Senate Standing Committee on Business, Professions and Economic Development

Hearing. Thank you to my colleagues for being here bright and early on a Monday morning. Sorry. I am the reason we are a little bit late here. Apologize. We will make up for the time. All right, we are now in order. I think we have enough people to call quorum, so would you call the roll, please?

Ashby. Here. Ashby. Here. Choi. Here. Choi. Here. Archuleta. Here. Archuleta. Here. Araguain. Here. Adequin. Here. Grayson. Niello. Here. Niello. Here. Richardson. Here. Richardson. Here. Smallwood, Cuevas. Here. Smallwood, Cuevas. Here. Strickland. Strickland. Here. Umberg. Weber. Pearson. Great.

We have 14 bills on the agenda today. File item two, which is SB791, has been pulled. File item 719. Sorry. That's our collective dyslexia. Sorry. 719. File item six, SB 602, file item seven, SB 652, and file item 14, SB 861 are all proposed for consent. All right, we'll take that motion now.

[Roll Call]

That is eight. We'll put it on call for our last couple Members. I see Senator Cabaldon is here, ready to present. Senator Cabaldon, you have two bills in front of us today. First up, SB351, and then second up, SB790 again. We'll hold onto 719 for another day. Welcome.

Thank you, Madam Chair and Members, I'm here to present SB351, which is a narrowly crafted targeted update to California's corporate bar on the practice of medicine, which allows the Attorney General to enforce violations by private equity and hedge funds involved in medical and dental practices. I want to make something clear.

This Bill is not intended to hate on private equity. Private equity is an important source of funding for many healthcare providers in the sustaining of their practices and scaling innovation and helping providers modernize. But private equity activity in healthcare has grown dramatically, and it is growing faster than any other sector of that market.

And it's essential that California's guardrails move beyond simple guidelines from the medical board into enforceable standards in the law. Over the past decade, the number of private equity and hedge Fund investments in health care has surged by more than 20 times.

In 2022 alone, private equity firms completed an estimated 863 health care related service deals, a signal that investment in this space is accelerating, often without meaningful oversight. That kind of growth requires modern investment and enforcement tools and SB351 accomplishes that.

It provides the Attorney General with the authority to step in when financial interests cross the line and influence how care is delivered. And it protects providers by invalidating contracts that muzzle them, sometimes through non competes or gag clauses that silence concerns over care quality.

I want to be clear, private investment and quality of care are not mutually exclusive. But patient care has to come first. We've seen growing evidence lots and lots and lots of peer reviewed academic studies from throughout the country, year after year after year that shows the same thing.

Investor driven models have prioritized profit over long term patient incomes outcomes. At this Ann, there's I know there have been some questions why, why just private equity in this Bill and I want to address that directly at the at the outset of our conversation today.

As I noted, first of all, this private equity is the fastest growing part of the of the health care sector for for private practices experiencing a 20 fold increase.

Second is that unlike the nonprofit sector, the publicly traded sector and others, there are no alternative mechanisms for accountability or for enforcement for private and private equity transactions are very very short in their turnover.

So the average over the last 10 years has been about three years of a private equity interest holding medical practice or management services organization. That three years is shrinking. In the most recent years it's been going down to two and a half years, then two years and less than two years.

So the impacts of reputation, enforcement, hearings and transparency on this sector are far less potent than they are for others. Because when you don't expect to be in the sector for more than a year or two, those things no longer are controlling parts of your internalized accountability. And so rapid turnover means less accountability.

And unlike other private equity, health areas, pharmaceuticals, healthcare innovation and what have you, in most cases private equity buys in management service organizations for physicians and dentists are then sold to other private equity firms, not to stable long term strategic interests that are then taking over from a rapid turnaround from private equity.

And that leads to then that second private equity investor has to achieve the same sort of leverage buyout savings quickly. And so you end up with a very an ongoing cycle, a spiral of cost cutting that reduces patient outcomes and increases cost for patients or for providers.

And there is substantial evidence of higher levels of physician turnover, physician dissatisfaction, Shorter less opportunities for appointments, more expensive procedures and more high cost billing and higher costs to patients and plans. And so at this point I'd like to turn it over to our witnesses on the Bill, if that's okay.

Madam Chair Stephen Velowicz, who will share his personal story to fill in the color for you about why this Bill is needed. And then also at the table to answer technical questions from Members of the Committee, if needed, is Shereen Goodeschi with the California Medical Association.

Great. Thank you. You have two minutes. Welcome to the Senate Business, Professions and Economic Development Committee.

Thank you. Can you hear me?

Yep.

Thank you. Madam Chair and Members of the Committee, My name is Dr. Stephen Abelowicz and I've been working as a practicing pediatric physician for almost 30 years. During this time I've cared for thousands of children, including generations of families.

I feel it's my responsibility and ethical duty to testify today to advocate for those families and to share my story of what happens when we fail to adequately enforce the ban on the corporate practice of medicine.

Years ago, I partnered with private equity investors in my pediatric practice, thinking that it would help me grow my practice to reach more patients and provide better care.

While the investors agreed to not interfere with the clinical practice and just provide administrative services, they began interfering with clinical decisions in the pursuit of profits that were compromising the care of my young patients.

Their actions included limiting access and time for patients needing ongoing care, particularly for mental health canceling COVID vaccine clinics during the pandemic, coercing physicians to prescribe a specific brand of formula that they had financial ties to regardless of an infant's nutritional needs making hiring decisions favoring less competent and less costlier medical staff and attempting to dictate which medical equipment should be used for delivering care and treatment.

These actions breached the prohibition on the corporate practice of medicines and endangered my young patients health. Eventually, I left that practice and opened a new clinic where I could provide quality care without interference. While some of the families have found me in my new practice, others suffered from substandard care under private equity influence.

One concerning case involved an 8 year old who received inappropriate vaccines meant for teenagers. This mistake was hidden from the parents, only coming to light when I resumed the child's care. This situation underscores the need for physicians to oversee medical decisions and why it's critical to ensure that physicians and physicians alone oversee medical care and clinical decisions.

Absent true enforcement, the interest to increase profits and lower operating costs will come at the cost of patient safety and quality of care. I urge your support on SB351 to protect patients by creating a new enforcement tool to enforce the prohibition on the corporate practice of medicine in Our state. Thank you all for your time.

Thank you for your testimony. And you're here for technical questions, is that right? Correct. All right, great. Is there anyone else in the room in support of SB351? Please come forward and do me too testimony. Your name, organization and position on the Bill.

Thank you. Madam Chair. Members, Tim Madden, representing the California chapter. Of the American College of Emergency Physicians in Support.

Good morning. Tiffany Brokaw here on behalf of Attorney General Rob Bonton. Support.

Kim Stone. Stone. Advocacy on behalf of the California Orthopedic Association. In support.

Guy for the California Association of Orthodontists.

In support. John Doherty on behalf of the California Independent Physician Practice Association. In support.

Angela Hill on behalf of the California Medical Association, a proud co sponsor of the Bill. Thank you.

Lawrence Gaydon on behalf of the California Dental Association, also a proud co sponsor of the Bill.

Thank you.

Taylor Nichols, on behalf of the California chapter of the American Academy of Emergency Medicine in support of this Bill.

Dr. Khadijah Lang, on behalf of Golden State Medical Association. And we are in support of the Bill.

Great. Thank you. Is there a lead witness in opposition to the Bill? If so, please come forward. You can have a seat at the table here as well. This microphone. You'll have two minutes. Also each is. Are there two of you? Okay. Welcome. When you're ready, please begin.

Thank you. Chair Ashby, Members of the Committee, my name is John Steinbrenn. I'm the CEO of Children's Choice Dental Care. We're opposed to SB351 unless amended. Children's Choice was founded in Sacramento and we've delivered dental care to children since 2008. We've expanded to 28 locations in California and every year we see 380,000 visits, pediatric visits.

86% of those children are covered by Medi Cal Dental. We've been able to expand because we've had access to private equity funding. The purpose of corporate practice of medicine laws is to ensure that medical decisions are made solely based on patient care and not influenced by corporate interests or the pursuit of profit.

We are not opposed to prohibiting the corporate practice of medicine or dentistry. We are, however, opposed to any measure that focuses on ownership structures rather than health care outcomes. Existing law already prohibits the corporate practice of medicine and dentistry and applies to all, not just to private equity firms and hedge funds.

So why does SB351 seek to protect patients who are cared for by a private equity backed dental practice differently from patients who are cared for by by practices that are not private Equity backed?

Applying SB351 only to private equity and hedge funds may be politically expedient, but it's not in the best interest of patients nor is it sound public policy.

Finally, SB351 sends a strong message that private equity investment is not welcome in California, thereby threatening our ability to raise capital from private equity, which we need to build more dental clinics in underserved areas to help more Medicaid children.

I ask this Committee to direct the author to work with us to amend the Bill so that it applies to all, regardless of ownership structure. Thank you.

Thank you for your testimony. When you're ready, go ahead.

Thank you for the opportunity to testify today. My name is Dr. Tim Herman, a practicing dentist and a Member of the Ada CDA and the Sacramento District Dental Society. We have locations in Roseville, Rockland, Lincoln, Folsom, Sacramento and North Adomas. I'm here representing the Association of Dental support organizations, the ADSO.

Our Association has 15 Member companies in California supporting thousands of dentists and hygienists and serving patients in every corner of our Golden State.

I join you today because ADSO wants to work with the lawmakers and the CDA to ensure that future legislation advances our shared priorities, advancing both oral health and the ability for dental professionals to practice their profession.

To achieve this, we ask this body pursue amendments to SB351 to improve clarity of language, specificity of definitions and alignment with existing standards.

The core of our request is to protect the practitioners and the patients, especially those in underserved communities, by protecting their access to care and preventing cost increases while ensuring dental and medical decisions rest solely with licensed professionals.

Dental Support organizations, or DSOs, play a critical role in ensuring that dentists can focus on providing quality care to their patients by managing the burden and complexities of running a business. These challenges include procurement, legal compliance, accounting, administrative tasks and facility management.

By supporting these back Office Services, DSOs clear the way for dental professionals to do what they're educated to do provide quality and needed patient care. Here in California, there's a long history of promoting independent medical and dental practices. This is tradition our requested amendments seek to protect.

Our goal is to work with you to create clear and enforceable protections for dental providers. Accountability for bad actors in our profession, including those in private equity and regulatory clarity for ethical, transparent support organizations. Making these amendments promote fairness, reduces uncertainty and spares those who are serving their community from unneeded litigation or misdirected enforcement measures.

Most of all, it supports the preservation of a healthy, sustainable dental care ecosystem serving Californians at a time when confusion and cost increases our front of mind for so many families and business owners across California. Skip that One quick example of how DSO has helped our group of practices.

In 2020, when the pandemic started, we were able to continue to see patients because our DSO was able to provide and source the PPE we needed and help formulate regulations and guidelines so that our staff could treat patients safely without getting our staff or our Doctors affected.

The COVID 19 we were able to stay open, see our patients, see other dentist patients because we have the support of the dso. And thank you for your time today.

Thank you for your testimony. Appreciate it very much. Are there others in the room who oppose the Bill? Now would be the time to come forward to the microphone with me too. Testimony. Your name, organization and position on the Bill.

Hi. Gary Picard with Pacific Dental Services, now. Known as PDS Health. We oppose the bill.

All right, thank you very much. Anyone else? All right, we will bring it back to the dais for questions from colleagues.

No questions, but I'm happy to move the bill when the time is right. Senator Arreguin, thank you.

Well, thank you very much, Senator Cabaldo, for bringing this bill forward. Just a clarifying question. Your bill does not prohibit a medical or dental practice from seeking or entering a contract for private equity capital. It just limits those types of arrangements if they limit the ability of medical or dental professionals to make their own independent medical decisions.

There are other provisions of the bill with respect to respecting the scope of practice of. Of both the medical and dental professionals. Yes, that's.

That's exactly.

It doesn't prohibit it. It just limits the ability of interference in those decisions. And for that reason, I strongly support the Bill.

Any other comments from colleagues, Senator Niello?

Thank you, Madam Chair. And I'll apologize ahead of time for my voice. I. I agree with the intent of the bill, but. And there definitely is a difference between professional clinical decisions and business and management decisions.

And what my discomfort with your bill is, I think it goes too far into limiting the latter, specifically with regard to hiring and firing decisions, setting parameters under which the practice shall enter into contractual relationships with third party payers, decisions with regard to coding and billing procedures, and also medical equipment and medical supply decisions.

And I can see where in each one of those cases it can bleed into sort of the clinical area. But to prohibit participation in those sorts of basically administrative management business decisions hinders the ability of the financier, the owner, to properly control their investment. And that's my discomfort. I can't support it because of that.

But as you move forward, it sounds like it's consistent with the concerns of the opposition. It's interesting to me, by the way, that it's dental interests that have concerns about that.

I'm not sure what the significance of that is, but nonetheless, I think that it just wanders too far into those things that are truly management and administrative decisions.

Okay. I believe we have a motion from Senator. Smallwood-Cuevas. I have just one comment on the bill. Thank you, everyone, for your testimony. I appreciate you being here and taking the time this morning.

This bill does have some components that the Legislature has seen before prior to Senator Cabaldon's time here that may cause some concern for some folks.

However, the reason it is leaving this Committee without amends from the bped staff or myself is because the item for which Senator Cabaldon has already laid out very clearly, is actually already very clear in both the Medical and Dental Practice Acts.

And the role of decision making on behalf of patients is clearly in the hands of the medical provider, where it should remain. And this bill is a restatement of that fact, with some additional provisions on enforcement. Although the Attorney General is actually already the enforcement arm for both boards as well. There's a slight increase in scope.

And for that reason, he has my support today. Senator Cabal, would you like to close?

Yeah. Thank you, Madam Chair, and thanks for the questions and the comments. I do want to emphasize that all the. All the law firms that represent private equity in the transactions, if you peruse all their websites about this Bill, they all say the same thing. The bill mirrors the guidance from the California Medical Board.

It isn't an expansion of that scope in any significant way. So all we've been attempting to do here is use that definition, as you say, the definitions of private equity and other issues, they're drawn directly from the legislation that passed the Senate in the Assembly in the last session, but was vetoed by the Governor for other reasons.

So we do not intend to disincentivize private equity investments in California health care. That is not the purpose of the Bill. And I think we know that private equity is not heavily influenced by vibes. So in all, the recommendation to private equity companies from their attorneys is you should continue to invest. It's still the same guidelines.

They don't like the bill, but the. No one's saying we're not coming to California if this Bill passes because it is the exact same standards that are in the existing guidelines. That said, I do want to emphasize that we're committed to working with the opposition on precisely the kinds of issues that Senator Niello has raised and others.

And they're committed to sharing amendments in that vein in the coming weeks. So we look forward to reviewing those and continuing the conversation. And with that, I'd ask for another vote.

All right, we have a motion from Senator Smallwood-Cuevas. Let's call the roll on SB 351.

And motion is due. Passed the Senate Judiciary Committee. Ashby. Aye. Ashby, aye. Choi. Archuleta. Aye. Archuleta, Aye. Arreguin. Aye. Arreguin, aye. Grayson, Niello. No. Niello, no. Richardson. Aye. Richardson, aye. Smallwood-Cuevas. Aye. Smallwood-Cuevas. Aye. Strickland, Aye. Strickland, aye. Emberg, Webber, Pearson.

That was six to one. We'll put that on call. Thank you to your witnesses. Thank you for being here today, Senator Cabaldon, are you prepared to move on to SB790?

I am. Thank you very much, Madam Chair. This is a piece of legislation I've been working on since 1989 when I was the chief consultant at the Assembly Higher Education Committee. It's been a long road of the state's involvement in this issue.

SB790 is intended to address a gap in the state's right in the state's regulatory framework to benefit both California residents enrolled in online courses that are provided from other states and to provide access to the national market for students to California's own institutions.

Over the last several years, we've seen a substantial shift in how students access higher education both here and nationally. During the pandemic, enrollment in online distance education skyrocketed and even today it's well above the pre pandemic levels. A majority of college students now take at least some some of their courses online.

And notably a third of these students are taking those courses from institutions outside of their home state, including California. So tens of thousands of Californians are doing so taking online courses from schools throughout the country.

But California stands alone as the only state not participating in interstate reciprocity agreement that allows higher education institutions to effectively receive certification of their online programs by interstate authorization. That puts California's own institutions at a disadvantage.

While out of state, public and nonprofit schools can recruit California students with minimal oversight, California's colleges have to obtain authorization from every single state, dc, Puerto Rico and Guam, one at a time through their application processes and pay fees. Each one, even though they may have zero students in any particular year.

And so universities have to accomplish that causes many of them to not be able to compete in the national market. And that applies both to California community colleges, CSU and to UC, but also to independent and private colleges from Otis College of Design, Concordia University, usc, the California Indian Nations College, William Jessup University, Samuel Merritt College.

You know, private and independent institutions of all shapes across California cannot access students out of state.

That matters for those institutions, including for our CSU institutions, which are many of which are experiencing drastic drop and enrollment because those out of state online students can be the deciding factor in whether a course happens at all, whether a faculty Member gets hired or retained for that semester, and whether students can take that course.

If it only has 11 students and they could have had 16 because of enrollments from Georgia or Wisconsin or Arizona online, that course doesn't happen at all. And both the faculty Members here in California and the students lose out.

So SB790 takes an important Step forward in strengthening California's higher education system both internally and nationwide by directing the Governor to, or authorizing the Governor to join an interstate reciprocity agreement and directing him to designate a state agency to administer it and enforce it.

The Bill specifies that any reciprocity agreement the Governor enters has to meet very specific consumer protection standards that are the strongest of any state in the nation. It would require the national, state, the national reciprocity Agreement, to substantially change its own policies.

We're pushing on the national agreement here to authorize states, including California, to enforce consumer protection standards that are not currently in the agreement for all other states. By joining the pact, we would know our institutions will no longer need to navigate a patchwork of all these 50 authorization processes and fees.

And students in California who currently have very few protections when they enroll in courses offered by out of state institutions will now have the full benefits of both California's existing registration process and the reciprocity agreement and the enforcement by the other states.

The Bill balances access, efficiency and accountability and ensures California students have the protections that they deserve and that our institutions can compete on the national market and sustain their own programs for California domestic students with online courses, online enrollments from other states. So I'd now like to turn it over to our witnesses, if that's okay, Madam Chair.

The first is Bob Scheierman, who's a senior fellow and was former Deputy Under Secretary of Education for the Government of the United States. And also at the table is our second witness is Dr. Julie Greenwood, the Dean of Continuing and Professional Education at the University of California at Davis.

Great. Thank you both for being here. You have two minutes each.

Thank you, Madam Chair, Members of the Committee, thank you for the opportunity to testify. I'm Bob Scheierman, Senior Fellow at the Century Foundation, a social policy think tank. I also served in the Clinton White House and in the Obama Department of Education, where I focused a lot on consumer protection in higher education.

And I launched two nonprofit organizations in California, again focused on higher education. I have for years been concerned and opposed to California joining this national reciprocity agreement because of concerns about its low level of consumer protection.

The approach that Senator Cabaldon's Bill is the right approach, which is for California to lay out the conditions under which it is willing to join this agreement. It's a better approach that would help protect Californians. It recognizes the particular hazards of for profit institutions.

It creates a much needed escape hatch in the situation where another state is failing to adequately oversee their home state institution. Instead of California having no ability at all to do anything about that situation. California could bring that institution back into our own oversight system so that we can protect California citizens.

It ensures that the state Attorney General and the Bureau for Private Post Secondary Education does not have its hands tied with an inability to investigate a complaint if they feel that it's important to investigate that complaint. And it improves the overall registration process for out of state institutions that are not part of a reciprocity agreement.

I do think that some improvements of the Bill are needed to make sure that the kind of protections that the compensation that students have under the student tuition recovery Fund are something that would be available under reciprocity.

But overall, this is a very constructive step in developing a strong reciprocity agreement in the context of a Federal Government right now that unfortunately has other priorities.

Thank you very much.

Good morning. I'm Julie Greenlit. I'm the Dean of Continuing and Professional Education at UC Davis and formerly I was the Vice Dean for Educational Initiatives at Arizona State University where I worked closely with ASU Online. I'm here to share a campus perspective on Sara at asu.

We could offer online programs to California residents without navigating separate state authorization processes. In contrast, California institutions like UC Davis must apply for authorization in each state individually for each program separately. This is a burdensome and costly process.

For just five online programs, this can cost over $250,000 annually per institution, funds that could support students, faculty and innovation. Instead, joining Sarah would lower costs and reduce administrative complexity, allowing California's public universities to expand access to high quality online education both in state and nationally.

This is vital for working adults, caregivers, military personnel and the over 6 million Californians with some college but no degree who rely on flexible online options to complete their education and contribute to our workforce.

Participation in Sarah would also increase enrollments for out of state students, generating new revenue that supports financial sustainability of our programs, especially critical during periods of budget constraint. California public universities have world class faculty and instructional experts expertise.

Sarah provides a framework to extend this excellence beyond our state borders, enhance diversity in our classrooms and build inclusive, high quality digital learning ecosystems. Thank you for your time and consideration.

Thank you for your testimony. Are there others in the room who would like to support the Bill with me too? Testimony. Just your name, organization and position on the Bill. Welcome.

Thank you. Good morning. Alex Graves, the Association of Independent California Colleges and Universities in support.

Thank you. Good morning. Missy Johnson with Nielsen Merckximer here on. Behalf of the University of Southern California in support.

Good morning. Jessica Duan, the University of California in support.

Eric Baku, the CSU Chancellor's office in support.

Nick Romo with Stanford University in support.

Thank you. All right. Are there lead witnesses in opposition to this Bill? If there are, please come forward now. You can have a seat at the table. You'll have two minutes when you're ready.

Madam Chair, Members of the Committee, Scott Guyver, on behalf of University of Phoenix. We have an opposed and less amended position on the Bill. We think reciprocity is a good thing, as the sponsors suggested, provided it applies to all schools, which this does not.

Under this Bill, this new entity can simply deny participation by an out of state for profit institution at their discretion. No due process, no cause. They can just do it. This is probably why California is the only state that hasn't been able to join Sarah, because we don't want to play by their rules.

We want to establish our own rules as noted by the author. And the likelihood of these states accepting that or Sarah accepting that is low at best. Despite that, we're still going to establish a new regulatory body.

There is none in existence unless you go to the Bureau, which is not unlike the prior cpec, which was eliminated under Jerry Brown due to cost concerns. Even if California isn't allowed to join an agreement, we believe this measure should be open equally to all institutions in order to work now.

The Bill also modifies the Private Post Secondary Act. This is going to be the subject of sunset review next year. We would hope that that provision be struck and discussed next year. And interestingly, although this Bill modifies the act, it still doesn't allow this subset of institutions to participate.

So if you want to modify the act, this should be open to all comers in the same way that a USC can join or a UC Davis can join. And with that change, it would substantially alter my client's position. So for these reasons, we are opposed unless amended.

Thank you for your testimony. When you're ready.

Good morning, Chairmembers. My name is Manny Rodriguez. I'm here on behalf of the Institute for College Access and Success, also known as ticus, with an imposed and less amended position. First, I'd like to apologize for the late letter submission and appreciate the author's willingness to work with us and others on several of our concerns.

I also want to clarify that TCAS does not oppose the coordinating body aspect of this Bill or the overall concept of reciprocity. And we recognize the potential benefits for California based institutions. We believe California should not give up its ability to enforce stronger higher education specific consumer protections. The recent amendments taken are steps in the right direction.

But we still see a few issues. As written, California still cannot enforce a set of stronger higher education specific consumer protections outside of those in Section 94897. Additionally, the findings criteria outlined in ED section 66920 have been strengthened, but we believe additional factors around process and enforcement are needed.

Finally, while the changes to the Bureau's registration process for out of state institutions is helpful, the new language allows schools to keep enrolling students even after facing an enforcement action. That is the reversal from the current policy where enrollment is paused until the Bureau confirms there's no risk.

Without these changes and others outlined in our letter, we believe this does not meet the bar California has set for over a decade on accountability, oversight and transparency. Lastly, we're not alone in our concerns. State Attorney Generals across the country have voiced concerns about the state authorization reciprocity agreement and without any changes made.

Lastly, the State of Washington is considering legislation to only be part of a reciprocity agreement that provides another stronger safeguards for students due to their frustration with Sarah. We look forward to working with the author on this Bill. But as written, we respectfully request the Legislature to maintain California's Independence. Thank you for your time.

Appreciate your testimony. Are there others in the room who oppose the Bill and would like to provide MeToo testimony?

Thank you Madam Chair and Members. Tristan Brown of CFT Union of Educators. And Classified professionals representing faculty and community. College lecturers and UCs as well as faculty and private sector. We share the sentiment with Tikis. Look forward to working with the author on figuring this all out and protecting the consumer protection levels there.

So thank you so much.

Thank you. Others in opposition. Okay. Seeing no one else, we'll come back to the dais. Colleagues, are there questions?

Thank you Madam Chair and really appreciate looking at ways to better strengthen the ability for educational access and the conversations around enforcement in particular. And that's, that's where my, my questions sort of rest.

The Attorney General in California, we've had some problems with some of the for profit campuses, in particular California based Carician colleges, for example, was really targeting some low income students of color with predatory practices that, you know, led to a lot of false advertisements, a lot of unreasonable predatory programming.

And you know, my concern is that by moving in this direction, are we creating a pool of these bad actors and how do we ensure that we aren't creating sort of a downstream issue of giving more credence to these campuses that have in the past, we know, historically preyed upon some of our most vulnerable population?

So I'm just curious, would you consider, are you considering, it seems like you're doing a lot of work with some of the concerns to make sure that this applies only to public universities and private schools, but not the, not for, not the for profit campuses.

That you've hit on. One of the long standing issues in the, in this conversation. And I want to let me respond in two ways.

So the, because this has been an issue since the very beginning when I mentioned 1989, it was the bipartisan legislation by then Assembly Majority Leader Maxine Waters and Republican Senator Becky Morgan who advanced this legislation. At the time the distance education market was mailed VHS tapes.

And so the Bill, that legislation didn't really attempt to get at that broader market unless institutions had a physical presence in California. As that market has evolved, it's now so large that it's clear that a mechanism is needed, which is why the Federal Government insisted that you have to have state authorization in order to operate in California.

Though we have not regulated the out of state institutions almost at all for most of that period.

Solely out of state institutions that have no physical presence or other link in our statute, with only a couple of exceptions in recent years, the Legislature has passed a registration requirement so at least we can keep an handle on who's there, who is providing those services so that the Attorney General and others can reach them in the event of, you know, widespread fraud and abuse and all of that.

But it, but the, but the mainline law that did apply to Corinthian and to other institutions doesn't apply to those out of state online institutions. And so what this Bill does is it first, it applies a larger set of those consumer protections.

One of the code sections that was mentioned earlier is a set of consumer protections that currently does not apply to registration institutions out of state. This would apply that to them as well as then subject them to the, to the reciprocity system.

So then you will have to go to the State of Washington, if you're in Washington, and they will do the full review of your institution under those, under the standards that the 50 states have agreed to and that each state commits to enforce.

Prior to joining the Senate, I represented California on the Interstate, the Western Interstate Commission along actually with Mr. Scheireman. And I chaired the Committee that was responsible for, for cracking down on states when they applied for renewal.

Okay, Wyoming, are you really enforcing, are you doing your job so that we can be assured, even though we weren't a part of it, the country can be assured that these standards are not Just on paper, but they're fully enforced.

And so the current State of the world is that students in California who are taking a course from an out of state institution, proprietary or otherwise, is that they don't have access to the protections that our in state students have really at all, other than the registration requirement and a couple of other small ones.

This Bill expands it and then requires that those out of state institutions must be approved by one of the other states using the standards that we agree to.

The second part of the answer with respect to whether or not this could just be for publics and nonprofits, that I think that's, that's a live policy discussion to be had. The challenge here is that the other 50 states and Guam and Puerto Rico and the Washington, D.C. have agreed to this system that includes all institutions.

And this Bill does push on that state agreement. They will have to make changes to the agreement in order for California to join under SB790. That will, that is, that will not.

That will be, that would be a poison pill for us if that were in the legislation that required that private, that proprietary schools couldn't be in the reciprocity. That basically means we're not joining because there's no way the other states will agree to that.

However, the Bill does say that it doesn't require that we join that reciprocity system. The Bill says the Governor may join a reciprocity system and in another reciprocity agreement it could be if we could find other states that were willing to go along.

And I will tell you, we have had conversations, they didn't go anywhere, but we have had conversations with other states about that possibility. So the Bill opens the door for the first time to California being able to assemble a coalition of the willing of states that might be interested in that approach too.

But it doesn't do that directly. And so that's the reason for the University of Phoenix's opposition as well is they don't want the door open. But the door, we open the door, but we don't require that the Governor go through it because that would mean that we would almost certainly not be able to join the agreement.

Okay, thank you. All right, thank you, Senator Niello.

Thank you, Madam Chair. I will provide a alternative viewpoint on this with an appropriate regulatory structure. It really doesn't matter whether there's for profit or not for profit institutions involved. It was mentioned that there have been issues with for profit institutions. That's true. There have been issues with not for profit institutions, public as well as private.

One could look at the student debt that has been piled onto some graduates of public as well as private nonprofit institutions. I'm not going to get into that because that's sort of the same as concentrating only on the bad actors in the for profit area. And are there some?

Yes, but there are profit for profit institutions that provide high quality education, especially in the trades. And I think it would be a mistake to actively exclude them from any participation, this or otherwise. The California Private Post Secondary Education act of 2009.

I actually worked with then Assemblyman Portantino on that exactly because I was concerned about the incredible bias against for profit institutions and that regulates all. I'll support the Bill because I agree with the direction that it's going.

But I think to exclude all for profit institutions just because some have been bad actors is totally unfair to the services to many students that have benefited significantly by for profit institutions, as I say, particularly in the trades area.

Senator Weldon, I'm going to ask you to address those in your close, if that's okay. I'm going to give you a couple of comments, then we'll give it to you to close and then we'll take a vote on this item.

This Bill allows California to control its own destiny, which is important to me and to the standards set on this Committee in the time that I have chaired. It does not require submission of California to other states laws and codes.

The Bill does not require California to compromise its values hard fought many generations to where we are now particularly exampled in our educational facilities. I am somewhat compelled by the comments of the opposition here, but I know that the Senator will work with them.

And I think that Senator Niello has laid out another way to address that in moving forward. I don't think anyone disagrees. However, were we to not push this Bill forward, it would not in any way advance the opponent's comments. It would only hinder the ability of the other schools to move forward.

So I ask the author to continue working with the opposition and will lend my support to the Bill today. I do however, need a motion unless. Senator Niello, you made the motion?

I make the motion. Motion.

All right, great. Then we'll call the roll.

Motion is do pass the Senate Education Committee. Ashby. Aye. Ashby, Aye. Choi. Aye. Choy, Aye. Archuleta. Adein. Aye. Adaguin, Aye. Grayson. Grayson. Aye. Niello. Niello, Aye. Richardson. Richardson, Aye. Smallwood, Cuevas. Smallwood. Cvis Aye. Strickland. Aye. Strickland, Aye. Amberg. Weber. Pearson.

Is that eight? All right, we're going to put it on call, but you have eight votes for now. Senator Cabaldon, thank you.

Thank you.

And thank you, tree witnesses for being here today. Senator Valadaris, thank you for hanging in there with us. You have two bills on the agenda today. First up, SB402. And then we'll go to SB713 when you are ready.

Good morning, Madam Chair and Members of the Committee. I'm here today to present Senate Bill 402. And this bill will move the existing requirements for qualified autism service providers, qualified autism service professionals, and qualified autism service paraprofessionals from health and safety and insurance codes to the business and professions codes.

SB 402 does not change the current standard and qualifications for these professions. In current statute, behavior analysts, qualified autism service paraprofessionals and qualified autism service professionals are the only providers whose qualifications are not listed in the business and professions codes. So this bill simply brings parity for all providers today.

Testifying in support of the bill are Penny Schenken, board certified behavior analyst and Calaba board Member, and Melissa Cortese with the Council of Autism Service Providers.

All right, well, two of you can each speak for two minutes and the other can be here for technical questions. You decide when you're ready. Please proceed Good morning.

My name is Penny Schenken. I'm a board certified Behavior Analyst and native Californian representing the California Association for behavior analysis or CALABA.

I've worked here for over 15 years providing behavioral health treatment to individuals with autism and developmental disabilities, and I'm here today in support of SB 402 which will relocate the provider qualification requirements for qualified autism service providers, professionals and Paraprofessionals, collectively called QASPs, from the health and Safety and Insurance Codes to the Business and Professions Code.

This shift is a proactive step to align these standards with those of other Healing Arts professions without changing the qualifications themselves. A little history when SB 946 was passed in 2011, it required insurance coverage for BHT for individuals with autism and pervasive developmental disorders and also defined the qualifications for BHT providers.

The QASPs which were placed in the Health and Safety and Insurance Codes along with the mandate. However, after conversations with Senate and Assembly Committee staff, it became clear that the PPCs are the more appropriate venue for maintaining provider qualifications. SB 402 is the result of these thoughtful conversations and is on request of the Committee staff.

Specifically, SB 402 will move the existing QASP provider qualifications to Business and Professions Code with no changes to those qualifications.

It will promote consistency by placing QASP qualifications alongside those of other Healing Arts professionals regulated under the PPC, and it will facilitate better oversight by the Department of Consumer affairs, thereby increasing consumer protection without imposing new barriers or restrictions it will not create new regulatory burdens, it will not disrupt the workforce or business operations of agencies employing QASPs, and it will not reduce access to services or affect the ability of families to obtain care.

In short, SB 402 will ensure that private provider qualifications for behavioral health treatment are housed in the right place for long term regulatory alignment and oversight without causing disruption or preventing families from accessing high quality care. Access for families is an integral part of CALABA's.

Your final thought there.

And we are SB 402 supports our mission of ensuring quality care and we thank Senator Valadares for her.

Thank you. Now, did you guys want to do one minute each or just you?

No, I'll just quickly introduce myself Rachel Blucher on behalf of with Nielsen. Mercksmer here for technical questions. Great.

Hi. Melissa Cortese on behalf of the Council of Autism Service Providers. CASP is A nonprofit trade Association made up of autism service provider organizations, including 56 Member organizations here in California, here in strong support of the bill.

I was looking through the analysis and I think there's a lot of confusion as to what this bill does and what it doesn't do. It simply puts the standards for who can provide treatment into the business and professions code where we believe it belongs.

Whereas the coverage mandate itself, what should be covered, remains in the health and safety code. Going forward, should there be legislation, and there have been attempts in the past which this Legislature has, either it's stalled or the Governor has vetoed. Should there be attempts to change the standards?

We believe that conversation should be in this Committee, in the business and professions Committee, and not in the Health Committee, where the conversation should surround changes to what's actually coverage and not standards. So with that, we ask for your aye vote.

All right. Thank you for your testimony. Are there others here in the audience today with MeToo testimony and support? Your name, your organization and your position on the bill.

Thank you so much. My name is Michelle Hyde. I'm a board certified behavior analyst, also. The parent of a child with autism. On behalf of Advanced Behavioral Pathways here in support. Thank you.

Thank you for your time. Emily Schumann, board certified behavior analyst, also a parent of a child with autism, here on behalf of Behavior Management Solutions. And I am in support.

Thank you very much. Are there lead witnesses in opposition here today? If so, please come forward to the table. I might have to ask a couple of you to take a seat. We'll call you up if we need technical assistance. Thank you. All right, ladies, when you are ready, two minutes each.

Good morning, Madam Chair, Members of the Committee, my name is Jasmine Gutierrez. I am a behavior analyst serving children with autism in San Joaquin and Santa Cannes. I am here today to speak in opposition to SB 402.

Firstly, I would like to extend my gratitude to Senator Valadares for her ongoing dedication and thoughtful connection to the autism and development developmental disabilities community. It is clear that her commitment to addressing the needs of individuals with autism and other developmental disabilities is genuine and that effort is recognized and deeply appreciated by our community.

However, I must respectfully express my concerns and opposition to SB 402. Autism prevalence in California is at staggering levels. According to the CDC, 1 in 12.5 boys in our state is now diagnosed with autism. With an overall incidence rate of 1 to 30 children.

California has built one of the most effective systems in the nation to address increasing needs of this population. Yet SB 402 fails to add necessary value to this well established system or the individuals it aims to help. Your Committee consultants analysis highlights an important point that I urge you to carefully consider.

The analysis notes and I quote, these individuals remain unlicensed and it does not appear that Bill does anything to add to the oversight and accountability of providers, nor does it impact consumer protection in any meaningful way.

The analysis further points out that simply recasting code provisions from the Health and Safety Code to the Insurance Code and Business and Professions Code may inadvertently create harmful roadblocks for service delivery to consumers.

By expanding scope, our autism clients and families we serve risk losing or never capturing qualified practitioners due to those limited practitioners being able to serve other conditions.

Since the enactment of the historic Autism Insurance Mandate Bill, not a single issue has ever been raised with providers or families relating to the status establishment of these sections of law in the Health and Safety Code by the Office of Legislatures Council. The Bill is simply unnecessary.

In conclusion, this Bill does not address the fundamental issues that families and providers face, that is the critical shortage of services, supports and qualified practitioners. Instead, SB 402 risk adding unnecessary complexity that could hinder access to already limited life changing services. Thank you for your time and consideration. I urge a note on vote on SB 402.

Thank you for your testimony. Two minutes.

Hello. Good morning, Madam Chair, Members of the Committee, my name is Karen Dubon. I'm the Executive Director of the QABA Credentialing Board. Thank you for the opportunity to speak with you today.

I'd like to begin by expressing gratitude to Senator Valadarez for her dedication and tireless efforts, especially supporting the autism community again with those alarming rising incidences of autism. We deeply value this work being done at the QAB Credentialing Board. We are committed to ensuring all individuals diagnosed with autism have access to the care and resources they need.

While we share the same goal of expanding access to qualified behavior analysis practitioners, our position on SB 402 is opposed. Unless amended, we believe that any changes to the Business and Profession Code should ensure inclusivity and prioritize expanding access to care.

Unfortunately, as it stands, SB 402 risks institutionalizing a monopoly by naming a single certifying entity in the statute. Other states such as Texas and North Carolina have established a more inclusive approach. These states recognize QAB practitioners by name and the American National Standards Institute.

Rather than exclusively naming a single organization, it is essential that California follows this more inclusive model. Professional diversity of certification options is critical not only for ensuring fairness but also for expanding the provider pool which directly impacts access to care for the Autism community.

To meet the growing demand for services, California must avoid limiting its certification standards to one entity and instead expand its criteria to include nationally accredited organizations like the QABA Board. I'd also like to highlight a pertinent point from the Committee analysis which recognizes the quote, existing law to a named certified entity may no longer be relevant.

This presents an important opportunity to refine the statute and align it with current best practices. The analysis further recommends determining appropriate metrics for certification rather than relying on a limited pool from one organization. We wholeheartedly agree with this recommendation and urge the Committee to include additional qualified ABA providers, such as those certified by QAB in the statute.

We look forward to working with Senator Valadarez and Members of this Committee to refine SB 402 and better address these issues. Together, we can ensure that California leads with equity inclusivity and forward thinking solutions that benefit our autism community.

Thank you for your testimony. Are there others here in opposition today who would like to provide me too testimony? Please state your name, organization and position on the bill.

Thank you, Madam Chair and Members of the Committee. Rick Rollins, former Secretary of the Senate and representing the Autism Business Association Association, the provider community and also the ABC School here in Sacramento, has been serving children with autism for the last 30 years.

I'm also a parent of a 35 year old son with autism and I'm here in opposition to this bill.

Thank you. Testimony.

Good morning, Senators. I'm former Assemblymember Eric Linder. I'm here representing Autism Behavior Services in opposition to the bill.

All right, thank you very much. I will bring it back to the dais for questions from colleagues. Seeing none, I would need a motion. Move the bill. Okay. Moved by Senator Strickland. Would you like an opportunity to close?

I just respectfully ask for an aye vote.

Great. We will call.

The roll motion is due. Pass to the Senate Floor. Ashby. Aye. Ashby, Aye. Choi.

Aye.

Joy. Aye. Archuletta. Grayson. Grayson. aye Niello. Richardson. Aye. Richardson, Aye. Smallwood, Cuevas. Aye. Smallwood, Cuevas. Aye. Strickland, Aye. Strickland, aye Amberg Weber, Pearson.

Is that seven? I think seven. We'll put it on call. Thank you to your witnesses for being here. Senator Valladares, you have another bill up, SB 713.

Thank you, Madam Chair and Members. SB713, as proposed to be amended, provides a bid preference for companies that operate employee stock ownership plans, or ESOPs. ESOPs are ways for normal California employees to build wealth by owning shares in the company that they work for. Building wealth through employee ownership is not a new concept for the Legislature.

Senator Becker passed SB 1407 in 2022 that created the California Employee Ownership Hub. Also in 2022, Assembly Member Mia Bonta passed the Promote Ownership by Workers for Economic Recovery act which called upon this state to study ways to promote worker ownership. That report was completed earlier this year and it is an.

It's an exhaustive read of 314 pages and references. ESOP's 747 times. One of the report's findings recommends that the state provide a modest incentive to high road worker owned firms. ESOPs fit that description.

On page 79 of the January 2025 Power act report, it reads, we suggest the state consider giving a modest incentive to procure from bidders certified as high road worker owned firms. SB 713 does just that.

As proposed to be amended, the Bill certifies construction companies that operate an ESOP and provides a modest bid preference scaled to the ownership level of the company. The bid preference only applies to Caltrans construction contracts that only use state funds. The state currently has several bid participation goals and bid preferences for certain business communities.

But those preferences only truly benefit the owners of companies and fail to take into consideration worker owners. SB713 is a first step to incentivize and promote worker ownership in California. And with me today to testify is Mr. Youssef Lewis, who is a worker, owner and a general superintendent at a construction company.

And Steve Ward is here to answer any technical questions.

All right, thank you very much. You have two minutes when you're ready.

Thank you. Madam Chair, Members of the Committee, once again, my name is Joseph Lewis, a General Superintendent at Pavement Recycling Systems, also ESOP company. So that means I'm an owner of the company. I'd like to speak in support of SB713. ESOP to me has been awesome for me and my family. It's also given.

It's given us the forefront to see how when we retire that we're going to be very comfortable. Now the ESOP companies bring up good value and leadership. Watching our shares growing since I've been a part of CSOP for the last 10 years.

Now me and my family can honestly say that we can retire and retire in a very comfortable position in that we all as employee owners are getting the same results. Not just one person making all the money of most individual companies as a whole. We all won't be okay when we retire.

So I'm thankful and blessed to be a part of an ESOP company.

All right, thank you very much for your testimony. Would you like to introduce yourself on the record? No. Yeah.

Hi. Madam Chair. Committee, thank you for having us here. I'm Steve Ward with Pavement Recycling Systems. We're 100% employee owned company including 100% participation. Even our union shops are employee owners. I'm mostly here for technical. If I can answer any questions. The gentleman from UC Berkeley who did the study was supposed to be in this chair.

And I'd also like to voice support from the over 400 employee owners, the ESOP Association and ESCA and the many employee owned companies who have sent letters in in support of SB713.

Great. Thank you both for being here. Are there others in the audience in support of SB713? If so, please come to the microphone now. Seeing none, Is there opposition to SB713? Lead opposition. Seeing none. Is there anyone in the audience who would just like to do me too? Testimony as opposition. Seeing none.

I'll come back to the dais. Colleague's comments.

Move the bill.

Bill moved by Senator Strickland. Senator Valladares, would you like an opportunity to close?

I respectfully ask for an aye vote.

Thank you very much. We will call the roll.

Motion is due. Pass the Senate Rules Committee. [Roll Call]

All right, that's 9-0. But we will put it on call for our couple outstanding Members. Thank you Senator Valladares, for being here. Senator Grayson, can I call you up? You ready to go?

Most of our remaining authors are on Committee, but if you are in the building and you can hear my voice, and your name is Senator Caballero, you should probably head down to this chamber when you get a chance. We would love to hear your bill. Senator Grayson, when you are ready.

Thank you so much, Madam Chair. I would like to start by first thanking you and Committee staff for their time and work on this Bill. Should the Bill advance from Committee today, I am committed to taking a minute amendments that directly address the questions and suggestions that are outlined in the Committee's analysis.

At its core, SB291 is a simple Bill, of course. It seeks to ensure that licensed contractors who have employees carry workers compensation insurance policies by 2028 as required by law.

It would also establish new steep penalties for licensees who do not comply with workers compensation insurance requirements if it is sub subsequently determine that they do have employees with amendments that I plan to accept.

SB 291 will also direct the Contractor State License Board to develop an audit or other system to determine which of their licensees truly do have or do not have employees.

SB291 will uphold consumer protections by establishing significant penalties for any licensee who does not follow existing law and with promised amendments, will also make sure that we have the necessary data to create a pathway in the future to ensure that licensees without any employees do not have to carry unnecessary workers compensation insurance policies.

This will ultimately help our state to maintain the licensee population needed to meet consumer construction needs while meeting our commitments to California's workers. Again, thank you to the Committee for their work and with me today is Rebecca May, Chief of Legislation for Contractor State License Board to the Chair, thank you.

When you're ready. Good morning Chair Ashby and Committee Members. Rebecca May, on behalf of the Contractor State License Board, the sponsor of SB291, I want to thank Senator Grayson so much for authoring this bill. As the Senator noted, all licensees are required to carry workers comp insurance whether they have employees or not starting January 12028.

Right now, the law allows some licensees to self certify that they do not have employees and are exempted from workers comp requirements. Approximately half of licensees claim this exemption. Through the board's consumer complaint handling. It is apparent that many contractors falsely claim the exemption despite having employees.

This creates a hardship for workers that may be injured on a construction site and an unfair business advantage over those licensees who secure workers comp for their employees. This prompted the Board to sponsor legislation SB 216 of 2021 requiring workers comp for all.

Since that bill's passage, the Legislature and CSLB have heard from individual licensees who work by themselves with no employees and do not benefit from having a workers compensation policy.

The Board aims to strike a very delicate balance between licensees who follow the rules by having workers comp policies to protect the workers that they hire and contractors who legitimately work by themselves with no employees.

I want to thank Chair Ashby and Committee staff and of course Senator Grayson and his staff for continuing to work with us on a lasting and workable solution to this issue. While the board has not had an opportunity to review the proposed amendments, CSLB staff will continue to work with all stakeholders as this Bill moves forward.

Thank you.

Thank you very much for your testimony. Is there anyone else here in support of SB291? If so, please come to the microphone now. Is there opposition to SB 291 in any form? Seeing none. Come back to the dais.

I have one comment on this Bill, and then I could use a motion from anyone who'd like to make it. Senator Grace. Thank you. Senator Richardson, you have your motion. I want to thank you very much for coming and speaking with me and with staff.

And most importantly, I want to thank you for your tremendous efforts to support businesses and find the balance of also protecting workers. Well done. Senator Grayson, you have a motion? We will call the roll. Would you like an opportunity to close?

Respectfully ask for an aye vote.

Motion is do pass as amended to Senate Judiciary Committee. [Roll Call]

I believe you're at 9-0. That will go on. Oh, he's at 10. All right, sorry, 10-0. But we'll still put it on call for the last couple Members. Thank you. Senator Grayson. Senator Arreguin. Are you ready to move forward with S. All right, great. We'll hear SB372, then. If you have witnesses, please come to the table.

That would help us. We're making good time here, friends. Let's keep moving. Appreciate everyone's effort to work together.

Go ahead, Senator, when you are ready.

Well, good morning, Madam Chair and Members. Thank you for the opportunity to present Senate Bill 372, which narrowly authorizes a highly qualified nonprofit research institution with a physical presence in California, but headquartered in another state to be recognized as an independent institution of higher education under the state Education Code.

I just want to clarify this is a district bill that is introduced to address the disparity that impacts one institution in my district, Northeastern University, which took over the former Mills College in the City of Oakland. This designation would clarify an institution's regulatory standing with peer institutions headquartered in California.

Under current law, many nonprofit universities are classified under the same regulatory framework as vocational schools. While this law was designed to protect students from predatory institutions similar to what we discuss with a prior Bill, it will now disproportionately impact reputable nonprofit institutions that merge with California schools, such as Northeastern University when it merged with Mills College.

Established in 2009, the Bureau for Private Post Secondary Education, BPPE protects students and consumers by overseeing California's private post secondary institutions and vocational schools. While these regulations safeguard students against fraudulent institutions, they inadvertently burden students at highly qualified nonprofit institutions committed to serving California. Senate Bill 372 would grant an exemption to Northeastern University.

This is consistent with other peer institutions and would clarify the University's regulatory standing with the Bureau of Private Postsecondary Education. When a nonprofit college merges with another, students face unnecessary fees as outlined in the letter of support in the Committee analysis, and requirements that are not imposed on their peers at other similar nonprofit institutions.

For example, following the 2022 merger between Mills College and Northeastern University, students at the Oakland campus were required to declare major upon enrollment and pay a fee that did not apply to other Mills students.

Those of you that understand higher education, when you come into a undergraduate institution, you may not know what your major is, but the requirement that you have to declare your major was an undue religious requirements that we're trying to clarify through this Bill.

Northeastern University is committed to maintaining and expanding academic programs at its Oakland campus indefinitely and want to acknowledge the incredible partnership they have done with the City of Oakland with the East Bay community, and the particular focus on trying to bring students from the surrounding community to study at that institution and the service learning and public service mission of the University as well.

Northeastern University is committed to maintaining and expanding academic programs and given this narrow clarification to the institution's regulatory standing with BPE is therefore warranted.

Senate Bill 372 ensures that Northeastern University, which is a high quality nonprofit research institution receives the same and fair regulatory treatment as other independent nonprofit higher education institutions in the State of California such as Stanford University, Santa Clara University and Mills College prior to its 2022 merger.

Specifically, and this is a very narrowly tailored bill, the bill guarantees that an in state independent institution of higher education that operated as a NonProfit continuously from 1877 until 2022 and later merged with an out of state nonprofit post secondary institution with comparable accreditation remains recognized as an independent institution of higher education under California.

Along with me today is Renee Jadush Lever. Did I get that correct? The Vice President of Campus Administration and Strategic Initiatives at Northeastern University in Oakland and Alex Graves, the Vice President for Government Relations with the Association of Independent California Colleges and Universities, to testify.

Great. Thank you. Senator Arreguin, when you're ready, two minutes.

Thank you for the opportunity to testify today on Senate Bill 372 offered by Senator Arreguin prior to joining Northeastern for 31 years, I've served in a variety of leadership roles at Mills College. Founded in 1898, Northeastern is a comprehensive, nonprofit global research University and the recognized leader in cooperative education and experiential learning.

Mills merged with Northeastern in 2022, joining the network of 13 campuses across the United States, Canada and the United Kingdom, including a campus in San Jose offering graduate degrees, which opened in 2015.

Under current state law, high qualified nonprofit institutions that maintain physical presence in California but which are headquartered outside the states such as Northeastern, fall into the same regulatory category as private for profit institutions and vocational schools.

The purpose of SB372 would be to add Northeastern to the list of more than 80 nonprofit higher education institutions in the states such as Stanford and Santa Clara that were exempted from the California Private Post Secondary Education act enacted in 2009.

The bill would also make clear that Northeastern meets the statutory definition of an independent institution of higher education under California law and ensure that Northeastern is also subject to all laws and regulations that apply to California private colleges and universities.

By adding Northeastern as exempt institution under the act, the bill would eliminate requirements that currently impede the student academic progress. Academic exploration and discovery are the hallmark of an undergraduate education, particularly during the first year. One fourth of all Northeastern Oakland entering students want to explore majors before declaring.

The BPPE advises students that they can only enroll in an approved degree program. SB 372 would eliminate the requirement that first year students must choose a major before they matriculate. The bill would ease substantial administrative burdens and reduce delays for program approvals. It would save time the BPPE staff currently spend auditing.

We do need you to give us your final thought. And as you do that, please state your name and title for the record. I know Senator Arreguin said it, but it's good for us to have the person testify and say yes.

Renee Jadush Lever, Vice President for Campus Administration and Strategic Initiatives at Northeastern Oakland. Also, as you remember, similar legislation passed the Assembly and this Committee unanimously last summer, but was held over in Senate Appropriations. SB372 is substantially similar. Eliminates potential fiscal impact. Thank you for that.

Thank you for your testimony. Appreciate it. All right, next step. Two minutes?

Sure. I'll be brief. Alex Graves again with AICCU, or the Membership Organization for Over 80 Private Nonprofit accredited colleges in the State of California. You know, as was mentioned, the higher ed landscape has and continues to change a lot and rapidly.

We think that Northeastern has been hard at work on this issue, as mentioned by Renee, for over a year.

And we think that, you know, given the issues that the institution and the students attending the institution are seeing under the current regulatory structure, we believe that some remedy is warranted and in our opinion, think this is a pretty narrowly crafted approach. And thank the Senator and Northeastern for their work on it.

Thank you very much. Did you want to contribute as well? You have one minute.

Yes. Hi, I'm Carolyn Simard. I'm the Dean of Northeastern's Silicon Valley Campus, located in San Jose. We offer graduate programs focused on data science. Computer science and artificial intelligence are really meeting the needs of the regional workforce. And I'm here in strong support of SB372. Thank you.

Thank you. Thank you all for being here for your testimony. Are there others in the room in support of SB372? If so, please come forward now with your MeToo testimony. Seeing no one is there lead opposition to SB372? Seeing no one is there anyone in opposition in the room just like to voice their concern? No.

All right, then. We will come back to the dais. Let's see any comments from my colleagues moved by Senator Archuleta. I want to thank the author for carefully crafting a very narrowly tailored bill specific to a district concern. I think that was excellent work as illustrated by your speakers today. Would you like an opportunity to close?

Respectfully ask for your Aye vote.

Great. We will call.

The roll motion is due. Passed the Senate Education Committee. [Roll Call]

10 and then we will put that on call as well. Thank you, Senator Arreguin. I think we'll go to Senator Niello, if that's okay. Senator Strickland, you are all right with me bouncing to Sen. Okay, great. Senator Niello, you ready to present?

I was born ready.

I know you were. I know you were. Great. This will be SB382. If he has witnesses in the room, please come forward to the table.

I'm sorry, 517. I said Senator Strickland's bill. I'm sorry. Go ahead. Sorry. You want me to. 570. No, no, no, no, no, no, no. He's good. He's making an adjustment. SB517. I'm so sorry, Senator Niello. House Improvement contract requirements. Subcontractors. When you are ready, my Sacramento partner.

Yes, we have joint custody of Sacramento county with visitation rights. SB517 is about basic fairness and importantly, transparency. When homeowners sign a contract, they deserve to know who's actually doing the work on their home. This bill ensures that consumers will have the information available to them when making that important decision.

In my own district and in the Sacramento area, we've seen the consequence of this lack of transparency firsthand. A company advertising itself as a full service ADU builder was actually handing off the entire project to a single subcontractor. And the homeowners didn't know that. Customers thought they were working with the original company from start to finish.

But in reality, all of the work was outsourced. When things went wrong, there was no accountability. Unfortunately, this is not an isolated case. SB517 helps protect Californians from these bad actors while requiring contractors to disclose when there will be subcontractors. Excuse me.

On the job, it's really a fairly simple bill, but we did go through some negotiation with the Committee that had issues with originally a clause that would disclose if more than 50% of the work was being subcontracted with other disclosure that we felt was a little bit burdensome on contractors.

So instead, we're requiring the home improvement contract to state whether or not there will be subcontractors, and upon a request by the consumer to disclose which subcontractors that could be. Again, it's pretty simple. And you have to wonder, why would you have to do that? Well, because it's not required otherwise.

And there were terrible abuses with that particular ADU contractor, who, by the way, is under investigation by the District Attorney's office as we speak. Requiring contractors to name subcontractors upon request of the consumer does not create a burden on the contractor to list a whole list of subcontractors that could possibly be involved.

And this isn't about punishing legitimate contractors. It's about stopping the deceptive practices that we experience. Which is why I got involved with this in the first place.

We plan on continuing to work with the Committee staff and those from the industry to make sure that this building language achieves the goal that's desired while not harming the good actors in the profession. I respectfully ask for an Aye vote and I have two witnesses.

Marion Smith on behalf of the National Insurance Crime Bureau and Steve Tankersley, founder of Tankersley Construction. And he's also Vice President of the National Association of the Remodeling Industry. And I met with him early on when I discovered this problem in my district and he's been very helpful in coming up with a solution that can work.

Great. Thank you both for being here. You have two minutes each when you are ready.

Good morning, Madam Chairman and Members of the Committee. As the Senator said, my name is Marion Smith. I'm the Strategic Director for Policy and Government Affairs with the National Insurance Crime Bureau.

The National Insurance Crime Bureau is a national century old not for profit organization supported by approximately 1200 property and casualty insurance companies, including many who write business in California. Working hand in hand with our Member companies in California State and local law enforcement, we help detect, prevent and deter insurance fraud and crimes.

We are currently investigating numerous questionable claims here in the State of California relating to contractor fraud. Just one example to give you. The contractor under investigation is receiving bids from the subcontractor portion of the work to fire damaged homes. And the contractor is then significantly marking up the subcontractor's bid anywhere from 33% to 102% higher.

And then submitting that cost on top of the usual and customary overhead and profit amounts to the insurance company charging exorbitant fees, including those for unwarranted services or work never performed in order to Bilk insurers is insurance fraud. Senate Bill 517 increases transparency in home improvement contracts.

This reform would help combat unscrupulous contractors that have left customers with unfinished products. Deficient work or over inflated billing tactics can ultimately lead to insurance cost increases for all of us. So accordingly, NICB supports Senate Bill 517 and we urge its adoption.

We applaud the Senator's efforts in bringing transparency to California contractors and subcontractors and we encourage your Committee's support of this Bill too. I'd be happy to take any questions.

Thank you for your testimony. Go ahead when you're ready.

Good afternoon, Senators. Thank you for the opportunity to speak today. My name is Steve Tankersley. I'm the founder of Tankersley Construction. We're based in Sacramento Residential remodeling company. I also serve as Vice President of NERI Sacramento, the National Association remodeling industry for the Sacramento Chapter. We promote ethics, education, excellence across our profession.

Over the past several years, we've seen a significant decline in the amount of work that's directly performed or closely managed by General contractors in the residential construction sector. This shift has contributed to the rapid rise and just as rapid collapse of many companies, especially in the ADU market.

Many of these companies have heavily over leveraged subcontractors without maintaining adequate oversight of project execution and financial management. In the worst cases, we've seen companies subcontract an entire project to a single outside entity, effectively selling the contract without the homeowner's knowledge or consent. A recent example is anchored tiny homes.

Their failure to manage their commitments led to abandoned projects and harm to vulnerable clients. One such case involved a disabled veteran whose project was left incomplete. My company, Tankersley Construction, in partnership with Nary Sacramento, stepped in to help him finish his home. The lack of transparency and accountability is exactly why greater subcontractor disclosure requirements are needed.

As a contractor and industry leader myself, I strongly support transparency and accountability in construction. Homeowners deserve to know who is working on their homes and to feel confident that those individuals are licensed and qualified. Contractors are currently not required to disclose what work is being subcontracted on a project and to whom if requested by a subcontractor.

This leaves homeowners with no way to verify who is working on their project, if they're licensed, and the amount of the work being subcontracted. Allowing contractors to provide the subcontractor list upon homeowner request is reasonable, balanced approach. It supports transparency without creating unnecessary red tape for legitimate businesses working hard to deliver quality projects.

Our projects often involve schedule shifts, evolving scopes, and subcontractor substitutions that happen in real time. We need to ensure the changes do not penalize good contractors for the natural dynamics of construction workflows. At Tankersley Construction and through my leadership role in Narrator Sacramento, we strive to elevate standards across our industry with a practical and clear implementation.

This contract change can improve the homeowner confidence and industry performance.

Final thought there.

Thank you for Your time.

All right, thank you very much. Are there others in the room in support of SB517? If so, please come to the microphone. How about opposition? Is there any opposition in the room? Seeing none. Then we will come back to the dice. Senator Grayson, thank you so much.

Madam Chair, quickly here. Just to clarify, Senator, on this bill, what information upon request, which I have a comment about that, what information upon request is provided about the subcontractor?

Under the, under your bill?

Currently or under the bill?

Well, we're working on the amendments, but the, the subcontractor would be identified and presumably his license number, his or her license number also, that could be employed as a subcontractor under the job.

To me, that's very, very important because you must have more than just a name. You've got to have the contractor's license. Right. That gives the ability for folks to go and look up anything from like a bill I'm carrying on workers comp. Are they properly licensed and is their license in good standing?

So having the license number is almost just as important or more important than just the name of that. And then the other thing is, I appreciate that balanced approach upon request, but if there's a subcontractor doing more than 50% of the work, I would almost imagine it would just be a mandated thing to.

To disclose that contractor, that subcontractor, both name and license, because they now become the primary contractor when it comes to work. And there's an incredible amount of fraud that is happening. And I think this is a fantastic bill.

I'd like to see it go a little bit further in some areas to kind of seal it up and close up some loopholes that could very well come out of the current rendition of the bill. So I will be supporting it today, but I'll be looking for some amendments coming forward.

Senator Niello, you have a few more comments lined up. Do you want to address them all in your close or would you like to take them one by one?

I'll address it in the close. Okay.

All right. Senator Richardson. And then Senator Smallwood-Cuevas. Senator Strickland, did you have your hand up at all?

Thank you, Madam Chair. I had a question for the author. I do a little renovation work myself.

And beyond the actual customer, the client, who would else potentially have the information and the reason why I asked this question, some cities are beginning to do this to require that you actually provide your list of subcontractors that you work with.

And on the flip side, people can take your good companies and, you know, One of the keys of renovation is you really need to develop a good team.

And so if people have access to a person's name and number and all of that, next thing you know, your team, you know, you're trying to line them up for the next couple of houses, and, you know, now they've undercut you in terms of a bid, and they're out at two or three other places.

So it also, there's a lot of work that goes into developing that team. And, you know, that can be perceived in some ways as confidential information as well, from a business perspective, from the person doing the work.

Well, specifically in this case, the. There would be a disclosure of a subcontractor on a job, if there was to be a subcontractor, and that subcontractor, or if it could possibly be one of a couple or three, would be specifically identified. But not all subcontractors that deal with that General contractor. It would be specific to that job.

But who gets the information? And it's not provided beyond.

No, no, it's contractual between the contractor and the. And the customer.

Okay, thank you for the clarification.

Thank you. Thank you, Madam Chair. And. And I wanted to align my comments with Senator Grayson supporting the Bill and questions about it, whether we can go a little bit further with it. One of the. And I think you kind of answered it in responding to Senator Richardson.

One question I had is, would the bill require us to report that information to a state agency? The reason I asked that I held a wildfire oversight hearing in my labor Committee.

And in the fire zone where we're doing repairs, it was made clear to us from FEMA and from some of the county offices that our osha, for example, doesn't know what contractors or subs are working in, for example, the fire zone.

So as we were cleaning up and we were investing in making sure that we were doing it safely, the state didn't have information about what other private contractors might have been hired who were doing similar work, who maybe were not doing it safely. And so it just seemed.

It struck me as problematic that we don't have information, particularly in areas that are defined through emergency zones, where you have multiple contractors and subcontractors, where we want to make sure work is being done in a standard and healthy way, that we don't know who those contractors are, particularly our health and safety department.

So I was just curious, you know, is there a sense that public agencies could be made aware of this information, particularly in, you know, emergency zones where we are, as the State of California investing and wanting to make sure that this work is done, it's done properly, and that our FEMA and emergency departments are aware of who else is doing similar work in an area.

So I'm just curious if there's a way to make sure that information gets to the proper agencies.

There could be a way. I would suggest that perhaps that might be another piece of legislation. This was developed with the experience of specific abuses in the ADU building area and more broadly, really remodeling, not complete reconstruction of the house, but ADU and remodeling type of work. And that would not typically be reported to any governmental entity.

It would be a contract between a contractor and a building owner or a customer. And in this case, the disclosure is just simply contractual between the contractor and the customer that there either will or won't be subcontractors involved.

And if the answer to that is yes, then the customer can ask who that subcontractor may be and either identify 1 or if it's possible of 2 or 3. Identify the 2 or 3 to that specific job, but no other reporting publicly. And that gets to the issue that Senator Richardson was asking about.

Okay, thank you. Senator Archuleta, was your question answered?

Thank you, Madam Chair. Mine more is the umbrella of the.

We're not working on umbrellas.

Well, hang on a second. It's coming. The umbrella of the workman's comp insurance. The contractor, does it funnel down to. These subcontractors or do they have their. Own workman's comp policies?

That's. That's covered separately under contracting law. And Senator Grayson's bill addressed that if there's a single. If there's an owner with no employees, but otherwise there is a requirement for contractors and subcontractors to have workers comp insurance. This bill doesn't address that because it's already addressed in current law. Okay, very good. Thank you.

Great. Thank you. Senator Choi.

My question is also related. Workers comments are required for the general contractor for their employees or subcontractors, say. For anyone gets injured? Right.

Yeah. That's covered under separate law. This bill doesn't address that because it's already covered under existing law.

Does it exempt any possibility of going after the homeowner, the customer? Yeah.

Above and beyond the workers come that that issue is covered or not covered under current law. This bill doesn't address that. This bill just addresses the disclosure of potential subcontracting that can be undertaken under a contract with a general contractor.

I wonder. I'm Just curious if anybody knows about that.

Maybe we can follow up with you afterwards on that one, Senator. All right. Senator Niello, I know you have a couple comments to cover in your close. I want to thank you for the bill and for your great work. I know it's very narrowly tailored and pretty specific to ADUs. Thank you for supporting him.

Would you like an opportunity to close?

Yes. I'll address the 50% issue. That was our original proposal and we came up with that in discussions with Mr. Tankersley, who I said. I said has been very helpful in trying to get at a solution to this issue.

And we just simply included in the bill a disclosure if more than 50% of the job was going to be subject to a subcontracting, that would have addressed the issue that the anchored tiny homes issue involved. The Committee staff had an issue with the 50%.

And so we negotiated and landed on the option that there just be a question required of the contractor in the contract. Will any work be subcontracted?

And if the answer to that question is yes, then the potential subcontractors would be identified if the customer requested it, but only directly to the customer so as not to violate any secret disclosure to more broadly with regard to who the general contractor subcontractors are. And with that, I respect, respectfully request an Aye vote.

Senator Grayson, did you give him a motion? Sure. All right, then. So moved by Senator Grayson. And we will take the roll.

Motion is do pass to Senate Judiciary Committee. [Roll Call]

Senator Niello, that has 10 votes, but we'll place it on call for our missing Member.

Thank you.

Thank you very much. Okay. Senator Caballero, thank you for waiting patiently as you make your way forward. I'm going to let my colleagues know here that item number 11, Strickland, SB382, we will not hear today. That is going to stay here with us. That's SB382. Will not be heard today at the author's request.

Senator Caballero, thank you for joining us. I know you had your own Committee you were chairing. Appreciate you making your way over to us. You have file item 8, SB769, when you are ready.

Thank you, Madam Chair and Members for the opportunity to present SB769, which would establish the Golden State Infrastructure Fund as a new tool to help finance critical infrastructure projects across California. As you know, California's infrastructure is under great stress, from aging roads and bridges to outdated water systems and power grids.

Existing state financing programs, while helpful for small projects, are not designed to handle the scale and complexity of California's modern infrastructure challenges. Federal funding is increasingly uncertain and private partners often face barriers when working with public agencies. We need a more flexible, forward looking solution that incorporates public private partnerships and long term investment strategy.

SB769 creates the golden State Infrastructure Fund, a revolving fund to finance sustainable and resilient infrastructure projects to meet the challenges and needs of California today. The Bill would create a governing board that would oversee the Fund and be empowered to make debt and equity investments in projects that advance California's long-term infrastructure goals.

The Bill will help reduce the backlog of essential infrastructure repairs and improvements that current state financing mechanisms are unable to address. The fund will support projects focused on climate resilience, disaster recovery, transportation efficiency, housing, clean energy and other areas where investment is urgently needed.

By attracting both public and private capital, the fund can stimulate the economy, create good paying jobs and build a stronger foundation. SB769 is about modernizing how we finance projects in California to build our infrastructure smarter, faster and more sustainably.

Here to testify in support are Patrick Henry, Henning, the Chief Deputy Treasurer for California State Treasurer Fiona Ma and Fritz Pollan, the General Counsel for the California State Treasurer. They're available to answer any questions, technical questions you might have about the Bill. Respectfully ask for your aye vote.

Thank you very much. Welcome Mr. Henning. You have two minutes.

Thank you. Senator. Good morning Chair, Members of the Committee. My name is Patrick Henning, Chief Deputy Treasurer. I'm here on behalf of State Treasurer Fiona Ma, who's a proud sponsor of SB769. I think that we have heard from the author about the various need.

In fact, I was coming over the bridge from West Sacramento into Sacramento today, took a look at the date stamp on the Tower Bridge.

Don't get me started on that bridge.

This is why I'm here, to get you started on this bridge and hopefully gain your support for this important legislation. And it's because of bridges like that one, like others, the Pasadena Bridge, there's several others, our aging water infrastructure as the Senator pointed out that we needed. Not just that we're a state that looks forward.

We have the Olympics coming, we have the World Cup coming, we have the Super Bowl, several Super Bowls in our future and we need to make sure that we have the infrastructure that's ready for it.

I would like to point out a few things because in coming to the Treasurer's Office, I frankly thought, hey, the Infrastructure Bank is there for that. And in fact, it's not. It has some things about it that don't allow it to, number one, invest in housing. It doesn't allow it to attract private capital.

In fact, this Bill will allow us to leverage that, bringing the state in at least two times its dollars from day one to be able to be invested in infrastructure. It has a cap of $60 million. As the Senator pointed out, that only allows for small infrastructure projects.

In California, we do things big and much bigger than $60 million. This also allows us to get into the equity phase. So when you're starting and you're a city or a county looking at what your needs are for infrastructure, you can start to look to this type of a program to be able to invest in the future.

It's also self sustaining. This is a fund that hopefully, with smart investment, will be able to bring a just return back to the state. There's a similar program that the Treasurer sits on, and I proudly sit.

Mr. Henning, can you give us your final thought, please?

Yes, ma'am. CSU has a program just like this one that allows us to invest in infrastructure. It's produced hundreds of millions of dollars outside of the state's General Fund for those buildings.

With that, thank you for your incredible dedication to the State of California, too, and your assistance to our State Treasurer. You're an asset to our region and our state. Are there others here in support of this Bill who would like to testify on SB769? Seeing no one. Is there any opposition?

That's probably well advised, as it is the author's birthday. Today would not be the day to go against her. Bringing it back to the dais, are there questions?

Move the Bill.

You have, I think, 10 motions to move the Bill. Senator Caballero. We'll take Senator Grayson. I think I heard him first. But note for the record, Senator Richardson also enthusiastically supports. We will call the roll unless you have final.

Respectfully ask for your aye vote today.

Thank you, Senator Caballero.

[ROLL CALL]

That was nine, right? We will put it on call, Senator Caballero, but you should be good. You're headed to Judiciary Committee next. When we do, close that one out. All right. We just have one Bill left. Colleagues, thank you so much for hanging in there. You're doing an amazing job.

Senator Weber Pierson, are you ready on SB, SB679? This is file item 13. She is headed to the podium. If she has folks here to testify, please come forward. That'll help us move along. When you are ready, Dr. Weber Pierson.

Thank you. Thank you. Good morning, Chair and Committee Members. I'm here to present SB679. For too long, California has lacked any consistent statewide data on how physicians, especially medical residents, are treated when it comes to credentialing, discipline, or dismissal from hospitals.

We've heard repeated concerns, particularly from communities of color, about residents and physicians being pushed out under questionable circumstances with little transparency and no ability to track broader patterns of our physician workforce. When these decisions happen behind closed doors, without accountability, it becomes impossible to tell whether a physician was truly fairly or if bias played a role.

In 2017, prompted by concerns from the Charles Drew Medical Society and the Los Angeles Society of Golden State Medical Association, the California Research Bureau released a study commissioned by the medical board which found significant racial disparities in how physicians are investigated and disciplined.

The results of the study showed that Latino and Black physicians were more likely to receive complaints, be investigated, and face disciplinary actions despite making up a smaller share of the physician workforce. Black physicians are only 3% of the total physician workforce and 6% for Latino physicians. These findings, while observational, are not antidotal. They reflect systemic trends.

The Accreditation Council for Graduate Medical Education has also raised similar concerns at the national level. They found that Black residents, who make up about 5% of all residents, are disproportionately dismissed from their training programs. Dismissal at this stage can be career ending.

It cuts short years of needed education and training, with often no path forward, especially if due process wasn't followed. California is already facing a critical physician shortage. By 2030, we're projected to be short 4,100 primary care doctors, with the most severe shortage being in rural areas and communities of color.

Nationally, across all physician specialties in the United States, there is a projected shortage of over 80,000 full time physicians. In 2035, many of these physicians are being lost to these questionable practices and are the very ones who serve these vulnerable populations.

By addressing these disparities and supporting the retention of physicians from underrepresented groups, we can help foster a healthcare system that is both culturally competent and reflective of the diverse populations it serves. Ultimately improving patient care by ensuring that all communities needs are met effectively.

For example, a 2020 study showed that Black infant mortality in the first year of life is halved when treated by a Black physician. Losing competent, well trained physicians due to institutional bias or lack of oversight is not just unfair, it deepens disparity in access to care and also decreases positive health outcomes.

SB679 would address this by creating a simple, transparent statewide reporting system that collects non-identifiable demographic data on hospital credentialing decisions, including data on how many physicians and residents had their hospital privileges granted, revoked or limited, and how these decisions break down by race and gender.

The goal is not to punish or micromanage care, it's to identify patterns that might suggest bias or inequity so that we can protect civil rights and ensure fair treatment of physicians of all physicians in our state.

I also want to note that we will also be taking amendments and Senate appropriations to strike the Medical Board of California from the Bill. And this is in addition to the future amendments that are discussed in the analysis.

So instead, all reporting will go exclusively to the California Civil Rights Department, which is the more appropriate agency to analyze civil rights issues and demographic concerns. So to be clear, this Bill isn't about isolated stories, it's about concrete data. It's about moving from individual complaints to systemic understanding, knowing that we can't fix what we can't see.

Let's ensure that here in California we give the tools to finally see how physicians are being treated across the board and whether racial or gender disparities exist. I respectfully ask for your aye vote.

And here testifying with me today is Dr. Khadijah Lang, President of the Golden State Medical Association and and Dr. Thurman Hunt, anesthesiologist and member of the Sinkler Mill Medical Association. Thank you.

Thank you Dr. and Senator Weber Pierson. When you are ready, you have two minutes each.

Good morning, Senator Ashby. And thank you, Dr. Pierson. Senator Pierson, Weber Pierson. Golden State Medical Association, California's branch of the National Medical Association speaks as a voice for parity and justice in medicine with elimination of health disparities for California physicians of African descent and the patients we serve of all backgrounds.

In addition to Dr. Weber's points on SB679, I'd like to share some unapparent consequences of non-indicated faultless physician dismissals and terminations. Along with our current physician shortage, California's senior population is expected to increase by 59% in 2040, with one in four of us being seniors.

Then a frequent accompaniment of aging and or poverty is declining health and multiple health conditions requiring chronic medical care. Better outcomes for such elderly or under resourced patients are more likely to be achieved when the complexities of their comorbidities are managed by culturally competent physicians and are optimal when they are racially concordant.

The current physician workforce shortage is resulting in increased numbers of complex patients being seen by mid level providers such as PAs, NPs and other advanced RN specialists whose training is designed to prepare them to handle straightforward non-complex patients thus can lead to non-optimal results when they treat such patients.

The ensuing consequences often cause the state more to manage increased disabilities in early retirements and decreased quality of remaining life underrepresented in medicine. Physicians dismissed from a residency program typically have at least $400,000 of taxpayer funds already invested in their education that are simply lost when the resident is put out.

Much of those taxes were paid by seniors, but these dismissals rob the elders of ever getting any benefit or return on that investment. The national losses are much higher...

Can you give us your final thought there?

I'm sorry?

Can you give us your final thought there?

Yes. Let's just consider how much we have invested in these physicians, how much they can be offering to our communities if allowed to practice fairly and halt the hemorrhage of qualified physicians from California. Vote aye on SB679 please.

Thank you for your testimony. All right, you have two minutes as well.

Thank you, Madam Chair and the Committee. My name is Thurman Hunt. I'm a board certified anesthesiologist with added qualifications in pain management. I came to California in the early 1980s from Detroit, Michigan to study medicine at Stanford University. As a result, I have spent the majority of my professional career in Northern California.

During this time I have been fortunate enough to practice in a variety of settings including teaching hospitals, an HMO, private practice and safety net hospitals. This has afforded me a broad exposure to the plights and challenges of underrepresented minority physicians in general and Black physicians in particular.

During this time, I have witnessed both physicians and trainees being pushed out under questionable circumstances with little transparency. This is often spearheaded by quality review committees, where insidious biases can often result in adverse judgments disproportionately impacting underrepresented physicians.

Unfortunately, this is happening at all levels, including medical students, interns, residents, junior and senior physicians, making it even more difficult to fill existing manpower shortages and provide culturally competent care to California's increasingly diverse population.

Most recently, I myself was targeted and suspended for 14 days, only to be reinstated and fully exonerated when the cases cited were sent out for external review. As a result, I have firsthand experience of the toll these actions can take both emotionally and financially.

If this can happen to me as a senior physician with over 30 years of experience, board certified, fellowship trained, master's in business administration, former department chair and former president of the medical staff who has never been involved in a malpractice case or any previous issues with medical staff or the medical board.

You can imagine how vulnerable, how vulnerable and isolated more junior physicians might feel in the same situation.

Can you give us your final thought as well?

Oftentimes they just choose to leave the institution in the hopes of finding more inclusive work setting elsewhere.

It is imperative that we begin to obtain data on the demographics of physicians whose privileges have been suspended or terminated so that we can better understand how best to ensure equitable treatment for all physicians and support the training and retention of underrepresented physicians who are uniquely qualified to tackle the persistent challenges of health care disparities. Thank you.

Thank you for your testimony and also for sharing your personal story with us today so we could fully understand. And thank you both not only for your testimony today, but for your lifetime of service to the care of our communities. Much appreciated.

Are there others in the audience here in support of SB679 who would like to provide me to testimony? If so, please come to the mic. Tell us your name, organization and your position on the Bill.

My name is Stacy Hunt and I am President of Sinkler Miller Medical Association and I support SB679. Thank you.

Thank you for being here. Others? Is there anyone in opposition here in the room to SB679? If so, please come forward. Seeing no one, we will come back to the dais. The Bill is moved by Senator Archuleta. Seeing no comment, Senator and Dr. Weber Pie rson, would you like to close?

Yes. Thank you so much. Appreciate the Committee for allowing us to present this Bill today. Really want to thank both of my witnesses who are very, very passionate about this. I don't think there are very few minority providers that have not had an experience that is similar to what you heard from my fellow physician colleague today.

And with that, respectfully ask for an aye vote on SB679.

Hopefully, this Bill helps. Just to clarify, Senator Weber Pierson, you are accepting the Committee amendments here. I'm not sure what will happen when you go to Judiciary, but the amendments you're accepting are here in Business, Professions, and Economic Development today, correct?

Yes.

All right, great. Thank you. Then we will call the roll.

[ROLL CALL]

I got eight there. Is that what you got as well? All right, we're going to close that out. So 8-0. You are on to Judiciary, Senator Weber Pierson, thank you to your testifying witnesses. Thank you both for being here and again for your service to our communities.

All right, colleagues, if you have been here since the beginning, then you have completed your duties for Business, Professions and Economic Development today. If you still need to vote on one of these bills, we are going to quit quickly run through everything on call. We will start with consent.

[ROLL CALL]

I think that takes us to 11-0. Consent is done. We will move on to file item one. Senator Cabaldon's SB351.

[ROLL CALL]

That's nine to one. That Bill is out and headed to Judiciary. We pulled item two, which was SB 719 by Senator Cabaldon. We'll move on to file item three, SB 790 by Senator Cabaldin, which is do pass to the Senate Education Committee.

[Roll Call]

That's 11 to 0. That bill's out and onto Education. We'll move on to file item 4. SB402.

[Roll Call]

That's 11-0. That Bill is out and onto the Senate Floor. Next up, SB713. File item five. Valaderis. It is headed to Senate rules. Next.

[Roll Call]

That's 11-0. Out to rules. Up next, file item eight. Actually, yes. File item eight by Senator Caballero.

[Roll Call]

That's 10. Zero. That is out to Judiciary. Next up, file item nine. Senator Grayson's SB 291. This is also headed to Judiciary. He has accepted amendments. Current votes 10 to 0. Umberg. Umberg, aye. That's 11 to 0. Headed to Judiciary. Next up, file item 10. SB 372 by Senator Araguin. Current votes 10 to 0.

That's 11. Headed Education Committee. That bill's out. File item number 11 by Senator Strickland was held by at the author's request, so that will stay here. Item 12 by Senator Niello. SB517 headed to Judiciary. Next. Current votes 10 to 0. That's 11. That bill's out to Judish. File item 13.

Last item on our file by Senator Weber Pearson, I believe is already out with now. So that is it. We are done. Oh, hold, please. Just one second. Thank you, guys. Yes, we do. Thank you.

Okay, great. We're all set. That's it for Senate Business, Professions and economic Development. Thanks to everyone, especially my colleagues. Great job today. We're able to move through that agenda quickly. Appreciate everyone.