Senate Standing Committee on Transportation

All right. The Senate Transportation Committee will commence in 60 seconds. Senate Transportation Committee will come to order. Good afternoon. Welcome. We have nine measures on today's agenda. First, as usual, a few housekeeping items. We're going to allow for two primary witnesses each, two for support, two for opposition. Each witness will have two minutes each to speak.

And any additional witnesses, we're going to be asking you to limit yourselves to name affiliation and your position on the Bill. That's how it's done here in Sacramento committees, at least on the Senate side. We have one measure proposed for consent today, and the proposed consent Item is item 8, SB400.

I don't think we have sufficient Members for quorum yet, so we'll come back to that. Both the establishment of the quorum and the consent item per our agenda. We want to start off with SB63 first. Do we have the author here? Well, we wanted to start off with SB63 first, and that part was true.

I know the author has been very busy today, so we will take that item up as soon as we can get him into the queue here. And. And that brings us to, actually, item three. Six. Our only author here is Senator Blakespear. SB569.

Senator, if you'd like to present, you can move over to the podium and present. So if you're here for the first time, essentially, we'll be operating as a Committee of the whole. Until such times, we establish a quorum, and then it's business as usual.

But we're going to do everything else as we can except take actual votes until we get the quorum established again. Welcome, Senator Blakespear. Thank you.

I wanted to make sure that my. Okay, great. My witnesses are here. There's an enormously long line outside, as you may have noticed. Yes, thank you, chair and colleagues.

I'm here today on SB569, which will direct the Department of Transportation, also known as Caltrans, to improve the efficiency of its encampment resolution process to make our state highways safer and cleaner.

On any given night, we know there are close to 200,000 people who are unsheltered in our state, living in makeshift tents in our riverbeds and parks and on the sides of our streets and highways. This is a terrible condition for people living unsheltered, and it's terrible for everybody else as well.

California needs to house our unsheltered, and we need to do it right away. Encampments on state highways have become a clear problem across the state. While locals have had success with addressing encampments on municipal properties.

Some of this because of the recent grants passed federal decision they have struggled to address encampments near the hundreds of miles of highways that run through cities. In San Diego, the city receives over 300 complaints a month about encampments on Caltrans property that they are not able to deal with.

Many encampments pose environmental hazards and many have been linked to fires. If you speak to any fire Department, you will know that they spend an enormous amount of time dealing with fires that are started in encampments. In Los Angeles, for example, a blaze started by an encampment led to the closure of the I10 highway.

In San Diego, over 60 brush fires have been started by encampments on highway land. Only Caltrans has authority to resolve these encampments and the law requires cities to coordinate with Caltrans to conduct the abatements. This has been a problem because cities often run into long delays when they try to coordinate with Caltrans.

For example, in San Diego, the city is able to immediately, in under two weeks, remove, give notice and remove encampments. When working with Caltrans, abatement can take up to two months to complete.

Some cities have also sought contracts with Caltrans to conduct encampment solutions on the department's behalf, but efforts to secure contracts have been logjammed because of legal uncertainty on whether the Department can authorize local agencies to deviate from its own encampment resolution policies.

This Bill, SB 569, will provide legal clarity on this issue and direct Caltrans to establish clear timelines for coordination with local governments. The Bill will also direct Caltrans to prioritize encampments that pose environmental hazards, particularly and specifically fire risks.

SB569 will address bureaucratic and legal barriers so that our state can be a better partner with our cities in managing and helping people who are living in encampments. Connect with Services with me today in support of the Bill.

I have two people, Mayor Jorgel Chavez from the City of Bell Gardens and Franklin Cooper Smith, Deputy Director of the Environmental Services Department at the City of San Diego. You're welcome to go in either order.

Good afternoon, Chair Members of the Committee, thank you for the opportunity to speak today in support of Senate Bill 569. My name is Franklin Coopersmith, the Deputy Director of San Diego Environmental Services Department.

Like many California cities, San Diego faces the impacts of our state's homelessness crisis on the streets, parks and freeways, a humanitarian crisis affecting individuals experiencing homelessness in our communities alike.

San Diego knows firsthand the dangers of unsanitary encampments tragically highlighted by the hepatitis outbreak 2017 and the Shigella outbreak in 2021, both of which severely impacted our downtown homelessness populations.

Experiences like this highlight the need for the city to develop a tailored approach through innovative protocols and solutions, affording us the capability to deploy effective and rapid solutions with critical support from the state.

Over the years, San Diego has developed contemporary local solutions like the Police Department's Homeless Outreach Team with dedicated per clinicians or our Homelessness Strategies and Solutions Department Safe Sleeping Program, which is getting the hardest to reach individuals off the streets and into the system.

These are examples demonstrated by the San Diego's commitment to developing and adapting proven solutions based on local realities approaches which we believe are critical for addressing encampments successfully, including those on state property. Furthermore, San Diego continues to express strong interest in entering a delegated maintenance agreement with Caltrans to address the encampments on state right away.

However, the rigid structure of these agreements has made it difficult for cities like ours to even move forward. We're seeking flexibility to do more, especially as growing encampments on state property, increasing the fire risk and underscoring the urgent need to get a stronger local authority response to take care of the homelessness crisis on our state right away.

SB569 is vital because it facilitates partnership between Caltrans and local jurisdictions like San Diego, enabling us to use use proven local processes on state right of way more effectively having humane outcomes and streamlining existing state processes to assist with those living in encampments and ensuring public safety. The City of San Diego supports this important measure. On behalf of the city, I respectfully request your aye vote thank you.

Good afternoon Chair, Senators and everyone from the public. My name is Jorgel Chavez. I serve as the Mayor of my hometown, the City of Bell Gardens And I support SB569 as another important way to help the city and other cities address the homelessness crisis, specifically on freeway property that is owned by the state and maintained by Caltrans.

Bell Gardens is a socially, economically disadvantaged community in southeast LA. Approximately 40,000 residents. The entire western border of the City of my city is along the northbound 710 freeway, one of the busiest truck traffic corridors in the nation that creates air noise, air noise and trash pollution that negatively impacts the residents and stakeholders of my community of bell Gardens.

The I710 freeway runs along a park, residences and businesses in Bell Gardens. It also creates a corridor of travel and encampment locations for various unhoused individuals and groups that further impact these residents and stakeholders while creating significant impacts to the City of Bell gardens.

The northbound I710 corridor and encampments locations are on the property of the state and maintained by Caltrans, not the City of Bell Gardens.

Additionally, the City's major retail and business area is assessed accessed by the I710 freeway and Florence Avenue off ramp and this includes major shopping centers and entertainment locations including the Food 4 Less our El super grocery store, Ross and Marshalls clothing and home goods stores, restaurants, small businesses and our Park West Bicycle Hotel and Casino.

Approximately 70% of my city's General Fund revenue come from the sales tax and card room tax generated by businesses located and accessed by this florist Florence Avenue off ramp so its appearance and maintenance is very important to us. The condition of this off ramp directly impacts the businesses in the City of bell Gardens.

The I710 freeway and Florence Avenue off ramps is a cloverleaf style off ramp that creates significant amounts of Caltrans maintains property in this area including large secluded islands of land that consists of grass, shrubs and trees that provide an ideal location for large scale homeless encampments.

Specifically, this Florence off ramp, an island has been location for several large scale encampments over the past several years. It has housed as many as 30 to 40 individuals at a time in makeshift structures that have even included Wood framing with front doors that have handles and locks.

In addition to the people and structures, a tremendous amount of trash and other waste has been generated by the unhoused people living there. Currently and in the past.

The off ramp island has become unsafe and unsanitary environment for those that take shelter there, particularly because they must walk between cars as they as the cross off ramps off and on ramps to get to and from the island.

Also, it becomes a haven for panhandling of cars that exit the off ramp and procedures and produces a business visiting and living environment that is not not up to the standard of my community in the City of Bell Gardens and all of all of our stakeholders. Last paragraph.

While Kyle Trans somewhat responsive over time in addressing these issues, the amount of time and quality of the response doesn't match the timeliness and quality of response that is expected and achieved by the city for property that is under city's control.

In summary, I support SB569 and another important way to help the City of Bell Gardens and other nearby cities across Los Angeles and across our state address the homelessness crisis. Thank you so much.

Thank you for your testimony. Are there others in the room who wish to express Support for this Bill. If so, please come to the microphone at this time. Name? Support Affiliation.

Nicole Wordelman on behalf of the Orange County Board of Supervisors. And support.

Caroline Grinder on behalf of the League of California Cities. Proud to co sponsor. Thank you.

Michelle Cava on behalf of the City of Chula Vista. And support.

Claire Sullivan here on behalf. Of the City of Corona, City of Carlsbad, City of Thousand Oaks and city. Of Redwood City in support.

Good afternoon, Chair and Committee Member Stephanie Estrada with Crew Strategies on behalf of. San Jose Mayor Matt Mahan in support. Thank you.

Thank you for being here. Opposition witnesses. Do we have lead opposition witnesses? Seeing none. Is there anyone in the Committee room who wishes to come forward and express opposition? I see no one come forward or bring it back to the Committee. Questions? Comments? Yes, Senator.

Thank you, Mr. Chair. I want to start off by commending the Senator of this Committee. If I were to say some of the key problems in the state, particularly in our communities, in our neighborhoods, this is the number one issue. The implications between safety, between health, between property values. It just goes on and on.

And so I applaud your work. I'm excited about several of the Members in the Senate who are taking this issue on, and in particular the mayor. Your city surrounds many of the cities I represent, and I couldn't have said it better in terms of all of what you're experiencing.

So I look forward to I make the motion to move this Bill and look forward to seeing it implemented. Thank you.

Thank you, Senator Richardson. Anybody else? Yes, Senator Cervantes.

Thank you. I just want to commend the author. For the work on this Bill. In particular, my two cities, city, Riverside City, Corona, are eagerly supporting it. We need to have better facilitation between. Different departments, state agencies and local government, better communication and collaboration. So look forward to seeing this Bill through.

Okay. Seeing no other comments, I want to thank the author for so much early work and cooperation with the Committee staff, especially, you know, to get to a point where we could. We could have a very smooth hearing on this today. And, you know, certainly I support the Bill.

Something that we try to do here, especially we have cooperative authors to try to get things worked out ahead of time. And certainly that was done in this case. So appreciate the witnesses being here as well. And with that, we have the offer of a motion, but we don't have a quorum yet. So we'll just keep the motion in abeyance until.

May I close, Chair?

You may close.

Thank you. I really want to thank the two Senators, Senator Richardson and Senator Cervantes, for speaking in favor of this, and also the chair and emphasizing the importance of this. I. I just want to highlight that, you know, we really.

It wasn't clear that we would need a Bill like this because last fall, Governor Newsom issued Executive Order N124. And what it did is it ordered state agencies and departments to expeditiously address encampments on state property.

And when that came out, I remember reading that and thinking, Oh, thank goodness, you know, there's finally some serious focus on the Caltrans. I was immediately thinking of the Caltrans right of way. I wasn't thinking of state parks or our state colleges or other properties. I was thinking about Caltrans.

And unfortunately, in that time, we have not seen the type of resolutions, the prioritizing of those spaces or the types of partnerships that are necessary in order to solve for that problem.

So if we identify unsheltered street homelessness, people living in encampments outdoors, and places that are not fit for human habitation as a top state problem, then our state agencies should be working really with focus and dedication and a financial commitment to solving problems that are happening on the state property. So it is.

It's particularly galling and egregious that we are not yet doing that, given that there was actually an Executive order about it. But my hope is that this Bill will clarify what it is. What are the barriers to working better together or why is it that it is not happening yet.

And if it doesn't result in change, then we'll be back here next year with further tweaks. But I am very hopeful and I hope that we're able to send a message to the Legislature by passing bills like this that says we take this seriously when it's our state property. We really want to walk our talk.

So this Bill allows us to do that with. With much more clarity. And I respectfully ask for your aye vote. Thank you.

All right. Thank you. As soon as we establish the quorum, we'll begin the voting process on the Bill. Thank you for being. For presenting your Bill at this time. We appreciate that. We welcome you back to the dais. And do we have another author in the room yet? Was looking for Senator Hurtado.

If we have no one else. I'll go ahead in the interest of time and pass the gavel over to Vice Chair Strickland and I'll present if he will. Yeah. Allow me. Item 9. Do you want to go and file order? Is there one Bill that you want? zero, the other one's on consent. Sorry, sorry. So for the audience, this is file item 10, SB791. Consent.

Mr. Chair, you may open.

Great, great. Thank you very much. Vice Chair, appreciate you presiding, and to the Members of the Committee, I'm very eager to present SB791 which modernized the non governmental document processing charge, or DPC as we sometimes call it, that vehicle dealerships are authorized to collect during a car sale or lease.

It replaces the outdated flat cap of $85 with a new percentage based structure, 1% of the vehicle price capped at $500. This Bill is necessary because California's DPC is currently the lowest in the nation. It's about 1/5 the national average.

At the same time, California dealers are subject to the most stringent document processing and consumer protection requirements in the country. A 2019 J.D. power study found that the average cost for dealers to provide these services is actually $447 per transaction.

Dealers perform a wide range of services, as most of us on this Committee know, that would otherwise fall on consumers or perhaps the government itself, like vehicle registration, loan processing, contract translation, and fraud prevention.

Without these services, buyers would need to visit the DMV, manage trade ins on their own, or go without the convenience of dealer assisted loan processing. SB791 insures dealerships can recover real costs while maintaining transparency. With us today we have Anthony Sampson representing the California New Car Dealers Association and John Moffitt representing Enterprise.

Turn it back over to you, Vice Chair, at the appropriate time, I'll respectfully ask for your aye vote.

Thank you witnesses and support. Great, thank you Mr. Chair. Members. Anthony Sampson with Sampson Advisors here on behalf of the California New car dealers Association. CNCDA is pleased to sponsor SB791. Senator did an excellent job summarizing the measure in print, so I'd like to just cover a few points here.

First, recovering costs is fundamental to the excess to the success of any business, whether it be a local mom PA shop or a multinational corporation. Many businesses recover their cost by imposing various charges and fees that go by different names. Convenience charge, service charge, appreciation fee.

There have even been online retailers that have added something called a fuel and inflation fee. Call it what you want, those charges exist so that businesses can recover the cost of doing business which historically speaking, increase over the course of time.

What is unique in the context of auto dealerships is that for several decades, California and many other States have designated the document processing charge, a statutorily capped charge, as the exclusive mechanism through which dealerships can collect costs associated with all the services dealers dealers perform during a sales and lease transaction, ranging from DMV services to vehicle financing and many other requirements.

So while businesses of all types continue to adjust charges and fees to reflect the cost of doing business, auto dealerships must continue to come back to the Legislature to ensure it can do so. The opposition has stated that DPC increases have historically been accompanied by new dealership obligations.

Notably, that argument fails to acknowledge the fact that this Legislature introduces and passes bills placing significant new obligations on dealers year after year, and indeed we were just here a couple weeks ago discussing yet another one of those. Yet those measures are never accompanied by a DPC increase.

And second, the opposition states that dealers can recover their costs in the price of the vehicle or elsewhere. A couple of things on that. First, that argument implies that there is acknowledgment that dealers, like other businesses, should be able to recover their cost.

If that's the case, why would we not disclose this to the consumer as a separate transparent line item charge, as California long law has long required?

And second, if we believed we could simply recover our costs and the price of the vehicle, I assure you that we would not be here today asking for your support on this measure. But the vehicle code contemplates that that the charge is exclusive is the exclusive legal mechanism to recover cost.

Ten seconds.

And we simply do not believe that following some other states which allow dealers to bake in an uncapped charge into the price of vehicle makes sense in a states like California. Thank you for your time today. We respectfully ask for an aye vote. Thank you.

Next witness.

Good morning, Mr. Chair. No, I'm sorry. Good afternoon, Mr. Chair, Members of the Committee, John Moffitt, on behalf of Enterprise Mobility. Most of you know us as a rental car agency and rent cars from us all the time, but we also have a sales division. We sell only used cars here in the State of California.

We do that in 50 other states throughout the, throughout the country. Want associate ourselves with the comments that Mr. Sampson made. You know, in many ways, the obligations and the cost of fulfilling those obligations have continued to rise.

When we go through, in our case, a used vehicle purchase transaction, this fee has remained capped at, you know, for quite some time now. And there is a transparency argument here with respect to all of the new paperwork. And it's not just those things that apply just to those who sell vehicles. It's the broader things.

Privacy all of those compliance obligations that we think are important, that the Legislature has thought are important for our customers, all of those things have to go through the process of legal vetting. How do we put this in writing? How do we make sure we're clearly communicating to the customer there's cost associated with all of that?

And we believe that the proposal outlined in the Senators, in the Senator's Bill, you know, gives the consumer a more accurate reflection of the costs that go into completing these transactions for vehicle purchase, and we ask for your aye vote.

Thank you. Any other witnesses in support? Witnesses? Oh, please. Sorry to make you run.

Sorry, Senator. Mr. Chair of Members Ken Standup on behalf of the California New Car Dealers, but also here for our metro partner associations, the Orange County Auto Dealers Association, the San Diego New Car Dealers Association and the Greater Los Angeles New Car Dealers, all in strong support.

Any other witness support? Witnesses in opposition? Thank you for being here.

Good afternoon, Vice Chair and Members. I'm Rosemary Shahan, President of Consumers for Auto Reliability and Safety and we regret that we're here in opposition to to the chair Bill. We have a long history of opposing increases in the document fee here in California.

And we were involved in the negotiations over the fee increase pursuant to one of the bills that's mentioned in the analysis, AB 1215 by Assemblymember Blumenfeld. And there were benefits for consumers that were part of what was negotiated. And we see the document fee as a form of junk fee in the respect that it's non negotiable.

Usually it's sprung on consumers at the end of the transaction. It's not disclosed to them up front. We also feel that the timing is really bad, that we need to do more to make cars more affordable. And this goes in the opposite direction.

And when you look at who benefits the most from the increase in the document fees, it's dealer chains that are often like multibillion dollar entities that are traded on Wall Street.

And this is a cost that would be passed on to consumers in California at a time when we're expecting the price of cars to increase significantly due to other factors. So for those reasons, we respectfully request a no vote.

Thank you. Any other witnesses in opposition? Seeing none. Members, any questions? Go ahead.

Yes, thank you. So unfortunately I'm not able to support this Bill today and I communicated this to the chair. I'm concerned about affordability for consumers and I'm also concerned about the very high increase, up to $500. I was speaking to someone who recently purchased a car.

And he said that when he asked for this fee to be waived at the end and it wasn't at $500, it was at the much lower rate that they said, no, we're not allowed to do that. And essentially springing that at the end of a three hour transaction, I just, I don't feel right about that.

So I think it's important that we, that we recognize that there are the sale of a car leads to profit at, because of the sale of the car. And so being able to have this fee lead to additional profit isn't something that I see as a top priority. So I'm not, I'm not.

I think this is to the opposition witness's point, the timing of this, when there are tariffs that are going to be facing consumers who are buying cars and overall our affordability concerns, this doesn't seem like the right move at this time. So at this point I'll not be able to support it.

But I appreciate the communication with the chair and with that I'll yield back. Thank you.

If you don't mind, Mr. Chairman, we have a quorum, so I'd like to establish a quorum. Please do.

Senators Cortese. Here. Cortese, here. Strickland. Here. Strickland, here. Archuleta. Arreguin. Blakespear. Here. Blakespear, here. Cervantes, Dahle. Gonzalez. Here. Gonzalez, here. Grayson. Here. Grayson, here. Limon. Menjivar. Here. Menjivar, here. Richardson. Here. Richardson, here. Seyarto, Umberg. Valladares. Here. Valladares, here.

So, quorum is established. Senator Richardson, did you have a question?

I didn't have a question. I had a comment. In my limited experiences of when I've actually purchased or leased a vehicle, I would say the time that I spent with the paperwork and the documents was probably as much as actually looking at the vehicle itself.

I mean, it's just gotten to the point where it's pages after pages after pages, time, time, time. And although we certainly want to minimize cost, to think that people are going to sit there and be able to do the work without that, you have to pay someone to do that.

And hopefully the goal also in paying someone is that they're accurately reviewing the information with the potential person who's making the purchase. So I certainly do support this Bill,

and when I look at the length and everything of it, at some point I know we've passed whatever regulations that have occurred regarding purchasing vehicles, but my recent experience of doing a lease, the papers were just beyond. And I think at some point a person purchasing begins to zone out and just sign, sign, signs.

And because it's so cumbersome. I think it's just gotten beyond what's really acceptable. So I look forward to supporting the Bill and us hopefully also establishing a more concise document process if that would be possible in one day.

Thank you, Senator valaderis.

Thank you, Mr. Chair. I want to also kind of echo the sentiments of Senator Richard Senior, and I just bought a car in December and I feel like that process was just as long as signing closing documents on a house and just as thick and can completely appreciate and understand needing to pay for those services.

And it's a legal document, right? You're signing whether it's a lease, whether it's a loan, it's important contract being established between the purchaser and the dealership and it's important. I do, however, understand the need for affordability and how expensive it is just to live in California and the sad reality, it's not just buying a car.

It's everything that costs way too much in this state. I have had conversations with the sponsor of the Bill and we've had conversations about potentially looking at some tweaks that may help with the affordability component.

So I'm going to support this Bill today, but I do reserve my right to change my vote because I want to see it be an even better Bill down the road.

Thank you.

I would like to say that I'm a proud co-author of this Bill with the Chairman. California car dealerships are subject to the most stringent document processing in the country and they need to be able to recoup those costs, they provide a service for our customers.

And I think this is a very good Bill and proud to be a co author of it. Mr. Chair, would you like to close? Oh, I'm sorry, I didn't. Okay, Senator, go ahead.

Thank you so much. I apologize, I missed most of the conversation on this. Just first some comments and then I have some questions. I find it difficult that this body is so, so fast to jump on providing opportunity to recoup fees for businesses. But then we struggle to pass bills to help everyday Californians.

So it's always easy for us to help the businesses, not the consumer. The analysis points out that dealerships have the ability in other ways to recoup these fees. But consumers won't have another opportunity or don't have opportunities to find an extra $400 something dollars or almost $500 to pay on their car.

We have Members on this Committee that talk about their district is a commuter district and cars nowadays don't last a long time. These are very expensive. I bought a car last year, and you're right, I spent almost eight to nine hours in that dealership. It's a long process.

And maybe because I'm a Senator, I read through everything now because I want to see what bills we've imposed on dealerships and what extra things we have to sign on to, and yes, some of them are very, very frustrating.

And I will give you that it's a lot of extra regulations, but nowhere on the, in this Bill does it prevent dealerships from adding that 1%. And also in adding additional junk fees within that price, nowhere is there guardrails in this language that says they can't add another way. So I'm very worried about that.

Additionally, we're talking about an industry. The analysis says their profits are pretty healthy profits. So if we're looking to help everyday Californians with affordability, why are we looking at helping an industry that is making a healthy profit? And Californians are continuing to scream at us saying they can't afford things.

Very contradictory as to what we're standing for as a body of the Legislature. So I mean, to the sponsor or the Senator, can you reassure me that there's guardrails in here, that increasing it to 1% isn't double dipping? If the analysis states that there is ability to recover in other ways.

Yes, and we're not changing the underlying statutory scheme and I like to allow

Mr. Sampson to respond in more detail because I think he knows the history of the statute going back to, to the day one and really coming in now from my perspective and trying to catch up with the lack of indexing that's occurred going back to 1987, when the cost of my apartment over at Davis was 75 bucks a month.

These folks have been struggling to try to get, you know, basic dollars to, to recoup the cost of somebody that's spending 45 minutes or an hour ensuring that people get their

Senator, I wouldn't say struggling. If your revenue per store average $83.9 million, I don't think that's under the definition of something or someone that is struggling. That's hard for me to accept that that's an entity that is struggling to make ends meet.

You know, by that analysis, I guarantee you by the end of the day today, this Committee will support, support a sales tax increase in the entire Bay Area on these same people who are buying cars that you are arguing that we should try to protect from an embedded statutory fee that can't be changed.

But I think that's more of an issue in terms of who are we trying to help here today. But let's see later when we get to that debate, if we hear the same arguments from the same people, I'd like to go back to Mr. Sampson and let him talk about the history of the statue.

Yeah. Thank you, Mr. Chair. I would, I would say that as to the original comment about how the Legislature comes in and seeks to protect business but not consumers, I will say year after year we are dealing with Bill after Bill on consumer protection in the context of vehicle sales and lease transactions.

We do not come in very often seeking an increase in the document processing charge. So that's what I will say on that issue.

On the issue of double dipping, our view is that, you know, California law is unique in the sense, you know, along with some other states where it has a statutory mechanism through which dealers can collect their costs. That is unique here as compared to any other industry.

Our view is that that is the exclusive mechanism through which dealers can collect costs. To the extent you are concerned about double dipping, legitimate concern. And I think that that is something that we can work through moving forward to ensure that we can protect against that type of behavior.

On the profit issue, all I will say is this. When dealer profits are not doing very well, nobody comes to this Legislature saying, hey, we really need a document processing increase. Profits in the vehicle sales world are cyclical and sometimes they're up, other times they're down.

But like I said, when things are struggling, nobody says we ought to increase the charge. So profits come and they go. As is the case with any other industry, what remains constant is the fact that we have to do a whole lot of work in order to conduct a sales and lease transaction from cradle to grave.

And we just need to assure that we're able to recover those costs.

What are, what are now? And I agree with you. You know, there are a lot of bills. Part of my comments were all those paperwork because of our regulations, right. So I agree with you with that.

What is your, what would be your response to the analysis suggested that the DMV should set that price to actually dictate how much it costs to process that?

I would say that I don't think the DMV is in that business to be able to determine what a private entity's costs are.

I think that that is to process there because part of the, you know, part of the questions is embedded in the fee. It's not just the DMV processing fee, it's third party services. It's payroll, it's forms. So I'm wondering if the cost is to cover the DMV processing that could be difficult for a consumer. Why isn't it just that?

And why are we including additional fees into this total 1%?

I just want to be clear as the author of the Bill, this is not just a DMV processing fee. It's a processing fee that by statute covers all the work that the finance and insurance f and I person does at the dealership, one piece of which is getting that title transfer and that registration he's got to get.

He or she has to get a conditional sales contract over to the bank. It's got to be all signed properly. It's got to verify insurance, has got to get proof of insurance in, in order to roll the car out so you could drive the car home. It's got to get disclosures.

That person's got to get disclosures signed that we require as the State of California has to get disclosure signed that the Federal Government requires, especially on, on the contracts like conditional sales contracts, according to regulation Z of the Federal Government. So this isn't just a DMV processing fee.

And the industry, the, I think the numbers you were talking about earlier and that the opposite position, witness, we're talking about in terms of the entire industry. The new, the new car industry in terms of manufacturing is certainly a multi $1.0 billion industry.

We have dealers out there right now that are trying to figure out how to pay their electric Bill because they're flooring cars, EV cars that have flattened out that they can't sell and they're worried about going out of business. So I think that's, with all due respect, a little bit of red herring.

And I also don't think that, that the Bill should be minimized to what does it cost from DMV, DMV standpoint to, to transfer title.

And what about the payroll, Senator, can you explain the payroll aspect that is embedded in this fee?

The pay, the, the fee is. Let me, let me ask the experts on the technical side, but payroll in terms of the dealership is going to be compensation for the individual who has literally the segregated job doing all the work I just described.

And I would worry about the temptation of dealerships who frankly, by and large on the sales side aren't governed by collective bargaining agreements like they are on the service side to say, you know what, if we're getting paid, if we're getting reimbursed at a rate of 80 bucks, let's go hire an $80 person to run this paperwork and live with the consequences.

I don't think that's good for Californians. I don't think that's good for consumers or consumer protection or the person that's getting paid, you know, below market wages to sit there and slave over that. I did that kind of work once and I know what it's like to be underpaid to do that job.

It's one of the reasons I have a little bit of passion for this Bill because I see that the compensation for this work has been stunted over the years because the legislatures that came before us didn't have the wisdom to index it to a CPI or to something that would have prevented us from having to be here today.

And I can appreciate that. I think I spent my first or I spent most of my teens in young adulthood helping my father at his used car dealership. So I filled out all these forms. I know all the work that goes into it. Is he an honest man? Maybe not.

But very interesting what you learn in this industry. And I do appreciate, I know I heard it from the sponsors and not from the author. I'm not sure if he was at liberty to share. Potentially adding guardrails so that there's no double dipping. That would definitely reassure me. But today I can't. It's not in the Bill.

I can't support it. I'll definitely be looking at it when I and the floor if it has additional protections. But as is, it's not something I can support today.

Through the chair. Let me just say, yes, obviously if the Bill gets out today, we want to hear your proposed amendments well before, you know, deadlines for us to amend the Bill. Always, you know, especially before a for a vote. You know, hopefully we get there. And I want to say the same thing to Senator Valladeros.

Great comments about what else can be done in terms of trying to, you know, put some. I want to paraphrase what you said, essentially some limitations on, on the cost of doing business here as we go forward.

I've worked with sponsors on this for several weeks now and I know they're very open to whatever the suggestions are of the Legislature to, to make this feel like the right thing.

You do you want to make that your close or you want to do a close? Yes, sir. Okay. It's been moved by Strickland. It's closed. Secretary called the roll.

The motion is do pass to the Committee on Rules. Senators Cortese. Aye. Cortese, Aye. Strickland. Aye. Strickland, Aye. Archuleta, Arreguin, Blakespear. Blakespear, No. Cervantes, Dahle. Dahle, Aye. Gonzalez. Gonzalez, Aye. Grayson, Limon, Menjivar. Richardson. Aye. Richardson, Aye. Seyarto Umberg, Valaderis, Valderis, Aye.

So that Bill is six to one. Remains on call. While the Chairman's coming up, I would like to move the consent calendar, which is file item 8 SB400.

[Roll Call]

And Madam Secretary, we've already heard byline six. I would like to move that we vote for 56 SB569 by Blakespear.

[Roll Call]

Bill's on call. 7 Ayes and 0 No's at this point. We're going to call. We're going to go by file order if you're done with your call. Otherwise, I'll get Senator Gonzalez up here. Thank you.

New York Times. All right, thank you. I'm going to grab some water. You can start whenever you're ready, Senator. Great. Thank you, Mr. Chair. Members, appreciate it. So California has been seeing a piecemeal development of a market and infrastructure designed to capture and recycle the very valuable vehicle, EV battery materials that go into batteries for electric vehicles.

And we're talking about lithium, cobalt nickel, those kinds of materials. We know that recycling batteries reduces the demand for raw materials, thereby avoiding some of the negative social and environmental impacts of mining. All around the world, there's human rights issues at play.

In some instances, batteries can be actually repurposed for energy storage, which further extends their useful life. The problem, of course, as we continue to roll out and encourage the use of electric vehicles, we don't have a proper infrastructure in place and certainly no policy framework to ensure that we have beneficial outcomes in this area.

And that's going to become really problematic as more and more EVs and EV batteries reach their end of life. And it could create a hazardous waste crisis if clear pathways for management are not already in place.

So we're already seeing evidence of this growing problem, including in the complications that the EV batteries posed in the cleanup of the Los Angeles fires. And also as local household hazardous waste facilities are starting to, you know, handle EV batteries coming into their facilities and they've got extra challenges. And the sad thing is we're losing so many opportunities.

A lot of these batteries are going straight to the landfills. They're creating toxicity there, and they're actually chock full of valuable materials that can be used to turn into new batteries and new things. I mean, this is actually, as you all know, I've been working on plastics.

One of the challenges of plastics, of course, is that the value of the used plastics is so low that it's hard to build a market. In this case, we've actually got valuable items, minerals in the batteries, and yet so many of these batteries are ending up in the landfill, creating toxicity and representing a real lost opportunity.

So Senator Dahle. Brian did a bill back in 2018 that was AB 2832, and it called for an advisory group to develop recommendations to the Legislature to ensure that as close to 100% as possible of lithium ion batteries in the state are reused or recycled at end of life.

And you know, the concern that I think everybody had, including very much on the Republican side, was as we kept pushing EV batteries, there were serious ethical and environmental concerns associated with the extraction of lithium in a lot of places. And, you know, lithium ion materials from all over the world, certainly in Africa and elsewhere.

Were we doing everything we needed to do to ensure that we were capturing those materials and repurposing them and turning them into the next generation of materials, batteries, et cetera.

So this bill builds off of the report that came out of the Dahle Bill and then count stakeholder feedback over the past two years so as to ensure that EV batteries are properly handled and eventually recycled at the end of their useful life. And of course, we're trying to encourage reuse, repair and repurposing when feasible.

So this bill holds EV battery suppliers responsible for proper management and recycling of end of life batteries under warranty and other batteries offered back to the appropriate battery supplier, including associated costs of collection. The bill also holds entities that remove a battery from a vehicle, such as an auto shop or dismantler, responsible for proper management.

That could mean returning the battery to the manufacturer, could mean selling the battery to be used for battery storage, selling it to a battery recycler, although all those sorts of things. Now recycling facilities that handle these batteries would be certified by DTSC subject to environmental and other standards developed by the Department.

And all of these entities handling batteries up and down the supply chain would be required to report to a Department created system to efficiently track these batteries and ensure that bill's requirements are met.

The flexibility of the structure is particularly important since unlike other materials that we sought to manage at the end of life, EV batteries contain critical minerals, as I mentioned, which make them valuable in a growing and robust recycling market.

But the bill structure is also designed to include producer responsibility as a crucial backstop if the recycling market and value of the battery material changes over time so as to ensure proper end of life management continues.

So with me today to speak in support of the bill, we have Alyssa Silhi from Ford Motor Company and also Michelle Canales from the Union of Concerned Scientists.

Please proceed when ready. A couple minutes.

Good afternoon, Chair Members. Michelle Canales, on behalf of Union of Concerned Scientists in support of SB615, we have been advocating for the broad deployment of electric vehicles for years because of their clear public health and climate benefits.

With the increase of evs on the road, we need to make sure that the clean transportation future is also sustainable over the next decade. EV battery retirements are estimated to increase by 450% in California.

This wave of retirements will include batteries that are damaged, dispersed and that may contain fewer valuable minerals and are therefore less profitable to recycle. Without policy intervention, batteries might slip through the cracks and end up in hazardous waste landfills or abandoned. To avoid this and reduce the need for newly mined material, we need SB650.

Specifically, there are three provisions that make this bill effective. First, producer responsibility is critical so that when manufacturers put their vehicles out for sale, they have a plan for ensuring that their batteries are responsibly managed when they retire.

Producer responsibility is not a new concept for California, and both the European Union and New Jersey have passed policies to require producers to be responsible for their batteries.

Second, tracking and reporting requirements in the Bill will make sure batteries are not getting lost in the shuffle and if they do, these requirements will provide the Legislature and state agencies with the information needed to identify and rectify any problems.

It also requires facilities to report the recovery rates of critical minerals so that future action can be taken if these rates are insufficient. Finally, SB615 seeks to prevent batteries from being processed with harmful and inefficient recycling technologies to ensure batteries the battery recycling industry is safe and sustainable.

We are grateful to Senator Allen and his staff for their tireless efforts on this bill and we respectfully request your Aye vote. Thank you.

Thank you. Next witness.

Chair and Members, It's a pleasure to be here today. Alyssa Silhi, I am the Western Region Director of Government affairs for Ford Motor Company. I appreciate the opportunity to provide comment today on SB615.

I'd like to start with my comments by just giving appropriate thanks to Senator Allen for being a master collaborator and bringing together I think it's important to note bringing together so many stakeholders to the table over multiple years to really hash out a very complex bill.

We believe that the bill before you strikes a current balance that's workable and sustainable and in fact we started this in opposition and I think pretty significant concerns and over the process of being brought to the table and really working through the meat of it, we were able to go neutral and eventually in support and I'm here and support today on this very important piece of legislation.

So I will also note we appreciate the Senator's willingness to strike a balanced approach to producer responsibility.

The provisions in the bill we think has that balance, but we also do remain committed to working with the author, the Legislature, the Administration to address the governor's concerns from last year while retaining a workable balance so that we can ensure that batteries are reused or repurposed when possible or recycled when they no longer are useful.

As to why Ford is here, why we're at the table. We have a long history of supporting California's ambitious climate goals and the transformation of the fleets, the state's fleet, from, you know, traditional cars to ZEVs. We have invested 50 billion globally in electric vehicles.

We've revolutionized our manufacturing process and supply chains to electrify our most iconic products. It's a core component of our goal to achieve carbon neutrality globally by 2050. As a company, we have been actively working to make EVs more sustainable, to make them more affordable. We've localized a complex supply chain network.

We've created recycling options for end of life vehicles. We've ramped lithium ion recycling and increased U.S. battery production. And in fact, Ford Ion park is our global battery Center for excellence and it leads the way in battery and battery cell technology. R and D. We've prioritized integrated battery recycling and we believe that this Bill furthers those goals.

We're committed to furthering it and appreciate the opportunity to be here in support.

Okay, we appreciate you being here as well. Thank you both. Is there anyone else in the Committee room wishes to express a support position on the bill? Name support affiliation please.

Good afternoon, Mr. Chair. Brandon Wong on behalf of CalSTART. We are supportive of the billing concept and we want to echo the comments about the author being great stakeholder. We're continuing to work with office and his staff. We really appreciate.

Good afternoon. Lee Kamerick with the Rural County Representatives of California in support.

Hi. Katherine Eager on behalf of Redwood Materials we have a support if amended position and look forward to working with the author on and stakeholder. Thank you.

Thank you. That concludes the support side. Do we have opposition witnesses in the room? If you're the lead opposition, you can come up and. Okay.

Yeah. Thank you. Andrew Anthony, on behalf of Tesla, we have lingering safety and cost concerns for those reasons we currently opposed.

Thank you Mr. Chair, Members. Sarah Bridge, on behalf of Rivian here in respectful opposition. Thank you.

Kasha Hunt, with Nosman here on behalf of the Motorcycle Industry Council we have an opposed and less amended position as we'd like the motorcycles excluded. Thank you.

Elizabeth Esquivel, with the California Manufacturers and Technology Association and respectful opposition. Thank you.

Okay, thank you. That concludes the oppositions. No, it doesn't. Please come on up.

Good afternoon. John Kendrick, on behalf of the California Chamber of Commerce opposing loss amend. Look forward to working with author's office.

Thank you. All right, thank you. I'd say that appears to conclude opposition and the tweener I think that we had. So we'll come back to the. The dais. Is there anyone here on the Committee has a question or comment or concern seeing we have the offer of a motion by Senator Blakesbier.

And as soon as you have an opportunity to close, we'll go ahead and entertain the motion.

Thank you. Thank you to all the folks who had a chance to talk. And special thanks to our friends at Ford and other manufacturers of fortune working so hard with us. We're going to continue our conversations with the rest of the OEMs to get this to a place that ultimately works for everybody.

I mean, this is all about making sure that we create a circular system where we can collect these batteries in a responsible manner and then get them repurposed and refurbished, use the materials for the next generation of electric vehicles. So that's what this is. That's our goal is here. And with that I respectfully ask for an Aye vote.

Okay, thank you, Senator Allen. And the motion was made by Senator Blakespear, so I will ask the assistant to call the roll.

At this time the motion is do passed to the Committee on Appropriations. [Roll Call]

Thank you, Members. Thank you very much. Thank you.

All right, it's a 6- 1 vote thus far on call. Senator Hurtado, you would be up next if you're prepared, which I believe you are. I know you have two items. Item three, which is SB 496. Item four, which is SB 661. Will you be. Will you be starting with item three? SB.

I'm sorry, our item three is your SB 496.

Yes.

All right. Thank you. You can proceed whenever you're ready.

Good afternoon, Mr. Chair, Members of the Committee. When wildfires sweep through our communities or storms knock out power for days, we rely on frontline workers, firefighters, utility crews and emergency responders to show up with the tools and vehicles to save lives.

But what happens when the vehicles they depend on aren't available or are incapable of performing during critical situations? That's the question Senate Bill 496 seeks to address. Senate Bill 496 seeks to uphold California's emission goals without interrupting the critical public services fleets. Provide.

The bill establishes an Advisory Committee to address the exemption and extension process for the California Air Resources Board Advanced clean fleets regulation. SB496 also expands the vehicles covered by the emergency vehicle exemption, ensuring that our frontline workers and the communities they serve have access to vehicles that can do the job during these emergencies.

And with me to testify in support of SB496 are David Terrazas of the Soquel Creek Water District and David Worthington, a Fleet Director for County of Santa Clara.

Good afternoon. Good afternoon, Chair Members of the Committee I 'm David Worthington. I'm the Fleet Manager for the County of Santa Clara. I'm also a Member of the National Association of Fleet Administrators and a Chair of the Municipal Equipment Maintenance Association's Northern California Chapter.

Our chapter Members and the Members of Napa Napa actually manage over 60,000 vehicles and pieces of equipment just in the State of California. We are the ones that implement regulations, make sure that we're compliant with them. We are here today to support Senator Hurtado's Bill.

My efforts and those of the teams that I've led have resulted in 42 local, regional, state, national and international awards, including a US EPA clean air Excellence Award in Transportation Efficiency Innovations, a number one Government Green Fleet in North America Award, and to be recognized as the number one Government Fleet Manager in North America last year.

I have worked collaboratively with CARB and other regulatory agency staff for more than 30 years to assist in the development of regulatory language and implementing Green Fleet technology. I've served in multiple emergency operation centers during my career, responding to wildfires, floods, pandemics, public safety, power shutoffs and civil unrest.

During these events, every vehicle is an Emergency Response Vehicle 247 and for up to a year. Current and near term ZEV product offerings only meet a small percentage of vehicle emergency operational duty cycles and range, thus jeopardizing our ability to provide services that protect life, property, the environment and critical public infrastructure.

During the 2017 wildfires in Sonoma, Napa counties, revs were of no use after 12 hours due to infrastructure challenges related to the fires. Requiring a vehicle sales agreement to exist to submit a time extension request creates a stranded asset, an asset that depreciates whether we use it or not.

In closing, SB496 addresses these challenges and others while ensuring that we still achieve significant emissions reductions while not while not waiting for these technologies and infrastructure to catch up to our current needs and our near term needs. I would like to thank Senator Hurtado for her leadership on this critical issue.

I thank you for your time today and I appreciate it and respectfully ask for your Aye vote.

Thank you, Chairperson Cortese. Senators, my name is David Terrazas and on behalf of the Soquel Creek Water District, I'm pleased to voice our strong support for Senate Bill 496, introduced by Senator Melissa Hurtado. This important legislation recognizes and supports the essential role of water districts and special districts across California.

Agencies that are on the front lines of safeguarding public health and ensuring the delivery of essential services, including safe, reliable water, to local communities like ours does. Water districts like ours are not only responsible for daily operations of long term sustainability planning, we also serve as critical first responders during emergencies.

Over the past several years, our region and much of California has faced unprecedented local emergencies, from fires to floods. In 2023 alone, when water mains were threatened and community access was at risk, our team deployed heavy equipment, generators and emergency materials in real time, not after an emergency was declared, but because an emergency was happening.

This threat is ongoing and a constant presence in our industry, and this is what we ask you to consider. Essential services and their operations must not be limited in times of emergencies.

Senate Bill 496 provides a thoughtful and essential framework to support the operational needs of local agencies like ours for water distribution and the clarity and flexibility needed to ensure that emergency response capabilities remain intact and at other public agencies throughout our state.

The current lack of sufficient infrastructure and lack of appropriate vehicles in the marketplace poses a significant challenge for emergency readiness. Our ability to respond must not be compromised by limitations in access to appropriate vehicles or charging capacity.

Therefore, in our case, the ability to deliver water to homes and the residents to hospitals and fire hydrants relying on our fleet and with dedicated public employees is an essential public service which our community depends on on a daily basis.

This work is something for which we have a vital commitment to serve our residents, especially in times of emergencies. For these reasons, we respectfully request your support and vote for 496. Senate Bill 496.

Thank you. Is there anyone else in the Committee room who wishes to express the support position? I see there is. Please come on up. This is limited to name, affiliation and support.

David Renschler, on behalf of the City of Fairfield, strongly support. Thank you.

Michael Taylor, with NAFA Fleet Management Association. We strongly support the bill. Thank you.

Damon Conklin with the League of California Cities strongly support.

Mark Newburger, California State Association of Counties, proud sponsor and supporter.

Elizabeth Espinosa, on behalf of the Boards of Supervisors in the counties of Riverside and Ventura, in support. Thank you.

Good afternoon, Mr. Chair and Members, Beth Olhasso on behalf of Inland Empire Utilities Agency and Cucamonga Valley Water District and strong support. Thank you.

Kasha Hunt with Nasimin have County of County of Monterey Board of Supervisors, Olivenhain Municipal Water District and Padre Dam Water District all in support. Thank you.

Lee Camerich, with the Rural County Representatives of California, also a co sponsor. Request your Aye vote.

Hello, Mr. Chair, Members. Kristen Olsen Kate, on behalf of the West Valley Water District in support.

Clifton Wilson, on behalf of the Board of Supervisors for the counties of San Joaquim, Stanislaws, Shasta Butte, Kern, Solano, Fresno and San Luis Obispo, all in support. As well as the South San Joaquim Irrigation District. Thank you.

Good afternoon, Senators. Adam Quinonez, California Advocates on behalf of Mesa Water District as well as Santa Clarita Valley Water Agency in support.

Good afternoon. Cassandra Mar, on behalf of Eastern Municipal Water District, Santa Margarita Water District, Turlock Irrigation District and the City of Downey in support.

Good afternoon Mr. Chair and Senators. Rosanna Carvacho Elliott, here on behalf of Mission Springs Water District in support. Thank you.

Mr. Chairman and Member. Cyrus Devers, for the Municipal Water District of Orange County, the Coachella Valley Water District and the Las Virgenes Municipal Water District all in support. Thank you.

Mr. Chair, Members. Andrew Antwee, with Moser and Lang. Here today on behalf of the City of Beverly Hills and support.

Good afternoon. Claire Sullivan, on behalf of the California Association of Recreation and Parks Districts, the town of Hillsborogh, the City of Corona, the City of Bakersfield, City of Belmont, City of Carlsbad, City of Rancho Cucamonga, City of Redwood City and the City of Roseville, all in support.

Thank you. Chair, Members. Anthony Tannehill, with California Special Districts Association proud co sponsor support. Thank you.

All right, thank you all for your testimony. I'm not showing any opposition listed. Is there opposition here? Wishing test label. Please come on up. And I apologize for not picking up on the opposition earlier. It is actually listed in the analysis. Thank you.

Thank you. Mr. Chair and Senators Michelle Canales again on behalf of Union of Concerned Scientists.

Move the microphone a little closer. That's our microphone's fault. Thank you.

Sorry about that. Michelle Canales on behalf of Union of Concerned Scientists and respectful opposition to SB496 advanced clean fleets was crafted in a practical manner to ensure that flexibility is available for regulated fleets. This is represented by the many exemptions under the rule, including exceptions for daily usage needs, emergency response and vehicle configuration availability.

Thousands of air pollution related deaths are anticipated to be prevented as fleets gradually comply with regulation. SB 496 seeks to make two significant changes to ACF. First, the bill creates an Appeals Advisory Committee to review denied requests for exemptions from compliance.

And while we appreciate that the appeals Committee is advisory in nature, we have concerns that it may unnecessarily delay compliance for fleet service who are able to transition. Additionally, the bill expands the types of vehicles that are fully exempt from the rule to include any vehicle that is reasonably anticipated to be used in a disaster.

We understand the intent of the author and sponsors and the importance of emergency response. However, we're concerned with the ambiguity of the provision. There is no clarity on what qualifications surround reasonably anticipated in terms of vehicle eligibility, as well as no clear understanding of which entity is making the determination for said vehicles.

Given the lack of reference to carbo forsight. Ultimately, UCS believes that SB496 will inadvertently interfere with the regulation and its goal of reducing emissions for this sector where feasible. For these reasons, we are respectfully opposed. Thank you.

All right. Excellent job on timing. Thank you. That concludes the the lead opposition testimonies or anyone here here in the Committee room wishes to come up and express opposition. Seeing no one come forward. We'll come back to the Committee. Senator Archuleta.

Thank you, Senator, for bringing this forward. I represent portions of Orange County and Los Angeles County in Southern California, and a number of my cities have supported this bill, as I will, and I'm ready to move it. But I have a question. Would you walk me through?

Perhaps your witness can walk me through how the Committee, the Appeals Advisory Committee, would walk through a situation where something was discovered, because obviously we're protecting our environment and everything else. Walk us through a scenario that the Committee would be involved in.

Thank you. I appreciate the question. A very common situation would be where a vehicle to meet our operational and duty cycles, the manufacturers say it's available, it's not available, or when we set up that vehicle and put specialized equipment on it that draws power from the traction motor battery, then our range is reduced significantly.

One thing that the regulation does not address is duty utilization of the vehicles. We have lots of vehicles in emergency response that drive short mileage range, but then the engines that drive all the auxiliary equipment are operated for hours and hours on end. An EV won't make that.

It's not capable right now with the technologies available and what's available in the marketplace. So a Committee, if somebody submitted a vehicle exemption request and was denied and they provided all the information and it's a disagreement over facts or what's available or what isn't available, that's where the Committee would come in.

Because these will be subject matter experts from all parts of our industry and they would be able to provide additional information to CARB staff in regards to what we feel is denied requests that shouldn't have been denied.

So it wouldn't be a punitive information or punitive action, but more guidelines is supporting and adjusting and correcting the issues.

Correct. It's a collaborative process is what we envision.

We'll come back to you for that, Senator Archuleta, when we conclude the discussion. Senator Gonzalez.

Yes, thank you, Mr. Chair. And I think you answered my question, as Senator Archuleta had asked, in terms of the process and you know, how the exemption process would work. But I think leading off of what the witness and opposition had mentioned is just the.

Just ensuring that there is, you know, that these are actual emergencies and that it's not a broader scope that could be potentially, you know, these cars could be exempted for, you know, that are not actually an emergency purpose.

So can you speak on that a little bit or is there any other sort of work you can do with the opposition to ensure that it's really narrowly focused?

Yeah, I'll just comment and say that I am committed to working with the opposition. And as we move this, this, hopefully we move this Bill, continue this Bill forward, but I'll go ahead and defer also to my witnesses if they want to elaborate on the question.

For example, we're a district of 47 employees, and many of these vehicles are required to pull generators in the case of emergencies. So when there is a water shortage, I mean, our first responders are unable to pump water out of our hydrants. So it is an emergency.

How often that occurs is determined by when they're put in use. And there are no vehicles that we are aware of that can handle the towing capacity for some of the generators we use in these types of emergencies.

And so I think the body that would be used to review these vehicles would be in a position to see the types of uses that are needed, the times they're used, and provide the opportunity for the Senator to incorporate that inter Bill as needed.

Great. Well, thank you very much. I just wanted to make sure that was addressed. We'll continue discussing.

I just know that, you know, obviously this regulation was a behemoth of a regulation, but as we move forward and with a different Administration, we are starting to see the sort of unrolling and, you know, chipping away of these regulations that are really intended to ensure that there is cleaner air in some of our, you know, most burdened communities, one of which I represent.

So I. But I appreciate the dialogue and I know you'll continue working on this. Thank you.

And Senator Grayson.

Thank you, Mr. Chair. And though I deal with a little different situation in my district with bar pilots and movement of ship and shipping and goods, I know they were under mandate for their fleet to replace boats within a certain time period that if you ordered the boats today, they wouldn't be here for years after the deadline. And so they.

However, CARB still rejected their application for an extension. Having put that aside for a moment, if the application for exemption or extension is rejected and it goes to the board, then when the board assigns or provides all of their scientific data and brings it back to CARB, then CARB is still not obligated right to follow the board's advisory. Is that correct? How does that work?

So you started the process with Senator Archuleta. Can we finish the process?

Certainly. Thank you for the question. It's been our experience with CARB, when the data suggests that a decision in one direction may not be correct, they typically reverse course. It's a matter of providing them with all the information and accurate information. Thank you.

And we do have a problem coming up with the withdrawal of the EPA waivers for the Clean Air Act in January. It's taken the zero emissions vehicle market for this regulation down by 330,000 trucks over 10 years. All that remains with the state and local fleets In California is 50,000 trucks over 10 years.

We're not going to have the vehicles that everybody thinks we're going to have available because the manufacturers aren't going to be able to afford to produce them. And if they can, they're going to be focused on the low hanging fruit which are our partial delivery vans, our potato chip trucks.

They're not going to be focused on where local, state and local government fleets have a majority of these vehicles the regulation applies to, which are utility trucks, aerial trucks, trucks with special body and equipment on them, which are actually the most difficult and most costly to produce from a ZEV manufacturer standpoint.

Thank you very much. Okay, anybody else, comments, questions? Senator Hurtado, you can close. We do have, yes,

I. I really appreciate the, the opportunity for us to provide you with that information and feedback on, on your questions here today. With that, I respectfully asked an aye vote for an aye vote.

Thank you. So we do have a motion by Senator Archuleta.

[Roll Call]

Bill is on call. 90 is the vote. Currently. Senator Hurtado, you have one more item, which is our item four, which is your SB661. If you'd like to proceed with that. Thank you.

Thank you. Thank you. Once again, Mr. Chair and Members of the Committee, I'm here for a different bill, SB661. 661 is a symbolic number for us in Kern. County. That's the area code that represents the region. So just wanted to make a little note of that special effort that we made there to get that number.

Anyways, SB661 at the outset, I would like to thank the Chair and his staff for their tremendous assistance with this bill.

Specifically, I would like to state that I have committed to the chair to continue working with the California Airport Council to develop a funding distribution plan that is equitable to all airports across the state by the end of June.

I'm bringing this bill forward because in a state as vast and dynamic as California, access to air travel shouldn't depend on your zip code or the region where you live. We know that transportation is about more than moving people from point A to point B. It's about mobility, opportunity and infrastructure that binds our state together.

But right now, too many of our regional airports, like Meadows Field Airport and Bakersfield, are falling behind, not because the demand isn't there. And not because the need isn't urgent, but because the state has never created a sustainable, reliable way to Fund their growth and invest in their future.

We've seen this kind of neglect before, when rural transit systems were left underfunded, when highway expansions skipped over communities that needed the most, when smaller cities had to fight just to keep a single commercial route.

And now those same communities, growing communities, are being told that if they want affordable flights or new airline service or updated terminals, they'll need to wait again. SB661 says no more waiting.

It redirects dedicated funding stream by using existing aviation fuel sales tax revenue, which is revenue already generated at our airports, to invest back into airport infrastructure, air service expansion and aviation workforce development. It's not a blank check. It's a targeted tool guided by market studies, performance metrics and stakeholder collaboration to strengthen connectivity where it's most needed.

For the Central Valley, this means shorter commutes to access flights. It means better infrastructure to support cargo and cargo and commerce. It means jobs in aviation logistics, hospitality and maintenance that don't require leaving town.

For California as a whole, it means a more resilient, balanced transportation network, one where no single region shoulders the weight and no community is left behind. SB661 supports our transportation goals.

It complements our climate efforts, and it strengthens regional economies by making sure our airports can serve the public efficiently, affordably and equitably, which is what California is all about. Colleagues, let's help California's airports take off. Together with me today, I have Jim Light, representing the California Airport Council.

And unfortunately, my other witness, Kern County Supervisor Philip Peters, was not able to join us. He couldn't travel to Sacramento today.

Thank you. Go ahead and proceed when you're ready. You'll have a couple minutes.

Jim Leitz, on behalf of the California Airports Council, representing the 31 commercial airports in the state.

While it's a common refrain we use here not to fall in love with bills, airports are head over heels over section three of this bill, which will finally move us into compliance on the FAA's revenue use rule, which comes over a decade after the FAA notified the state that we were out of compliance.

Very important time for us to finally ded these monies for aviation purposes. We are, however, looking forward to working with the author, as she mentioned, to revise the allocation formula so it is more equitable between the airports and where the actual revenues on fuel sales taxes are generated. So we ask for your support at this time.

Thank you.

Thank you. Is there anyone in the room who wishes to come up and express support, please do so now.

Clifton Wilson, on behalf of the Kern County Board of Supervisors, in support. Thank you.

Claire Sullivan, on behalf of the City of Merced, in support. Thank you.

Mr. Chair. Members, Kathy Van Austen, United Airlines. I'm supportive. Section three. Love it. Thank you very much. Long overdue. We do have issues with the formula. I understand the author is willing to work with us and we're. We're looking forward to that in that conversation. But this is a. We really appreciate the bill and the conversation.

Just ask you, Ms. Van Osten, are you satisfied with the commitment that the author made on timeline at the in her opening comments?

I apologize, I did not hear the timeline.

She agreed that by. In effect, by the end of June, I guess, or you could say the first of July, to conclude negotiations around funding allocation and equitable solution that the airports and the airlines can agree upon. That's basically it. I just. Yeah, I want to make sure the timeline itself was satisfactory.

Negotiations would start before that, by May, and the commitment is to everyone to try to conclude those by July.

That's very reasonable. We appreciate that. Thank you so much.

Thank you. Anybody else in support or. We just had a tweener. We'll go to opposition. Do we have an opposition lead witness? Do we have anyone in the Committee room in opposition that would like to come forward? Seeing none. We'll come back to the Committee. I'd like to move the bill. Senator Strickland, no other questions or comments?

Yes, we do. Senator Richardson.

Thank you, Mr. Chair. I want to commend the author for her work on this. Certainly in these tough times as we struggle of where is money going to come from and the tremendous amount of needs that we have to address this issue is long overdue. I would agree with one of the witnesses that testified.

The only thing I would ask is that I appreciate the author's willingness to look at revising the allocation formulas and if the author would be willing to work with maybe some of the Members of this Committee or providing information as you determine those allocations representing, for example, Los Angeles LAX airport.

As I'm sure you can imagine, there are significant. A lot of work we've done, but there's so much more to do and with the incoming FIFA Super Bowl Olympics, I mean, it's just on and on and on. So I welcome being included or at least advised of your thoughts of revising the allocation formulas.

But other than that, I think it's great work and look forward to supporting you. Thank you.

Anybody else all right, thank you. Seeing no one else, we will allow you to close at this time, and we have a motion awaiting. Senator Strickland's already offered a motion.

I can close. Thank you. Chair and Members, I think we're ready to take off and willing again to work with everyone and anyone that's interested in launching this effort. You know, I saw a need in my region, but obviously I think that there's need across the state.

And I see, you know, I see this as a benefit to all Californians, and I look forward to working with all of you moving this forward. And with that, I'd respectfully ask for an aye vote.

All right, Senator. Well, we're going to assume that 661 is a lucky area code.

I hope so.

Thank you.

And Vice Chair again. Vice Chair Strickland made the motion. Thank you very much for that. And we'll go ahead and call the roll call.

The motion is do pass to the Committee on Revenue and Taxation. [Roll Call]

Okay, we're at 9, 0 but we'll keep it on call for absent Members. Thank you. Senator Gonzalez, if you're ready, we would love to have you present at this time. And this is Our file, item seven, SB572.

Good afternoon, Mr. Chair and Members. I'm here to present SB572. I'm going to be really honest, it's going to be really silly when I say this, but I actually hope that this Bill does not get implemented, and you'll find out why.

But it seeks to ensure that California maintains access to critical road and vehicle safety information if the Federal Government ceases to collect this data and information.

Not too long ago, on April 10, there was a news article basically saying that multiple outlets are saying that car safety experts at nhtsa, you know, that NHTSA may be axed given this new federal Administration. So that would mean a lot of vehicle and road safety information that would be critical for Californians.

And so Californians deserve transparency and accountability from auto manufacturers. And we cannot, we have to ensure that, regardless of who the manufacturer is, that they are providing this information for our own public safety. And SB572 will ensure that if NHTSA, the National Highway Traffic Safety Administration stops requiring collision reporting.

Manufacturers of vehicles with driver assistance features including lane centering and adaptive cruise control will still be required to report crashes to the DMV instead. Testifying and support. I have Rosemary Shahan from Consumers for Auto Reliability and Safety and Doug Soopers from California Professional Firefighters. And I respectfully ask for an aye vote.

Thank you. Mr. Chair and Senators Doug Subers on behalf of the California Professional Firefighters. We represent 35,000 professional firefighters and emergency medical service personnel statewide.

As many of you know, we've been involved in a series of bills over the last several years regarding the introduction of autonomous vehicle technology and other types of technology to try to enhance safety around when our Members are in the field, interacting with this technology and hopefully arrive at the safest technology possible.

When our Members are in the field, many times our Members are responding, responding to individual accidents that may, motor vehicle accidents that may occur. They may be using this type of technology.

And while our Members are on scene rendering aid to patients and observing what happened on that individual scene, it's difficult to tell if there are larger trends or issues associated with the technology, you know, when these accidents are occurring or they could be occurring in multiple jurisdictions.

And so we think the data reporting to NHTSA currently is incredibly important and able to be used to identify if there are trends or issues with the introduction of assist driver assisted technology.

And you know, I would echo the comments of the author if that reporting continues, this Bill would not be, you know, not need to be implemented. But we do think if there are reductions in that reporting, it would be important for the Department of Owner Vehicles to have that data and be able to assess that data. For those reasons, we'd ask for your aye vote. Thank you.

Mr. Chair and Members, Rosemary Shahan, President of Consumers for Auto Reliability and Safety. We strongly support SB572 and applaud Senator Gonzalez for her leadership in championing this important pro consumer, pro safety legislation. And we agree with our friends the firefighters. This is really important to have the data.

And we also agree with the Center for Auto Safety and Advocates for highway and Auto safety that collecting such data is vital to ensuring level two vehicles are operating safely.

And we would note that according to NHTSA data, California has a history of the most crashes involving Level 2 ADS vehicles, 747 crashes, over 500 more crashes than the other state. So that makes it even more clear that it's important for us to be gathering this data at the state level. If NHTSA Drops its requirement. And we respectfully ask for your aye vote.

Okay, well, thank you for being here. Thank you both for your testimony. Are there others in the Committee room who wish to come forward and express a support position? Please come on up.

Mark Vukovich on behalf of Streets for All and strong support. Thank you.

Thank you.

Steve Wallach on behalf of the California Bicycle Coalition in support.

Mr. Chair Members. Louie Costa with Smart Transportation Division in support. All right, thank you. We'll go to opposition. Is there. Are there any opposition witnesses? If you would like to express opposition, please come on Forward at this.

Mr. Chair Members, Andrew Antwih on behalf of Tesla. We actually have an opposed unless amended position.

Thank you. Anybody else opposed or opposed unless amended? All right, seeing none, we'll come back to the Committee. Do we have any questions or comments on this Bill?

Move the Bill.

All right. Senator Richardson is prepared to move the Bill. Senator Gonzalez, you can close if you like.

Just want to thank my witnesses and this would hopefully again not get implemented. I do hope that the National High Highway Traffic Administration does continue reporting these collisions to make us all safer. With that, I respectfully ask for NY vote.

All right, thank you. And with that, we once again will acknowledge Senator Richardson's motion and we'll ask the assistant. Call the roll, please.

[Roll Call]

All right, eight aye Votes. Zero. No votes. And we'll keep it on call for absolute Members. Thank you. Senator Wiener. Right on schedule in a way. So we read. If we read. I'm bad, agenda backwards. But we know how busy you've been today, so I'm bad at most things. Good at timing.

We're very grateful for the fact that you're here. Thank you. You have sb63. It's our file, item one, if you want to proceed with that. And of course you have SB 445 thereafter.

Yeah. If I may, Mr. Chairman, I prefer to start with SB 445 because Senator Arreguin is going to co present SB 63 with me. Thank you. Okay. Thank you, Mr. Chairman. Thank you to you and your staff for working with us on this Bill.

Senate Bill 445, the initial version of this Bill before we amended it recently included detailed provisions to set timelines on specified third party permits and approvals for certain public transportation projects in California. Public transportation like bus rapid transit, light rail, passenger rail are essential for our future economy, for an abundant, affordable zero emission future.

And we need to build these projects more quickly. They take too long. These projects are often plagued by cost increasing delays as lead agencies navigate California's balkanized local permitting. This is all post environmental review, local permitting process, utility relocation, construction approvals.

Because of our failure to streamline project delivery, we get 5 less clean transportation improvements at a higher cost. To be clear what this is about, we're talking about public transportation projects where the project is already agreed to, approved, funded, it's all ready to go, and all that has to happen is for it to be built. So it's already been approved, it's already been funded and they want to build it.

And then to build it, if it goes through 10 different cities and four special districts, and through PG&E country and through Comcast wires, you have to get individual permission from a permit from each of those cities, permission from PG&E to bury a wire that's like an hour's worth of work or a Comcast wire that needs to be moved.

And if any one of those agencies or utilities doesn't get back to you or blows it off, we have situations where transit agencies have to literally demobilize their contractors because of some minor permit that they need that they haven't heard back on. And that is, it's a lay's project.

It's a black eye for California when we have these delays in terms of project delivery. It's a waste of taxpayer resources because it makes it more expensive to deliver these projects that have already been approved and funded. And we should move away from this.

So the original version of the Bill had a detailed system, a shot clock of 30 days for these agencies and utilities to provide that permission or that permit. It's obviously a very, very complicated issue with many, many, many stakeholders.

And so in consultation with this Committee and with the local government Committee as well, and Senator Durazo, we decided that to sort of buy ourselves more time to get the details really truly right and to work with stakeholders.

So we amended the Bill to make it a moveable spot Bill and then to have intent language indicating our intent to rebuild the Bill over the coming months. Working with this Committee, which will be deeply involved local government as well as Assembly transportation and local government.

So I'm asking the Committee to advance this Bill so that we can Continue that work. And I respectfully ask for an aye vote. With me today to testify is Keith Dunn with the California Building and Construction Trades Council. See, we can work with people some bills while we don't agree on other bills.

So I appreciate the trades working very collaboratively with us because we do have many, many, many agreements. And Mark Vukovich from Streets for all. Mark, are you going to go first? I will.

Senator, we have a couple minutes as usual. Thank you. Welcome.

Yeah, good afternoon, Committee chair and Committee. Yeah. So this, this Bill is simple. It's about building sustainable transportation projects in California on time and on budget, something we don't do in California and we don't do across the country. Building transportation and sustainable transportation costs about six times more.

Just a mile of light rail costs about six times more than it does cost in Europe and about twice as more as it costs in, in Canada. We're not very good at it and there's real issues that we need to fix.

If you look at the sort of the Master project delivery reform report out of UC Berkeley, if you look at the ENO Center for Transportation report that covers this. If you look at the transit cost projects that covers this.

If you look at California High Speed Rail's Inspector General report, all of them point to permitting as a major issue for cost overruns for our major transit projects. And that's what we're trying to do here.

I think Senator Wiener has been incredibly clear about our intent that this is a, this, this is a work in progress, a movable issue. And we received, I think, tremendous and really helpful comments from the opposition as well.

Stuff about engaging in early planning and early conversations so that we don't have to wait to get to the permitting phase. We're incredibly open to that. We want to work with stakeholders, but we're trying to do here is make sure that California can deliver for its constituents and for its taxpayers. Thank you. Thank you.

Thank you, Mr. Chair, Members of the Committee, Keith Dunn here on behalf of the California State Building Construction Trades Council, as well as the Self Help Counties Coalition, of which most of you are representative of, I'm very pleased to be here with the Senator, one of the most tenacious authors of bills.

And it's nice to be on a side to be supportive of these efforts.

I can tell you, having been involved in almost every major infrastructure piece of legislation for the last 20 years, this is a really big issue and it's one that we look forward to working with the utilities on to make sure that we're getting it done right.

But when we look at what are the costs and delays on construction projects, we've got great, brilliant engineers. We have political will, sometimes the coordination that we have between our many agencies that line our government here in California, just those communications with utilities, interacting with others.

So I'm very hopeful that this is something that as we work to improve and partner with the utilities and others that we can start identifying. We do a great job of developing new procurement methods to design and build the job. But once we get out to construction, sometimes we don't have that plan in place.

And so I'm very optimistic. I think we've got a great, tenacious author who knows how to dig into an issue and work with parties across all aspects. And hopefully this is a Bill that everyone can get on board with. So, again, I'm happy to start tackling this issue.

I know we're going to have some great conversations and prioritizing how we can save money for important infrastructure that California needs. And with that, I would ask for your support.

All right. Thank you both for your testimony. Is there anyone else in the Committee room wants to come forward and express a support position, please do so now.

Jonathan Cole with Climate Action California. We support the Bill as amended April 10. We support the intent of the Bill and we look forward to reviewing as it develops. Thank you.

Good afternoon, Chair and Members. Jordan Grimes on behalf of Greenbelt alliance in strong support of the Bill. Thank you so much.

Hello. Brooke Pritchard on behalf of California Yimby. In support of the Bill. Thank you.

Good afternoon. Gracia La Casillo Krings here on behalf of the Abundance Network in support. Senator, we owe you a letter.

All right, thank you. Thank you all. On the support side, opposition side. Now, is there anyone here who wishes to testify in opposition? Is there anyone. zero, please come on forward. Is there a lead opposition witness? Okay, please come forward to the microphone and express your name, your affiliation and.

Good afternoon. Laura Parra. On behalf of Southern California Edison, we. Appreciate the Committee for working with us. To address our issues. We are still in opposition, want to be part of the stakeholders discussions and ensure that the intent of the Bill doesn't put a type of shock clock. That we won't be able to meet. So thank you. Thank you.

Good afternoon, Mr. Chair Members. Joe Zanze with San Diego Gas and Electric and Southern California Gas Company Align my comments with those of my colleague at Edison. Thank you.

Good afternoon, Chair Members. Yolanda Benson representing US Telecom, the broadband Association. We appreciate working with the Committee. Concerns are very much the same as the utilities have expressed. We look forward to being part of the stakeholder meetings. Thank you.

Thank you. Obviously, these are what we call tweeners here. That's fine.

Good afternoon, Chair Members. Melissa Cosi with Pacific Gas and Electric Company Align our comments with those of Edison and look forward to working with the author. Thank you.

Juanita Martinez on behalf of Cal Broadband, like to echo all of those in front of me. Thanks.

Mr. Chair. Members, Andrew Antwee on behalf of the City of Beverly Hills, in respectful opposition.

All right, thank you all for your testimony. We'll come back to the Committee now. Senator Blakespear.

Yes. Thank you. I very much appreciate tackling this problem. It's so deeply embedded in our system that each utility and each property owner and each permitting agency has their own fiefdom and process, process and timeline.

And so, you know, I commend the author and the sponsors for working on this because I do see this as such a problem and I'm not sure how you're going to resolve it.

From my time in local government serving as a mayor, I did find it to be so frustrating and I didn't see what a solution would be to this without taking away the authority of certain, particularly utilities, because things can get stuck so hung up around utilities.

And then as you said, there is a demobilization even of construction workers, and they're ready to do the work and it's been funded and permitted and everything. So I really do encourage this Bill and I'm a huge supporter of the effort and I hope you're able to land it. I'll move it when the time comes.

Chair, thanks. We'll go to Vice Chair Strickland and then we'll move right on to Emily.

Thank you, Mr. Chair. First I want to get those numbers again about why it's what are those numbers again in terms of more expensive here versus Europe or permitting process for public transit?

For one mile of light rail, it. Cost about six times more in the US Than it does cost in Europe and about double as what it does cost in Canada.

Double Canada. Okay. Well, I want to commend the author for doing this. I mean, as we move forward on the spot Bill, I'd like to see the actual language that comes forward, but I think it's a noble goal. But what I would also say to my colleagues here is we need to look at the overall macro, not just for transit, but everything.

When we talk about infrastructure, when we talk about housing, the permanence on housing, the permitting on roads, permitting on water, infrastructure permitting, it's one of the major problems that we have is it takes forever to get it done. It's more expensive. What we do here in California, we need reform in that space.

I mean, we're talking about building construction trades. They would like to get started right away. And I commend the author for doing it for public transit.

But I would also say for my colleagues, we need to take a look at it for the entire piece of the pie for infrastructure and get some real reform to get if we pass something, we want to get it up and running right away.

One of the things that I'm really firmly against right now is the high speed rail. It should have been done already and we spent billions of dollars and we have really nothing to show for it. To talk to the people of California.

But you know, I know you will disagree on that, but I want to commend the author as this Bill moves forward and then maybe in the future we can look at some other areas where we could do fast track our Permitting process.

if I Mr. Chair, if I may. Sure. Yeah. Thank you for that, Senator. In fact, I agree we need to be looking broadly and I just walked over here from the Housing Committee where I had a we had a little bit of a rambunctious discussion on two of my housing permitting bills.

We've as we also In Senate, Environmental Quality. Have a Bill tomorrow and had a couple of bills a few weeks ago. So I think we need to. I know Senator Blakesburg is working in the space others. Senator Cortese, we. We need broadly to make things to agree.

What are the good things that we need to happen in California to make people's lives better and more affordable, and how do we make them happen faster? I think that's just a broad issue confronting California. It underlies a lot of my work and other Members of this community Committee and Legislature. So. Yeah.

All right, thank you. We have Senator Archuleta wishing to be recognized and then Senator Grayson. Go ahead, Senator. Yes, sir.

Okay, good. Thank you. Thank you, Senator. Bringing it up, obviously in Los Angeles County, because I represent Los Angeles County and Orange County, and of course we have the. The fires. That is not just doing. Replacing the homes and so on, it's redoing the infrastructure and that's part of the package. And I'm hoping eventually it'll roll over into that.

But in Los Angeles County, we've got the Olympics coming up, super bowl coming up, soccer. I mean, it goes on and on. We've got to move people and that's transportation, that's infrastructure. But let's stop for a second.

When I was mayor of a city, like some of my colleagues who were municipalities, we were frustrated because we couldn't get things across. Even as the mayor, we couldn't get things across. But when would you implement the plan to push this along?

Is that in the beginning of the project or once had you stated earlier when you were ready to go and you're trying to figure out what to hold up, at what point you hit that hammer on the table to get things moving.

Yeah. So this is all. Thank you for that and I'm really excited about. We're going to see a huge rebound in La. You're going to recover from the fires and have amazing Olympics and everything else. And I think Los Angeles has an exciting future and we're going to get Hollywood back on track, too.

So I look forward to all that work to support la. And this is about. This is what we call post entitlement. So this is after the transit agency and whoever has to approve it has said, we're building this, you know, light rail line or whatever it is, and the funding's in place and it's all ready to go.

The CEQA has happened. If there is CEQA required, it's just all ready. And so there. So we've made that decision and funding it, funded it, and then we have A situation where we effectively give every city, special district or utility or telecom that it touches the ability to effectively, like not intentionally, but to effectively.

Or it could be intentionally or unintentionally obstruct, delay, even kill the project. And that if you think about it, we've made a decision, whoever the decision maker is, we're doing this. Here's the money that the taxpayers are providing. It's all done, ready to go. And we're going to let every utility or cable company basically hinder it.

And so it's really after the entitlement, when we're ready to go and build it, that we should make sure that happens expeditiously. And listen with respect to the utilities and telecoms cable companies, they have a hard job. They have big infrastructure to maintain.

I appreciate, I read all of their opposition letters and we look forward to working with them. We want it to work for the utilities and the telecoms cable companies. But they also have to have a can do attitude. They have to have a can do attitude.

They can't just come in and say, zero, it's complicated, so don't tell us to do anything because what's happening now is not working. Just like it's not working when, when, if the, if the utilities are not energizing new housing that gets built or telling a new business you have to wait three years to connect to the grid.

We need a can do attitude from the utilities and from the telecoms and I'm confident they will have that and work with us and we'll get something good done.

Thank you, Senator Grayson. Thank you, Mr. Chair. And our one of your witnesses, Mark, you brought to light the expense of what it is here in the states versus in other areas and in construction. In many cases, time is more valuable than money itself.

And when there are delays, after delays, after delays, the costs continue to go up. Your Bill screams efficiency and effectiveness and it really does break down the barriers or it will break down the barriers with that can do attitude you're talking about and actually get infrastructure jobs or jobs, but also projects done.

So with that, we love to be able to support it today. I think you already have a motion. If not, I would love to offer one and glad to support it today.

Okay, thank you. If nobody else, let me just thank the Senator for working with the Committee on the Bill going back to original concept. And we are very aware at the Committee level, Committee staff level of a number of areas that you'd like to tackle with this and I'm sure you're going to get much of that done.

We have confidence in that. And to your earlier comment, I know you acknowledged all that in your opening. This Committee stands ready to assist and, you know, try to thread the needles where those are issues and see if something effective can be done here. So we do look forward to working with you and stakeholders.

For all the stakeholders that came forward, I think it's important. Chair speaking now, I think it's important for the stakeholders to be uninhibited in coming forward and saying, a, this could be a problem for us if it's not done right. But B, you know, we want to be engaged and we want to help figure it out.

That's, that's what will make it work. And I know you're very good at pulling people together like that. So with that, I'll let you close and then we'll come back to the motion.

I appreciate the conversation. And Mr. Chair, I want to thank you. You've been very positive and helpful on this from the very beginning and I really appreciate that. And we look forward to the continuing work. And I respectfully ask for an aye vote.

All right. I think it was Senator Archuleta that offer the motion. Okay. He says yes. So we'll go to the roll call.

[Roll Call]

All right, you're already to 10 to 0 and I think we have absent Members, so we'll keep it on. Thank you, colleagues. Yep. Thank you. Now, SP63, I understand you're going to be possibly joint presenting. Yes. With Senator Arreguin. So we'll let the two of you decide how you're going to do that. But whenever you're ready, you can start again. Item one, SB63.

Thank you very much, Mr. Chairman. I'm here today with my joint author on this bill, Senator, to co present SB63. And it's great to have Senator with me and also Mr. Chairman, we're all former MTC commissioners. And so we come out of living and breathing Bay Area public transportation, politics and financing, which is never easy.

We're trying to do a good thing today. First, I want to just say that I'm happy to accept the amendments outlined in the Committee's analysis, which we will be taking in the Revenue and Taxation Revenue Tax Committee, which will be hearing the bill tomorrow. Thank you. So thank you for that.

The amendments clarify various provisions and we appreciate the Committee's work with us. I also just want to thank all the relevant county transportation authorities, transit operators and other stakeholders who have been working so hard with us. This is now our third year in trying to address a very, very real issue.

And I hope that three times is a charm, which is that we want to have a bright future for Bay Area public transportation. We are absolutely at a crossroads. If nothing happens, if we just go with inertia, we will see essentially a collapse of Bay Area public transportation.

BART, Muni, Caltrain, AC Transit will be absolute shadows of what they are today, which will be horrific for the Bay Area's economy. It'll make traffic congestion even worse than it already is. There will be a lot of people, particularly lower income people, who will not be able to get to work or to school.

It'll just undermine the Bay Area in so many ways. In my great City of San Francisco, we Muni could have to scale back service by as much as 50%. I can't even imagine San Francisco losing half of its transit service. BART will collapse. So we cannot let that happen.

And that's why we are so insistent on trying to get this done. And so this bill. And I want to also be clear, this is a long standing festering issue in the Bay Area. For as long as I've been involved in regional transportation funding and issues in the Bay Area, our major systems have had structural operating challenges.

And we don't provide enough tax dollars for these systems, particularly the multi county systems, they get remarkably little support. They are overly fare reliant, particularly BART and caltrain, which means that they have to continually raise fares. And BART is too expensive. Caltrain is too expensive.

When we look at other transit systems around the world where you go in and it's amazing, fast, reliant, clean, efficient transit and it's like 75 cents to ride, people wonder, wow, why is it so cheap and so good? It's because tax dollars go in to support those systems and we don't do enough of that here.

And so this will allow us to do that. And so what we're proposing is this is currently drafted as a three county authorization to go to the ballot to ask the voters to enact a sales tax to support transit operations. Contra Costa County, Alameda County and San Francisco County.

We have a very polite and lovely invitation in the bill for San Mateo county and Santa Clara County to join in the fun. And we are working very diligently with both counties to see if there is a path for them to come in the bill. We're not looking to force anyone in the bill.

We want this to be collaborative and so we'll see how that plays out over the process. The bill will specifically authorize up to a half a cent in Alameda and Contra Costa counties and up to a full cent in San Francisco.

We the scale of San Francisco has a particular challenge because we are responsible to BART, we're responsible to caltrain, we're responsible and we have complete ownership over Muni. And so we have a huge hole to fill. And this will again be up to the voters ultimately, but we need this authorizing legislation to do that. Again.

I want to thank the Committee for working with us. This will be a continuing work in progress. And now I want to turn it over to my joint author, Senator Arreguin.

Thank you, Senator Wiener. Thank you, Mr. Chair and Committee staff for your work with us on this bill. I think the Senator really outlined the crisis that we're facing in the Bay Area, but I know it's something that major urban areas throughout the State of California are also facing.

With the change in which we work, people are working from home, which is change transportation patterns and has resulted in a fiscal cliff with, with farebox revenues decreasing and state and federal support decreasing, transit agencies not just in the Bay Area but throughout the State of California are facing a crisis.

And so that's why separate from this, I have put forward a budget ask to look at providing General Fund support to provide a bridge for transit operations over the next year or two.

But this Bill is really trying to make sure we have a long term path for the Bay Area to make sure that our major transit operators, Bay Area Rapid Transit and Muni and AC Transit in my district in Alameda County does not have to close stations or significantly suspend service.

The impact that will have on transit dependent Californians is significant. And I just want to acknowledge the thoughtful work that's gone into this Bill. This is the third iteration with the Metropolitan Transportation Commission convening a working group of stakeholders that helps provide the sort of policy framework that informed this Bill.

The ongoing discussions we've had with operators, with local officials, with business stakeholders, this really is a thoughtful approach to keep our transit systems running over the coming decade, ensure that public funds are being used responsibly. A key component of this is the financial efficiency review. That is one condition of this Bill.

To ensure that the operators that will receive funding from this revenue measure, if it is successful, that they'll find ways to cut costs and find efficiencies to make sure that those taxpayer dollars are spent effectively and to make sure that we can instill confidence in the voters that those dollars are being spent effectively.

This Bill and this measure will not provide all the funds needed to keep these operators going. They're going to have to find ways to cut costs and find efficiencies. And we think this efficiency review is in the interest of good government and also making sure that we can address the fiscal cliff.

So would you like to introduce the witnesses or I can do it.

You can do it.

Okay. Our witnesses here today are the President of the BART Board of Directors, Mark Foley, and the Chair of the Metropolitan Transportation Commission, Su Nuwak.

Welcome to both of you. And you can proceed in whatever order you want. You'll have a couple minutes each.

Great. Thank you. Good afternoon, Chair and Members. I'm Sue Nowak. I'm the Mayor of Pleasant Hill and the Chairman of the Metropolitan Transportation Commission, or MTC.

MTC supports SB63 as it will give Bay Area voters the ability to protect transit service on BART, Muni, AC Transit and caltrain and invest in a more seamless regional transit network over the next decade.

The COVID 19 pandemic's impact on remote work upended the business model for transit agencies across the Bay Area, especially those that were the most reliant on fares. The shift has required agencies to adjust their service, prioritize the customer experience and reinvent themselves to attract new riders for non commuter purposes.

Bay Area transit has been growing steadily since its low in March 2020 and is now almost 70% of its pre Covid levels. Yet these four operators face a combined annual operating deficit of at least $700 million.

Make no mistake, without new funding, these operators will have to make devastating cuts that would harm current riders, clog Bay Area freeways and harm the region's economy, the state's budget, not to mention climate change and public health.

SB 63 continues the Bay Area's strong tradition of self help and simply asks permission to let Bay Area voters tax themselves. While tax sensitivity is high right now, a January poll of likely voters found that over 60% think it's important to prevent major service cuts, and almost 80% want to see improvements.

SB63 is aligned with MTC's principles, which call for transit operators to be held accountable in terms of performance and finances and requires some funds from the measure to go directly towards improving the transit customer experience. As a regular BART rider, I shudder to think about what the Bay Area would look like without frequent reliable BART help service.

Please help the Bay Area help ourselves by supporting SB63 today. Thank you.

Thank you, Madam Chair. Next witness please.

Good afternoon, Chair Cortese and Members. My name is Mark Foley. I'm the President of the BART Board of Directors. I first want to thank Senators Wiener and Eric Yin for their steadfast support of public transit and for inviting BART to testify today.

As you may know, before the pandemic, BART was a model for self sufficient operations with more than 2/3 of our operating expenses covered by fare revenue. But the pandemic and some of the lowest return to office rates in the country have turned our funding model on its head.

We are thankful for the state assistance provided through SB125, but that money will run out at the end of fiscal 26. I'm proud to share that BART is working to reduce costs and has closed a $35 billion deficit for FY26.

However, we cannot cut our way out of this crisis and will face a 350 to 400 $1.0 million annual operating deficit starting in FY27. That is why SB63 is so important to the future of transit in the Bay Area.

If BART is forced to drastically reduce service or even shut down, connecting transit agencies will be affected, transit dependent individuals will be left behind, traffic congestion will worsen and the Bay Area's economy will suffer. Please note that this funding measure is not, I repeat, not a green light to continue the status quo.

We are supportive of the financial transparency and accountability provisions in SB63 and funding that will not only help close transit agency financial gaps, but also help Fund rider focused improvements.

We appreciate the work of the authors, the Metropolitan Transportation Committee, our transit partners and the other stakeholders to build consensus on a bill that meets the urgency of this moment. BART was the first agency to take a support position on SB63 and we look forward to engaging in future discussions regarding amendments. I thank you for your time.

I urge you to support Senate Bill 63 and I will just say please allow our constituents to make a decision about whether or not they support public transit. Thank you.

All right, well, you're definitely professional. Two minute presenters on time. We're going to ask if anyone else in the room would like to come up and express name affiliation, in support. .

Sebastian Petty, with SPUR strongly support SB63.