Senate Standing Committee on Business, Professions and Economic Development

All right, we're going to get started with the business, professions and economic development agenda of Monday, April 7. Again, we are looking for one more Senator to have a quorum, but we are not going to wait. We're going to go ahead and start since Senator Niello is here and he is presenting for Senator Valaderis. Are you ready to get started? Senator Niello, would you mind?

I was born ready.

Born ready. I somehow knew that. Okay, great. And then if Senator Padilla shows up, he will be after that. And then Senator Archuleta, if you could present on the Senator Reyes Bill, that would be fantastic. Senator Neillo, we don't quite have a quorum yet, as you know, so if we get one more Member here, I'll stop you. We'll call the quorum. That way we can actually do a vote. Otherwise, go ahead and get us started.

Thank you very much. My script says. Mr. Chair and Members of the Committee. Madam Chair and Members of the Committee, I'm here today to present Senate Bill 508 on behalf of Senator Valladares. SB 508 recently took amendments to narrow the bill to address the primary concern. We appreciate the Committee staff for their assistance.

AB 1369 of 2023, also known as the David hall act by Assemblymember Bauer-Kahan, allows for patients to access out of state care via telehealth for an eligible patient under that act. An eligible patient is someone with an immediately life threatening diagnosis, meaning there is a reasonable likelihood that death will occur in a matter of months.

SB508 seeks to allow patients that at 1.0 qualified to receive such out of state health care under the David Hall Act that may have gone into remission to continue seeing that provider if they no longer otherwise meet the criteria.

Before handing the mic over to the primary witnesses, I would like to acknowledge that the author has been approached by the California Medical Association about concerns with the original language. Since amendments were taken shortly before this hearing, the author is committed to continue conversations with the cma.

With that, I'll pass this over to our primary witness, Robin Clough, Senior Assembly Member. And there's Robin. You can come over and sit down here or speak from the mic there.

Yeah, you can come on up to the table's fine. Welcome, Ms. Clow. You have two minutes. Go ahead and give us your testimony. Okay.

Hello, Committee Members. Thank you so much for inviting me. I was wheeled into the operating room for thyroid surgery that was scheduled to take three hours. Nine and a half hours later, I was wheeled out to discover that my life would be forever changed.

I was diagnosed with a rare and aggressive type of thyroid cancer known as anaplastic. The typical survival time for this cancer is four to six months. My daughter was expecting our first grandchild. I underwent seven weeks of simultaneous radiation and chemotherapy at Cedars Sinai in Los Angeles.

When the cancer returned, my physicians supported my decision to seek care. At MD Anderson Cancer center in Houston, I received a newly discovered targeted therapy that has been successful for me. It is uncommon for a bill to undergo a test run in public before enactment, but this is true for SB508.

The pandemic led to federal and state Executive orders allowing telehealth visits, which enabled doctors and patients to communicate about health issues across state lines. These Executive orders have expired, leaving patients like me without life saving expertise from oncologists practicing outside of California. There are times when I've been too ill or weak to travel.

And because I'm immunocompromised, I was at risk of exposure to other illnesses. Telehealth visits are truly a lifeline. Patients in my anaplastic thyroid support group are desperate to receive care from oncologists beyond California when needed. And with the projected shortage of doctors, telehealth visits will become even more crucial.

I've survived two and a half years and now not only have a grandson, but have a granddaughter. Telehealth is essential.

Congratulations.

Thank you so much.

Thank you. Thank you so much for sharing your story with us. And congratulations on the grandkids and the successful treatment. Senator Niello, do you have a lead opposition witness that you know of?

I do not know of any opposition at all.

Okay. Do you want to come up? Before you start? I'm going to take a roll call here so I can establish quorum. You okay with that?

Absolutely.

[Roll Call]

Great, thank you. Thanks for letting us interrupt. Important we could establish.

Good morning, George Stories of the California Medical Association. Appreciate the Senator's comments. No official position today, but we are. Working with the author and we'll continue. To work through our concerns with her as the bill moves forward. But thank you.

All right, thank you.

And Senator Valladares assures me they will be working together.

Okay, no problem. Are you lead opposition as well? Okay. So if there are others in the room who would like to take a #MeToo position in support of this bill, please come to the mic. State your name and organization and your support of the bill.

Good morning. I'm Helen Lopez. I'm with the California Senior Legislature. I'm the Chair of the Legislative Committee. And I am here, #Metoo. Support of the bill that we have sponsored. And it's extremely important. So thanks very much for your support.

Thank you for being here. You guys can tilt that down if you want. Go ahead.

It's a little bit too high for me.

Yeah. I don't know why it's pointed at the ceiling. Go ahead.

Christine Smith, Health Access California, in support.

Thank you.

Cassidy Eggman, on behalf of the American Telemedicine Association, in support. Thank you.

Great. And if there are folks here in opposition or other tweeners who'd like to get up and state your name and position, come on forward now. Seeing no one else, I will bring it back to the dais. Colleagues, are there any questions? Senator Menjivar and then Senator Hurtado.

Madam Chair, I think I'm a tweener. Just had a question. Can you. I guess. Senator, I don't know if the Senator shared with you. I just want to make sure, given. The removal of DEI across other states, the cultural competency trainings across other states. That physicians from there are going to.

Have the training necessary to care for Californians.

The witness cited the.

Apologize. I missed it. Sorry.

Beg your pardon?

No apology for coming late. I missed that part.

The witness cited care from the. I think it's the Anderson, M.D. Anderson Institution, and I believe it's Houston, Texas, which is world renowned for its cancer treatment. And there are institutions like that outside of California that can provide unique care for unique situations.

And your concern with regard to DEI in my opinion has absolutely nothing to do with that.

Would a witness or someone be able. To answer if the word female is. A trigger word for the federal Administration.

To remove in terms of grants for research in cancer, other types, would the physicians be would the physicians in other states have the necessary information to care for women with cancer if they don't have the up to date research on new treatments for women?

I'm failing to understand your question.

So there's a list of words that. Have been deemed inappropriate for grants to be distributed.

You're talking about federal policy.

Yeah, federal grants.

We're not talking about federal medical institutions. We're talking about state medical institutions that are housed in other states. Which has nothing to do with federal policy.

What I mean is for grants that are no longer going to be coming down to certain states for research, for. Example, research with women who have cancer. If those no longer come, would the physicians in other states have up to date information on how to treat females with cancer?

I'm still not understanding your question.

Maybe the Committee or Madam Chair could. Just be able to address some of. My concerns if that was talked about in conversations.

So I'm looking at CMA have any ideas on. I think what she's asking is, you know, California has standards and definitions, particularly around gender. How would that be impacted? This is not unlike other questions we've asked when we have extended programs beyond California to allow people to seek care or resources or come into the state.

So do you have a grasp on whether or not this bill would address the definitions that she's seeking some answers on?

So with this bill in particular, it's. Unclear if it would just because this is something that's kind of new and. It's a pretty simple bill. But I mean, it's something that we'll. Certainly monitor and coordinate with AMA and folks in other states on. But I mean, this is a core piece of why we want to address.

Our concerns of kind of the services. That are provided in this current bill. But to answer your question directly, it's. Unclear at this point if those are kind of, you know, being shared with other states or not.

Okay. Can I ask you, Madam Chair, can. I ask another question for the physicians that are going to be able to do telehealth and provide care for Californians? Are they. Are there training up to par to our physicians here?

That is. That's probably a better question for folks potentially with the medical board to kind of share as far as training standards, because it is different across the board. As far as where, where folks went. To school and their residency requirements and et cetera, et cetera. I will say that a lot of.

Physicians in other states are very highly. Trained as well, though, but we cannot speak directly to their kind of training standards and requirements. Of course.

Senator Menjivar, I know it's hard without the author here, but do you feel like you got some answers there? I will say this bill is specific to osteopathic medical care, so it is fairly narrow, which is partially what you would see from the Committee Review.

So it isn't as broad as some of the other things that we've heard where you and myself and others have really questioned whether or not we can achieve the legal standards that we've worked so hard to establish in California.

This one is fairly narrow, but we can certainly note your questions to the author as well and make sure that they're addressed. It's hard to pinch hits sometimes, but. Thank you, Senator Niello. All right. Senator Archuleta.

Yes, thank you, Senator, for coming before us. It's not your bill. I know it's difficult. I'm a co op, not your bill. But some of the questions that maybe I'm concerned about is the fact that we're talking about someone from out of state and virtually on a Zoom with their patient.

And obviously what's happening here is the patient chooses that physician. My concern when that is done, is that physician going to open himself up or herself up for additional patients that open up A. No, this is just narrow. That one time, one event, one situation.

I guess if a we. We had already passed the. The Bauer-Kahan bill of 2023, the David Hall Act, I think it's called. That's existing law and allows for telehealth medicine. California patient, out of state doctor. This bill, if that patient. That patient was deemed to be terminally ill on a relatively short term basis.

But happily, sometimes those circumstances are cured and the patient, having been terminally ill, is now in remission but wishes to continue to seek care for from the same doctor already approved based upon existing law. That's the circumstance. And that's the only circumstance in which this particular bill would come into play.

And that was my concern that if it's just specifically to that patient. Yes, to that care. To that illness and not general. Correct. Okay, thank you, Madam Chair.

Great. Yeah, this. This bill is pretty narrow, first of all in subject matter and secondly in scope.

I think it really just affords a patient like this the opportunity to continue to seek care from someone for whom they've already received some services once they have overcome the diagnosis, but still would like the ongoing care of that particular physician. Great questions from the Committee. Seeing no one else here with additional issues. Are there.

Is there a motion? Okay. Motion by Vice Chair Senator Choi. Let's go ahead and call the roll.

Could I close?

Oh, I'm sorry. Yes. Senator Niello, I apologize. Would you like to close?

Thank you. I'd like to emphasize in my response to Senator Archuleta, the bill is very narrow and the bill is needed. This is ongoing care to a patient that previously was going to be dead by the time this ongoing care takes place. This is a unique circumstance.

This patient needs unique care and the comfort of continuing to have that care from the same doctor that helped him or her go into remission. To deny that because of concerns about cultural issues, the so called cultural culture wars. That's coming out of the Trump Administration currently a national situation, not individual states.

To deny that unique care, I think would be terrible injustice. I ask for your. I vote.

Okay. We will call the roll.

The roll motion is do pass the Senate Appropriations Committee. [Roll Call]

I think that's five votes, which is everybody we have here. So we will put that bill on call. Thank you, Senator Niello. All right. We do not have Senator Padilla yet, I don't think. Right. All right, so then we will go ahead. And Senator Archuleta, are you prepared? Can you present? Can you. Congratulations to you both.

Can you go. Go ahead? Yeah, sure.

I'll do both of them.

Sure. Senator Archer, that'd be great. So we're going to Hear file items 4 and 8. The first item 4 is SB 781, which is a Reyes Bill that Senator Archuleta is generously presenting for us. And the second will be file item 8, SB779, which is Senator Archuleta's Bill on civil penalties for contractors.

Senator Archuleta, let's start with the Reyes Bill, OK? SB781.

Yes. Thank you, Madam Chair and Members, I appreciate the opportunity to present this Bill for Senator Reyes. As we all know, she is also dealing with her illness, and we wish her well. And we in the Senate and the Assembly and here in the state Capitol wish her well and talk about the fortitude to continue on.

And I appreciate that. So I'm honored to present Senate Bill 781 on her behalf. Once again, I'd like to thank the chair for the opportunity to let me do this. So Senate Bill 781, on behalf of Senator Reyes, as I mentioned, couldn't be here, but she is here in spirit with us.

And I think she might even be watching. So Senate Bill 781 encourages cities and counties to adopt small business utilization Plans to leverage local contracting activities to support small businesses and local economic growth. As we all know, small business is the foundation of our state and our communities.

California is home to 4.1 million small businesses, making up 98.8% of businesses in the state and employing over 7.2 million people. We're truly appreciative of the small businesses in our state. And we mustn't forget the workforce, the private workforce with 47.6%. But small businesses serve as an essential foundation of the California economy.

However, their economic contributions could be more significant, more significant and strengthen local economies if they had access to city and county government procurement opportunities.

That is the key of the Bill, to be able to reach out into the communities in the cities, into counties, in government as a whole, to be able to get the procurement dollars that's there to help local governments succeed.

The Bill provides General authority to the Office of Small Business Advocate to support local government small business procurement activities relatively.

The Federal Administration recent Executive order issued on January 202025 to discontinue all diversity, equity and inclusion activities in Federal Government has created uncertainty for contracts and eligibility of federally designated technical assistance Centers because of their work with Minority Business Development Centers.

And we're still working on that because we are California There is currently a requirement in state law that necessitates federal matching of funds for the California Small Business Technical Assistance Program Technical Assistance Program, also called tap. This requirement combines with federal uncertainty, potentially jeopardizes the state's ability to support small businesses through this program.

Small Business Forms foundation and California Economy As I mentioned, it is vital that we enable competition for small businesses and make it easier for small businesses to thrive in our economy here in California.

Senate Bill 781 will simplify the partnership process by creating the Small Business Utilization Program and by protecting access to technical assistance support for small business their owners and to clarify the language that supports California small business technical assistance programs.

So here to testify with us today is Pat Fong Kushida of the California Asia Pacific Chamber of Commerce and Julian Canete of the California Hispanic Chamber of Commerce. Thank you, Madam Chair.

Thank you. Welcome.

Ms. Pat Fong Kushida. Nice to see you. Nice to see you. Thank you so much.

Madam Chair and Senators, on behalf of the joint sponsors, including the California Asian Pacific Chamber of Commerce, the California Hispanic Chamber of Commerce and the California African American Chamber of Commerce, I want to thank Senator Reyes for authoring SB781, which addresses two critical small business issues.

First, the Bill advances a cost effective economic development approach enabling local governments to maximize their procurement dollars when contracting with fully qualified local small businesses. This approach yields tangible local benefits such as retaining more funds within the region and helping businesses expand operations and hire more workers.

Second, SB 781 addresses potential gaps in the small business services caused by evolving federal policies and programs.

Since its establishment in 2017, the TAP program has served as the state's primary link between small businesses and the organizations that offer free and Low cost workshops and one on one counseling federally designated small Business assistance Centers, including Minority Business Development Centers, play a crucial role within the state network.

Recent federal actions have created uncertainty about existing and future contracts, including a January Presidential Executive order to discontinue all diversity equity inclusion activities in Federal Government, a proposed 40% reduction in staffing at the Small Business Administration, and a marched presidential Executive order to eliminate all non statutorily required activities of the Minority Business Development Agency.

This Bill makes three short modifications to the state program to ensure that federally designated centers retain their ability to apply and remain in the network during these three funding rounds. During the next three funding rounds.

So on behalf of our tri chamber coalition and the 1.9 million minority owned small businesses in California, we respectfully request an aye vote.

Thank you, Ms. Kushida. Go ahead, Mr. Canete.

Good morning, Chair and Committee Members. My name is Anthony Butler-Torrez, Policy Coordinator for the California Hispanic Chamber.

We don't have your right name on file.

Tell us your name again so we get that right for you.

Okay, no. No worries. No worries.

Anthony Butler-Torrez.

Okay, Mr. Torrez.

Got it. The California Hispanic Chambers of Commerce, the California Asian Chamber of Commerce and the California African American Chamber of Commerce are committed in creating economic opportunities for California's small businesses. With the Legislator's support, we have created.

Positive public policy that encourages the utilization of small and diverse businesses to create economic growth and jobs in our communities throughout California. We believe that small businesses should be. Included, not excluded from contracting and procurement activities, which is healthy for both the business community in the government at all local levels.

California's 4.1 million small businesses account for more than 98% of the total businesses in the state and employ more than 7 million people. Nearly half the state's private sector workforce embody the entrepreneurial spirit that drives the economy of the Golden State.

Small businesses and entrepreneurs accelerate economic growth and mobility in California, creating two thirds of the net new jobs, building wealth and innovating to solve global global problems, watching future growth industries and defining the main streets across our local communities.

SB781 would promote and enhance the utilization of local small businesses and enterprises in the local agency procurement and contracting processes. California small businesses contribute to the overall economic health of the community. Therefore, the government has a compelling interest in providing economic opportunities to small businesses.

A community's economic health depends and upon active and thriving business community, including both large and small businesses. SB781 is no different than the past policies such as AB 2019, which created a 25% small business goal for state agencies.

Okay, Mr. Torrez, we just need your final thought there.

SB781 would support small businesses in their local procurement efforts and clarify for the. State and able to continue to Fund. Small business programs regardless of federal matching requirements.

Okay, thank you very much for that and for your testimony, both of you. Is there lead opposition testimony in the room? Not lead opposition. Okay, great. Then we will take opposition. Just if you want to come forward and state your opposition, that's fine. No. All right. Testimony and support. This is just going to be me too testimony. So your name and organization.

Good morning. Andrea Devoe, on behalf of the California African American Chamber of Commerce, Proud co sponsor, respectfully ask for your aye vote.

Thank you. Thank you very much. Others in support.

Good morning. My name is Oscar Garcia. I'm a Director of the California of the Northern California SBDC Network, and we are in support of this Bill.

Thank you. Thank you very much.

Good morning. Troy Belton, business owner in California, support of 781MBDA Sacramento.

Great. Thank you very much for being here.

Hello. Good morning. My name is Stacey Tate, Director of the Sacramento MBDA Business Center and Cal Asian Chamber, and we support.

Thank you.

Hello, my name is Tim Rimel, Director of ready site go. And we support SB 781.

Thank you.

Good morning. Loraine Scott. I own Acheson Wine Company and I support SB781.

Thank you. Thanks for being here.

Good morning. I'm Anette Smith. I'm the founder and CEO of Impact Group Enterprises, as well as in support of my client, the California Asian Pacific Pacific Chamber. And I request your yes vote on this. On this Bill.

I love that scarf.

So it's actually tied together. Oh, my God.

That is so cool. I love it.

Thank you.

Hi. Michelle Cromeenes with Baby Signs Too, LLC. And I am in support of this. Asking for your support.

All right, thank you so much. Let me just ask one more time. Anybody in opposition? I know it's Monday morning. We're all moving a little slow. Good. No opposition. Thank you very much. We'll bring it back to the dais. Colleagues, questions for Mr. Archuleta? Seeing none. You have a motion from Senator Menjivar. Would you like to close, sir?

Yes. Thank you all. Once again, as you can see, we've got chambers, we've got diversity, we've got California. And as we've heard, the foundation of our businesses are the small businesses. So on behalf of Senator Reyes, I urgently and proudly ask for your aye vote.

Thank you, Mr. Archuleta. We'll call. The roll motion is do pass the. Senate Local Government Committee. Ashby. Ashby, aye. Choi.

Choi aye. Archuleta.

Aye.

Aye.

Archuleta aye. Arreguin. Grayson. Grayson aye. Menjivar. Menjivar. Aye. Niello. Aye. Niello. Aye. Smallwood-Cuevas. Strickland. Umberg. Weber Pierson.

All right, we will put that on call. Also, Senator Archuleta, you want to take us to file item 8, SB 779. This is your Bill now.

Yes, thank you, Madam Chair. And of course, for those of us who are fortunate enough to have a home, that we've had some remodeling done, and we hope and keep our fingers crossed that the contractor will show up in time, the contractor will do the work professionally at a decent price.

That was agreed upon between both parties, the homeowner and, and of course, the, the contractor. So as we've heard from the chambers, well, this Bill seeks out and actually acknowledges the good actors in the construction business, but also says something about the bad actors, and we've got to do something about that. So Senate Bill 770,

I'm sorry, Senate Bill 779 is a Bill that I think people always ask is when something goes wrong in the construction of anything, are they being held accountable, the individuals, the contractors?

Typically, penalties are done for wrongdoing, and, but they're not always equal, as we'll see here shortly, equal to the infraction and the damage that it may have caused the family. There are even, we have the contracting board that has minimum fines and of course, there's maximum fines to ensure that the penalties are accurate.

And they take out and point out the bad actors that we talked about, but holding them accountable.

This Bill, this Bill does not, in any case, reach out and try to penalize the good contractors, but seeking those who don't even have a contractor's license, who don't abide by the law, the contractors law, the laws of the State of California.

So in these cases, we are trying to help the contracting board by establishing minimum fees for their fines. And the maximum fines are already there. But we, to my surprise, we didn't have a minimum, some of these fines.

And what happens is when these contractors actually go to court, the judge will see there's no minimum and establish something.

So, but this way, if there's a minimum fine, then the contracting board can see that at least they perhaps will be on the path to get their license, get within the programs, because the contracting board is not just there to be punitive, but to help these contractors along the way.

And so citations may include enforcement up to $30,000. Imagine. But you can imagine the size of the construction job for something like that or the discrepancies or the severity of the, of the violation. And restitution obviously is something that's important. So because that family's been financially hurt.

But the board is also there to authorize administratively and to cite individuals for unlicensed construction work and the unlicensed. I just can't believe that the penalties are so minor because we have good actors, contractors all over the State of California that are playing by the rules.

So recently legislation has increased the maximum fines for those who violate the law. And in 2021 and 22, they were increased from 5,000 to 8,000, from 15,000 to 30,000, as I had mentioned. But each time the maximum amount were increased, there was no corresponding minimum amount at all in some cases, and none were increased.

So this Bill will make these minimum amounts, which we, I think I can't even believe, $200. $200 for not having the license, $200 for doing faulty work. I think that obviously needs to be increased. And that's what this Bill is all about.

So when setting fines, administrative law judge considers minimum fines as well as the maximum fines and the citation process in appeals sometimes result in reduction of enforcement, but also the fines because they are so minimal.

So this Bill will increase the minimum fines and these reductions result in fines that are there to be equivalent to the seriousness of the violation, not audically, that are not normally done. So the board's investigation, in some cases it doesn't even warrant an investigation because the fine is so small.

So the administrative work, the hearing costs, which are important for all of us that are in the general public, so it will set the scale a little better off. So Senate Bill 79, I'm sorry, Senate Bill 779, would establish minimum enforcement fine amounts that they. So they. Because they don't exist.

And we'll raise those minimums to find these individuals, these bad actors. So the Bill also authorizes the board, as I said, to investigate and raise the fine along with the consumer price index over the years.

And these increases are needed so the enforcement fines continue to reflect the seriousness of the violations and support the board's consumer protection mandate. And the consumer protection mandate should be ours as well. And with me today, I have Rebecca May on behalf of the Contractors Licensing Board and the sponsor of the Bill.

Great. Thank you. Thank you. Good morning, Chair Ashby and Committee Members. Rebecca May, on behalf of the Contractors State License Board. Thank you, Senator Archuleta for partnering with us on this important measure. Citations are a valuable tool in CSLB's enforcement toolbox. Most complaints received by CSLB are resolved without taking administrative or enforcement action.

However, a citation is sometimes warranted if CSLB is unable to resolve the complaint and the contractor is failing to comply with contractors law. This is especially effective, as the Senator noted, when the citation orders restitution to the consumer.

Statute is mostly silent on the enforcement fine amount minimums, where the maximum amounts are set at 8,000 for general violations and 30,000 for more serious violations, including unlicensed activity. Currently, the only minimum enforcement fine amount in statute is $200 for unlicensed activity, and this amount has not changed since 1990.

SB779 sets the minimum fine amount for General violations of contractors law to $500 where the maximum is 8,000, and to $1,500 for more significant violations, including unlicensed activity and disregard for building laws, where the maximum is $30,000.

In determining the new minimum amounts, the amounts needed to be high enough to encourage compliance and to prevent repeat violations, but not so high to be considered punitive or to encourage individuals to leave the profession instead of complying with the citation.

The new range proposed in this Bill still allows CSLB enforcement staff and administrative law judges who hear citation appeals enough discretion to consider mitigating circumstances for each citation on a case by case basis. I respectfully ask for your aye vote today, and I'm happy to answer any technical questions you might have.

Thank you. Ms. May, are there others here in support, other folks who'd like to, to chime in? Okay. And is there lead opposition, anyone in opposition of this Bill? All right, so no one in the room who wants to speak to this Bill. Last call on that. Okay, great. Then we'll bring it back to the dais. Senator Grayson.

Thank you, Madam Chair, and thank you to the author for bringing this forward. And a question to the witness, if you will, please. On the fines, when they are collected, those fines help provide funding for further enforcement that goes, that goes out. Right.

The fines do go back to CSLB to support its consumer protection mandate through enforcement.

Okay. And that is the true root here that we're trying to deal with is the fact that with no minimum, then in some cases it's way more costly for CSLB to enforce because you don't actually even recover the cost of the enforcement, which actually brings down your ability to enforce on other egregious acts.

And this is exactly how it should be done to go after bad actors rather than, rather than putting a blanket policy out there that punishes even the good actors and we'll be talking about that later on, I'm sure.

But I do want to express my appreciation to the author for this Bill because this is exactly what is needed, especially with us going into the rebuilding phase of areas where that has been mostly impacted by wildfires.

We need CSLB to be fully funded, to be able to do enforcement, to go after the bad actors that are exploiting and taking advantage of consumers who don't know better. And we need to provide that protection. So again, thank you very much. I'll be supporting the Bill today and move it when it's appropriate.

All right, you have a motion, Senator Archuleta. Senator Choi.

Thank you also Senator Achuleta, for bringing up this important issue. Couple of questions regarding this Bill. I can understand your intent very clearly. The minimum standards set for violation of lack of license of practicing bad actors from $200 to $500 is that. I wonder if $500 is, in general, that's enough. That's my question.

That's the minimum amount. The maximum, which the Legislature increased a few years ago, is $8,000. So it's just increasing the bottom of that section.

...an infraction, the judge will make a different amount assessed or who's going to determine what amount will be assessed.

So CSLB determines the amount that is assessed to the licensee or the unlicensed contractor for individuals that appeal the citation.

Those go before an administrative law judge and the ALJ can then set the amount and they'll usually look at that, that spread between the minimum and the maximum and make a determination which may vary from what CSLB determined originally.

Senator Choi, just to be clear, there's two steps. So the first range is the minimum 500 with the maximum 8,000. But for a more egregious act, the minimum is 1,500 up to 30,000. So one of those two categories.

Okay. And second level question is that this one is definitely trying to prevent bad actors. However, your Bill doesn't address the fines collected is stays in Administration, not to the victims. The victims will recover the damages that they have.

The victim always has the small claims court or if something really major, they have the, the Superior Court. But. But the contracting board, they have the authority to, to fine differently. Right?

Because if you think about it, with all the construction that has just been mentioned by Senator Grayson, that's going to happen in Pasadena, Altadena, in the Palisades, people are going to be out there unlicensed, no doubt. Well, we've got to find them. And if the contracting board is able to locate them.

And now they'll have a bigger bite. But don't forget they still have the courts themselves and law enforcement themselves and there's still remedies there. But we as the licenser, the State of California has got to be on that same playing field with them and we've got to stop these bad actors. And this is the first good step.

And if I may chime in the citation that CSLB issues to the individual can have an order of restitution in it. So we can say you need to make your consumer whole by this amount in order to satisfy the citation. And then we also would include a fine.

Are you saying that the citation itself will specify restitution for the consumer?

Yes, yes. That's separate from the fine then the CSLB issues.

Yeah, that's the level what I would like to really encourage the service that the consumers will be protected because when you leave it up to you. Well we gave citation and penalized but the restitution is up to you, quote, small claims, quote, is sounds simple but it's not simple for general public.

And in terms of time and cost, even though you don't have to to have a lawyer for those small claims court and you don't even know how the outcome will come out, when the citation has been already the bad actor has been caught already, you know the degree of the violation and egregious act.

Then I was hoping that there may be a clear citation, what kind of violation, like whatever down payment has been paid shopping be paid or your agency can collect that amount. Because when you collect a citation you have the power and you know the person exactly the bad actor in your hand.

So it'll be a lot easier to collect the fine plus restitution for my money that I have lost than it'll be further service for the consumers.

Thank you.

I wonder whether there has to be different amendment or you can.

Well, I think this is the first step and I appreciate their spirit because yes, as I mentioned, God knows what's going to happen in the future with some of these bad actors.

But this is the first step and in the future if it turns out that the restitution isn't able to be obtained, then maybe again that's when the courts come in.

But again this is just happening and this is our first step and I know that we'll be working in the future with the Contracting License Board and the construction industry and everything else. So. But we need to go forward with this Bill.

Senator Grayson would like to chime in on that point as well.

If I may through the Chair, there are several different aspects. This is. This is a relationship between CSLB and the contractor, and this is about putting for implementing fines for violating policy. So this is, that is completely different than the consumer. The consumer has a way to file a complaint with CSLB.

The contract General contractor or any contractor is required by state law to have a bond on, that's present, which the consumer can go after that bond. And if the bond doesn't cover the entire fault or whatever the cost is, then the consumer can then pursue other avenues. But this Bill does not address that.

This Bill is completely separate. Sounds like a great Bill you could run down the road somewhere to help the consumer. But in this particular case, it's about CSLB dealing with the contractor directly and making sure they follow the rules.

That makes it clear.

Thank you Senator.

Thank you. I appreciate your comments.

Senator Choi, are your questions answered? Yes. Okay, great. I'll just make one statement and then we'll send it to you to close. Senator Archuleta. First of all, I think this is a good Bill in the sense that it's definitely time to raise the minimums.

And as Senator Grayson has already clearly articulated, we need to make sure that the Contractors State Licensing Board has the tools and resources it needs to hold folks in line. And to Senator Choi's point, we would never want to limit the opportunities for remedies for folks out there that encounter a bad actor.

Obviously it could, it could be so egregious that there are criminal penalties involved or civil penalties or a bond, of course. But I would say that a ruling in favor of the victim on a contract from the CSLB would be highly prejudicial in any court proceeding. So it is a good place to start.

In other words, if you are suing somebody in a civil court or even if there were criminal charges and you had a finding from this State Licensing Board that that entity had already been fined for that poor behavior or performance, it would certainly prejudice the hearing in your favor. So it is a good and important first step. And Senator Archuleta, would you like to close?

And I appreciate the comments from the chair and of course, the Senators. And again, as I said, this is the first step. And in the future, we are going to be looking at further remedies as we see what is going to be happening when we get the reports in.

So I'm hoping that we all understand that the board is there to help those who are not licensed to get licensed, those who may have violated the law, to get back on track. They will do what they can. But at the end, we have to protect our consumers. And this is what I do.

So I ask for your aye vote.

Great. Thank you. Senator Archuleta. We're going to call the roll.

Motion is do passed to Senate Judiciary Committee. Ashby.

Ashby. Aye. Choi.

Aye.

Choi. Aye. Archuleta.

Aye.

Archuleta. Aye. Arreguin. Grayson.

Aye.

Grayson. Aye. Menjivar.

Aye.

Aye.

Menjivar. aye. Niello.

Aye.

Niello. Aye. Smallwood-Cuevas. Strickland. Umberg. Weber Pierson.

That's 6-0. We'll leave it on call, Senator Archuleta, and then we'll do a roll call at the end and scoop up the...

All right, we're going to bounce back to the top of the agenda here to file item three because we have Senator Padilla with us on SB534. Senator Padilla, if you're ready, welcome.

Thank you, Madam Chair.

Good morning, Madam Chair and Members. I am pleased to present SB 388, which would establish the Salton Sea Regional Green Empowerment Zone to develop increased capacity, redress disparities, and draw down economic opportunities, including streamlining investments, sustained economic development. One of the most economically distressed and environmentally challenged areas in the State of California, the Salton Sea.

Just to be clear, Senator P., I think you might have—it's 5:34, right?

Yes, ma'am.

All right. Making sure we're on the same page.

We are on the same page. Thank you, Madam Chair.

It's a Monday, so.

It is a Monday, and I'm only halfway through the first cup of coffee, so I beg your indulgence. No, I brought my own.

I just haven't sipped it enough.

Gross. Gross, we don't share.

Senator, thank you. As you—it's been one of those mornings.

As you well know, the Salton Sea region suffers from a historic lack of public and private investment, which results in inadequate infrastructure to support economic development, poor air quality, high unemployment, workers without advanced and specialized skills, and limited access to health care.

The California EPA's CalEnviroScreen mapping tool identifies a majority of census tracts in the region are disadvantaged and disproportionately burdened, by multiple sources of pollution. Today, the Salton Sea region stands at a critical juncture with a chance to become a major domestic supplier of lithium.

This opportunity could drive regional prosperity, create high paid jobs, support a well-articulated workforce, training programs, expand local supply chains, new battery manufacturing, and related R and D facilities. Central to this scenario is the region's ability to unite and attract private and public investment, paving the way for a brighter future.

Unfortunately, the region has expired—experienced—major boom and bust cycles, economic promises that have often failed to deliver sustainable quality of life improvements to the residents and local communities. You name the state statistic, and an Imperial County is usually near the top or the bottom, whichever is worse.

Unemployment, per capita income, welfare recipients, families below the poverty line, elderly living in poverty, and on and on. In 2020, Governor Newsom signed legislation establishing the Blue Ribbon Commission on Lithium Extraction in California.

It brought together a broad spectrum of government, nonprofit, and other private sector stakeholders to help the state better understand lithium recovery's opportunities and potential challenges in California and the region. In its December 2022 report, the Commission recommended the establishment of an economic zone that would include Imperial County, in the eastern Coachella and Palo Verde valleys.

Federal state local governments would recognize this zone, which would be eligible to compete for funding and investments. To capture the full benefits of Lithium Valley's renewable energy development, the southeastern desert valleys need a definitive economic development designation and structure that supports efficient resource attraction and fosters economic relationships between business, labor, and the community.

With me today is Aydee Palomino from Alianza, and Christian Torres from Comite Civico Del Valle.

Great. Thank you. You each have two minutes.

Thank you. Madam Chair and Senators, good morning. My name is Aydee Palomino. I'm representing Alianza Coachella Valley, a joint sponsor of Senator Padilla's SB 534, which establishes the Green Empowerment Zone. Since 2010, Alianza has supported collaboration among organizations and government agencies in the Salton Sea region. We are jointly sponsoring SB 534 for two key reasons.

As just mentioned, the first is that Salton Sea region designation is a key recommendation from the Blue-Ribbon Commission on Lithium Extraction in California. The Commission was convened with the support of the California Energy Commission in 2021, with Alianza's Executive Director, Sylvia Paz, as the Chair and Mison Melo, the Executive Director of Comita Civico De Vallo, also served on the Commission.

It hosted 23 meetings and gathered more than 290 comments from a diversity of stakeholders including industry academia, community-based organizations, public agencies, tribes and local community members. At its end, its members found that existing informal community development models were ineffective and that a formal designation was needed to address historical disinvestment in the region.

It would help the region better compete for grants, incentives, and private investments, while building local capacity to drive community-led projects. The second reason for the—for this designation—is based on Alianza's own experience trying to advance projects that would benefit our communities who live and work in multiple jurisdictions with overlapping districts and organizations.

There's no disagreement that working collaboratively across jurisdictions is essential for addressing historic underinvestment in our region. However, our communities are poor, our local governments have many competing interests, and the private sector lacks a central point for engagement.

We believe that establishing a regional identity, such as the Green Empowerment Zone, will streamline collaboration, reduce redundancy in funding applications, and formalize collective efforts. This Bill provides a structured way to ensure everyone has a seat at the table, shares responsibilities, and advances regional priorities highlighted in many research, including our own.

Thank you for your time, and Senator, thank you also for this Bill. I answer respectfully—request that you vote "Aye" on SB 534.

Thank you very much.

Good morning, Madam Chair and Members of the Committee. My name is Christian Torres. I'm the Director of Climate Equity and Resilience for Comite Civico Del Valle. Comite Civico Del Valle is a strong supporter of SP 534 and the leading environmental justice organization focused on lithium value issues in the Imperial County.

We were also a Member of the CEC's Blue-Ribbon Commission on Lithium Extraction, representing disadvantaged and low-income communities residing in the Salton Sea known Geothermal Resource area.

Currently, we're the lead convener in Imperial County for the Southern border region—under the Governor's California Job Service Regional Investment Initiative—and jointly authored a Lithium Valley Workforce Development Report, under the California Workforce Board's High Road Training Partnership Program, with the UC San Diego Labor Center last year.

The development of a California-based clean energy supply chain in the Salton Sea region, that facilitates vocational and higher education opportunities for local residents, in their pursuit of high road quality jobs in the Imperial Valley emerging clean energy sector, is a priority.

SB 534 will create a regional designation, as an additional strategy to encourage the successful build out of Lithium Valley. Such a designation is a well-established tool for attracting state, federal, and private investments.

SB 534 is modeled after the Contra Costa Empowerment Zone but also goes a step further in pursuing cross regional economic development cooperation, in alignment with the Governor's economic blueprint. The blueprint supports an ecosystem of regions that can drive both local and cross regional economic development initiatives, and SB 534 is drafted in the spirit of implementing this vision.

Due to the remote rural locations and the rapid development of other areas in Southern California, Imperial County and the Southeastern portion of Riverside County have historically been assigned to different economic regions—Imperial County with San Diego, and the Coachella and Palo Verde Valleys with the Inland Empire.

SB 534 provides a much-needed sub regional overlay to support better collaboration on key Salton Sea projects and activities, without disrupting existing state-assigned regions, county borders, boundaries, and special districts. This innovative type of integration will break down geographical and economic silos on future clean energy projects, that will undoubtedly transcend boundaries and transform the region.

For these reasons, I respectfully request an "Aye" vote today. Thank you.

Thank you, Mr. Torres. Appreciate both of your testimony. Is there lead opposition to this item? All right, then we'll take me to testimony in support. Sorry, go ahead.

Thank you, Madam Chair and Senators. Kobe Pizzai, representing the California Association of Recreation and Park Districts, in support.

Thank you.

Hi, good morning. Michael Chen, on behalf of Audubon California, in support.

Okay, thank you.

Misset Short, on behalf of Loma Linda University Health.

All right, thank you very much. Is there anybody in the audience who is opposed but doesn't want to be lead opposition? Seeing no one. Bring it back to the dais. Colleagues? Senator Archuleta?

Yes, thank you, Senator, for bringing this forward. This is your area, is it not? Your district?

Madam Chair, Senator, absolutely.

Absolutely, and because of the green environment zone, what do you envision, if you can close your eyes 10 years from now, the growth, the prosperity, the workforce development?

Tell me how you're going to change the region with this Bill.

Madam Chair.

Senator Padilla, Senator Archuleta has clearly had more coffee than both of us.

I was going to beg the indulgence of the Chair. She might throw the gavel at me. How much time do you have? Just to briefly respond to the question, Senator, thank you.

I think the great irony that we face, and the real complexity of the issue, is that the State of California literally right now sits on about a third of total global demand for this critical strategic mineral, lithium. It has not just economic and public health and environmental, but also national security implications, as you well know.

The interesting thing is, while we have a potentially superior workforce and we have existing infrastructure in the Salton Sea region, which is geotherm infrastructure in the ground, which means we already have infrastructure in the ground that can extract and separate lithium from brine, in the most environmentally appropriate and superior manner anywhere on the planet.

There is—this is an impoverished, under-invested community, without critical infrastructure—economic infrastructure, physical plant and equipment. We have investments from CSU and UC that are putting pipelines together to train the special skills needed to work in this area.

But there's no infrastructure to do co-production, for example, storage, or to export product that is of appropriate grade to market—to the global market. So, it's one of the poorest environmentally challenged areas of the state that, literally, is sitting on top of a gold mine.

The problem we face is that we have huge infrastructure obligations and opportunities to make real in order to position California to compete globally.

In Texas, in Arkansas, Louisiana, other states that don't have the same workforce or environmental standards we have in California, they can say to us, hey—or to any investor—do you want us to extract and get product to market? We'll build it in sensitive habitat, we'll build it in tribal lands, we'll build it without any environmental review, we'll build it tomorrow, as a matter of fact. They have a competitive advantage over us.

So, in order for us to get there, to some, before the Chair throws the gavel at me, we need an architecture that helps coordinate interests and entities to better be strategic about going after funding and investment, and what comes first. And that's what the empowerment zone.

But if we do this right, Senator, this can be a huge opportunity, not just for this region, but it can be a huge opportunity for the state.

Very good. Thank you, Madam Chair.

All right. Thank you, Senator Archuleta. Senator Niello.

Thank you, Madam Chair. This is basically a regional economic development collaboration effort, if you will, and it requires that, in order to participate, individual jurisdictions have to volunteer to be included. And first of all, I'm going to support the Bill, so, but I do have some critical questions to consider.

Under the support, there's only one of the political jurisdictions, unless I'm reading this incorrectly, that is formally in support, the City of Imperial. Are you assured that all the political jurisdictions want to join the effort?

Madam Chair, Senator, as you and I both know, in this business, there's never complete assurance. But I have high confidence in continuing to collaborate and work with all of my constituents, and relative jurisdictions, and special districts, to get that buy in, because everyone benefits.

And I do have a high level of confidence that more and more support will come on.

The reason I ask the question is because, as the Chair knows, I have extensive experience here in the Sacramento area, with regard to regional collaboration, particularly in the economic development space. And due to realistic—being realistic—institutional egos and the tendency of individual jurisdictions within a region, and by the way, our friends are sometimes our worst enemies.

That's overstating it, but it is a challenge because there's a natural sort of parochial view. It's hard for one jurisdiction to realize the success of a neighboring jurisdiction helps them immensely, but it puts the success spotlight on the other, not on them. These dynamics make it very difficult to coalesce and collaborate within a regional area.

And I just, I offer that, that caution when I see only one jurisdiction in support. If your experience will be anywhere close to the experience I've had over the last 40 years, being involved in things like this, it takes a lot of work.

Madam Chair, Senator, a point well taken. I don't quite have 40, but about 30. And I can tell you, both in local, regional, and other experiences in state government, working on federal policy issues, I've experienced much the same. I love a good challenge. I think the focus is always to be trying to highlight and articulate mutual benefit.

In the absence of that mutual collaboration, it's a scenario where there could be zero benefit realized. And I think that's what's always important too, to emphasize, is that there's a certain set of benefits that only come through collaboration. And you're absolutely right, sir. It is not easy.

Senator Choi.

Okay, thank you. Senator Padilla, thank you for the presentation. It's exciting to read that this Salton Sea region has a very important resource, lithium, which I understand is a very important, valuable element for electric car battery manufacturing. Has there been any extensive study on this, how much lithium is buried in there, or it can be excavated?

I know this is, what I heard, was very expensive. So, I would like to know how extensively that the region has that resource of lithium. And number two, is that, is that in the, in the Salton Sea itself, or it says in the region? The region means where is it buried, and when that's excavated.

I know we are dealing with always CEQA. Have you looked into whether it is compatible with the environmental issues, or whether CEQA will put a brake on it, or they will be exempting for that special region of a green empowerment zone—will have exemption for that kind of development?

Madam Chair, Senator, thank you for the questions. First, as to the quantification, most of the surveys that have been done, based upon existing infrastructure, there's already a substantial amount of infrastructure in the Salton Sea region that extracts—that is for geothermal energy.

And that infrastructure, it turns out, the brine that is extracted has, because of the unique geological features and the environmental history of the Salton Sea and its evaporation and high salinity, and a lot of other factors that are really kind of complex, there is a large, large deposit of this mineral, right in the proximity of the Salton Sea.

And most professional estimates indicate as much as 30% of global demand, which is massive. The advantage, again, is that there's already existing infrastructure that could double its purpose and be utilized to extract and separate lithium from the brine.

So, that's one. The CEQA question, with respect to establishing an empowerment zone, I think the empowerment zone establishes a multi-dimensional, multi-jurisdictional, multi-interest hub, where priorities can be established and agreed upon, coordinated action in seeking investment, seeking public funds, and the use of those funds to leverage the ability to build massive infrastructure at scale to help assist in identifying key skill sets and workforce development demands.

All of these things need a point of collaboration that is much more geographically specified. The Bill before you follows basically the jobs first economic blueprint set of recommendations. We have a Southern Border Coalition that looked at the Southern Border Economic Region that was identified in the study, which was just released this year in February.

And so, this is very, very consistent with those recommendations and that of the Blue-Ribbon Committee, about what kind of structure and tool can actually help operationalize a lot of the challenges and recommendations that have been made.

It's so exciting that the region has 30% of global needs, not the US needs. So, that means we don't have to go out of country to import lithium. And I think that was one of the big challenges for the US, but is there any production right now being done of this lithium, or is it planning stage?

Madam Chair, Senator, unfortunately no. But the potential is there and part of the infrastructure there. And I think the challenge, again, is to make sure that the global investors, and there are a number who have reinvested and bought up some of that infrastructure with the sole desire to get into the lithium extraction business, encounter challenges.

To be frank, in California, we haven't done—we've done a lot of great work to prepare this table, but we face challenges in really preparing, for example, a strategic suite of incentives, on behalf of the state, that clearly identify our partnership posture to help incentivize more investment and get guarantees on community benefit, employment, and workforce development.

We don't have an integrated plan to really build out specific infrastructure to co-produce on site, which is also an economic advantage, and to export product to market. This is an area that is very—doesn't have a lot of infrastructure—because it's been under invested and overlooked, historically.

And so, the bar is high for us to position ourselves in a way that's really competitive. And so, we need every kind of structure in the arsenal that we can bring to bear, to position California to be competitive. One additional challenge has been certain fees that are assessed for toxic substances.

An interesting irony, and it's a subject of perhaps different legislation, certain geothermic uses are, or are not, exempt from those fees. That—if they're not, if they're not exempt from those fees, that puts an additional burden on the cost investors face to be able to position themselves in a competitive way.

So, there's a lot of big challenges for California to get this right. And I'm hoping that if we can successfully put a structure together like an empowerment zone, that it will bring real benefit to the state.

Yeah, that's one of the reasons I brought up CEQA, because CEQA is always an impediment for investors from outside or any ideal project—that the promising project that you are talking about. But when CEQA gets involved, the license fees, permit period, it just gets too bogged down for a long time.

So, it's also exciting that the region has also geothermal resources and that can be very vital—our power supply. But how it is coping with the CEQA requirements, meeting the CEQA demands—is it right now producing electricity with the geothermal energy that you are talking about?

Senator Padilla, I'm going to ask you to address that in your Close, if you wouldn't mind. We're not quite halfway through our agenda, and I need to keep us moving, if that's okay with our Vice Chair. Is there anything else you'd like to offer up to him that you'd like him to address in his Close?

Okay, if you can address—you know, that would be my final question then. I'm very interested in that potential of the region, yeah.

Appreciate it. It is a tremendous opportunity, and I enjoy hearing my colleagues support an interest in the issue and applaud you, Senator, for your dogged tenacity to figure out a way to identify how to get this resource out of the ground and into, sort of, monetized into the community and into our state.

And, as others have stated, including Vice Chair Choi, how to, how to do that without having to go outside of our own state. Pretty cool stuff and pretty cool opportunity. I would just like to say one thing to you about Senator Niello's comment.

You might remember, not too long ago, just a couple weeks ago, there was a hearing in the energy—I think it was Energy Commission—where we talked a little bit about a battery group that was coming to Sacramento.

And the good Senator from—who put together the Contra Costa Green Zone—said, in that hearing, I'm a little jealous this didn't happen in the Green Zone I created.

The reason that happened in Sacramento is because of the group that Senator Niello and former Mayor Kevin Johnson put together, which is, here, it's called the Greater Sacramento Economic Council, but an economic council that brings the region partners together and it's not just elected officials. In fact, it's a little light on elected officials actually.

It's more focused on, you know, UC Davis, Sac State, high-ranking business entities here, other folks who can talk to what it's like to do business in the region. That has become a major economic development tool for Sacramento.

And you can really point to them on several economic victories in this region, large-scale, high-profile ones that they've gotten involved with. And it might just be a tool that could help you, because I see what you're doing.

You're weaving together as many economic development tools as you can to really try to push forward the idea and concept that exists uniquely in your district, which I think is fantastic.

But it might be worth talking to Senator Niello offline a little bit about the power of an economic council and how that can really help push an agenda forward, as well. All of that being said, this is great work, and I think it's exciting, which is why you get so much interest here.

You have a motion from Senator Archuleta, so I'll give you the opportunity to close.

Thank you, Madam Chair, for the input and the comments and the collaboration, and I'll be brief. To answer Senator Choi's question, yes, there is export of that element in the energy portfolio. It's limited, sometimes feels a little left behind, but it has, you know, the infrastructure that's there has great potential to be applied in the lithium space.

And with that, Madam Chair and Members, I respectfully ask for an "Aye" vote.

Thank you, Senator Padilla. We will call the roll.

[Roll Call]

As promised, we're going to go to Senator Grayson and then Senator Umberg. So, Senator Grayson, if you would, File Item 7. This is SB 227, sticking on theme with Green Empowerment Zones.

This one for the northern waterfront area of Contra Costa. Senator Grayson, when you're ready.

Thank you. Good. Is it still good morning? Yes. Good morning, Madam Chair, Members. I would like to first start by thanking the Committee for your work and collaboration with the office. And I will be accepting the Committee's suggested amendments as outlined in the Bill analysis. I am pleased to present SB227,

which extends authorization for the Green Empowerment Zone, otherwise, or AKA we refer to it as GEZ and expands the GEZ board's jurisdiction to include four additional cities and environmental justice representatives. As many of you know, the Bay Area is the second largest oil refining hub on the West Coast, home to multiple refineries, some even in my district.

And the impetus for this, when I first authored AB 844, was the fact that I didn't want to happen to Contra Costa what happened to Detroit, Michigan, when the automakers all uprooted and left. And we literally have tens of thousands of jobs on the line. And I want to also distinguish the fact that,

this Green Empowerment Zone is not in competition with economic development groups and others, other business groups. This is more of a governmental board. And so in 2020, the Marathon Martinez refinery in Contra Costa was indefinitely idled. That resulted in a loss, immediate loss of 700 jobs.

And this abrupt closure deeply affected not only the workers and their families, but also served as a warning signal to the broader community about the volatility of this industry and the potential risk of thousands of more workers refinery jobs amid our state's shift from fossil fuels toward a clean energy.

So in response, I did author AB 844 in 2021 establish the Green Empowerment Zone for the northern waterfront area of Contra Costa County. The Green Environment Zone builds upon federal, state and regional partnerships to attract tax incentives, grants, loan programs and private sector investments, all focused on fostering our region's clean and green energy economy.

Although the Green Empowerment's Board of directors already includes a diverse array of stakeholders, there is an absence of representation from environmental justice organizations. This leaves a critical perspective really unaddressed on our board.

So additionally, while the Board has the authority to incorporate new cities, explicitly codifying the inclusion of these cities in statute will ensure sustained and proactive regional participation. SB227 addresses these gaps by formally expanding the Green Empowerment Zone to include El Cerrito, Pinole, Richmond, San Pablo, and by adding environmental justice representatives to the Board.

In addition, the Board extends its authorization date to 2040, providing long term stability and framework for sustained regional collaboration. And by incorporating these additional voices and extending of authorization, SB 227 strengthens the Board's ability to leverage regional assets, facilitate a just transition to a lower carbon economy and creates pathways for equitable economic growth in Contra Costa County.

Thank you very much.

Thank you. Senator Grayson, do you have a lead witness?

She is ill, could not make it today.

Okay, no problem. Is there anyone in the audience who'd like to speak in support of this Bill? How about in opposition? All right. Going it alone today, Senator Grayson? Yes. Colleagues, any comments?

I make a motion.

All right. So moved by Senator Choi. Sure. Senator Niello

I'm going to support this Bill, but I just have to make a comment related to the effort but having to do with other state policies that it's my opinion and those of a lot other that fossil fuel powered vehicles will probably last a little bit longer than we're looking at now in terms of certain mandates. Particularly as fossil fuel vehicles' internal combustion engines become cleaner and cleaner and even less and less carbon emissions.

The need for fossil fuel is going to stay around and by virtue of other state policies that if I could state vilify oil producers and are encouraging them, the refiners, to leave the state. That accelerates the challenge that you have and other state policy actually will make the effort of this economic development collaboration that much more difficult.

Plus, we're going to put more carbon into the air by virtue of importing fuel. Now, I realize all of that has nothing to do with this Bill, but it does.

That was a support statement, Senator Grayson. That's right.

It does make it more difficult for your organization to get its job done.

Okay.

I appreciate your appreciation for what I'm doing.

Okay. Is there a? We did, we got a motion already from Senator Choi. We're gonna, do you want to make a closing statement?

Respectfully ask for an aye vote.

All right. Thank you. Call the roll.

[ROLL CALL] 6 right?

All right, that has six votes for now, and we will put it on call Senator Grayson, and then we'll scoop up the rest at the end of the hearing okay? Thank you for your presentation. Senator Umberg, you ready? We have two for you, sir. You'll get to start with file item five first. That's SB95. That's sellers of travel. Yep?

Yep.

All right, thank you. We'll start with file item 5, then SB95 by Senator Umberg.

Thank you, Madam Chair. Members, I'd like to thank Sarah Mason for your work on this bill. Appreciate it. What this bill does is it simply requires accountability for some entrance into the travel industry business known as ticket consolidators.

Ticket consolidators typically buy tickets in bulk from airlines and then resell them to either other travel agents or to consumers. The challenge is that ticket consolidators, when they purchase these tickets and they resell them, basically, the obligations of the airlines somewhat disappear. The ticket consolidators can impose their own conditions if they will.

For example, not providing for refunds. The other challenge is little enforcement. And that's because many of them are located offshore. And so there's not much that law enforcement can do here in the United States to enforce fraud provisions. For example, this bill simply requires them, just like other travel agents, to register with the State of California.

So at least there is one. One tether in terms of law enforcement. I have personal experience with ticket consolidators because I was actually scammed by one. So as was somebody else in our office, a different ticket consolidator. And so that's simply what the bill does. And I am my own witness. I don't think so. I like Mr.

Tirico, but my guess is he's not going to be in support. That's just my guess.

Before we. Before. Thank you. Before we go to Mr. Tirico, then, is there lead support in the room? Would you like to be lead support in the room? You can come up and tell us why you support the bill. And then we will go to my. Friend Mr. Tirico.

Jerry Desmond with the. California Coalition of Travel Organizations, one of the original sponsors of the cellular travel. Law with Jackie Speier in the 90s. We're not in formal support of the. bill, but we see value in the. Provision of the bill that would define. Travel consolidators, ticket consolidators, and ensure that.

If they're doing business with California residents that they're covered by the seller of travel law. And we look forward to working with Senator Umberg to improve upon the bill and other changes that may be necessary to update the seller travel law.

Very good.

Thank you.

Thank you. Not bad for pulling your witness out of the audience, Senator Umberg. All right.

Thank you, Mr. Desmond.

All right. Assemblymember Tirico.

Good morning, Madam Chair, Members of the Committee, Senator Umberg, I apologize for jumping the gun. I noticed from your comments you're trying to expedite things. I was just helping along. I'm here testifying on behalf of Airlines for America. The trade Association represents all the major airlines and freight carriers around the country. I know.

We've met with Senator Umberg sitting up with the Committee consultant. We appreciate their willingness to listen and to try to work on the bill. We do support, fundamentally, the tenets of the bill. The one provision, the one section that we do not support, is requiring refunds from the airlines.

The airlines, like Senator Umberg, like his staff, like even Members of the trade Association that I represent, have been victimized by these sites. They purport to, oftentimes purport to be the airlines themselves. I think that's what happened to Senator Umberg. So we do support some greater vigilance and enforcement and oversight over these sites.

But as Senator Umberg mentioned, they're difficult to do. It's difficult to do because they're offshore, they're off, they're web, web based.

But we are working with our lawyers and our regulators in the Association to try to come up with enforcement language to try to help not only give the public greater insight and tools, but also ultimately to put these companies out of business. So with that, we. We look forward to our continued discussion with the Senator. Thank you.

Thank you, Mr. Treco. Okay, so I'm going to bring it back. If is there anybody else in the audience who would like to speak either in support or opposition? All right, thank you very much. We're going to come back to the dais. Senator Archuleta.

Yeah. Senator. No longer Senator. Witness. Put on the witness hat here. Walk me through how you were damaged and how this happened.

In the interest of time, I will just short circuit it. But here's what happened is that family planned a vacation with 18 family Members coming together for reunion in Mexico. We purchased tickets from American Airlines, and then when we needed to change them, of course we needed to change them.

When you asked Siri for American Airlines, it connected me to an entity purportedly to be American Airlines, and they said they had changed the reservations. What they did was they did change some of the reservations, but they changed them to dates basically where they had tickets, not the dates we wanted.

And so we tried to change them back. Basically, it was impossible. And there's virtually no enforcement mechanism. So, I mean, there's a little more to the story, but that's basically it. We lost $2,500. But it's not about global travels and it's not about us per se. It's really about.

I found out that this is a fairly pervasive scam. This is a business model that basically scams people. And because they're overseas, because they're offshore, it's very difficult to get to them.

And the purpose of this bill and the reason why I would put airlines basically in the place of having to conduct enforcement is if you look at the bill, it says when they know. So for example, if you tell XYZ Airlines, hey, this travel consolidator is scamming people. You now know it.

So don't basically, if you sell tickets to them with actual knowledge that you know they're scamming people, then you've basically now you stand in their shoes. And so if you sell them a ticket, then you've got a refund it. I am, as Assemblymember Tirico said, I am interested in finding out other ways to enforce it.

Requiring them to register as a. In essence, a travel agent in California is helpful, but really doesn't enforce the. It doesn't really provide the kind of protection we want to provide to Californians.

Well, I'm glad you're bringing it forward and I'll move the bill at appropriate time.

All right, Senator Choi and then Niello.

Senator Umberg, thank you for bringing up this consumer protection measure. I wonder, there are Travel consolidators not only sell tickets for airlines, but hotels and rental cars, etc. Did you have a reason why not to include to make it inclusive rather than just airlines?

That's probably a good idea, Senator Choi, but I'm right now focused on airlines because airlines are required to. Excuse me, Agents who sell airline tickets are required to register with the State of California. Hotel sellers are not required to register. Don't think cruises are required to register, but I'm not sure about that.

So that's why that was the first part of the Bill is requiring them to actually register.

So this first party, you'll have a second part, the following for the maybe.

Next vacation, who knows. So. Yes.

Thank you.

Thank you, Senator Niello.

Thank you, Madam Chair. This wasn't the one subject of the April Fool's joke, was it?

That's an inside Senator Niello. No, this was not my spouse pulling an April Fool's joke. If it was, it's been long standing now.

So, so excuse me, it requires that the airline have knowledge. How would that be proven? That they indeed knew that before it happened.

So if, for example, because they're going. To know after it, but that's too. Late, so they wouldn't know. So basically, just like every dog gets one free bite, every scammer gets one free scam, so to speak.

In other words, if the airlines doesn't know that, that this consolidator is scamming people, then they don't have an obligation basically to stop selling. Once a consumer complains, once a consumer says, zero, hey, by the way, you know, Global Travels, using them as an example, they're a scam operation. They scammed me, they're scamming others.

So now there's a written record where they're put on notice. And I think that the airlines also, when somebody buys 40 tickets under the name John Smith or 40 tickets by a travel agency, they have some reason to know.

Now, I realize that this is a, that scammers are ingenious and they probably change their name after they're put on notice the first time. But this is a problem. It is in search of a solution and this is not an adequate solution as this problem increases. But it's the best I can do right now.

I'm just troubled by how the proof would come forward. The Bill is going to our next Committee, Judiciary, and I'll support the Bill today. But I'll be looking for the issues that Mr. Tirico brought up on behalf of, of his client to see how the more subtle issues are addressed.

So to complete the answer to your question, so for example, you're scammed. You tell the airlines, hey, I've been scammed. Give me, give me my money back. Airlines says no, I'm sorry, we didn't know. Well, I suppose then at that point then you can query them, hey, you know, did you get any communication about XYZ Travel?

Answer is yes or answer is no. You know, realistically, this is probably not going to hit the, hit the mark to be enforced until they've collected millions of dollars. And I do believe they're collecting millions upon millions, not hundreds of millions of dollars at this point.

So, you know, little old me trying to sue someone in small claims court, asking for discovery. Frankly, probably not going to happen. Airlines are probably going to be fine.

But when an airline sells $1.0 million worth of tickets to a scamming organization, at that point in time they're on notice and then consumers may be able to have some recourse.

...urge an aye vote.

Okay, thank you. Senator Niello. Perhaps Mr. Trico, you could work with the chair of the next Committee Judish, on some of your concerns. And I'm not sure about little old you, chair of Judish and 30 year trial lawyer, but I think you would have a better shot than most. Thank you for bringing this Bill forward.

You have, do you have a motion from Senator Archuleta? You do. Okay, then we will do you good on your close. Do you want to add anything?

I urge an aye vote.

Thank you, Senator Umberg. We'll call the roll motion is due.

Motion is do pass to the Senate Judiciary Committee. Ashby.

Aye.

Ashby, aye. Choi.

Aye.

Choi, aye. Archuleta.

Archuleta, aye. Arreguin. Grayson. Menjavar. Niello.

Aye.

Aye.

Niello, aye. Smallwood-Cuevas. Strickland. Umberg.

Aye.

Umberg, aye. Weber Pearson.

All right, five. And we'll put it on call, okay Senator Umberg.

Thank you.

All right, so let's go to file item six. This is yours. SB312.

Ready?

Yes. Thank you very much, Madam Chair and Members. SB312 addresses a different kind of fraud, and that's in regard to the sale and transport of in particular puppies, but it can be other pets as well. California is an outlier in this space is that most states both require a health certificate.

So for example, if you purchase an animal online from XYZ State, that state then has a health certificate. A veterinarian certifies that the dog is in a certain condition. That health certificate then is kept on file. California doesn't keep them on file.

Until recently, we wrote a letter and said, hey, California, you ought to do what other states that are doing. At least keep these health certificates so that the consumer can know from whence this, for example, puppy came. And that's what this Bill does.

It basically was the catalyst for this and two other bills was an expose in the LA Times by Melody Gutierrez about the puppy mill operation in various states and how it's impacting California. And with me, I have two witnesses to make up for the no witnesses on the last Bill. I have Ms. Jennifer Fearing on behalf of the San Diego Humane Society and Brittany Benisi with the ASPCA

Thank you, Senator Umberg. Welcome to you both. You have two minutes each. Go right ahead.

Thank you. Chair Ashby, Members of the Committee, Brittany Benesi on behalf of the ASPCA. For decades, we and our partners have worked to address the puppy mill pipeline, a predatory industry that makes cruel out of state breeding conditions profitable by misleading consumers across the country with wholesome images and manipulative financial tactics.

This is difficult work, not because the many cases of cruelty seen are difficult to witness, but because the actors involved in this industry are highly adept at misleading the public, avoiding oversight, and obfuscating information that would impact their bottom line.

This is why back in 2014, the ASPCA sponsored AB 1809 to require certificates of veterinary inspection or CVI's to accompany dogs coming into the state for the purpose of resale and to help ensure that dogs coming into the state are healthy and ideally not born of cruelty.

Rather than directing CVI's to a centralized database, though, the budgetary limitations of that year led 1809 to direct documentation to county health departments with the hope that local health departments and animal control agencies would be able to gain pertinent information as to the population and health of dogs in their communities.

Unfortunately, as illustrated by the LA Times, the misdirection and subsequent destruction of many CVI's and the lack of capacity at the county level has shown that this was not the case.

It's clear that a more transparent process is needed, which is why SB312 offers a solution by requiring health certificates for dogs imported into the state for resale be submitted to the CDFA and made publicly available.

This gives consumers access to clear, factual information about where their dogs are coming from, whether it was healthy at the time of shipment, while also giving the state and municipalities information about the health of animals in our communities.

SB312 ensures that buyers are not left in the dark, that bad actors are brought into the light, and that law enforcement has the information needed to take action when action is needed. Back in 2014...

We're going to need your final thoughts.

Yes, we tried to ensure transparency back in 2014. We've learned our lessons and this is the opportunity to right that path. We urge an aye vote thank you.

Thank you for being here and thanks for your work. Fearing.

Good Morning Madam Chair and Members. Jennifer Fearing on behalf of San Diego Humane Society. We are a municipal animal care and humane law enforcement agency that we serve 13 cities in San Diego County and we're proud co sponsors of SB312.

We're on the front lines of the crisis created by unregulated imports of out of state puppies that are often bred in large scale facilities with minimal oversight, shipped into California through online sales or third party brokers.

With no meaningful transparency about where they come, what conditions they were raised in, or whether they are even healthy and vaccinated. California consumers have no way to verify the origin or health status of the pets they're purchasing.

And when something goes wrong, when the puppy arrives sick or the breeder disappears, these families are left with emotional distress, unexpected vet bills, and no recourse. They then turn to us in animal care and our colleagues around the state, and we're expected to investigate the sales of sick puppies and suspected fraud.

But we're operating in the dark. Because we have no record in California of where these puppies are coming from, our enforcement efforts are nearly impossible and bad actors continue their operations unchecked. Also makes it hard for policymakers like you to decide how to address, appropriately develop laws addressing this behavior.

This Bill is a simple common sense solution that conforms California with almost every other state in the union. And we are working collaboratively with the California Department of Food and Agriculture to develop the system that would implement this Bill. We would urge your aye vote today. Thank you.

Thank you, Ms. Fearing. Are there lead opposition witnesses here? Not lead opposition. Okay, then we'll go to support witnesses that are in the audience. Like to do me too testimony. Just your name and organization position on the Bill. Go ahead.

Thank you, Madam Chair. Members, Jason Schmelzer here on behalf of Humane World for Animals in support, formerly known as the Humane Society of the United States.

Thank you.

Hello, Madam Chair. Peter Kellison on behalf of the Pet Advocacy Network which represents pet care owners and the pet care community. Thank you.

Good morning, Chair and Members of the community. Sosan Madanat here on behalf of Animal Legal Defense Fund in support. Thank you.

Thanks for being here.

Good morning, Nicholas Sackett on behalf of Social Compassion and Legislation in support.

Thanks for being here. Okay. I know we don't have lead opposition. Is there anybody in the audience who wanted to state their opposition or an in between position? All right. Seeing no one will come back to the dais if there are questions from my colleagues. Senator Archuleta.

Senator, I've not heard the punitive side of this thing. Obviously there's a need for it. But if someone is caught continuously doing this, a breeder keeps doing this. What punitive side. Calling law enforcement. But how do we stop it? Obviously there's a need to stop it. Punitive side of it all.

I'll take a shot, then you all can correct me. So you've identified a key challenge, a key issue here. Is that so, for example, if you see that a puppy mill basically as part of its business practices shipping animals that are not well, then the State of California notifies the law enforcement officials in that sending state says, hey, you've got a puppy mill that's defrauding, you know, consumers in California.

We'd like you to take action. I am told that there are, there are at least some, and they're going to help me out here, that do take action, but that's, that's the consequence. So let me turn it over to the witnesses.

Briefly, Ms. Fearing.

Sure. Briefly. Jennifer Fearing again on behalf of San Diego Humane Society. Couple of things. First, this law is being written into an existing chapter that does have nominal but not zero fines. $50 for the first offense and a fine of not more than 100 for second and subsequent offenses.

And given that many of these brokers are peddling in numerous dogs, that is a hook that I think we would utilize on the humane law enforcement side to go after those fines. We also feel like the, that we have been talking to folks in other states. There is more enforcement occurs on the exporting state side on failures to do these,

because it's a veterinarian's license in those states who sign these forms and who are on the hook. I think we would struggle a bit in California to figure out how to bring accountability on the form submission to licensed vets in other states. But we are open to considering working on that.

And then I think Brittany might share, we have other legislation aimed at these brokers as well. That these, these certificates will be valuable in a tool for enforcing those laws.

Also briefly, if you have something to add.

Yes, in just a moment. We have two bills moving in the Assembly right now, AB506 and AB519. Part of this puppy mill Bill package. AB519 would prohibit brokers from selling to Californians pets, cats, dogs and rabbits.

And AB506 has contract requirements that would prohibit non refundable deposits frequently used and require that a seller disclose the source of an animal and authorizes the public prosecutors to bring suit on behalf of the state.

You want to tell Senator Archuleta, the author of those two bills, so he could look them up if he'd like?

Yes, absolutely. AB519 is by Assembly Member Berman. AB506 is by Assembly Member Bennett.

Alright, thank you.

Thank you, Madam Chair.