Senate Standing Committee on Business, Professions and Economic Development

Okay, we are going to get started with the Business, Professions and Economic Development Committee meeting of Monday, June 30, here in the California State Senate. We do not quite have a quorum, so if you are a Senator who serves on the Business, Professions and Economic Development Committee, we would love to see you in Room 2100.

And then, when we do get enough folks in for a quorum, we will stop what we're doing and establish that quorum and then proceed with our agenda. In the meantime, we can proceed as a committee of ourselves, which means we can hear from some authors.

And since we do have Assembly Member Harabedian here with family, we will definitely start off with you, sir. And please introduce your special guest to us.

Oh, thank you, Madam Chair. I have two of my sons here with me—Johnny, who's 11, and Joe, who's 4—and Joshua, who's 7, is still in my office. So, it's going to be a wild week.

Yes.

Pray for me, they will be here all week. Floor Committee, everything.

Welcome. We're very glad to have you here.

I don't think we want that. I mean, maybe they could be if this gets really close. But thank you, Madam Chair. Thank you to committee staff for all the work on this bill.

So, first of all, good morning.

Absolutely.

As you know, I have a number of different wildfire bills, and we know that the communities of Altadena and the Palisades have been devastated by the wildfires. This one is about preserving homeownership. Homeownership has been a long cornerstone of generational wealth building. And for many Altadines, their homes are not just structures.

They're the most important financial asset. For far too many of them who have lost their homes, this asset has become a source of uncertainty. They faced the difficult decision of whether to rebuild or sell in the aftermath of the disaster.

So what we're seeing on the ground, unfortunately, is a lot of folks who have lost their homes are trying to figure out whether they can stay, sustain themselves, or whether they need to sell their homes. For those that are selling, unfortunately, the marketplace has lent itself to low ball bids.

So corporate investors coming in bidding less than the fair market value of the property. And unfortunately, I mean, that is something that will just add insult to injury here. It's going to cause a lot of people who have to sell to really not even be able to survive after they sell.

And what we're also worried about is the community looking a lot different after these transactions. So not only are we trying to provide a floor for the fair market value of these properties, but we're trying to make sure that Altadena actually, and this is focused on Altadena and Palisades.

But as the person who represents Altadena, I want to be very clear. Altadena is a community historically of middle class families, very socioeconomically, racially and ethnically diverse. And this is where you have generational families who have been there for three to four generations, many of whom are African American and Latino, who have built wealth.

It was tied up in their home. And after they've lost their home, we are very concerned that these same people who have lived there will not be able to stay or come back.

And so in order to kind of address not only the fair market value of these homes, but also to kind of maintain that socioeconomic and racial and ethnic composition of the community, we've authored AB 797, the Community Stabilization Act.

AB 797 creates a pathway for qualified nonprofits to purchase homes at fair market value using funds that banks are already required to invest under the federal Community Reinvestment Act. This allows families to sell with dignity without limited- without being limited to options like selling to a speculative investor at below market value. Here's how it works.

And I understand this is a very innovative new type of structure that we've come up with. And I know there's probably a lot of questions, so let's just go down the list of how it works. We have clarified that I bank will issue zero interest securities to CRA qualified investors.

And again, the CRA is, and I don't think I define that. It's the Federal Community Reinvestment act that actually came out in 1977. What it does is give incentives for financial institution banks to actually invest in communities that have been historically underserved and or are going through crisis, disasters like this.

And so CRA investors are your everyday banks, credit unions, and they have an incentive and a requirement really under federal law to put money back into areas like Altadena and like the Palisades. So CRA qualified investors would put money into these securities. Those funds are then directed to community based nonprofits to purchase and manage disaster impact properties.

When those properties are later sold, 90% of any profits go back to the investors. So those financial institutions, banks, credit unions, who put the money in, 5% will go to the nonprofits who have actually managed the properties and then 5% will come back to the state through the bank. Two things to make very clear.

$0 of the state. This is not budget money. I know with our, with our, the state of our budget and what we've just been through and what we're going to go through today. This is $0 from the General Fund. There's zero risks to the state.

This is all private money coming through the CRA, and we actually make money on it. So down the road, when these properties actually change hands or they are some sort of refinancing happens, money will come into our coffers, which I think is an upside of all this as well.

The bill really is about fairness and choice and about creating fair competition in the market. To be clear, no owner of any property that burned down would be required to sell their property to any of these qualified investment entities, these nonprofits.

Think about Habitat for Humanity, Green Line, whatever the homeowner wants to do, they can still sell their property to an individual. They can still sell their property to a financial buyer. But this just gives them another option and hopefully will stabilize the market and give them more options.

This bill has no registered opposition, supported by the Los Angeles unanimously by the Los Angeles County Board of Supervisors, the NAACP, and local groups like the Altadena Tenants Union. And here with me to testify in support is Elise Borth on behalf of the California Community Foundation. So thank you, Madam Chair and senators.

Thank you. Yeah. If your witnesses can come forward and have two minutes to share with us your thoughts on the bill. Yep. Sit right there at the table. Don't worry about the mic. We will turn it on for you as soon as you are ready to speak.

Thank you. Good morning, chair and members. My name is Elise Borth and I'm here on behalf of the California Community Foundation, which has been strengthened. Sorry. Which has been committed to strengthening the communities of Los Angeles for more than a century. To date, our Wildfire Recovery Fund has distributed more than 30 million to. Hold on.

I'm going to stop you for just a second.

Senator Archuleta, are you having a hard time hearing her?

I'm trying to get the volume up. Or put the microphone a little closer.

Can you hear better? Was that good? Senator, thank you.

Right ahead. Go ahead and start over.

Okay. Good morning, Chair and Members. My name is Elise Borth and I'm here on behalf of the California Community Foundation, which has been committed to strengthening the communities of Los Angeles for more than a century. To date, our Wildfire Recovery Fund has distributed more than 30 million to more than 200 community serving organizations.

At CCF, we are focused on finding long term comprehensive solutions that address the vital issues concerning quality of life in Los Angeles County. We invest in systemic solutions, ones that don't just treat symptoms, but actually change the conditions that hold communities back. AB 797 is one of those solutions.

It offers a thoughtful, market based solution to a complex issue that didn't just arise with the January wildfires, but was exacerbated by them, especially in the Eaton fire area.

This bill empowers mission driven nonprofits to leverage Community Reinvestment act funds to acquire homes at a fair market value and ensure that those properties are redeveloped or resold in ways that benefit the community, not just private equity.

It's a smart and fiscally responsible model that protects homeowners from predatory practices, prevents neighborhood destabilization, keeps wealth circulating locally, and puts the possibility of preserving the character of beloved neighborhoods like Altadena within reach.

As a foundation deeply invested in housing justice, economic mobility and disaster resilience, CCF sees AB797 as a critical tool to help communities recover with dignity and and retain control over their future. Thank you.

Thank you so much for being here and thank you for your comments. Okay, are there others in the room in support of AB797? If so, please come forward to the microphone. Now. Share with us your name, organization and position on the bill.

Chair, Senators, Dean Grafiel with Capital Advocacy here on behalf of the Los Angeles, Los Angeles County Board of Supervisors reiterating the author's statement in support of AB797. Thank you.

Great. Thank you so much. Is there lead opposition to this bill in the room? Seeing none. Is there anyone in the room opposed to the bill? Seeing no one. We will come back to the dais for comments from colleagues. Senators Niello and then Archuleta.

I want to understand, you mentioned it's innovative and, and new. And my concern is that it's not particularly well developed as it's presented here. But the point is to is for a non profit entity like Habitat for Humanity to purchase a property, the resources of which would be provided by securities that would be sold on the marketplace.

By whom? By the I Bank. So it's within the Office of Economic Development, but the I Bank is the one that would sell and administer the program.

So where does the CRA come into this? Qualified investors would be buying the bonds, if you will, then they participate in any downstream profits.

I suppose that's exactly right. And they're not bonds. This is equity capital. So. So bonds are obviously debt capital that would, that would gain interest. These are. These don't have any interest bearing on them. So to be very clear, it's an equity base. So their return is their Return is. On the back end.

So if you think about any equity investment in the stock market or venture capital or private equity, that you are just taking risk in the investment vehicle itself. The. Those have to be nonprofits. No, those, to be honest. Excuse me. To clarify, those are the opposite of nonprofits.

Those are bank of America, Wells Fargo, our credit unions here throughout the state. That through the CRA, the Community Reinvestment Act. To take a step back.

The reason why it was passed in 1977 is because many of these financial institutions were not lending and doing business in communities like Altadena, communities where there were large portions of Members of the community from racially disadvantaged areas and backgrounds. Socioeconomically disadvantaged backgrounds. We're not getting the same deals or the same coverage from these institutions.

Community Reinvestment act gives incentive and really requires these financial institutions to give back to the community. So they would be the ones investing in the security. They are the only ones that can buy the security.

The, the bill would restrict investment by anybody other than financial institutions that are subject to the Community Reinvestment Act.

The only. The only eligible investors in the security are Community Reinvestment Act Dollars. So by definition, if you are not a qualified investor through the CRA, you cannot buy these securities.

Hmm.

That legal? I believe it is, yeah. This is not something that we've invented. So CRA itself is a program that's been stood up by the Federal Government. We are just utilizing the bounds of that.

But is it where you're setting up a completely separate program has nothing to do with the Community Reinvestment Act. It's just only allowing those subject to the Community Reinvestment act to invest in this particular security. Is that legal?

I mean, I would quibble with the way that you just described it. So we are not setting up something completely different. This is literally an investment through the CRA. So we are just utilizing the CRA and specifically saying that CRA funds are going to be directed here to these areas that have been stricken by disaster.

CRA is a federal law. It is. We are the state. We are. And the state has historically utilized CRA funds for a lot of things. Think about opportunity zones, Think about a lot of investment vehicles that states have actually put forth and elevated. The funds are federal.

We are just giving a vehicle and a structure for how they are invested in our communities. So in a way, we are really just helping the Federal Government put forth a more successful CRA program.

And the reason why we want to limit it to CRA investors is Senator Niello looks at this and says, hey, it's a great investment. Some of them are hard beating. We don't want this to become. Although it will help fire victims, that is just not something that we think that the state should get into. Okay.

We have very limited equity and debt capital securitizations in the state. We issue bonds through the I Bank and we do it for a very specific reason. Those can be a little bit broader in terms of who can go into it.

The CRA though, is very specific as to who can actually buy in and purchase CRA backed vehicles.

I still have questions about that, but I'll let them sit there and others can think about that. Because you are excluding potential investors. That's where potentially could be an issue. But the other thing is you're restricting the managing entity to be a nonprofit. And you cited Habitat for Humanity.

And let me stipulate, I think Habitat for Humanity does great work. But if they are going to purchase a property, are they going to be motivated to pay as much for it as they possibly can, or are they going to be motivated to buy it. For.

An amount that is going to be affordable relative to their ultimate mission, which is providing housing to others, not to the person from whom they're purchasing the property. In other words, there's somehow some notion that the motivation of a nonprofit relative to purchasing an asset is inherently more generous than a for profit entity would be.

Is that really true?

Is what really? I can, I can take the question as you teed it up before. You said is that really true? I just don't know what you mean by is that, Is it really true.

That a nonprofit would be more generous in what it would be willing to pay for one of these profits, particularly given that its motivation is to provide an end product for the least amount of money possible under the circumstances, Whereas a for profit would undercut that theoretical value just because it's a for profit.

Whereas both of the motivation of each of them is the same.

Yeah. So I think it's a fair question. I would say it's not a hypothetical. So what we're seeing now is for profits coming in and purchasing property properties in these areas. Hundreds, hundreds of them have been sold. And the data will show that most, if not all these transactions have been well below fair market value, pre disaster.

Okay, so based on your hypothetical question, we have real data to show that for profit entities who are purchasing these, these properties are lowballing.

Do you have real data that shows that not for profit entities would do the opposite?

Well, the real data is in the bill which requires the nonprofits. And this is why it's very important for nonprofits to be the qualified investment entity managing and buying the properties. They have to give an offer on any of these properties based on fair market value.

And fair market value will be pre disaster 12 months before the fires hit. Appraisals county tax assessor data to show what the value of that property was before it was ravaged by the wildfires. So there is no hypotheticals here. The bill will actually create a floor for fair market value.

And the nonprofits who administer this program will ensure that out of all the offers that the homeowners get, this one will be at least the fair market value minus the structure. The structure is no longer there for that land that they would have received prior to the fires. And again, to your point, it's a fair question.

I wish I didn't have to run this bill, but what we've seen over the last six months is for profit entities coming in and saying this is a great investment.

This is a great investment opportunity because I get to buy for 50 cents on the dollar in some of the most, I would say, desirable communities in Southern California. And I know in a couple years I'm going to make a killing on it. And unfortunately my constituents lose on that.

And I would love in a world where this bill wasn't needed, but unfortunately it is.

Senator Niello, are you satisfied?

Just one more question. Did you consider perhaps trying to supervise the market by requiring any transactions to be at fair market value? Well, I think that those.

I will to the genesis of your question. I'm not sure the law would actually require or uphold any sort of bill or idea like that. If I were to legislate something to the effect of you have to buy a property for fair market value, I don't think that survives in the. That's what you're saying. Well, that's.

Well, it's different here because we are using CRA dollars which already have these requirements attached to it. What you proposed is just generally speaking saying in an open market requiring a certain price. That is not. That is not the country we live in. That is not the economic system we live in.

I am merely providing through this program a option that the seller does not need to take of an offer from a nonprofit through CRA funds. That would be a floor, not a ceiling.

Senator Niello. Good. Okay. Senator Archuleta, before we go to you, I'm just going to establish a quorum if that's okay.

[Roll call]

Okay. Senator Archuleta, go right ahead.

Okay. Assembly Member, I'm excited about your bill, but I think the clarity of it is still kind of lingering. I think we can clarify a lot of questions here. Obviously, we're trying to prevent land grabs. We're trying to stabilize the value of the area and obviously in your opening remarks, to stabilize the area.

So it looks like it did some years back and bring that population that sense of pride and community through diversity that Altadena seems to have, which is what California is really excited about, diversity. So walk us through this.

So here you have a homeowner whose property is burnt to the ground and you got scavengers trying to jump in and bake these low balls.

And so because of this bill and the monies that are made available through the program, that seller no longer has to sell to that individual, but he can sell at a fair market value based on an appraisal that is 12 months ago, prior to the fires and so on.

So now that individual sells to the entity, the entity is able to buy it because they have the funding through the program that will be administered by Go Biz here in the state and they will make sure that the transaction is clean, above board and that entity is able to buy it at fair market value.

So now let's take it one step further. The property is now obtained. They will rebuild. That's assuming they build a, a three bedroom, two bath, 1700 square foot house. And now that goes up to the, to the market. So the seller is out of the picture now. He's been compensated.

So now the entity becomes a seller, fair market value again. So is it, are they trying to take it as high as they can or are they trying to limit what it can? Because the buyer could be someone coming back that has decided to come back to the neighborhood. Not this one, the original, but someone else.

Will they be buying it at fair market value as well?

That's a great question. So the first transaction is where the fair market value requirement comes in. And in your, the situation you just laid out, by the way, I should have you presenting the bill. That's exactly right.

And the way you laid it out is 100% accurate in a world in which your house burns down and you have four offers from private entities who are offering you $0.75 on the dollar. $0.65, $0.85. This one offer will offer you, hopefully $0.100 on the dollar. And it's your choice.

You can take one of these or you can take this. Any economic rational person would take this as soon as that purchase happens. Greenland Housing, Habitat for Humanity. A number of different entities that do this for a living and have done it well for decades would develop the property.

They would maintain it for up to 10 years, and then the property would either be refinanced or put back on the market. We are not dictating where the price of that home needs to be sold. By then, economics of the market will have corrected themselves. Okay510 years down the road.

We're not worried about the vultures coming in and preying on victims at that point, because we've stabilized, the victim has gotten through the emergency room, we've gone through surgery, and now they're living a very healthy life. At that point, the market goes back to operating, I think, in a economically rational way.

I'll just say again, continue the walkthrough. So now the property is built.

Is it going to be rented for those 10 years that you mentioned, or is it going to be put on the market so, as I said, someone else can come back in because you're trying to stabilize it and maintain that sense of pride in the community and so on?

And are they going to be able to do the funding through some of these banks in order to purchase? Or what if the seller originally wants to keep it? Are they going to be able to get funding from the program to rebuild themselves?

Yeah, there's a couple questions there to answer the last one first, the original sellers are not in the picture anymore. If they want to come back and purchase the property themselves five or 10 years down the road, they would have to come up with the funding to do that. They've already been monetized. Right.

And so it would be on them to do that just in a regular transaction. This isn't a program to set up a bunch of. A bunch of rental units. In fact, the way that it would work is within 10 years of the transaction, there needs to be some sort of monetization.

So that would be a complete refinancing or it would be a sell. The point of this is to actually get these homes back on the market so that homeownership of these units is realized.

Again, my last question to that is someone who lived in the neighborhood who fits that description, can they come back and buy that horse?

Absolutely. Absolutely not going to get CRA funds to do it. Okay. They're not going to get funding through the program. The only entities who are getting funding through the program are the qualified investment entities, which are the nonprofits to purchase the entity, the homes, the properties in the first instance. Okay. All right, Very good.

Thank you, Senator Grayson.

Thank you very much, Madam Chair. So you just said that after 10 years, the hope is that there's home ownership. What? Or that there's a sale within 10 years.

Let me.

If I said after. Yeah, within 10 years. Within 10 years. Is there a guarantee built in that it does turn in back into homeownership and is not perpetually rental?

Well, I think the guarantee is in who the qualified investment entities, the nonprofits are who would be selected. We've worked in a lot of guardrails to make sure that any qualified investment entity who was obtaining funds and actually administering the program is the habitats for humanity is the green line. They aren't.

These aren't nonprofits that are in the rental business. They build affordable housing for regular, everyday people to buy. So the way in which the program would be administered almost guarantees with the 10 year trigger and the entities who are managing it that these are homes for sale.

Right. So if it almost guarantees that, it would be nice to see it codified in language to solidify, because really that's what it's about.

And I really appreciate the bill and your intents and the guardrails you're putting in, but to make sure that if a home was owned, gone through this catastrophe, that somehow, some way in that period of time, if they choose to go this route, it does turn back into the hands of the homeowner.

Well, that. Back in the home of the homeowner. No, no, no, no. Not back into the hands of original. Yeah, it turns back into home ownership. I have no problem with making that clear. That I appreciate the question, Senator. That is the intent of the bill.

So anything that we can do to clarify that and this will obviously go on to another Committee if it, if it passes out of here and it will go on, make sure the bill. Says what you mean. Yep, got it. Thank you. I appreciate that.

Madam Chair, I gotta jump on what, what Senator just said. So again, now we have, as I said, there's a beautiful three bedroom, completely rebuilt and it's not going to be occupied for rental.

It's on the market to bring people back in to buy and it would be nice if someone who lived there in the area before came in to buy it. So they're not going to get financing through the program. They will get their own financing. It'll be fair market value.

And everyone would get, as you said, the state would get 5%, the entity who created the building of the home. And so we get 5%. And. But it would be at fair market value for anyone who want to come back in.

Correct. Stated. I have a joint author here, a co author. I mean, you're just. Every time you are laying this out. Absolutely correct. That's the whole idea. Because of that, I'll move the bill.

Thank you, Assemblymember. And thank you, Senator Archuleta. First of all, just to clarify the item that you have identified with Senator. Senator Grayson, we can take a look at this bill if it. If it should pass here today.

We'll go to Judiciary next, where you will see Senator Arreen, Senator Niello, myself, Senator Weber, and Senator Umberg again in round two.

So you will want to think about maybe talking to Senator Grayson about what language you would like to have amended or added for clarification purposes in Judiciary, so when he follows up, we can give that update.

Appreciate that, Madam Chair.

Secondarily, I want to say to you that I think this bill is. It is complicated, but it gets to the heart of what I think we're all trying to do. There are several bills in this space this year that are trying very hard to make sure that we deal with predatory practices post emergency situations.

This Committee actually advanced a bill together, all of us, that also addresses predatory practices post fire, and focuses, of course, on the licensing aspect of that and making sure that people who are licensed to help sell homes and protect people are doing so.

And the reason that Senator Archuleta is so good at this, because this is another career he's had in his life and somebody who deeply understands how this process works. So I appreciate what you're doing on behalf of your constituents. It could potentially be a model for other areas of the state or even country. State.

Since it is federal law in how to protect home ownership in a community and the pride of home ownership in a community. We just wanna make sure that that is the stated goal in the bill. I applaud your efforts.

Also, there should be a Big Brother award given over here for the duration of time that he has entertained his little brother. Very impressive. You have a motion? Did your dad do okay, fellas? What do you think? Is it like an up? Should we vote for him or not for him. Year for him. Great.

You clearly owe your oldest son deeply.

Okay, that wasn't very. That wasn't very enthusiastic. I Think he's.

I mean, it was probably better than my kids would have done. Okay, we'll call the roll. Do you want to close?

Madam Chair, thank you for your indulgence. I appreciate the patience with a bill that isn't on on its face. Very straightforward and the questions were excellent. And I just appreciate all the work that you and the Committee staff did. Would respectfully ask for an aye vote and look forward to to conversations after this.

[Roll call]

That's six votes, which is enough. But we will leave it on call for a couple of colleagues who are not here yet. Fellas, you are free to go. Your dad has completed his duties for the Business Professions Economic Development Committee in the State Senate this morning. We have two presenters here.

We'll start with the top of the order with Senator Cervantes and then Assemblywoman Ortega. We will come to you as soon as she is done. Okay. Good morning, Senator.

Good morning, Madam Chair and Committee Members. Thank you for the opportunity to present SJR 7 today. I'll be brief. This resolution presents a clear and urgent choice.

On April 2nd, President Trump invoked the International Emergency Economic Powers Act to declare a national economic emergency and imposed a sweeping 10% tariff on foreign imports with even higher rates on 57 countries. Let's be clear. These tariffs are driving up prices for everyday essentials from bananas, coffee, even toilet paper.

And working families in California are paying the price. The U.S. Chamber of Commerce warned the Trump Administration that many small businesses are seeing their ability to survive endangered by the increase in tariff rates. Our global reputation is also at risk as close allies like Japan and South Coast Korea responded by strengthening financial ties with China.

SJR 7 offers a simple but powerful choice—stand with the people we represent and protect them from rising costs or stand with one man. Let's send a message that these tariffs are harmful, shortsighted, and must end. I respectfully ask for an aye vote on SJR 7.

Senator, do you have any witnesses in support with you today?

Okay, great. Are there folks in the room who would like to speak in support of SJR 7? If so, please come to the mic. How about any opposition? Seeing no one, we'll come back to the dais.

Not today.

Colleagues, I would entertain a motion if there are no comments. So moved by Senator Menjivar. There's a comment from Senator Niello, but you do have a motion, and then we'll give you an opportunity to close.

Let me state, first of all, that I completely agree with the fundamental motion that you're opposed to tariffs. I am opposed to tariffs. I'm committed to free markets. I'm opposed to tariffs, no matter who imposes them.

And I would point out that President Biden continued, I believe all tariffs that were imposed by President Trump in his first Administration. So, this motion is really opposed to President Trump's tariffs, not all tariffs. And that's one concern, because I think tariffs hurt free markets. They hurt the development of undeveloped countries.

And the way tariffs are going now, they may end up even hurting our domestic industries. But there's some inaccuracies here that I have to point out. Pardon me, Madam Chair, for taking the time, but you point out that Project 2025 espoused the tariff policy that President Trump is pursuing.

In there, Peter Navarro wrote part of Project 2025, upholding a tariff regime. Peter Navarro, who Elon Musk famously characterized as being dumber than a sack of rocks and then apologized to the sack of rocks. I won't make any comment on Navarro's intelligence, but when it comes to tariffs, he is not.

And that's why Project '25 had two visions of tariffs. Kent Lassman of the Competitive Enterprise Institute promoted a free trade policy in Project 2025. I feel it's important to point that out because the criticism of Product—Project 2025—is largely an exercise in cherry picking. And in this particular case, it gave both arguments.

So, and I would point out, too, that most people believe that President Trump's declaration of emergency under the authority that he did is not defensible, and I personally feel it will probably be defeated in courts. But also, there is a bipartisan bill in the Senate to rescind the tariffs in 60 days, after that Bill is passed, unless it's authorized by Congress, though, there are other efforts that are going on.

And the last point I'd like to make is this is—I think the premise is affordability, in the language.

And I just have to point out that our cost of living crisis is being worsened by inflation, tariffs, yes, I agree with that, but also by regulatory issues, regulatory issues that increase the cost of housing, cost of gasoline, cost of utility costs.

And I would think that any resolution that's dealing fundamentally with affordability and tariffs roles in that ought to point out other impacts in the State of California significantly on our cost of living.

Okay, great. We have a motion. Senator Archuleta, do you want to say something?

Yes. I would just like to point out that in our County of Los Angeles, where we have Los Angeles Port, Long Beach Ports, the tariffs have affected the economic situation in Los Angeles County, as it will the State of California.

And I think this Bill addresses the fact that there is some implementation of a Bill in the Senate, in the federal side, realizing that maybe we've gone too far, maybe we've got to look at this. So, I wish the Bill said that we'd call a timeout, but there isn't that ability. So, we have to stop it.

And I think rescinding the tariffs, the way they read, and what it's done to our economy and will continue to our economy. Businesses are losing billions of dollars every month across the nation because of it. So, I think the California legislators, we have no choice but to sound the alarm. We've got to do something.

We are the fourth largest economy in the world, and we've got to set the pace. We've got to announce to the world that we will negotiate, we work with, but tariffs is not the answer. So, I'll move the Bill. Oh, we already have the Bill moved. Thank you.

Yes, Senator, we do have a motion.

Thank you for presenting the Bill.

All right. Would you like an opportunity to close, Senator?

Yes. Thank you, Madam Chair, and thank you for my colleagues who participated in discussion today. I just want to be clear that the President's actions speak for themselves. And I know that some may want to deflect blame for what President Trump is doing to the—to our California constituency—but we do agree that affordability is a problem.

And we know that is a topic that we are discussing this legislative session. And I agree with that sentiment. I also believe that SJR7 is an important part of that effort.

We must send a message that while we work on the cost of living in California, we do not need Washington making the life of working families more difficult, which is why I respectfully ask for your aye vote on SJR 7. Thank you.

We have a motion. We will call the roll. Thank you, Senator.

[Roll Call]

You have six votes. That's enough, but we will leave it on call. Thank you, Senator. All right. We are going to hear from Assemblywoman Ortega now. And just to update those of you on the Committee, we have heard two of the bills today, one from Assemblymember Harabedian and one from Senator Cervantes.

We have a significant number of Assemblymember Berman bills, many of which are Committee bills from the other side. After we hear from Assemblywoman Ortega, if Assemblymember Hoover is here, we will take him and then I will present as quickly as I can, as many of the Berman bills as I can.

And we expect him to show up at some point a little bit later, and we will just push through as quickly as we can. All right? All right. That's our update. Assemblywoman, the floor is yours.

Good morning and appreciate the ability to go ahead of Mr. Berman. Assembly Bill 957 is a vital and logical step forward in California's ongoing fight against the devastating impact of tobacco use.

As a state, we've made significant progress by removing smoking rooms from restaurants, increasing age requirements, banning flavor tobacco products, and more. But our work is not finished.

AB9 57 takes a targeted approach by removing tobacco products in licensed pharmacies across California. Pharmacies are not just any other corner store or retailer. They are dedicated to promoting health and wellness.

Pharmacists take an oath to do no harm. Simply put, if we would find it unacceptable to sell cigarettes in a doctor's office, it should be equally unacceptable to sell them in pharmacies.

AB 957 is an evidence based measure to ensure that patients focus on healing rather than being distracted by highly addictive substances that endanger their health. AB957 has no registered opposition and no groups or pharmacies have reached out to express concern at any point.

In fact, the only pharmacies or pharmacists we have heard from are individual pharmacists and the State Board of Pharmacy, all in support. I have two witnesses in support with me at the appropriate time.

Great. Bring your witnesses forward now. They'll each have two minutes.

We have Dr. Lisa Kroon, Professor of Clinical Pharmacy at UCSF, Assistant Chief Pharmacy Officer at UCSF Health, and the Co-Director of UCSF Fontana Tobacco Treatment Center. I also have Dr. Manijeh Pouliot, a field medical director at Pfizer Oncology, and for technical questions, I have Kesa Bruce, the Director of Advocacy for American Lung Association.

The two of you will have two minutes each and then we will ask you if we have some technical questions. Sounds good. When you are ready, ladies.

I'll go first. Good morning, Chair Ashby and committee members. I'm Lisa Kroon, a licensed California pharmacist, UCSF professor, and co-director of our Fontana Tobacco Treatment Center. I'm speaking today in my personal capacity as a pharmacist and clinician.

Pharmacies are an integral part of our healthcare infrastructure where patients go to get well, to get medications, to treat health conditions, and receive health information and preventative services such as vaccinations. In my opinion, there is no place in a setting that promotes health to also sell a tobacco product that unquestionably causes death and disease.

In 2008, San Francisco became the first city to adopt a tobacco-free pharmacy law. Faculty at the UCSF School of Pharmacy played a leadership role in this. We prepared a position statement in favor of this law. Today I'm providing testimony again to support prohibiting the sale of tobacco in pharmacies.

We've surveyed pharmacists, and less than two percent were in favor of selling tobacco in pharmacies. Ninety percent of Americans live within five miles of a pharmacy. We are often touted as the most accessible healthcare provider. Community pharmacists now provide smoking cessation services and can furnish nicotine replacement therapy products such as the nicotine patch and gum.

So pharmacies are an important access point to help people quit smoking. For those concerned about revenue loss, AB 573 aims to raise the license fee, which would result in a net gain of over $9 million. In closing, there was a time when gift shops at hospitals sold cigarettes. Now, one couldn't imagine this. I hope we get to a time where we couldn't imagine that a pharmacy would sell tobacco products. Thank you for your aye vote today and Assemblywoman Ortega.

Thank you. Go right ahead.

Good morning, Madam Chair and committee members. I'm Manijeh Pouliot, a volunteer for American Cancer Society, Cancer Action Network, and a clinical registered California pharmacist. I've served patients over 30 years in hospital research and academic settings. As a healthcare professional, when I took my Hippocratic Oath, 'do no harm,' it included not selling tobacco products, and I'm here today to ask to hold the same standards and accountability for each pharmacy.

On October 29, 2014, the California State Board of Pharmacy approved a policy stating, quote, 'recognizing that pharmacies are healthcare providers and pharmacies are in business of improving customer health.'

Therefore, the board recommends that pharmacy and chain stores that include pharmacies eliminate the sale of tobacco, e-cigarettes, and tobacco products as these products are known to cause cancer, heart disease, lung disease, and other health problems. Also, I want to emphasize that California as a state actually has a strong experience with tobacco-free pharmacy policies.

Across the state, from San Diego County to Del Norte County, 65 local policies have already passed and enforced to eliminate tobacco sales in pharmacies. These local actions demonstrate widespread support for such measures across diverse communities in California.

Also, I need to bring up Massachusetts in 2018, New York in 2020 have successfully eliminated tobacco sales in all pharmacy practice locations statewide. So these examples show that extending this span statewide is feasible and practical.

All right, well thank you for your comments. It actually seems like a good spot to stop you. Good? All right. Are there other people in the room in support of AB 957? If so, please come forward. Share your name, organization, position on the bill.

Thank you. Judith Gutierrez, on behalf of the American Heart Association. We are proud co-sponsors and we urge your support.

Thank you.

Farrah McDaid Ting, on behalf of the County Health Executives Association of California, in support.

Good morning. Elizabeth Espinosa, here today on behalf of the Board of Supervisors in the County of Santa Clara, also in support. Thank you.

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

Kevin Guzman with the California Medical Association, in support.

Vanessa Cajina for the California Academy of Family Physicians, here in support.

Elisa Tong, internal medicine physician in Sacramento, in strong support.

Dr. Celine Chandler, a licensed California pharmacist, in strong support.

Chakoma Haidari, American Cancer Society, Cancer Action Network, in support.

Anyone else in support of AB 957 in the room? Seeing no one, is there lead opposition in the room? Is there anyone in the room who's opposed who would like to just state so on the record? Okay, seeing no one, we will come back to the dais. Yes. Senator Dr. Weber Pierson. And we have a couple other comments.

Thank you, chair. Really want to thank the author for this bill. It is definitely an extremely important bill and would love to be a co-author if possible and would move the bill at the appropriate time.

Great. Thank you. You have a motion then. We were going to hear from--hold on, Senator Choi. We have Senator Niello, Senator Archuleta, and then we'll come back to you.

Just a quick question. What pharmacies are still selling cigarettes? Just about all of them voluntarily don't sell cigarettes.

Yes, there's about a thousand, a little over a thousand pharmacies that still sell cigarettes. These are the big chains, and there's about five, small independent pharmacies that still sell cigarettes.

The big chains?

Yes. So CVS, like Costco, things, some of the bigger--

CVS has already taken the position of removing tobacco.

Yeah, well, there are grocery stores that have pharmacies within them. Would this ban cigarettes from grocery stores also?

Yes.

And I believe the vast majority--from the information I know and from what I see when I go into pharmacies--they're not selling cigarettes anymore, and if there are some that are, they will shortly not be doing as CVS has indicated, and I think it's a bit much to ban it in grocery stores also, just because they happen to have a pharmacy there, unless cigarettes are going to be outlawed, which is another issue, of course. So those are the concerns that I have.

Okay, thank you. Senator Archuleta and then Senator Choi.

Yeah, and so, for the record, the CVS is considered a pharmacy and Rite Aid is a pharmacy, that they no longer sell cigarettes?

That's correct.

Because when I go in, I never see them. I don't--

Yes, that is correct.

But the small corner pharmacy, they would be on this list not to be selling?

Yes.

But as has been stated, the market wouldn't be able to sell them either?

No, no. The market could--they--you could go into a liquor store, you can go into a grocery--but if they're licensed to have a pharmacy in their store, they would no longer be able to sell cigarettes.

So then people won't have to worry about lung cancer and things like that? Never. I'm just teasing. So, that's for you, doc. Anyway.

Okay, Senator Archuleta. Let's--Senator Strickland, did you have a comment you wanted to make, too? Okay. Seeing nothing else from my colleagues, I have--oh, I'm sorry. Senator Choi. Yes. Go ahead.

Yeah. Since I will be opposing to this bill, let me just state my position. My ears are plugged up from flying and not popping yet. I cannot hear what I'm saying. Anyway, I'm not a smoker and I don't condone anyone to smoke. I know it's harmful to the most general health issues.

And also, when I was mayor, I'm the one who enacted an ordinance not to allow any smoking in the entire City of Irvine open space, including parks, because I had a group of interns who did a study on the secondary impact of--the secondary smoking impact--upon the health. It was found to be also very significantly negative, so therefore, we all know that cigarette tobacco products are harmful to our health.

However, that is individual choice, and then also businesses to carry, whether to sell or not, just like CVS has chosen not to carry, that, we should be leading what the democracy--the characteristics of democracy is open market.

Government would not dictate what to do for the open market. Open society democracy, the virtue that we value is to have a free, open market, and we all have released all the study reports and still people choose to smoke. That's up to individual, but artificially endangering the principles of democracy, open free market, I think that is really dangerous, so for that reason, I'll be opposing to this bill.

Thank you, Senator Choi. Senator Menjivar.

Madam Chair, I wasn't going to speak, but we're fighting--we're talking about an individual's choice and I wish those same remarks that we talked about a woman's choice to choose when they're making their own personal decision on their body autonomy, and we're fighting, or my colleague on the other side is fighting for a free market for an individual to choose to smoke a cigarette, but then, again, will come out and vote against a woman's right to choose and I just had to squeeze in that comment of the hypocrisy here.

Senator Arreguin and then Senator Strickland.

Well, I want to thank the author for this bill. You know, pharmacies are here, you know, to dispense medications and to improve public health and wellness, and it's not appropriate that if there are any pharmacies in California still selling tobacco products that they're doing so. It goes against the whole principle.

And I think that this is important to protect the health of kids and the health of Californians, and the role of government is to put in place laws and regulations to protect the health and welfare of all Californians, and we just don't have a system where we completely deregulate everything.

We have to have rules in place that are evidence-based and that are focused on trying to protect public health. That's why decades ago, California banned smoking in public places. That's why cities have banned smoking in public places as well. That's why there have been restrictions on the sale of tobacco products and flavored tobacco products, because at the end of the day, this is about protecting the health of kids and protecting the health of families in Californians, and so I will be supporting the bill today.

Thank you, Senator Arreguin. Senator Strickland.

I just couldn't let the comments go from my colleague from Van Nuys without being a response, and I don't want to get into a debate regarding another issue, but to say that this issue about freedom with cigarettes is the same as a woman's right to choose is, I think, offensive.

You know, the debate, wherever you fall in the debate, it's a debate about where life begins at conception, and a lot of us do believe that we are fighting for the voice of the unborn child, and I don't want to get into debate here, but to compare the two, I think, is, is offensive. So with that, I will be voting with my Vice Chair Choi on this issue because I do believe in the freedom.

Okay. Yep. Go ahead, Senator Archuleta.

Yes, one last thing. I'd just like to comment, the California Pharmacists Association feels that this is a good bill and obviously we, majority, feel the same way.

Okay. Yep. Senator Dr. Weber Pierson, go ahead.

Thank you, chair. Was not going to respond or--you know, there is a difference between this and a woman's right to choose because when a woman is choosing about her body, it impacts her and herself.

When someone is smoking, as multiple studies have shown, it doesn't just impact the health and the well-being of that individual, it impacts the health and the well-being of those who happen to be around them, walking around them, living with them.

We've all heard of the consequences of secondhand smoke, thirdhand smoke, and as a OB/GYN who understands when life begins and when heartbeats begin and when something is actually--we consider it vital and be able to live outside of the mother's womb, these are two completely separate issues, and so, support the bill, again, would love to be a co-author, and have moved it. Thank you.

Okay, I have a couple of comments although moment may have passed us. Okay, but let's just, let's try to bring this back to whether or not we're going to have cigarettes in pharmacies or not. I'm sure we can all agree that pregnant women should not smoke. We'll agree to at least that concept.

That's the only way I can bring us all together here on that one. Assemblywoman, I think what you are trying to do here is incredibly important. I'm not sure why anyone smokes in the year 2025. We know exactly where it leads.

I'm sorry if there are people in the room who do smoke. You, you know what you're choosing and the people around you are choosing it, too. Nobody wants to be in the hotel room after somebody smoked in the hotel room. Nobody wants to sit in the same space as somebody who's smoking because, as the good doctor from San Diego has already indicated, none of us want to breathe your secondhand smoke.

We know that that is a significant problem. My only concern with this bill is very narrowly focused on what Business, Professions and Economic Development Committee does. This is not the Health Committee.

The Health Committee folks can talk all day about the health of individuals, and as you can hear, some of that has even been talked about here, but what this committee talks about is economic development and licensing and how we ensure that resources remain available in communities across California. And this is very clear.

This is not, like, up for debate. This bill will impact pharmacies and access to pharmacies across California. So the decision we are making today is really a value statement around whether or not access to cigarettes plays into how we value pharmacies in rural communities. This is, again, not up for debate because this is a fact.

There have been studies done. It's in the report from this committee, talks about the number of pharmacies that declined in 41 states after some research studies around this exact topic. So I just want to be clear. The vast majority of the pharmacies that closed were in disadvantaged neighborhoods that serve disadvantaged communities. That absolutely will happen here and it's not a maybe. It is a fact.

And so from an economic development standpoint, I think this is a tough one because it is my job to look at the economic development components to this and to say, 'I want to make sure that people in rural California and in disadvantaged communities across California still have access to pharmaceutical care,' and I can tell you, as the person who's been dealing with many other pharmaceutical issues for the last couple of years, I can tell you that is not a sure thing. It really is not.

It is very difficult for pharmacies to operate in our whole country right now, but--under the pressures of Medi-Cal and all of these other things, those things are getting more and more difficult. So layering on another pressure of removing an item that they sell to stay afloat will have an impact. It will.

Now, obviously, keeping people from smoking or preventing them from smoking is good for their health, but if they also don't have a pharmacy in their community, that's a bit of an issue. You're also asking grocery stores to choose. We all in this room know exactly how they will choose. They will pencil out which one is of more value: tobacco products or the pharmacy.

And I guess we all just pray that the pharmacy is of more value than the tobacco products in each of those grocery stores because if they're not, you'll lose the pharmacy and they'll keep the tobacco products because this does not make them choose the pharmacy; it makes them get rid of the tobacco if they choose the pharmacy.

So I'm struggling with that component of this bill. I did not ask, I did not issue a particular way to vote. I leave it to my colleagues. I think you probably do have the votes. I just would urge folks to think about it and the author to think about it as it moves through the process.

If there might be some things you want to do, the licensing fee will not offset in total the decline in access to pharmaceutical medicine and the other things that people get at the pharmacies, the care that people do get that's just so important. I would just ask you to think about that.

From here, you do go to Rev and Tax and then, you know, Appropriations. There might be some opportunity for you to review with your sponsors how you might move forward this really important goal, reduction of tobacco products in our stream of commerce in California, but also ensuring that people have access to pharmacies in every corner of California.

I just think we need to be careful about how we thread that needle. So I will be laying off of your bill today. That said, you have a motion, lots of support. Would you like an opportunity to close?

Yes, I would, and thank you for your comments. Definitely we'll continue to think about how to protect our small businesses. That has never been a goal of mine. My goal is to save lives and to respect the requests and the needs of the pharmacists who are, you know, took an oath, and find it very difficult to keep to that oath when they're having to sell tobacco products in the same space where they're trying to save lives.

In closing, I just want to make it very clear that I am not with this legislation. We are not banning the sale of tobacco. We are just simply, you know, banning a specific type of sale in stores that have pharmacies. Every other store, like liquor store, corner stores, grocery stores, all of those can continue to sell tobacco as long as they don't have a pharmacy. With that, I respectfully ask for an aye vote.

All right. Thank you, Assembly Member. We will call the roll.

Motion is do pass to Senate Revenue and Taxation Committee. [Roll Call].

Five votes. We will leave it on call. We have a few Members missing. And thank you very much for presenting today, and thank you for your witnesses. Appreciate it. And everyone in the room who came to speak on that important Bill.

All right. I thought I saw Assemblymember Hoover. Oh, yeah, there you are. Assemblymember Hoover, we will hear from you now. And then, colleagues, we will see if we can knock out some of these Assemblymember Berman bills before he gets here. When you're ready, sir.

All right. Thank you, Madam Chair. Members, just want to start by thanking Committee staff for your collaboration. And we are accepting the technical Committee amendments proposed today.

AB 1341 simply adds clarity to the contractor's state license law to specify that violations of the building laws of the state, including the unlicensed practice of architecture, landscape architecture, engineering, land surveying, and geology or geophysics, are clarified in the law to protect against unlicensed practice.

We did receive some late opposition, and we are very committed to continuing to work with the opponents of the Bill on some clarifying amendments moving forward. We do think that there is a pathway there.

And with that, I would like to turn it over to my witnesses to give some testimony. And we also have some expert witnesses here to answer questions, if there are any.

All right. Thank you. Assemblymember. Do you want to come forward to the table? Mr. Belote? Come on forward. And your lead witness. Is there a second lead witness in support here? If so, come on forward to the table. Mr. Belote, we'll give you two minutes.

Thank you, Madam Chair. Mike Belote...

I'm sorry. Come on forward to the table. Have a seat there next to Mr. Belote. And then when he's done, you may speak. Go ahead.

Thank you, Madam Chair and Members. Mike Belote, speaking on behalf of the California Land Surveyors Association. This makes a small, incremental, but important improvement in the law regarding unlicensed practice, something that we have been talking about for some years in this Committee and simply clarifies.

I'd like to talk about what the Bill does and what it doesn't do. What the Bill clarifies is that the existing law which prohibits contractors from violating the building laws of this state, includes the unlicensed practice of architecture, land surveying, engineering, and landscape architecture. That's all the Bill does.

It thereby conforms to the view of both the Contractor State Licensing Board and the Board of Professional Engineers, Engineering and land Surveying both, both of whom support the Bill. So therefore, it simply clarifies that if a contractor is doing unlicensed practice in those disciplines, they're in violation of their own license.

Here's what the Bill doesn't do. It doesn't go after and attack contractors or laborers in any way. It doesn't change scopes of practice. If you're not violating the practice acts now, you won't be violating them tomorrow.

The opposition has talked about prohibiting the use of tools. The Bill doesn't do that. We do not regulate the use of tools, whether it's ground penetrating radar or drones or anything else. It's how you use the tool that establishes a licensing violation.

The opposition has said, well, it's not reciprocal. There is no provision in the Bill that says the practice of contracting by a land surveyor is a violation of their license.

And we are happy to make that change. It should be reciprocal. We are not interested in committing the unlicensed practice of contracting. So the Bill is narrow, targeted. It conforms with what the law has already said with respect to pest control operators.

Thank you.

And we would ask therefore for an aye vote. Thank you.

Thank you. You have two minutes as well.

Hi. Thank you. My name is Jim Dickey. I'm a licensed land surveyor in the State of California as well as five other states around the western United States. This. I'm very much in support of this new provision because it's going to help ensure that the contractors are aware with what the laws are currently in place.

There's a lot of unlicensed practice that goes on in the State of California in regards to surveying in particular. And that unlicensed practice just gets and grows more and more over the years.

I think that being able to let the contractors be more aware of what the laws are currently will help ensure that there is compliance in the future.

Okay. Is that your final thought?

That is my final thought.

All right, thank you very much. Are there others in the room in support of AB 1341? If so, please come to the mic. You could tell us your name, organization and position on the Bill in support of AB 1341.

Good morning. Rebecca May, on behalf of the Contractor State License Board in support. Thank you.

Morning. Tyler Munzing, on behalf of the American Council of Engineering Companies, cosponsor in support. Thank you.

Good morning. Richard Moore, Executive Officer for Board of Professional Engineers, Land Surveyors, and Geologists in support. Thank you.

All right, thank you. Do we have lead opposition to AB 1341 in the room? If so, come on forward and we'll ask these two to take seats in the audience. Thank you. You will each also have two minutes when you are ready.

Perfect. Good afternoon, Madam Chair and Members, thank you. My name is James Thuerwachter, and I'm with the California State Council of Laborers.

First of all, I want to say thank you to Committee staff, to the author staff, and also to the sponsors of this Bill. We've had a lot of good, positive dialogue that addresses our concerns. So thank you for that. We look forward to continuing the conversation. Unfortunately, today we do come at a respectful opposition position.

Just a little bit about the laborers. We are comprised of about 80,000 men and women throughout the state who build California's infrastructure. We give opportunities to people of color, women and formerly incarcerated individuals to work in these spaces.

First of all, I just want to say that every project that requires you to dig just one inch of dirt throughout the State of California requires a call to 811.

The workers who are deployed to mark those sites often utilize the tools and technologies that AB 1341 implicates, whether that's intentional or not. We think that the, excuse me, as drafted, AB 1341 unnecessarily expands the authority of the CSLB and could inadvertently create confusion as to the scope of work that it seeks to regulate.

The unlicensed practice of land surveying and geophysics is already prohibited by the relevant licensing boards and through the Business and perfectionist code, section 7110. So we see this Bill as a solution looking for a problem at this time.

Further, the work that the laborers do has long been recognized by the DIR with respect to prevailing wage rates.

And we often implement the tools and the technologies in our subsurface imaging techniques that could unintentionally confuse auditors or other interested parties. Some of these techniques include ground penetrating radar potholing and the use of GPS in videography.

We have a deep concern that this Bill will not only not allow licensed contractors who currently use these technologies to perform subsurface work, but they will also risk them losing their license. So for that, we respectfully oppose today. Thank you.

Thank you very much. Welcome.

Thank you. Madam Chair, Members of the Committee, Eddie Bernacchi, on behalf of United Contractors. We also want to thank the author, his staff, the stakeholders, your staff, for the engagement they have done with us on trying to address our concerns.

Our concerns are really twofold. One is the regulatory redundancy that this Bill could create. There's a little confusion on who would be the lead agency if a contractor was deemed to be in violation by one of these other boards, violating their practice, scope of practice.

And then the board, the license board, was to take action if the contractor would be stuck in some sort of situation of double jeopardy. And so we were looking to address that issue with the Assemblymember.

The second is and I believe the sponsor said they're willing to address this issue was the reciprocity issue that the Bill is one is a one way street. If you violate the licensing practices of the boards listed within the Bill.

Currently the Contractor State License Board has to take action against their licensee. But nothing in the Bill states that if a licensee of those boards violate the contractor state license board's rules and regulations that their board has to take action against their licensee.

And we run into those issues quite often when you're talking about construction management and some other things that our industry finds that to be folks operating outside of practice. So we're looking to address that issue.

But until those issues are addressed, we are here to say that we are in opposition and we would urge your no vote and happy to answer any questions. Thank you.

All right. Thank you for your testimony. Are there others in the room in opposition to AB 1341? If so, please, please come forward.

Madam Chair and Members. Scott Govenar, behalf of the largest union signatory building contractors in the state and the Construction Employers Association here in opposition. Thank you.

All right. Thank you. Anyone else opposed? All right. Then we will come back to the dice. Are there comments from colleagues? Yes. Senator Menjavar.

Assemblymember, I see. I want to know if you had some time to respond some to the opposition. I know your supporters mentioned some of this, but does your Bill have a distinction between penetrating radar for survey work and underground utility making?

So if I could and there are some technical aspects to this. So would love to have my technical experts.

Can we have one of each of you come back up?

Come back up so that we can have them answer this as well. But it's my understanding and I think both the supporters and the opposition in this case have sort of already stated that, you know, this Bill really tries to better enforce existing law. We are not looking to change existing law or expand any prohibited actions.

And so I think that's something that, you know, as I've said, I'm very committed to in the next Committee and granted I will also say that normally would have loved to have these things worked out far before they ever get to your desk. So I do apologize for that.

It was late opposition. I recognize. Right.

It was late. But I also, you know, I do remain committed to taking some further amendments, but would love to let my technical witness answer your question a little more specifically.

Sure. Go ahead and answer her question.

Thank you. Rick Moore, again, from the- Executive Officer from Board of Engineers, Lands Surveyors, and Geologists. It's my understanding - I'm not a licensed geophysicist - my understanding though that GPR is a tool used to identify voids or changes within the Earth's surface primarily, but with any kind of mass like that, it's not land surveying.

They're totally two different topics. Sometimes you'll hear and you'll hear terms referred to as geophysical surveys. That is not a land survey. That's totally different. That's a survey using a GPR type equipment or some other methodology similar to that, if that answers your question.

Okay, so I know there are entities that have been doing this for over 20 years without a specific license. And I'm hearing that this Bill could inadvertently now pull that work that they've been doing.

And I'm hearing that if they've been doing this for X amount of years, it's current law and so forth, it's going to pull them into now obtaining a different kind of license and that GPR is going to be the action that pulls them into your Bill.

The way the Bill is written currently, it does not change the scope of any practice whatsoever. So if anyone is utilizing GPR now, it depends on the activities they're doing with that GPR. If they're practicing what a licensed geophysicist should do in California, then they could be, they would need to be licensed as geophysicists.

But if they're using it in a manner that is not considered to practice the geophysics, that would not change. It doesn't change now. It doesn't change with this Bill.

Through the Chair, can I have the opposition respond to that?

And by no means do I represent myself as the technical expert as much as Mr. Moore here. But I think the concern from the industry, from both labor and management is that there are emerging technologies. I think we see this across the board in different trades in different industries.

As those come forward, there could be a violation deemed of a contractor for using those technologies in the course of their business because that technology is also used in the course of one of the license practices that are being placed into this Bill. And so that is where our concern comes from.

I think there have been discussions around trying to bright line what that could look like to carve out and make sure there wasn't any issues moving forward. But that's what we're struggling with.

So it sounds like if I understand there's a certain tool in this case for this that is used or other tools that are used under a license, but it can also be used under other actions. Assemblymember. Is that something that you're looking to address?

Yeah. So that is my understanding and I've spoken with the sponsors of the Bill and we are happily open to address the actual tool issue specifically, you know, to the tools in the language. Unfortunately, we didn't have time before this hearing.

But I do think that there is some language we'll be able to come up with where we can clarify that, make that extremely clear. I think in terms of the emerging technologies that may require future legislation. Right. As things start to evolve and change.

But I think for the purpose of today's code and today's law, we're happy to make that more obvious and that bright line more, I'm sure.

Sure.

Chair, I have another question.

Can you also talk to me or maybe you'd like to turn to your witness here regarding the fairness in terms of other entities being able to also have their license there be a violation and so forth, or are we focusing just on a certain entity.

For example, other jobs like land surveyors, geologists, architects, engineers. Are they also going to be pulled under this Bill or is it only certain professions?

I'm going to defer to my witness on that one.

Again, Mike Belote, on behalf of the Land Surveyors Association. The Bill only affects the contractor's licensing law, but we are happy to make it reciprocal. We have zero interest in practicing contracting without a license.

So we will draft language that says, oh, by the way, if a land surveyor, architect or geophysicist or engineer is doing contracting, that is a violation of their license as well. That's perfectly fair.

Okay. So Member, I know this is your Bill, assuming you're also making that commitment as well.

Absolutely. Yeah. Definitely committed. And again, you know, I do think, I think was already mentioned we have had some productive conversations already. We got everyone together immediately after, you know, we saw this letter to try to start resolving those. And so those are ongoing.

Okay. Thank you so much Assemblymember.

So just a couple comments on this one. I know all the folks involved in this one really well and got some really interesting calls on this one. Normally these folks are all together, so this was kind of a weird one. And as you can tell, they're even a little uncomfortable opposing each other.

So I think you've all kind of...they're going to work this out. I figured we would just let them get to the next Committee. The author has some changes. If they aren't made clear at that time, I'm sure we will all hear about it, but they just didn't.

I don't think they saw this one fast enough to respond in time for us to fix it - go ahead - in this Committee.

Thank you, Madam Chair, and I appreciate the conversation. Joe Cruz with the California State Council of Laborers. I think we're confident at this point that we can work with the Assemblymember on coming up with a set of amendments that address our concerns.

And I'll just use it as an example in our directional drilling agreements, which is below board directional drilling to put in pipelines, electric infrastructure. We use GPR in real time as we do that work.

And how we read the Bill is that if that would upset that ability and have to hire a survey licensed person to come out and do it, it would disrupt the everyday work that we do.

If that's not the case, we can get a distinction in that bright line in a Bill that makes it clear that that would not be the case. So we appreciate the opportunity.

I appreciate you too. And the conversations were very easy on each side. So I'm going to give you the final word here, Assemblymember, and then I'll see if we have a motion for you. I know you intend to continue working on it. I know you want to...

No, appreciate it. Well, I introduced this Bill hoping it was going to be a very simple Bill. So I apologize for the some of the concerns. But really at the end of the day, our goal is to protect consumers and also just ensure fairness among these professions and ensure adequate enforcement of unlicensed practice.

Very committed to continuing to work on that. Would respectfully ask for an aye vote.

I will move my Assemblyman's Bill.

Feels like a little bit of favoritism, but okay. All right.

Your Senator, Senator Niello has moved your Bill and again, you know, my comment here is I know there's still some work to be done, but these are all folks who work together every day and normally we would see them all on the same side of a Bill.

So I have every confidence they will work it out before we any of us hear from this particular Bill again. So let's call the roll.

[ROLL CALL]

Nine votes. Assemblymember, that's more than enough, but we will leave it open because we are still...

Thank you. Best of luck. We will look forward to seeing the amended version of that Bill in the future. All right, the main event. Assemblymember Berman and his 10,000 bills in front of us today.

Thank you so much.

Sir, we will go as quickly as possible.

Welcome. You can thank..

Thank you.

Assemblymember Harabedian for giving you a very good opening to allow you time to get bills.

I was getting real time updates. All right, very good. As I was making my way over here.

Where do you want to start there?

Assemblymember, should we just do file order? Sure. 519 works for you.

Then we'll start with AB519, the pet broker sales Bill.

Thank you, Madam Chair and Senators. I'd like to start by accepting the amendments outlined in the analysis and thank your committee staff for their hard work on this Bill. I'm presenting AB519, part of the Stop the Puppy Mill Pipeline Bill package I am authoring alongside Assemblymember Bennett and Senator Umberg.

When Californians buy a puppy from a local breeder, they never assume that their puppy came from a cruel, out-of-state breeding operation. But this is the reality for far too many pet owners, who are deceived by dishonest brokers pretending to be legitimate breeders or even rescues, to serve as middlemen for out-of-state breeder mills.

In 2018, California banned selling dogs, cats and rabbits in retail stores. We affirmed this in 2022 when we banned online storefronts from offering predatory puppy loans to owners.

As Chair of the Assembly BMP Committee, I've seen the good work our state has done to further improve outcomes for animals and ensure retail channels are not sourcing pets from cruel breeder mills. I didn't realize my talking points are so long—let's just try to kind of skip to the end here.

This Bill will crack down on these businesses and individuals who claim to source from small home breeders, while actually importing puppies bred in puppy mills in states with lax animal welfare laws.

Specifically, the Bill defines brokers as any business that sells, offers, or otherwise transfers for profit a dog, cat, or rabbit, and prohibits them from making sales in California. I want to briefly touch on points raised recently by opposition.

This Bill does not prevent consumers from buying their pet of choice directly from the thousands of responsible breeders across California.

The Bill has—we've made necessary exceptions for service animals, police dogs, the animal welfare nonprofits—and in response to late opposition from the sportsman community, today's amendments further clarify ways that hunters, ranchers, and other professionals can still get the trained dogs that they need. Respectfully ask for your aye vote.

I skipped some. So if you have questions, I might answer them then.

Okay. We appreciate you, anything you can do to help us move our agenda along. We very much appreciate to your two witnesses here.

Go ahead and help us get started.

Thank you, Chair Ashby. Good morning, members of the Committee. AB519—Brittany Benesi on behalf of the ASPCA. AB519 is a critical step in California's ongoing efforts to shut down the puppy mill pipeline and protect both animals and consumers from deceptive and harmful practices.

Third-party sellers or brokers are acting as middlemen for large-scale commercial breeding operations, where animals often endure inhumane conditions—including overbreeding, lack of veterinary care, and poor living environments—that result in severe health and behavioral issues.

Those who would be regulated by this Bill suggest that we are cutting out highly regulated USDA-licensed brokers and the breeders that they sell for. Last year, the USDA licensed hundreds of commercial dog dealers who had recorded histories of violating the Animal Welfare Act.

Forty-five percent of licensed dealers did not even have a compliance inspection last year, and of those that did, one in five had violations. Reports detailed instances of dogs who could not walk, who were living in waste, dogs with painful wounds, and those suffering from contagious and deadly diseases.

Overall, the reports detailed over 4,000 violations, including 800 failures to meet even minimal care standards for these animals by licensed commercial dog dealers. Yet only two dealers who violated the law lost their USDA license. Most notably, not a single dog was removed from one of these facilities.

These are not—these are the enforcement standards the opposition provides as rigorous welfare benchmarks. And unfortunately, that is just not the case.

AB519 provides an answer to this importation of cruelty. What this Bill does not do is impact Californians—including hunters or other sportsmen's—ability to obtain pets or working dogs from responsible breeders, shelters, or breed-specific rescues. In fact, California has 1,678 Breeders of Merit, according to the AKC. What we don’t have is a USDA-licensed breeder.

Okay, thank you very much for your comments. We appreciate that. Go right ahead.

Thank you so much. Juliana Tetlow here on behalf of San Diego Humane Society, the contracted animal control and community care agency for 13 municipalities in San Diego County, serving nearly 3 million residents.

From the sheltering perspective, we see the heartbreaking results of unregulated sales of animals by third-party brokers—puppies and kittens bred in cruel mass-production facilities—arriving in California through online channels that bypass existing retail sales laws. These animals often come to us, the shelters, with severe medical conditions, behavioral issues, or both.

Many are surrendered when their new families cannot manage their needs, leaving the shelters to pick up the pieces. But it's not just shelters that bear the cost—animal control agencies, who already stretched too thin, are expected to respond to complaints, conduct investigations, and try to enforce laws on entities operating in the shadows.

Our shelters are already overwhelmed. In San Diego, we are seeing longer stays, more complex medical cases, and fewer adoptions. AB 519 is a common-sense solution that closes a loophole that is actively harming animals and contributing to shelter overpopulation. More importantly, it still preserves access to responsible breeders and rescues.

To be clear, this Bill does not prohibit direct purchase from breeders. It will prevent mass purchases from out-of-state puppy mills for resale to California buyers under false pretenses. This is about protecting animals and giving shelters a fighting chance to continue serving our communities. And we urge your support.

All right, thank you very much. Others in support of AB519, please come forward.

Madam Chair and Members. Jennifer Fearing. I'm proud to represent San Diego Humane Society and support. I have 30 animal shelters located all throughout the state. In the interest of time, I will not read all of them—although they asked us to—but I will just name a few.

Haven Humane, Placer SPCA, City of Sacramento Animal Care, SPCA La Rancho, Coastal Humane, and the Sacramento SPCA, but all animal shelters operating in each of your districts. Thank you.

All right, thank you very much.

Hi, I'm Sue Ibek, private citizen living in Fair Oaks. And I support 519. Thank you.

Thank you.

Good morning. Bob Guterres with the San Francisco SBCA in support. Thank you.

Clifton Wilson. On behalf of the California Animal Welfare Association, also known as Cal Animals. And very strong support. Thank you.

All right, thank you to those witnesses. Anyone else in support of AB519 in the room? Seeing no one, we'll go to lead opposition. Do we have lead opposition in the room? If so, please come forward. Ladies, we’ll ask you to step back into the audience, but we may need you to come forward later for technical questions.

Come on forward to the table. Two of you will be afforded two minutes to speak. If someone else is here for technical questions, you can also hang out, and we will see if colleagues have questions for you. When you are ready, please introduce yourself and your organization and begin.

Hello, my name is Claire Komorowski. I'm the CEO of Puppy Spot, and I'm here to respectfully oppose, unless amended, AB519 targeting pet brokers and breeders. The author recently shared with us that this Bill is intended to eliminate the reselling of animals to close a loophole associated with the 2018 pet store bans.

While we support those bans and hear the author loud and clear, we do not believe this Bill will accomplish its intent. The broker definition is too broad and would impact good businesses that have nothing to do with the reselling of animals—like ourselves and breeders. We are not resellers. We never purchase puppies.

We do not take ownership, nor do we hold inventory. Yet we are unjustly captured in this Bill. Puppy Spot has been in business for over 20 years. We are puppy lovers, focused on matching great families with great breeders, raising animal welfare standards along the way.

We screen every breeder thoroughly—through an initial screening, annual screening, and ensuring continuous compliance. Our standards are met and far exceed those of the USDA. Our proprietary breeder standards are developed by a scientific advisory board of veterinarians and animal welfare experts.

Here with me is Dr. Rhonda Haven, former CEO of the American Veterinary Medical Association, who sits on the board and is available for questions, too. On the customer side, we screen to ensure the home is a great fit for the puppy and provide customers protections on their purchase.

Over 460 California-based Puppy Spot customers shared their personal stories with you, illustrating the positive impact of a well-placed puppy on a family. These customers have a voice, even when we’re not clearly represented in the Committee’s analysis.

We have been attempting to reach a resolution for some time now—submitting multiple proposed amendments, yet receiving no substantive feedback from the author’s office. Our ask is to push the vote out a week and amend the definition of a broker to properly target animal resellers. Before closing, I’d like to read a quote from a Los Angeles..

You have five seconds.

“Oh, great. Okay. The platform connected me with a reputable breeder, provided thorough health records, ensured all veterinary checks were completed, and offered ongoing support. Through the process, our puppy arrived happy, healthy, and well-adjusted—clearly having been raised with care. Our puppy has brought immense joy to our life.

While I appreciate the Legislature’s intent to stop inhumane breeding practices, AB519 goes too far by targeting reputable and regulable sources.

Thank you for your comments. All right, go right ahead. Yep, two minutes.

Is my mic on?

It will be as soon as you start speaking.

Okay. Madam Chair, Members of the Committee, my name is Bill Gaines, speaking today on behalf of the California Helmsman for Conservation, Ducks Unlimited, and the California Rifle and Pistol Association. We must oppose this Bill unless amended. We apologize for our aid opposition, and we do appreciate the amendments the author has agreed to place in the Bill.

However, we still have concerns regarding the impact the Bill would have on those who are trying to acquire a quality dog for hunting or field trialing.

Even with the amendments exempting brokers who arrange for the sale of dogs that are one year or older, AB519 would severely impact the ability of individuals in California to locate and purchase specialty breeds of dogs used for hunting or field trialing.

Most often, these dogs are purchased as young pups—typically eight weeks of age or slightly older—as the buyer wants to get their dog to their trainer long before they are one year old.

The dogs used in conjunction with these activities are highly valued and the result of careful selection and breeding over many generations, with the cost of an eight-week-old untrained puppy typically being well over $1,000. Because of their value, these dogs simply do not end up in shelters.

Individuals in California looking for a quality hunting or field trial dog often conduct a nationwide search for a dog that meets specific criteria—such as the right sporting breed, pedigree, color, and timing of the litter, etc. Buyers simply cannot have a good handle on all breeders nationwide.

They need help from professionals who understand the nationwide industry. These professionals are not the bad actors who facilitate or assist puppy mills. When it comes to sporting dogs, it is quality—not quantity. Furthermore, nonprofit conservation organizations often sell young, high-quality sporting pups at their events and fundraisers.

In doing so, these entities can raise thousands of dollars to promote their conservation mission. Even as amended, this Bill would prohibit the selling of these young dogs at these events.

Specific hunting dog breeds are recognized by AKC and UKC to address all the above concerns, and we recommend that AB519 be further amended so that it can exempt brokers who assist in the purchase of hunting dog breeds specifically recognized by AKC and UKC.

All right, thank you. We appreciate your comments. And just before I go on, I just want to say—I know the two-minute thing is extremely frustrating. I appreciate you working with us, but I'm sure you can see: if we had endless time on all of these, it would be impossible for us to get through the agenda.

I know this Bill impacts your businesses significantly. I appreciate you being here and working with us on our constrained and imperfect system. All right, thank you very much. For those of you who are also in opposition, please come to the mic. Share with us your name, organization, and position on the Bill.

Hi, I'm Alyssa Miller-Hurley. I'm with the Pet Advocacy Network, and on behalf of our members in California—which also include the American Kennel Club and a non-regulatory body—we are in respectful opposition to this Bill. Thank you.

Greg Herner, on behalf of the 10 chapters of Safari Club International in California. We have submitted additional amendments to the author.

Hi, Madam Chair, Members of the Committee. Mark Henley with the California Waterfowl Association, in strong opposition. Thank you.

Kirk Wilbur with the California Cattlemen's Association. You have an 'oppose unless amended' letter from us. Just wanted to update you that today's author amendments move us to neutral on the Bill. Want to thank the author and the sponsors for those amendments.

Thank you.

Morning, Madam Chair, Members. David Bess, representing Backcountry Hunters and Anglers, in opposition unless amended.

All right, thank you very much. Anybody else in opposition to the Bill? You want to—

Madam Chair, Ron DeHaven, I’m a veterinarian, former CEO of the American Veterinary Medical Association, as well as the administrator of the Animal and Plant Health Inspection Service, and I speak in opposition to AB519.

All right. And available for expert testimony in case we need you. All right. Seeing no one else in the audience, we're going to bring it back to the dais and see if colleagues have questions, comments, concerns. Senator Niello,

Quick question: What what's the amendment that made the speaker go neutral?

The Cattlemen's Association? I don't know that one off the top of my head, but my witnesses do.

Thank you for the question. Brittany Bene, on behalf of the ASPCA. Moving the the one-year, the age requirement—the age threshold—for the Bill to one year or under. Most dogs that are trained for working purposes and for herding purposes take up to a year for training.

So, the events that the Cattlemen Association were concerned about being affected—we confirmed with them that the dogs in those situations are over one year of age, and so this Bill would not cover them.

So, they will just move their purchase of the dog until after it turns a year. Whereas I suspect currently they’re probably purchasing them earlier. Particularly, as the primary witness testified; why not just make the exemption based upon the intended function role that the dog will play?

And so, in terms of whether or not it’ll be used in a ranch capacity or

In a ranch capacity, in a public safety capacity, in a hunting or recreational capacity.

So, there is no definition in some state or federal law specific to what those types of capacities are—what a hunting dog is, what a working dog is.

There are no definitions.

You could make the difference.

Sure could.

So happy to continue having conversations. As you heard from the Cattlemen's Association in that example, I'm happy to continue having conversations with the opposition. We've had a lot of conversations with the opposition. What I won't do is water down the Bill completely, which is what they've asked me to do.

And so, if they want to come with some more—some tighter—examples, as we've seen from the 2018 law, and how that immediately got taken advantage of by loopholes that bad actors saw in that legislation and in that language to continue to sell puppy mill puppies in California. This language needs to be very tight.

And so, we will continue having conversations with the opposition to try to address legitimate concerns that they raise. But what I won't do is put language in my Bill that allows for those same loopholes that bad actors have been taking care—taking advantage of—for the past seven years.

Okay, just to be clear, I—a lot of bills—but I believe there's already an exemption. Senator Niello. For public safety dogs.

Correct.

Police Department, correct?

Yes.

Yeah, yeah. Some animals that help with people who have disabilities as well. Those are all already exempt.

Yeah. Guide, signal, and service dogs, as well as any animal soldier transferred to a government agency such as a Police Department or search and rescue.

Right, right. There you go. There you go. Okay. Senator Strickland

Just really quick on that note, I see in my analysis that the Riverside County sheriffs are opposed. Are they withdrawing the opposition based on that?

Their concern was regarding clarifying language that local government agencies who purchase a dog would be exempted. They were concerned that the language suggested that if local government agencies were selling a dog, they would be exempted.

Or like canine dogs. Correct?

Yes. So, it was. So, the language in the amendments clarifies that it is whether they are sold by or to a local government agency that those entities are exempt. So, yes, they should be removing their opposition.

Okay, Alright.

Thank you. I want to thank the assemblymember for bringing this Bill forward. What is the enforcement mechanism behind this?

Go ahead, Senator. Dr. Weber Pierson.

I might have first defer while I flip through my Q and A. What is our enforcement mechanism for?

So this Bill doesn't have any explicit enforcement mechanism within it. However, local animal control agencies who are aware of brokerages, as well as national organizations such as the ASPCA, Humane World Alliance—who are focused on addressing the puppy mill pipeline and eliminating bad actors from the puppy retail market—will be tracking this carefully.

And this law will give us the opportunity to bring claims against bad actors for breaking California law. There are also two other bills that I will say are part of this package that do include enforcement mechanisms. So, it's this three-legged stool that will—that will—support the efforts behind this Bill.

So, the enforcement mechanism for this Bill is in another Bill, is that what you're saying?

The enforcement mechanism for this Bill is partially in another Bill. That Bill relates to contract sales and eliminates the use of non-refundable deposits by—by—sellers. That Bill gives district attorneys and the Attorney General jurisdiction. This Bill could be—yes—looped in under the enforcement of that—of that—Bill.

However, the Attorney General—General—will have the right to bring a claim on behalf of Californians in California State law. And so, if—if—somebody brings evidence and brings a claim, the Attorney General will have the ability to enforce this law.

So, the reason why I asked is because there was this section in the opposition from Puppy Spot Group that said, “We believe this Bill penalizes responsible, transparent operations while doing little to prevent the underground or unregulated sales that put animal health and consumer trust at risk.”

So, if you have no form of enforcement, then what you're going to see are those that are doing the right thing just stepping back, but those that are actually doing the thing that you're trying to prevent, continuing to do it because there's no enforcement mechanism to really stop them from doing it.

So, I guess my concern is that we're really not going after the people or the corporations that you're looking to go after, because this wouldn't necessarily deter them.

It would deter those that are probably acting in good faith, because they just don't want to potentially get dinged, or because they do follow rules and regulations and things like that. But those that don't would get—they would continue to do as is, because there's no enforcement.

So, I was—as I was reading through the analysis and reading through the Bill, which is not a very long Bill—I could not see the mechanism of enforcement. So maybe I thought you were referencing another code in the Bill that really, truly delineates the enforcement.

I really appreciate the question and welcome the opportunity to answer it a little bit more clearly than the enforcement question. So, the actors that are currently engaging in online broker sales are, unfortunately, not acting in a transparent, good-faith manner.

If you go onto Puppy Spot's website, you can find out the astrological sign of a puppy, but you can't find out what state it was born in, or the full name of the breeder.

You do not have the opportunity to find out where that breeder lives, or an offer to visit the breeder—which is what the AKC recommends as, good, responsible pet ownership and breeding practices. And so, these are the actors that we are working to address.

We know from export data, from Certificates of Veterinary Inspection, that multiple breeders that have worked through Puppy Spot have over 100 dogs on their facilities. There are no on-site visits that we are aware of completed by Puppy Spot. And when we asked for—for clarification about their...

About their proprietary standards that are much higher than USDA, we were pointed back to the USDA enforcement as a proposed amendment. And so, while...