Assembly Standing Committee on Business and Professions

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Morning, buddy. Good morning, everyone. Welcome to this morning's meeting of the Assembly Business and Professions Committee. Today we will be hearing six bills on our agenda with the following two bills proposed for consent: SB 344 by Senator Weber Pierson and SB 652 by Senator Richardson.

Agenda Item Number Four: SB 508 by Senator Valladares, has been pulled by the author and will not be heard today. Before we begin with today's agenda, I would like to once again remind everyone that the Assembly has rules to ensure we maintain order and run an efficient and fair hearing.

We apply these rules consistently to all people who participate in our proceedings, regardless of the viewpoint they express. In order to facilitate the goal of hearing as much from the public within the limits of our time, we will not permit conduct that disrupts, disturbs, or otherwise impedes the orderly conduct of legislative proceedings.

For each measure being presented today, we'll be allowing primary witnesses here in the room to speak for up to two minutes each, with up to two primary witnesses per side. Any additional witnesses will be limited to name, position on the bill, and the organization they represent, if any.

For those wishing to provide further comments, we are accepting written testimony through the Position Letter Portal on the committee's website, and with that, we will begin today's hearing. And I see Senator Valladares is here to present Agenda Item Number Three: SB 402. Thank you for being on time.

Good morning.

Good morning.

Thank you, Mr. Chair and members of the committee. I'm here today to present Senate Bill 402. This bill will move the existing requirements for qualified autism service providers, qualified autism service professionals, and qualified autism service paraprofessionals from the Health and Safety Insurance Code to the Business and Professions Code.

SB 402 does not change the current standard and qualifications for these professions. In current statute, behavior analysts, qualified autism service paraprofessionals, and qualified autism service professionals are the only providers whose qualifications are not listed in the Business and Profession Code. This bill simply brings parity for all providers.

Today, here to testify in support of my bill are Penny Schenkkan, board certified behavior analyst and CalABA Board Member, and Melissa Cortese with the Council of Autism Service Providers.

Great. You have two minutes each.

Thank you, Chairman. As Senator Valladares said, I'm Penny Schenkkan, a board certified behavior analyst and native Californian, representing the California Association for Behavior Analysis, CalABA.

I'm here today in support of SB 402, which again, as Senator Valladares said, will relocate the provider qualifications--requirements for qualified autism service providers, professionals, and paraprofessionals, collectively referred to QASP-S, from the Health and Safety and Insurance Codes to the Business and Professions Code.

This shift is a proactive step to align these standards with those of other healing arts professions without changing the qualifications themselves. When SB 946, the autism insurance mandate, was passed in 2011, it required insurance coverage for behavioral health treatment for individuals with autism and pervasive developmental disorders and placed the qualifications for BHT providers, the QASP-S, in the Health and Safety and Insurance Codes along with the mandate.

However, after conversations with Senate and Assembly committee staff, it became clear that the Business and Professions Code are the more appropriate venue for maintaining provider qualifications. SB 402 is a result of these thoughtful conversations and is on the recommendation of the committee staff.

Specifically, SB 402 will move the existing QASP provider qualifications into the BPC with no changes to those qualifications. It will also promote consistency by placing QASP qualifications alongside those of other healing arts professionals regulated under the BPC.

SB 402 will not create new regulatory burdens, it will not disrupt the workforce or business operations of agencies employing QASP-S, and it will not reduce access to services or affect the ability of families to obtain care.

In short, SB 402 will ensure that provider qualifications for behavioral health treatment are housed in the right place for long-term regulatory alignment and oversight, including conversations about qualifications, without causing disruption or preventing families from accessing high-quality care.

Access for families is an integral part of CalABA's activities, and we are constantly evaluating barriers and prioritizing policies that improve access while maintaining quality. SB 402 supports that mission, and we thank Senator Valladares for championing this legislation. We respectfully urge your aye vote.

Thank you.

Hi. Good morning, chair and members. Rachael Blucher with Nielsen Merksamer, Counsel for CalABA. Melissa Cortese is here for historical background if necessary, but I wanted to just quickly thank the committee analysis, confirming that this bill does not do any--make any substantive changes to the law.

It's really, we see it as a technical cleanup to ensure that there is appropriate legislative oversight over any potential future changes to these sections. Also highlight, I think the committee analysis does a very good job with citing all of the prior legislation, that legislation that changed, in various ways, the qualifications of these particular providers.

Many of those pieces of legislation did not come to this committee and so the intent of this legislation is really just to remedy that and ensure that this committee has oversight of these particular issues. Here also for technical questions if necessary. Thank you.

Thank you very much. Any additional witnesses, you want to add on in support of the bill? Please come up and provide your name, organization you're with, if any, and position on the bill.

Hi. Melissa Cortese, on behalf of the Council of Autism Service Providers and our 56 member organizations providing services here in California, in strong support. Thank you.

Thank you.

Hi. Michelle Hyde. I'm a board certified behavior analyst, also the parent of a young man with autism who benefited from ABA, and on behalf of Advanced Behavioral Pathways, in support. Thank you.

Thank you.

Good morning. My name is Diane. I'm the grandmother of a young man with autism who has benefited from the support, and I'm in strong support. Thank you.

Thank you.

Hi. Lana McBee, on behalf of Behavior Management Solutions, in strong support.

Thank you.

Good morning. Emily Schuman, parent of a child with autism, also a board certified behavior analyst, also in strong support. Thank you.

Thank you.

Good morning. Dr. Lauren Phillips. I am a doctoral level board certified behavior analyst, and representing Bluesprig Pediatrics, in strong support.

Thank you. Do we have any primary witnesses in opposition to the bill? If so, come on up. You've got two minutes each. Just hit the little microphone button in front of you.

This one?

Yeah.

There we go. Good morning, Mr. Chair and members of the committee. My name is Claire Kerrigan. I'm a board certified behavior analyst, and I am here today representing the Autism Business Association to share our concerns regarding SB 402 and its implications for autism service providers and the broader autism community.

We appreciate Senator Valladares's attention to and interest in the well-being of individuals with autism. However, we would like to respectfully highlight that this proposed legislation does not seem to offer measurable benefits to the very community it seeks to serve.

Specifically, as noted by the Senate consultant and the autism society, it remains unclear whether the proposed changes, including the updated code placement, are necessary or beneficial to the qualified autism service providers.

There is no evidence that the bill enhances oversight or accountability for providers, nor does it meaningfully improve transferring code provisions from the Health and Safety Code and the Insurance Code to the Business and Professions Code, can inadvertently create harmful roadblocks to accessing critical services.

At a time when families in the autism community face numerous challenges navigating care and services, it is crucial that we focus on proposals that deliver clear, actionable benefits.

This bill unfortunately falls short in addressing the pressing needs and priorities of our community. Instead of moving forward with legislation that lacks measurable impact, we urge the committee to collaborate with Senator Valladares and other stakeholders on initiatives that truly advance the quality, access, and accountability of services for individuals with autism. Thank you for your time and thoughtful consideration.

Good morning, Mr. Chair and members of the committee. My name is Anna Cuevas, and I am a qualified autism service practitioner certified with QABA Credentialing Board. Thank you for the opportunity to speak today regarding this important bill. I strongly urge this committee to include the QABA Credentialing Board in this bill with parity of the BACB.

The QABA Credentialing Board is the second largest applied behavior analyst credentialing body in the United States and is also already recognized for licensing in the states such as Texas, North Carolina, Arkansas, Minnesota, and others. Its certifications are nationally accredited and meet rigorous standards, ensuring that qualified practitioners can provide high-quality services.

If the BACB is institutionalized in the Business and Professions Code, which is traditionally reserved for licensing authorities, I respectfully recommend that this committee amend the bill to add the QABA alongside with the BACB. Doing so would ensure fair recognition of qualified professionals and provide greater choice for both practitioners and consumers.

I deeply appreciate Senator Valladares's leadership on this issue. However, I believe failing to include the QABA in this bill establishes a monopoly which would hinder access and reduce options for both service providers and the families they serve.

Expanding opportunities for autism service providers necessitates inclusivity and recognizing multiple credentialing boards as a critical step toward achieving that goal. Thank you for considering this amendment. Expanding access to effective autism services in California depends on recognizing all qualified professionals who are committed to making a difference. Thank you.

Thank you. Any additional witnesses who want to add on in opposition to the bill? Seeing none, bring it back to colleagues for questions or comments or motions or seconds. I take it back. We don't have a quorum. Sorry, I got ahead of myself. Any questions or comments from colleagues? Yes, Assignment Member Krell.

Take two. I would just like to thank the author for your work on this. We've gotten a lot of calls from constituents who work in our public schools here in Assembly District Six and provide services to children with disabilities, and they've called and shared their support of this measure and how it would ensure consistency within the code section while setting up future conversations around autism service providers and oversight. So I appreciate it, and proud to support it today.

Any additional questions or comments? Senator, would you like to close?

Thank you. So those of you who know me know that I've been a long-time autism advocate. I was a former executive director of Autism Speaks, and that really came from my own family's personal experience. My niece was diagnosed when she was two years old.

She was diagnosed as severely developmentally delayed, nonverbal, and on the autism spectrum, and once she got her diagnosis, to see that little girl just blossom and learn to talk, and it has been amazing, and that was all because of the early intervention, because of the early diagnosis, because of her therapies, which truly changed her life.

I'm very proud to say that she just got back about two weeks ago from her first year at Northwestern. So when we provide phenomenal services to our autism community--which is lifelong, it's not just when they're little; it's--for a lot of them, it is a lifelong spectrum disorder--my own family has seen what can happen.

So this is a very small but meaningful bill that will help our autism community and provide our service providers the clarity and oversight that they deserve. I respectfully ask for an aye vote.

Thank you, Senator, and it looks like we have a quorum, so let's pause for a second to establish the quorum. Madam Secretary, please call the roll.

[Roll Call].

Great. We have a quorum. Got a motion. Looking for a second. Got a second. Thank you for already closing. Thank you, Senator Valladares. I know this issue is near and dear to your heart, and so I'm happy to support the day--the bill today and want to reiterate what you said and your witnesses have said, which is that the bill has no substantive policy effect.

And I want to assure everyone that any future legislative efforts to amend the qualifications of autism service providers or to require licensure would be considered thoughtfully and with significant engagement from all stakeholders by this committee. Happy to support the bill today. Madam Secretary, please call the vote.

On SB 402, Valladares, the motion is do pass to the Committee on Health. [Roll Call].

That bill is out. Thank you very much. I see we have Senator Wiener in the audience with Item Number Two: SB 378.

Oh, yeah. Ready whenever you are.

Thank you very much, Chairman. I want to thank you and your staff for the analysis. There are no amendments in the analysis, but the analysis does raise a few potential areas to work on. And on two of those three areas, we're in agreement and we will be working on it. In terms of the.

The payment platforms like the Venmos and Cash apps of the world. And then also we want to make sure that we are fully dovetailing with Assemblymember Aguiar-Curry's bill as well. So we'll just stay coordinated there and watch the progress of that bill. We don't want to conflict with that in any way.

So thank you for that. So, colleagues, this is a bill to. SB 378 is a bill to ensure that there's accountability when online platforms are allowing and effectively facilitating the sale of illicit cannabis and hemp products that are as strong or even stronger than cannabis.

Right now, there are situations where people, including kids, can just go on an easily available platform. I won't name names, but we know what they are and order cannabis products or hemp, particularly hemp products that are very, very strong and just have it delivered directly to them. No age verification, nothing.

We set up a legal cannabis market and industry in California, subject to many regulations. Some might say too many. They pay taxes, some may say too many taxes, but they're paying taxes. The products are tested for safety and health so that people don't get poisoned.

And this is an industry that is now really struggling in part because of the illicit market, which is able to undercut the legal market. And that is bad for California. It's bad for health and safety. It's bad for this legal industry that creates tax revenue and jobs for our state.

And so SB 378 will place certain requirements on these online platforms to try to keep these products off or make disclosures if they're not making those efforts and to create liability if these products are sold on their platforms and someone is injured as a result. So I respectfully asked for an I vote.

With me today testify is Kristin Heidelbach, the Legislative Director at UFCW Western States Council, and Tiffany Devitt, the chief of regulatory affairs at CannaCraft. And I respectfully ask for an I vote.

Thank you. You have two minutes each.

Good morning. Kristin Heidelbach here on behalf of UFCW Western States Council, proud sponsors of SB 378. We represent thousands of hardworking union members in California's licensed cannabis industry.

I'm here today to voice our strong support for SB 378, a critical piece of legislation that helps protect the integrity of California's legal cannabis market and, most importantly, the jobs and tax revenues that depend on it.

Despite the adoption of emergency regulations by the California Department of Public Health in October 2024, which clearly banned the sale of intoxicating hemp derived products, bad actors continue to operate online, selling untested and illegal intoxicants directly to consumers, including minors, while sidestepping all of the safeguards required of the licensed cannabis industry.

These unregulated products are not only a public health threat, they are also undercutting legal businesses, undermining worker protections, and siphoning revenue away from the Cannabis Tax Fund, which supports youth services, environmental restoration, and public safety programs. SB 378 addresses this urgent problem by establishing strict liability for online platforms and websites that facilitate the sale of these illegal products in California.

If a website profits from or promotes the sale of illicit intoxicants, whether derived from hemp or cannabis, they should be not be shielded from accountability, particularly when their actions directly harm licensed operators and threatened jobs. Our union members work in licensed regulated facilities. They undergo training and follow safety protocols.

In contrast, the illicit market, especially through these unchecked online platforms, offer none of those protections and the playing field is tilted dangerously against those trying to do the right thing. SB 378 will provide the tools needed to protect legal businesses, workers, and consumers.

It upholds the intent of CDPH emergency regulations and reinforces California's long standing commitment to a safe, legal, and fair cannabis industry. We urge your I vote. Thank you.

Thank you.

Good morning. Chair. Members. My name is Tiffany Devitt and I'm here on behalf of the San Diego Imperial Counties Joint Labor Management Committee. That is a partnership between uscw, March and Ash and Embark. I'm also here as one of the co authors of a recent study titled the Great Hemp Hoax.

The report was called the Great Hemp Hoax for a simple reason, which is we tested hundreds of hemp products, so called hemp products, and most of them had nothing to do with hemp. Most of them were either Marijuana that had been rebranded or synthetic designer drugs masquerading as hemp. These products, as the senator mentioned, are found everywhere.

They're massive online drug superstores as well as fly by night websites.

Most concerning of all, as the senator mentioned, these products are incredibly easy for minors to purchase and what I'd like to underscore is that that is not incidental. That is part of the business model of these companies. And I say that in part because the products that are sold often mimic kids candies.

They have names like Mushy Marshmallows, Smurf Streams. None of the products we ordered required an adult signature on delivery.

What's more, a number of the sites promoted the fact that the packaging was discreet, so you wouldn't know what was in the packaging when it was delivered to the house, and that the credit card billing was cryptic so it wasn't clear what company the product came from. This market thrives in a regulatory blind spot.

The Department of Cannabis Control tends to focus on illegal cultivations. Local jurisdictions tend to focus on illegal storefronts. But most of the commerce is happening online. SB 378 closes that gap. It gives consumers and legal businesses a way to hold platforms accountable and stop this trade from thriving in plain sight.

If you could wrap up, that'd be great.

We thank the senator and respectfully ask for your I vote.

Perfect timing. Thank you very much.

Thanks.

Anybody else who wants to add on in support of the bill.

Good morning, Mr. Chair. Justin Fanslau. On behalf of the California Cannabis Operators Association in strong support. Thank you.

Damon Conklin with League of California Cities in strong support.

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

Thank you.

Sarah Dukett on behalf of the Rural County Representatives of California in strong support.

Thank you.

Sarah Flocks, California Federation of Labor Unions in support.

Thank you.

On behalf of the County of San Mateo in support. Thank you.

Jordan Wells on behalf of the California State Association of Counties in support.

Thank you.

Josh Gagar on behalf of the Santa Clara County Board of Supervisors in support. Thanks.

Thank you. Do we have any primary witnesses in opposition to the bill? Come on up. You'll have two minutes each. And I'm going to. During your testimony, I'm going to hand the gavel to the Vice Chair.

I have to go present some bills on the senate side, but I'm also going to ask the Vice Chair to read some comments on my behalf at the end of the hearing. Yeah, just stick to the script. You have two minutes each.

Oh, there it is. These new devices I'm not used to. Mr. Chair. Members. Rand Martin, on behalf of the US Hemp Roundtable. I want to say at the outset that we support the intent of the senator's bill. The hemp industry does not want bad actors out there any more than the cannabis industry.

It's bad for the public, it's bad for the industry, and so we support that.

What we're concerned about is what we have been talking about for the last few years, for those of you who have been paying attention to what's going on with hemp, is that when the bill was enacted a few years ago to create this legal structure, some people, as it was implemented, got out ahead of their skis and put products out on the market that went beyond what the intent of the law was and created products that were far more intoxicating.

That is not where the Hemp Roundtable wanted the law to go, did not want the market to go, and have been trying ever since to try and pull that back.

Unfortunately, the reaction, candidly, within the legislature and within the administration has been to scoop all the hemp manufacturers into the same bucket, treat the good actors, the people who have been compliant with the law, the same as they do with the bad actors, and throw them all out of business.

The results, capped by the emergency regulations adopted in September, has been to obliterate the hemp CBD market in California, even for those who are selling wellness products.

What we have tried to do, and we appreciate the time we spent with the author's office and with the sponsors, is to try and find a way to get this bill to recognize that nuance and to create, to treat the good actors better than they treat the bad actors.

We appreciate the fact that they've decided they didn't want to do that. But we would point out that notwithstanding the work that's being done on AB 8, this bill stands alone. And if this bill moves forward without any changes, it's going to continue to perpetuate the problem for the good actors in this industry without any relief for them.

So we would encourage you to consider working with the author, working with us, to find a way to, to recognize that nuance and, and do something for the good actors in California. Thank you.

Thank you. Go ahead.

Good morning, chair and members. Jose Torres with TechNet. I want to start, start off by thanking our, this committee for engaging with us on our concerns and flagging them in the analysis. We remain as we remain respectfully opposed to SB 378.

The bill has a greatly broad definition of online cannabis and hemp marketplaces, and it places a strict liability on them, even if they have no role in direct sales.

For example, if an online business explicitly prohibits the sale of and advertisement of cannabis goods, but that online business allows for users to directly communicate with each other, that would be found liable under this bill. The bill, putting it simply, is extremely broad.

Mapping services, search engines, social media, and even digital financial technologies would be covered in liability. Because of just how broad this bill is. Our TechNet member companies remain committed to ensuring that online marketplaces have reasonable restrictions and policies in place to actively enforce prohibitions on illicit products. But it creates a.

But this bill creates a large umbrella of liability over companies and businesses that would greatly impact businesses with an online presence throughout the state. The bill risk over compliance and could chill legitimate speech and access to legal products due to the strict liabilities, reporting requirements and advertising provisions.

It is a heavy handed approach that would hurt businesses more than actually eliminate unlawful cannabis sales. I thank you for your time. But at this time we do ask that you vote no today.

Thank you very much. Any additional witnesses in opposition to the bill, come on up. Write your name, organization you're with, if any, and position on the bill.

Mr. Chair and members, Erin Niemela with Niemela Pappas. On behalf of Ebay, we want to thank the author and his staff and also the committee staff for the great analysis on this. But we do have some remaining concerns on the bill, mostly aligned with TechNet's concerns. We believe it's too broad in its regulation of online marketplaces. Thank you.

Thank you. Bring it back to colleagues for questions or comments. Assemblymember Irwin. All right, I got it, I got it, I got it. We got a bunch. We're going to start with Irwin.

Yeah, thank you. And I really like this bill a lot. We've been talking about it for a very long time. I have always said it's very important to go after the bad players and that there needs to be better enforcement.

But I'm also worried about implementation and agree with the comments that were pointed out in the analysis about online marketplaces and cash apps that really don't have any role here. So I am definitely supporting the bill today and I am going to hear it again in privacy.

So hopefully you can deal with some of those implementation issues about the bill right at the moment, in my opinion being too broad.

Yeah. And thank you for that. And there's a real spectrum. So when you're talking about the Venmos and Cash Apps of the world, that's one thing. When you start getting into Etsy, Ebay, Amazon, it's different.

And we'll continue to talk to the opposition and I'm always open to, to refining the bill to make sure that we are meeting the bill's goal, which is to really try to. It's sort of a swamp and it's out there and we see what's being sold and what people can easily access and I appreciate those comments.

So we're going to go to. Bless you. Assembly Member Krell, and then Assembly Member Haney.

Thank you. Thanks to the senator and the sponsors for bringing this important bill. Could you talk a little bit about the enforcement piece? I think my colleague, Senator Irwin is kind of referring to that in terms of how this would be implemented.

But if you could talk a little bit about how you see this being enforced, I would appreciate it.

Thank you for the question. Assemblymember Krell. Currently, it is a private right of action. So if someone has standing and can.

I should be careful the way I say this, because it was amended, although we are. It was amended in the last committee, so we're working on that in the next committee to make sure that we have a more detailed explanation of what that standing is.

But it initially listed, you know, someone who was harmed by purchasing one of these products, a parent, a labor union. It listed a number of different entities and it is a private right of action.

Mr. Haney.

Thank you. And thank you to the author and the sponsors. This is such an important bill. I know you and I and the sponsors have worked a lot on this issue and we have to make sure the regulated legal market actually functions.

And that includes not allowing, as you called it, a, a swamp or free for all, where people can just go around it.

So if we set up a process for folks to be able to provide for these products in a way that's safe and well understood and, and, and clear in terms of the transparency and not marketed to children, all of the things that we know are essential for a regulated market, whether it's cannabis or hemp.

And then we set all that up. And then here on the other side, whether that's online or in these stores that are being set up all over our state, they're just selling whatever, however, with, with sometimes certain types of synthetic products that are actually quite dangerous and being sold to children.

So I think this is hugely important to be able to, to, to protect the health and safety of our residents, but also to be able to ensure that we have a fair regulated market that people are incentivized to be a part of and to participate in, not go the other way, which unfortunately we're seeing more and more.

So this is hugely important and it is happening online. And I appreciate the comments about the enforcement and the work that's being done with the opposition on how best to define these online marketplaces.

Also, just wanted to ask you, I know you mentioned AB 8 and the work that's being done to ensure that this aligns with those efforts around definitions. And just wanted to ask you maybe to provide a little more insight into how you see these bills interacting and what that looks like.

I know that we're also strongly supportive of those efforts, and thank you for your commitment there and leadership on this really important issue.

Yeah, absolutely. I'm very supportive of that effort as well. And I think the most critical thing is in terms of just definition, that we're not conflicting in any way. So we want to really defer to AB 8 on just sort of those basic definitions and structures.

Right on, Ms. Macedo.

Thank you, Mr. Chair. Good morning, senator. So I want to. I love the intent of this bill. I want to make sure that we are getting rid of the illicit cannabis industry. And. And I actually get to see this bill three times.

So I'm really excited to see you so many times over the course of the next couple weeks. The main part that I wanted, because we're in business and professions that I want to talk about, is the hemp aspect of this. So first, why are we including hemp? Just so I understand.

And then secondly, is there any plans to differentiate the good from the bad actors so we're not just obliterating the hemp industry completely?

Yeah, and I'll respond, and then I'll ask my witness to respond as well. Hemp. There's a broad spectrum of hemp, and there is hemp that has so much THC in it that it's just incredibly strong and can be even stronger than cannabis.

And in fact, there was a sort of survey done of some of these products that you could buy online. And 88% failed to meet the state's hemp standards. And they were just incredibly potent. So we want to make sure that those. The hemp that is. It's strong, it doesn't meet state standards.

It is not what we want to be just sort of sold online where anyone can buy it, including kids.

Thank you for the question. So, just to clarify a few points, because this conversation did come up because of the 2018 federal farm bill, it opened up a loophole for hemp products.

And so those hemp products then were adulterated, changed, the molecular structure changed, made highly intoxicating, and they can ship cross state lines while cannabis cannot ship across state lines.

And so we wanted to find a way that we could at least address the illicit cannabis products that are sold, while also we couldn't ignore the fact that hemp was being sold, and some folks call it a wellness product. And in my opinion, And I'm not a scientist, but sometimes a consumer.

10mg is not a wellness product that could get a lot of people really high.

10 milligrams of THC?

Yes. So what we want to do, and also to the senator's point with AB 8, we are leaning into Assemblymember Aguiar Curry to really land the plane on those definitions. And also if, for example, they find that there is a certain amount of hemp products that are integrated into the cannabis supply chain, they would be fine.

They would be allowed to be purchased online or in whatever way. They can't. I don't know about shipping because we're talking about federal law and state law, but that was why. And we also, to Tiffany's point, with the hemp hoax, there's a lot of taxes that we're losing on hemp being sold because it's often not collected.

And so that's another huge issue that we're trying to make sure that we did address, the hemp sales that are happening in California that are actually hurting our cannabis operators, who have some pretty high guardrails to follow. So I hope that answers your question.

Yes, my question, and I would like the opposition to chime in on about the hemp part as well. But my question is, is there a way to narrow this bill in that we're just going after the bad actors, or do you believe this already gets to that?

I think it already gets to that, but.

So because of 2024 CDPH emergency rules, what they're selling now in California is currently illegal. So AB 8 is the vehicle for them to be able to integrate into the supply chain here in California. So none of it can be intoxicating. So that's why I'm saying AB 8 needs to at least allow for integration.

However, that manages its way through policy committees and whatnot. So what they're doing now is currently illegal, and our bill is not. Our bill is only adding strict liability to online marketplaces that are selling it.

And ultimately AB 8 will make that distinction about what's acceptable and what isn't.

I just wanted to hear from the opposition, if you guys had any. I mean, you're from the industry, so what do you forecast for this industry? And do you think there is a way that you could work with the author to make sure that your good actors are being rewarded?

Yeah, I appreciate the opportunity, Ms. Macedo. So I think it gets back to the point the senator brought up a moment ago, relative to definitions, and the definitions have changed, definitely have changed from the point the CDP put out regulations in September that really obliterated the industry.

What we're saying about this bill and AB 8 in its current form is that it perpetuates the current structure without acknowledging the fact that there are good actors. The senator and his witness have leaned into the higher concentration of THC in products that do make it intoxicating. We understand that there are bad actors out there.

We want to get rid of them. But there are wellness products out there that have low, low dose THC, products that are not intoxicating ,that need to be accommodated in the law. We think it needs to be done in AB 8. We also think it needs, as I said earlier, it needs to be done in 378.

Because if 378 is the law that passes all the way through the governor and AB 8 is not, then we're stuck with the current situation without the problem being corrected. And we would hope that people would want to correct it everywhere they possibly could.

Thank you both for all that wonderful information.

I will also just that one of the issues is also when you just go online and you're buying, you don't know what the concentration, it's not being tested the way I say cannabis is. So you really don't even know what you're getting.

And you know when you go and buy, you know, whatever melatonin online and you don't know, it says 5, 5 milligrams. But it could be a different. It's melatonin. It's not going to be the end of the world if you get the wrong dose of melatonin. For this, it can have a real impact.

So on hemp products, it doesn't say like it has this much THC in it or it does?

There. There are requirements in AB 45 was enacted four years ago that require testing of hemp products. If it needs to be strengthened, let's talk about that. But not. But not say that there's no testing happening.

Yeah, that's only California. It's not products from out of state.

Thank you very much.

Right on. By the time you see this bill three times, you're going to be like the new expert on this bill. So impressive. Look forward to that floor speech. All right, any other colleagues? Yeah, go ahead, Mr. Jackson.

My questions for the author and the opposition. I mean, obviously you were always referring to this bill and AB 8. Can you explain to the extent in which they affect one another?

I mean, AB 8 is going to set up the basic definitions and structure of what's allowed and not allowed in California with hemp. This is about selling illegal products online. So I mean, that's. And having liability for doing that and having accountability for these platforms.

So what we would like to have happen, and it's important, I think, for both of these bills to be successful, is for AB 8 to set up the basic foundational structure and rules. And then this is more. This is an enforcement mechanism for the online platforms.

Did you want to add anything or is that?

Dr. Jackson? Thank you. So AB 8 in its current form does not address the issues that Senator Wiener is talking about. We do hear talk that that is the intent of the bill. We've not seen what those changes might be that might be beneficial to wellness products in the hemp space. We're happy to work with Ms.

Aguiar Curry on that. We have tried to work with her the last couple years in bills that she's tried to do to change that 0.3% threshold that Ms. Heidelbach talked about to a milligram cap. That has been unsuccessful so far, but we hope that that could be resolved within the next few weeks.

And so you are engaging with the majority leader on?

The industry is talking to her, yes.

Okay, thank you.

Thank you. Dr. Jackson. We got a motion. We have a second. Second. Anyone else would like to speak on this bill? Members, seeing none. Senator, would you like to close?

Great conversation. This is obviously going to be an ongoing conversation. We are, as I mentioned, working, looking at several of the recommendations in the analysis, and we'll be making some refinements there. We'll continue to work with the opposition and with Assemblymember Aguiar-Curry to try to hopefully land all of this together.

And I respectfully ask for an I vote.

Thank you very much. Everybody gets settled in a little bit. I've got a statement to read from the chair. So here we go. So let's start by saying I support this bill today.

However, as noted in the analysis and as we've discussed here in Committee, there are a number of outstanding questions and concerns about the scope of this bill and how it will be implemented.

Ideally, we would have set this bill for a much later hearing date so that we can have this conversation with the author about how to address these issues prior to the bill moving forward.

Unfortunately, this bill is triple referred, so we have a limited amount of time to dive into the details of the bill prior to the bill needing to be heard in privacy and judicial committees. While I am recommending to pass the. And while I'm recommending the vote to pass this bill today.

My expectation is that the author will commit to continue work with the stakeholders to address the issues outlined in the analysis and those raised by opposition when the bill is heard in later committees, as he did in his open remarks. With that commitment, I will be voting to support this bill today.

So Madam Secretary, please call the roll on SB 378.

[roll call]

That bill is out. We'll leave it open for absent members. Thank you, Senator Archuleta. You are the last and final. We are ready when you are.

One more time there. Good morning, Mr. Chair and members. I'm so happy to present this to you. In light of the fires we've had in Southern California, Los Angeles area, it has come to light that there are people that are taking advantage of those that are seeking to remodel, rebuild and so on.

So this is why this bill is so timely. Once again, I'd like to wish you all a good morning. I want to start out by accepting the committee amendments. When someone does something wrong, they should be held accountable. I think we all can agree on that. Typically, penalties for wrongdoings are equal to the infraction.

This is not the case for the Contractor State Licensing Board. In cases where the where there are minimum fines, there is a massive difference between the allowed minimum fine and the maximum fine for infractions. In 2021 and 2022, maximum fines amounts were increased from 5,000 to 8,000 and from 15,000 to 30,000.

You can imagine the size of the construction, whether it be kitchens, remodeling roofs, et cetera, et cetera, to reach that number of 30,000. But each time the maximum amount were raised, no corresponding minimum amount was increased or established.

For example, the current minimum for an unlicensed activity is only $200, while the fines for adding or I'm sorry, for aiding and abetting unlicensed activity and workers comp violations have no minimum at all.

An administrative law judge considers the minimum fine amount during citations appeals, resulting in frequently reduced enforcement fines, creating substantial disparities in the final fine amount issued when compared to the maximum amount.

These reductions result in fines that are not equal to the seriousness of the violations, do not adequately support the coard's investigation and administrative hearing costs, and most importantly, do not provide sufficient incentive to comply with contractors laws.

Senate Bill 779 would establish minimum enforcement fine amounts where they do not already exist and raise minimum fine statutory amounts where they do exist. These increases are needed so that the enforcement fines continue to reflect the seriousness of the violation and support the board's consumer protection mandate.

And with me today I have Rebecca May on behalf of the Contractor State Licensing Board and who is the sponsor of the bill. I respectfully ask for your aye vote.

Thank you very much. You'll have two minutes. I'll move the bill.

Good morning Vice Chair Flora and Committee Members. Rebecca May, on behalf of the Contractor State License Board. Thank you Senator Archuleta for authoring this bill. So citations issued by CSLB often contain a civil penalty.

This is known also as an enforcement fine up to $30,000 depending on the seriousness of the violation, and they can also include an order of restitution to a financially injured party. While the legislature has recently increased maximum enforcement fines in contractor's law, no corresponding minimum amount was increased or established.

This makes the existing minimum, if there is one, it can exceedingly low when compared to the maximum amount like $200 on the low end and $30,000 on the high end. So currently the only minimum enforcement fine amount in statute is $200 for unlicensed activity and this amount has not changed since 1990.

SB 779 sets the minimum fine amount for general violations of contractors law to 500 where the maximum is 8,000 and to 1,500 for more significant violations, including unlicensed activity and disregard for building laws where the maximum is $30,000. So SB 779 also increases the board's fund reserve cap from six months to 12 months.

CSLB anticipates exceeding its current reserve cap this new fiscal year starting today with a projected 6.7 months in reserve. Increasing the reserve cap will provide CSLB a financial cushion should license renewals decrease due to a recession or economic downturn.

Two DCA programs going under sunset review this year are either having their caps increased to 24 months or eliminated altogether. It's staff's understanding that once these two programs increase or eliminate their reserve caps, CSLB will be one of only two DCA programs with a low six month reserve cap remaining.

Raising the reserve cap does not impact the revenue CSLB receives. It instead allows CSLB to maintain essential services by using its own resources to withstand a downturn if there is one in the construction industry. I respectfully ask for your aye vote. Thank you.

Thank you so much. Anyone else in support of SB 779? Seeing none. Any opposition of SB 779? Seeing none. Bring it back to the committee. We have a motion and a second. Any other Members have anything to say? Seeing none. Senator, would you like to close?

Thank you for allowing me to present this bill. And I respectfully ask for your aye vote.

Madam Secretary, please call the roll.

On SB 779. Archuleta. The motion is due pass as amended, to the Committee on Appropriations. [Roll Call].

That bill is out. Congratulations, Senator. Thank you. Can I get a motion and a second for the consent calendar? Got a bunch of them. Whole bunch. Whole bunch. Madam Secretary, please call the vote.

On the consent calendar,

[ROLL CALL]

Consent Calendar's out. Yeah. You take the rest of the day off. Madam Secretary, please take it from the top on, so absent members can add on.

[ROLL CALL]

How'd it go in elections, Mr. Alanis?

Did good by your leader.

Amazing.

Followed your lead.

Yeah.

Keep that momentum going.

[ROLL CALL]

[ROLL CALL]

[ROLL CALL]

Meetings adjourned.