offering to be as part of a dialogue and constructive discussion about how over the next six years do we distinguish between the triennial code updates, interim code updates, reach codes, and what types of code development are actually in the benefit of the state for both public safety, insurance, health and even reducing costs.

So with that, we oppose the bill and thank you.

Thank you. Anyone else wish to express opposition, please step up to the mic. Name, organization and position. And Mr. Manning, if you want to, if you want to stay, there might be questions. If you want to stay, additional opposition, please name, organization, position.

Good afternoon. Ada Welder on behalf of Earth Justice and respectful opposition.

Nico Molina on behalf of the NRDC Action Fund and opposition. Thank you.

Andy Schrader, Climate Action California. You're going to have 482 angry cities across California when you move this so quickly without their input. Opposed.

And good afternoon, Madam Chair. Mark Fenstermaker for Peninsula Clean Energy, the community choice aggregator for San Mateo County. It's 20 cities in the City of Los Banos. We don't have a formal position. We have expressed some concerns to the author's office. Thank you.

Thank you. We will bring it back to the Committee for any questions, comments. Ms. Dixon.

Thank you, Madam Chair, and thank you, Assembly Member. I applaud your efforts and understand the need, and I fully support the need for streamlining our construction processes everywhere, all over the state and provide a path forward for rebuilding, especially in the wake of wildfires which have impacted many cities in California.

I believe there are, however, several unintended consequences of this bill which I find problematic. In particular, I'm concerned with the impact AB306 will have on local control. And this bill takes away the city's power, a city's power to amend the building code to address local issues.

For example, in my district, the City of Newport Beach, which is a coastal town, has just for point of example, has installed solar on the roofs and uses a metal conduit. However, the metal corrodes very fast in salty air. So in response, the city changed local codes to address this.

So it's just a matter of having local flexibility and under AB306 this flexibility will be removed. And similarly, I share and think the concerns raised by the California building officials and the International Coat Council are worth considering in particular towards the risk to building safety.

For these reasons, I will be not supporting the bill today, but I hope that we all can work together to understand the circumstances that may lead to modest modifications to building codes during this seven or six or seven year hiatus period. I think could be problematic. So thank you very much.

Thank you. Any other questions? Okay. I also before you close, I just want to add, as a principal co author, I appreciate you bringing this bill. I know it hasn't been without controversy. It is going through the policy process.

I know that you are going to continue to meet with stakeholders both for and against the bill and appreciate your leadership in this space. And I do agree there's an affordability connection here that we need to be really mindful of, especially as we're trying to rebuild our communities, which I think is everyone's goal here.

So thank you for your leadership. And with that, would you like to close?

We'll just respectfully ask at the appropriate time that this pass through committee, we understand it will go to suspense for now, but we really just want to emphasize that to those who have expressed criticism or feedback about the bill, I remain available, happy to discuss with anybody.

This is a collaborative process and my only ask of all of you today is this is a conversation that we should have publicly. And while some may not want to have the conversation, we have to get serious about affordability. Thank you very much.

Yup and this bill is moving to the suspense file which we will take up at the end of this hearing.

Great.

Thank you.

Assembly thank you, Madam Chair.

And we have Mr. Ward here for AB253.

And you can begin when you're ready.

Thank you, Madam Chair and Members. Here to present AB 253, which allow homeowners and developers to hire licensed third party professionals to conduct building plan checks if it would take that local building department 30 days or more to complete the similar review.

Under our current law, local governments review building plans to ensure compliance with state building codes and local ordinances, a process which is prone to delays due to fluctuating workloads and resource constraints at local building departments. Lengthy review periods at this stage hinder housing production by delaying the transition from design projects to active construction, affecting the overall construction costs and housing affordability in California.

This bill addresses critical administrative hurdles by ensuring timely post-entitlement plan checks for small residential projects, providing an alternative mechanism for applicants to use licensed private professionals at this stage, which I might add, some already do and some are afforded already on a case by case basis within local practice. The approach aligns with best practices from other countries and recent legislative actions in states across the country.

And as you can see in your analysis, the fiscal impacts are limited, if any at all, with the Housing Community Development Department at the state, some limited, minor, and absorbable technical assistance and minor and potentially fully offsetting costs to local government. With me in witness of support for this item is Jordan Panana Carbajal, the Government Affairs Manager with California YIMBY.

Thank you. You can begin.

Good afternoon, Madam Chair and Members of the Committee. Jordan Panana Carbajal with California YIMBY, here as a proud sponsor to speak in support of AB 253. California is in the midst of a severe housing crisis, yet one of the biggest obstacles to building new homes is excessive delay in the permanent process.

AB 253 offers a solution that supports both local governments and home builders. It allows licensed insured third party reviewers to assist in processing housing permits application when cities face resource constraints and aren't able to complete the reviews within 30 days. This bill does not eliminate city oversight. It simply provides an additional tool to help cities manage workloads and meet housing goals more efficiently. With that, respectfully request your support for AB 253. Thank you.

Thank you. Any additional folks in the room wish to express support?

Madam Chair, Members. Madam Chair and Members, Alex Torres on behalf of two clients, Bay Area Council as well as the California Council for Affordable Housing, in support. Thank you.

Thank you.

Ali Sapirman on behalf of the Housing Action Coalition in strong support.

Catherine Charles on behalf of the Chamber of Progress in support. Thank you.

Raymond Contreras with Lighthouse Public Affairs on behalf of SPUR, Fieldstead, and Abundant Housing LA in support.

Thank you. Any witnesses in opposition? Okay, we'll bring it back to the committee. Any questions? We have a motion and a second. Great. Before you close, I'm a co-author of this bill. I love this bill. My only critique is I wish it was more expansive, but maybe we'll get there. Oh, we have... Ms. Dixon wants to...

Just a quick comment. So thank you. I appreciate, Assembly Member Ward, your intent on the bill and I'm fully supportive of your overall goals. However, I am hearing from local city planning development offices that when they hire, if they were to hire an outside plan check person, who's liable for any mistake that they made? That often can happen. And is there any possibility to have, exclude the city or the public agency or even the private homeowner if it's a private development, from liability issues? Has this come up in your conversation?

It's only recently come up, but happy to provide or continue to work with any of those objecting concerns. I would say just kind of today that any liability, if this case sort of came before me right now, would be on that professional who should be bonded, who should have some kind of protections for them as a business owner. And so they are, if they are assuming that that job, they probably come with those protections that are in place. I don't intend to assume any liability on the city.

And I would remind you and the committee that the city still maintains under this bill the ability to provide necessary inspections on, say, critical issues like structural and electrical and plumbing, et cetera, and the final inspection and the final approval of the project. This just gets you to have shovels in the ground a lot faster. Some of our cities can take six months or longer to even give you the green light to build.

Okay, that's good. Okay, thank you so much.

And just to finish up, just appreciate your work in this space. As you know, I had a Select Committee on Permitting Reform last year. This idea and many others percolated. And you know, I think we can all agree we have an affordability crisis and part of that is our own making.

We've made it too hard to build anything in California. And so I view this as a step in the right direction to make it easier to build all the things that we need for all of our constituents. So I'm happy to have already voted for the bill twice, am a co-author, and to... Wait. We need a motion before I can... Oh, we have a motion and a second. Great. With that, would you like to close?

Yeah. To your point, Madam Chair, I just want to recognize that there has been some discussion about the limitations of this bill looking at one to 10 style developments, residential units, or remodels thereof, which would apply and I'm open to that a little bit.

But regardless of where you decide to set that number at, the whole point is, is that if you are essentially allowing for some parallel pathway and sloughing off the workload for a local government to be able to clear out the easy stuff, that actually allows them to be able to train into the more intensive stuff, your mid style 50 unit apartment building, even faster because their workload just got reduced. The whole point is to try to get the total workload maybe down to a place that's 30 days or less for first review. And I think this bill will be a great step in that direction. Respectfully ask for your aye vote.

Thank you. Appreciate your leadership here, Mr. Ward. And with that, the bill is out on an a roll call with Mr. Hart and Ms. Dixon not voting. Okay, and now we will move on to Mr. Alvarez. No, it's not suspense. Yeah, it's out on an a roll call with Mr. Hart and Ms. Dixon not voting. Mr. Alvarez.

Mr. Alvarez, you are up next and AB 226, I believe. And you can begin when you're ready.

Thank you, Madam Chair. Appreciate the opportunity to present Assembly Bill 226. Assembly Bill 226 is a bill that would expand the California Infrastructure and Economic Development Bank by allowing bond proceeds and related revenues to be deposited into the fund.

The bill also streamlines the FAIR Plan's access to liquidity by allowing the Administration without yearly legislative approval. Fiscal impact as noted on your agenda, primarily at the end of page one and page two, is negligible as the cost of this is borne by the issuance of the bonds and not by consumers and not by taxpayers.

It's all self contained within the, within the the issuance of the bonds, as I stated. The bill's benefits include stabilizing the insurance market and avoiding disaster related fiscal risks, which could significantly outweigh any minimal administrative costs as is noted again on page two of your analysis today.

Additionally, under the IBank process, all minor administrative costs are fully reimbursed to the bond by the bondholder, resulting again in no taxpayer expense. We have a couple of folks here to testify. We'll start with the California Building Industry Association, and then I believe we have Department of Finance, Department of Insurance available as well.

Thank you.

Great. Thank you, Assembly Member. Steve Cruz on behalf of the California Building Industry Association. First, thank you to The Assembly Member Alvarez and Assembly Member Calderon for bringing this measure forward, along with the California Department of Insurance for their support and leadership to strengthen the FAIR Plan, the financial stability of the FAIR Plan, and ensure essential property insurance for homeowners and new home buyers.

While AB 226 has been tagged as a fiscal measure, as the Assembly Member pointed out, it's due solely to its relationship with IBank, and those costs will be borne and fully reimbursable by the FAIR Plan, which operates as a private entity outside of public funds.

Furthermore, the bonds issued at 226 will be paid by the insurers of the FAIR Plan policyholders and not taxpayers. This ensures no financial burden is placed on the public. AB 226 does include an urgency clause, so we were pleased to hear about the suspense calendar to immediately follow this hearing and hopeful that the bill will move forward today. Thank you.

Thank you.

Sorry. Good afternoon, Madam Chair and Members of the Committee. I am Andrew Deller, Deputy Director of Legislature, Deputy Legislative Director for the Department of Insurance under the leadership of Insurance Commissioner Ricardo Lara. Insurance Commissioner Lara is proud to sponsor AB 226 along with the California Building Industry Association.

First, Commissioner Lara would like to thank Assembly Members Calderon and Alvarez for their leadership in authoring this important measure. The fiscal impact of AB 226 is minor and absorbable on the Department of Insurance and would allow the California FAIR Plan to access bonds, loans, and lines of credit subject to Insurance Commissioner approval.

This would provide the FAIR Plan with another financial tool in their toolbox that they do not have currently today. A stable and solvent FAIR Plan as the state insurer of last resort is critical to ensure a reliable yet temporary safety net that is there when consumers need it when they otherwise cannot find insurance coverage in the traditional or non-admitted surplus line markets.

With the increasing risk of climate intensified wildfires and disasters like we have seen recently in Los Angeles, if the FAIR Plan's reserves are stretched too thin, it could delay payouts to consumers and create instability in the broader insurance market.

AB 226 would provide the FAIR Plan access to capital when needed to ensure the FAIR Plan's ability to continue operating and timely pay consumer claims from these devastating events and to also help ensure that the FAIR Plan can continue to pay claims as there are subsequent events.

This bill aligns with the goals for the FAIR Plan modernization and Insurance Commissioner Lara's broader Sustainable Insurance Strategy, a necessary part of the ongoing efforts to stabilize California's insurance market while holding true to the spirit intent of the landmark ballot initiative, Proposition 103.

We've already made progress by raising FAIR Plan residential and commercial coverage limits, enhancing regulatory oversight, and improving customer service. But we must also ensure it remains a viable safety net when homeowners have no other choice. We cannot wait for the next crisis to act.

AB 226 creates long term security for consumers, homeowners, and businesses across the state and is a practical step to strengthen the FAIR Plan's access to resources and protect Californians when they need it most. On behalf of Insurance Commissioner Lara, I respectfully ask for your aye vote. Thank you so much. And with me here today if you have any technical questions is Melissa Wurster, an attorney in the Reinforcement Bureau for the Department. Just...

Thank you. It's always good to have someone there for technical expertise. Yes. Great. Anyone else in the room wish to express support, please name, organization, and position.

Ali Sapirman on behalf of the Housing Action Coalition in support.

Kasha Hunt with Nossaman on behalf of the County of Monterey Board of Supervisors in support.

Catherine Charles on behalf of the Personal Insurance Federation of California in support.

Raymond Contreras with Lighthouse Public Affairs on behalf of Home Building Alliance, SPUR, and Habitat for Humanity California in support.

Thank you. Any primary witnesses in opposition? Any additional folks in the room wish to express opposition? Okay, we'll bring it back to committee. Any questions? Ms. Calderon.

Yes, actually, I just have a comment. So the FAIR Plan was intended to be the insurer of last resort, but instead it's turned into a leading insurer in California. And we're all seeing what happens when the FAIR Plan is overexposed in one area and we suffer a catastrophic event.

And so this is a really important measure necessary to provide the FAIR Plan with tools to ensure their solvency. And I just want to thank you, Assembly Member Alvarez. You introduced this bill last year. It was a good bill when you introduced it last year. And I'm so glad that you decided to bring it back and you're allowing me to join you on this bill. So thank you.

Thank you. Any additional questions? We have a motion and a second. Great. And would you like to close?

Thank you for, again, the opportunity to present this. This is a bill about the insurance crisis, which impacts us all. It's affordability. It's about being able to get into a home for those who have no access to insurance and to keep California Californians protected. And making sure that this system that we created of the FAIR Plan is sustainable long term. For that reason, I request, respectfully request your aye vote. And thank you.

Thank you, Mr. Alvarez. Appreciate your leadership in the space. That is going to the suspense file, which we will take up at the end of this hearing. Thank you.

Thank you.

And we are waiting on Mr. Lowenthal or Ms. Schiavo. If anyone sees either of them, please send them to the Appropriations hearing room. Oh, my gosh. There they both are. Perfect timing. We planned that. Thank you, Ms. Schiavo. Our last two authors. Ms. Schiavo, you are presenting AB 301.

Yes, I am. And I'm ready. Okay. Thank you so much, Madam Chair and Members, for being here, and sorry I'm late. I'm grateful for the opportunity to present AB 301. Members of our state are facing a severe housing crisis, and it's imperative that we take decisive action to streamline the process of delivering adequately on homes, the supply of homes.

The devastating fires in Eaton, Palisades, and the Hughes Fire, which was in my district, really demand swift and rapid reconstruction, fueling economic growth, revitalizing neighborhoods, and restoring stability. AB 301 establishes clear and consistent timelines, ensuring that state agencies adhere to the same permitting deadlines as local jurisdictions.

This alignment will eliminate unnecessary delays at the state level, expediting approval processes. And the committee's fiscal analysis indicates the cost associated with this legislation is minor or absorbable. And here to provide testimony and support of this measure is Ali Sapirman, who is the Policy Manager at Housing Action Coalition.

Thank you. You can begin.

Thank you. Good afternoon. My name is Ali Sapirman, and I'm the Advocacy and Policy Manager at the Housing Action Coalition. We are a statewide organization that advocates for building more infill housing for residents at all income levels and a proud supporter of AB 301 because it continues the Legislature's work to put reasonable timeframes around the review and issuance of building permits.

Beginning in 2021, the Legislature passed AB 2234, which sets shot clocks for cities and counties to review and issue post-entitlement building permits. In 2023, AB 281 continued that work and applied the same concept to special districts. AB 301 continues that work and brings parity to the exact same set of rules and times to state agencies.

While these agencies don't typically issue the final permit, that's done by the local government, their review of documents are often necessary for a project to proceed, and they're not necessarily timely. We've asked our members for examples of their experiences of these types of delays, and one instance was shared where the Department of Toxic and Substance Control took up to a year to review paperwork to clarify that a site cleanup had happened.

I've had other members alter and change housing projects entirely just to avoid Caltrans jurisdiction because of fear of the associated delays. These types of delays drive up the costs and further exacerbate our affordability and displacement crisis.

By setting reasonable time frames for state agencies to review and comment on building permits, we are taking another step to create good government guardrails around the home building process and creating consistency across the process. Thank you so much for your consideration.

Thank you. Do you have additional folks in the room wish to express support? Please name, organization, and position.

Good afternoon, Chair and Members. For the final time, Catherine Charles on behalf of the Bay Area Council, Chamber of Progress, and Housing California, all in support. Thank you.

Thank you.

Good afternoon, Madam Chair and Members. Raymond Contreras with Lighthouse Public Affairs on behalf of the Home Building Alliance, Abundant Housing LA, and San Diego Housing Commission in support. Thank you.

Good afternoon, Madam Chair and Members of the Committee. Jordan Panana Carbajal on behalf of California YIMBY in strong support. Thank you so much.

Thank you. Do we have any folks in the room expressing opposition? Okay, we will bring it back to the committee. Any questions? We have a motion and a second. Would you like to close?

Respectfully request an aye vote. Thank you. Or you know, when there's a chance.

Yes. Love this bill, and I'm a co-author, so thank you for letting me join your team on this. And it's on suspense, and we'll take it up at the end of the hearing. Thank you, Ms. Schiavo. Mr. Lowenthal, you are last but not least. And I believe you are presenting AB 462.

Thank you, Madam Chair and members. Very pleased to present AB 462, which will exempt the construction of accessory dwelling units or ADUs from coastal development permit requirements in Los Angeles County. Los Angeles County faces a severe housing crisis which became immediately worse with the devastating loss of thousands of homes in the Palisades and Eaton Fires earlier this year.

Due to the devastating and catastrophic loss caused by the wildfires, there are now entire communities in Los Angeles that are unexpectedly looking for housing, putting more strain on the already existing housing shortage. One way the state has successfully facilitated rapid housing production is by facilitating the construction of ADUs, which must be reviewed and approved in a streamlined fashion at the local level within 60 days.

Unfortunately, homeowners in the California's coastal zone do not enjoy the same streamlined process. That poses a barrier for homeowners seeking to add much-needed housing supply, especially in Los Angeles County where ADUs can be used to house those displaced by the fires, assist in freeing up other housing inventory, and increase the housing stock.

The bill also makes this exemption available to coastal communities that experience destruction from natural disasters in the future. AB 462 seeks to provide vital relief to the rental market in Los Angeles that was already facing a serious housing crisis prior to the loss of property caused by the fires.

It is essential for California to implement policies that facilitate the efficient construction of housing in order to be prepared when a natural disaster strikes again. Respectfully ask for your aye vote.

Thank you.

Here to testify in support of the bill is Jordan Panana Carbajal, on behalf of California YIMBY.

Thank you.

Good afternoon, Madam Chair, members of the committee. Jordan Panama Carbajal, on behalf of California YIMBY and here strong support of AB 462. Los Angeles County is facing severe housing crisis made worse by the destruction of thousands of homes in the recent fires. One of the most effective way to create new housing quickly is is through ADUs, now that--especially now that ADUs now make up to 20% of the new housing construction in California.

AB 462 eliminates these unnecessary barriers in Los Angeles coastal zone, allowing ADUs to be approved in the same streamlined 60-day process as the rest of the state. By cutting red tape, AB 462 helps expand housing options, increase affordability, and support wildfire recovery efforts. As for these reasons, I respectfully request your support for AB 462. Thank you.

Thank you. Any additional folks wish to express support in the room? Any witnesses in opposition? We will bring it back to committee. Any--wow. We have motions and seconds all over the place; okay, some fourths and fifths. Before you close, I appreciate you taking this on. This is a great bill. I'd love to be added as a principal co-author and would allow you to close.

Respectfully ask for your aye vote.

Great. That is out on an A roll call. Thank you. We'll do some add-ons to the rules. Committee Rules.

[Roll Call]. Fifteen to zero.

Okay, with that, we're going to move on to the suspense hearing. Everyone, welcome to the March 19th, 2025 Assembly Appropriations Suspense Hearing on Assembly Bills. Before we start with the four bills on the suspense file, I'd like to announce that the hearing agenda is organized alphabetically by order.

An electronic copy of the agenda is available at the Assembly Appropriations Committee website which is located apro.assembly.ca.gov. Later this afternoon, following today's hearing, the committee will post results of the suspense file hearing on the same website. Ms. Sanchez, would you like to say anything before we get started? You're great. Okay. Perfect.

With that, let's begin. The first bill before the committee is AB 226 by Assembly Calderon. I see a motion by Mr. Gonzalez, a second by Mr. Solache. That bill gets out on an A roll call. Without objection, we will substitute the motion and second for the--for all do pass or do pass with amendments on the rest of the suspense file.

AB 239: Harabedian: mortgage forbearance sets out a do pass. Sorry--238. This happened last time. I'm getting the numbers--okay. AB 301: Schiavo: post-entitlement housing permits, that's do pass. Sorry, let's go back to...let's see. AB 238: Harabedian: mortgage forbearance: do pass, A roll call. Right? Yeah. Okay. AB 301: Schiavo: post-entitlement housing permits: do pass, A roll call. AB 306: Schultz: building standards moratorium: do pass, A roll call. Okay, those are those four. Now...oh.

No.

Okay, with that, we are meeting adjourned, team. Okay.

Yeah. Because everyone--that's it? Everyone had a chance?

Right. Yeah, I was like...