Senate Standing Committee on Budget and Fiscal Review

The Committee on Budget and Fiscal Review will come to order. Welcome, everyone. And I. Before we start, I think we do have a quorum, so let's establish quorum.

[ROLL CALL]

Okay, a quorum has been established. So, colleagues, we have four items before us today. Two of them are, all budget trailer bills, two of them relate to housing and CEQA, and two are collective bargaining agreements which are in budget trailer bills for ratification. Item number one, AB 130. We heard this last week.

There has been an amendment on it. It does not add items, but rather removes the wage standards that have been placed in that bill. That's been removed from the bill. Otherwise, the bill is intact. And so that will be a vote only measure. For items 23 and 4. We have not heard them before so we will get presentations from the Department of Finance and then have any needed discussion. We will then go to public comment for all items. So with that, Mr. Vice Chair, do you have any opening comments?

No introductory comments. I'll have comments when we discuss AB 131.

Thank you very much.

Yeah, we're going to put that aye vote in the bank. Okay. With that, we will now go to the Department of Finance, Erica Lee, for presentation on items 23 and 4.

Good morning, Mr. Chair, Vice Chair and Members of the Committee, Erica Lee, with the Department of Finance here to present on items 23 and 4. The first is AB131, a Public Resource Trailer Bill.

This Trailer Bill includes a 2026 TR27 appropriation of 500 million General Fund for the Homeless Housing Assistance and Prevention Program, also known as hap, contingent on the enactment of future legislation, including accountability metrics.

It includes CEQA streamlining for housing and other areas, which was identified by the Governor as a top priority that should be incorporated into this budget. This targeted CEQA exemption is part of the broader budget agreement to accelerate housing and infrastructure delivery across the state alongside CEQA streamlining for infill housing and funding for key programs.

This policy moves critical clean transportation and housing projects forward without unnecessary delay. And moving to the third item, which is AB139, a state bargaining MOU Trailer Bill.

This bill makes necessary statutory changes to ratify and implement a memorandum of understanding between the state and bargaining unit 9, which is the Professional engineers and an addendum to an MOU between the state and BU12, which is the operating engineers. And moving on to the final bill, AB140 is also a trailer bill for MOU.

This bill makes necessary statutory changes to ratify and implement a memorandum of understanding between the state and bargaining unit six, the correctional officers. With that, happy to take any questions.

Okay, colleagues, any questions for Department of Finance and I'm sorry, does Dalio have any additional comment? Okay, Dalio is here for questions. Colleagues on items 23 and 4, if there are any questions or comments, now's the time. Senator Durazo, actually, if I may start with the Vice Chair and then Senator Durazo.

Thank you, Mr. Chair. I appreciate that. With regard to AB131, I complain a lot about process and certainly that is an issue with regard to this bill, but it also deals with the structure of our government and separation of powers.

We have a policy bill that is in the budget and I've often expressed opposition to that practice, but sometimes I'll vote for it anyway if the policy is compelling enough. And it may be in this case.

But we have a situation here where the Executive Branch is telling the legislative branch that if it doesn't pass this trailer bill that the budget itself will be null and void. I have to say that profoundly disturbs and offends me.

And I think just on the basis of the standing of the Legislature and the standing of the Executive separate as equal standing and separation of powers, that regardless of the efficacy of the policy proposal, this should be rejected.

I was going to say for the record, I respect the Vice Chair's views. I will say that this is a three party agreement. All aspects of the budget and the trailer bills. So it was a three party agreement. We don't have a dictatorship.

I appreciate that, but I wasn't part of that three party agreement. And nonetheless, if that was the case, why would the Governor have to say if you don't pass this, then that.

Okay, Senator Durazo.

Thank you, Mr. Chair. I want to raise a couple of questions. An AB 131.

SB 131.

Okay. Actually it's AB 131 on our agenda. Sorry about that.

Yeah, I'm sorry.

Okay. It includes a CEQA exemption for advanced manufacturing facilities on industrial sites. Just to give you an example, we had a big project, the excite issue in the district, that the area that affects our district, it's just one example of industrial facilities on land zoned industrial.

So if advanced manufacturing facilities are exempt, how will the public be notified and given an opportunity to engage in the project?

Yes. Megan Tokonoga Block, Department of Finance. I don't have additional details on that legislation.

Your microphone's not on.

Megan Tokonoga, Block, Department of Finance. I don't have additional details on that legislative priority.

Okay.

Well, I hope I can get.

I can just add one thing. First of all, there's still whatever permitting has to happen for, it still has to happen. It has to be zoned industrial. In addition, there's a threshold that's set in terms of polluting activities. It's the San Joaquin County Air Quality Management District. There are certain pollution thresholds.

It has to be below that threshold. So there are guardrails in the bill. About. About that.

Okay, thank you. And I also heard from coalition of tribal governments who are concerned that there is no tribal consultation in the CEQA reform bill. So if you could address that and what are the ways in which that could be addressed or fixed. Thank you.

Was that a question or was that a comment?

Yeah, no question. She said, how can it be fixed?

How can what be?

The tribal consultation.

So. And that's. How could that be addressed in 130 you're referring to? Yeah, well, yeah, it was in 130 that the travel consultation.

Yeah. I guess it's because in overall, it's CEQA reform.

Yeah. So in both bills. Yeah. So there's a. There is existing tribal consultation provisions in CEQA. I think it was AB54, but I can't. I might be wrong about that number from 25 years ago. 130has tribal language, tribal consultation language in there that is disputed, as we have heard.

And it's been my hope for many years that there will be an ongoing conversation about how to get tribal consultation, how to make it work for everyone.

Okay.

Does someone else have their hand up? Senator Ochoa Bogh

Yeah, I just want to comment on AB 31, though. I share the same concerns that my colleague, the Vice Chair, has expressed with including policy changes in trailer bills. However, I do want to highlight some of the items that I thought were actually positive things in here.

And it's interesting with CEQA reform because I think we have a very hard time working within that space legislatively.

And I think if we're going to try to ensure that we actually get building done in the State of California, I think this is probably one of the best ways to actually help address some of the delays that we have when addressing CEQA reform.

So I will be supporting the bill today and I just want to highlight some of the things that I think are noted in our notes and letters. Which is expanding homelessness funding with accountability, which I think Californians expect.

Establishes round seven of the homeless housing assistance and prevention programs with 500 million in funding, prioritizing for jurisdictions showing housing progress, including compliant housing elements and encampment policies. It also cuts red tape for housing and CEQA rezoning, extends rezoning actions that implement state approved housing elements from CEQA, streamlining housing production in communities already.

Planning for growth. Accelerates critical infrastructure by expanding CEQA extensions to broadband, advanced manufacturing, wildfire mitigation and essential public services like daycare centers, rural health clinics and food banks. And it also expands, extends and expands CEQA exceptions for water and sewer projects in disadvantaged community, which is desperately needed in California and helping to close infrastructure gaps without delays.

So those are some of the areas that I think are worth noting in AB 131. And as with most bills mentioned, though not ideal to put policy.

But when it comes to CEQA quite frankly, if we can get this through and move over and have some reform that would help our construction in California projects, I'm going to support that effort. So, okay.

My microphone. Senator Seyarto and then Senator Durazo.

Thank you. So I'm probably like my colleague, probably going to support this today. This is like, you know, I like cookies and this is like me getting offered an eighth of the cookie. I'm going to eat it anyway because at least it gets us pointed in the right direction.

CEQA has been an issue in California for a while, not because we don't want to save the environment or we don't want to protect the environment.

It's because what it has evolved into as a tool for anybody and everybody to get their slice of whatever the project is going to generate, how much the cost goes into that they're all trying to get their slice of the cost, or ultimately, what is the cost. They're trying to get their slice of the pie.

And you know, whether it's VMT, whether it's all these different things that go into the project cost, it has driven everything to a point where it's hard to get our bang for the buck if you're a taxpayer.

And you know, this is the culmination of this is right now we're going to do a CEQA bill in the budget process. This is too big of an issue to just do in the budget process. It has to be done on a balanced and on a whole.

Because if you start imbalancing what's happening here, and I appreciate some of the infrastructure issues that are being addressed in here, but not all of them are. If we have housing get too far ahead of everything else, and we're moving VMT from a mitigation fee for the local agencies to a state fund where local agencies probably won't get what they need, then all the infrastructure falls behind because they're still subjected to that CEQA process or the other processes that are involved.

And we wind up with lots of housing, lots of people, and no infrastructure, which is already happening in districts like out in San Bernardino and Riverside County, because that's where housing can be built.

But we're not building the roads, we're not putting in more schools, we're not doing any of those other things because those things take years to build for the exact same process that we have been building housing. And that's how we got behind in housing.

So we're going to try to fix the housing part and push that all forward. And then we're going to have a pile of housing but no infrastructure.

So unless somebody starts talking about having infrastructure included, in other words, a priority for this state to start working on that infrastructure in conjunction with making the housing more affordable and all of those things, we're going to be in a really horrible state in 10 years.

And maybe that doesn't matter to people who aren't going to be here, like me up here, but it sure is going to matter to the people that are here trying to figure it all out. And to me, this doesn't help a lot in that regard.

Like I said, it's an eighth of the cookie and I'm willing to eat it because that's all I'm being offered when I should just push it away because it's just going to make me gain weight . So, anyway, yeah, it's kind of a mixed bag. So that's my comment.

Thank you. And actually before I go to Senator Durazo, I misspoke before. The original version of the Bill had the San Joaquin County standards in it, that language was replaced by language around sustainability and minimizing resource use. So I just apologize for misstating it. So it was replaced with a different approach to sustainability in the trailer bill. Senator Durazo

One other issue, and this is more of a, Mr. Chair, the clarification, I think it's not a separate or added on issue, is about clarifying that the streamlining in 131 will not include or inadvertently will not include airports, convention centers, and hotels. I think there was some clarity that was done in 130. So I just want to make, ask you about 131 as well.

It does not. Yeah. So next we have Senator Menjivar.

Thank you, Mr. Chair. Department of Finance or LAO. I know a lot of the arguments are that, you know, removing CEQA, there's still other environmental rules and laws that can protect. But a lot of those, just like the Clean Air Act, focus on major contributors, major sources, and don't look at the smaller sources.

Especially when we look at small sources that are sometimes concentrated in a certain area, they create a bigger impact. What is in place to address smaller sources or what is in place to address the cumulative impact of smaller sources impacting our air?

Megan Tokonaga Block, Department of Finance I can speak to the housing element and perhaps other colleagues can join and provide additional information.

But relating to the housing provisions of the bill, I would point you to the what we're calling the near miss provisions, which say that if a project would be eligible for a CEQA exemption but for one provision, that the CEQA review that will move forward is subject to specifically to that provision.

And so the CEQA review is still moving forward, tailored to that specific point that a project was not eligible for full exemption otherwise. So.

I didn't understand that. Can you give that to me in a different way, please?

On the housing provisions of this bill, the bill provides that if a project would have been fully exempt from CEQA but for one provision because they fail to meet all of the criteria that are required but for one piece, the review that's going to move forward is specific to just that one piece.

So the environmental review still moves forward. It's just a more tailored approach. So that's the housing piece. CEQA still applies, but into a more narrow scope. So the distinction between larger contaminants and smaller contaminants doesn't apply in that.

So if a project was never even going to qualify for a CEQA review, or if a project qualifies for a CEQA review on the entire project versus the one or two that made it or triggered it, it would still have a complete CEQA review.

The CEQA review that moves forward is specific to the one piece that exempts the project from the full.

Versus doing a full CEQA review only doing the CEQA review on the one provision that would have triggered it to do a CEQA review.

Correct.

Okay, so for any of these projects, is there still an avenue for stakeholder community input?

I can answer this. This is what we call the near miss, where you fall one factor short of qualifying for an exemption. So the EIR is unlimited to the piece that you missed on, but it is an EIR, so it requires the normal public engagement that EIRs require. It's appealable to an elected body and it can be sued on.

Okay, thank you. And I know we, the chair and I, talked about this bill a lot.

Yeah. And this is narrower than when you saw it in Senate EQ because it's now limited to housing, it doesn't apply to other projects.

So no manu, no industrial.

The near miss.

Only applies to that.

Yeah. The near miss, when you fall one factor short of meeting a CEQA exemption, the EIR is limited to what you missed. Is limited, that area, is now limited exclusively to housing.

Is advanced manufacturing excluded from CEQA under an AB 131?

There's an exemption in the bill for advanced manufacturing.

Exemption. Which way? That's unclear.

So it creates a new. What this bill. So this bill, when it, when this bill was a policy bill, it had a provision in it changing the standard of legal review for negative declarations from fair argument to substantial evidence. That's the bill that passed out of Committee.

That fair argument piece was removed from the bill and replaced with a series of new CEQA exemptions around the food bank, childcare, certain water projects, certain recreation projects, and one of them is the advanced manufacturing. So that is a CEQA exemption now.l

In terms of the near miss, when you miss an exemption by one factor that is a separate piece of the bill, it's always been in the bill from the beginning, and it has now been limited to housing only.

Can you define advanced manufacturing?

I can, perhaps permanent finance can. I mean, it's defined in the statute.

As my colleague looks for that. I just want to clarify too, that it's for facilities for advanced manufacturing if it's located already in a site that's zoned for industrial uses. So not in residential.

It won't change any zoning. It doesn't supersede local zoning if it's already zoned for industrial.

Correct. So just wanted to clarify that.

It doesn't change zoning. Nothing in the bill changes zoning.

In this specific part of advanced manufacturing, is there an ability for public input? For example, is the definition so broad that it could bring any type of thing?

No. No, it's not. It's a very focused definition.

Yes.

The definition of advanced manufacturing is listed as in section 26003 of the Public Resources Code. So that's already defined in statute.

Okay, so it's using already defined statute. It's not altering the definition.

Correct.

Okay. Thank you.

Okay. Senator McNerney.

I thank the chair. And I want to say, I appreciate, I want to appreciate the negotiations, tough negotiations from the administration and the two houses to get this before us. But I've heard loudly from our constituents that we need to provide certain things, and that includes safe transportation, housing, jobs, and clean energy.

Now, I appreciate that the bill does not amend CEQA for all projects. Correct me if I'm wrong, but rather a specific subset of projects that most Californians agree that we need to support. For example, it does not, in my read, apply to the Delta Conveyance.

In other words, it is my read of the language that it does not streamline permitting of the Delta Conveyance. I've asked several independent lawyers to confirm my reading in the text, and they agree that it doesn't streamline permitting for the conveyance.

But I want you to confirm for me today that this is true, that this language is not written to provide any judicial streamlining for the administration's proposed Delta Conveyance Project.

Good afternoon. Andrew March with Department of Finance. That's correct. So nothing in this bill would apply to the Delta Conveyance Project.

Thank you, I appreciate that direct answer. My other big concern is that the language shielding the administration from having to share administrative records and internal emails as a part of the CEQA record. This does not, this does feel like a step backward in public transparency.

I don't understand what the purpose of this would serve from the public good other than preventing state agencies from having to answer some uncomfortable questions if there would be disagreements among staff on, say, impacts of a proposed project mitigation.

So, in general, I will support the trailer bills and ask the leadership to continue to consider returning for cleanup amendments when we're done in the fall.

Thank you, and I appreciate that, Senator. I actually, I'll answer that question because the administrative record reform piece was in the policy Bill. It's actually a little bit narrower than what passed out of Environmental Quality Committee.

And the purpose of it is right now, and this has happened through judicial interpretation over the years, the definition of administrative record is so broad and so vague that it's hard to even know in advance sometimes whether the scheduling email of the deputy assistant three times removed should be included in it.

And so what ends up happening is cities have to err on the side of including everything conceivable and beyond in the administrative record.It's very burdensome and expensive and it's easy to have a gotcha moment in court when the EIR is being challenged and some minor barely or barely relevant or irrelevant document, you know, was not included and then the EIR is overturned.

So the purpose was not in any way to constrain like relevant documents. And I think the language accomplishes that. It's about trying to eliminate those sort of got sort of ridiculous gotcha moments. So just to explain the background on that.

Okay, I appreciate the explanation.

Yeah, thank you.

Look forward to making sure that the language does what we hope it does.

Yeah, absolutely. And I'm always, I always enjoy getting good feedback. So I appreciate that. Senator Laird.

Thank you. Let me follow up on the very point that that question was because it seems that on the internal emails being exempted that the explanation was is that there were so many.

You, you know, there might be the gotcha moment, but it seems to me the wording is the opposite, which is that it just exempts everything in, in the staff emails in the internal record. Am I wrong about that?

No, I don't think it exempts everything.

So where's the line between what's exempted and what's not exempted?

I need to pull, I would need to pull up the language on, on that. The line is that it's certainly documents that, on which decision makers and not just the people like voting like a city council member, but senior staff people who are actually involved or involved in advising on the decisions, you know, the senior department.

So it's specific that people that were involved in this decision, their emails are still...

Yes.

...part of the, the administrative record. Okay, then to follow up on another question, the one that Senator Durazo asked about tribal consultation, I still was of the understanding that there was an absence of a reference to tribal consultation in 131. Is it there, is there tribal consultation in this.

So 131, so CEQA itself has a tribal consultation requirement. And so CEQA, which is CEQA itself and exemptions from CEQA has tribal consultation and 131 makes changes and some additional exemptions to CEQA, but it's within the structure of CEQA and so it doesn't change the CEQA tribal consultations at all.

So it still exists?

It still exists. I think it was AB 54 someone will correct me or text me probably if I got the number wrong from 20-25 years ago. And then in 130 there for the infill exemption piece or from the assembly, there is a new approach to tribal consultation which has caused some conversation. And so that yeah, but that's in 130. 131 does not change the existing.

And, I'm taking your word, that tribal consultation is still there.

We're not repealing the tribal consultation that has existed for decades.

Then another question that was raised.

AB 52. My staff just texted me.

Okay, another question that was raised was the claim that under 131 the definition of natural and protected lands is different from current law in SB 35. Could somebody speak to whether that's true?

So SB 35 is a ministerial approval law, meaning it's not just like a CEQA exemption or change to CEQA, it is ministerial approval. So no discretion whatsoever by right. Not even CEQA exemption, just outside of CEQA entirely. And so there were various things in SB 35 that go beyond other laws, like for example.

But on the definition of natural working lands, which is my question, is it different and is there a reason for the fact that it's different?

We retained all in Senate EQ, we negotiated a series of exclusions of what we called natural protected lands, I think was what we referred to it as. And those have all been retained in the bill. That was not one of them.

No, but I know that you've retained what was in the bill.

That was not one of them and so it's not in this bill.

So there's not a definition of natural and protected lands in 131.

No, there is.

Why does that differ from current law? SB 35, that's the question.

Because the natural and protected lands, in SB 35 there's not a natural protected lands piece. There are certain things that are exempted from SB 35, including for example, certain tenant occupied buildings as a series of things that are exempted. So SB 35 is different than this.

In this, in committee, in EQ, we created something that we called natural and protected lands. So it was a new thing and we included various exclusions under that rubric. One of them has actually been expanded. The buffer zone around wetlands was 100 coming out of committee. It's now 300ft. And so. And that includes various sensitive environmental areas.

And so it's not identical to SB 35, and it was never intended to be identical to SB 35. It includes some things that SB 35 did not contain and it does not contain everything that SB 35 contained.

Okay, well, and then let me. Okay. I'll follow up on the tribes thing in a moment. On the advanced manufacturing, I want to ask directly about one thing which is nuclear. If there's manufacturing of nuclear material or disposal. Given the fact that we negotiated the Diablo deal, does any of this apply to that?

I don't, no nuclear is not part of this.

So it is exempted.

Not by name, but if you look at the definition of advanced manufacturing, it would not reach nuclear.

Okay, I'll take your word. But that's the, that was, the question was whether it reached. And you're telling me it doesn't.

It does not.

And then somebody was pursuing me saying that if they're on the tribe issue, going back to it, that if there's no CEQA, there's no AB 52 consultation. That CEQA is the trigger and that if you remove CEQA, you're removing the trigger for the consultation.

Yeah. So a whole chunk of this bill is not removing CEQA. Administrative record, the near miss, that's still CEQA. And so AB 52 tribal consultation would not be changed in any way. Whenever the legislature creates a new exemption, then you're exempting it from CEQA. And we have, if you look every year, this legislature creates multiple new exemptions from CEQA.

We all see that Senator Blakes receives all those bills and committees. So we create exemptions on a very regular basis from CEQA. And so that does exempt projects from CEQA. And there are exemptions in this bill. Just like there, we have other bills moving in the legislature right now that create exemptions.

So it's no different than that. But the pieces of this bill, administrative record, near miss, those are not removing anything from.

But the question is, is if there's any place. Are you saying that there's no place that CEQA is absolutely removed, so there's no place that the trigger for tribal consultation is removed, Is that what you're saying?

That's correct.Except that whenever we have an exemption. Right? An exemption. If you're exempt from CEQA, then you're exempt from CEQA, and there are many exemptions from CEQA, and we create new ones every year and we create a few.

I know that, but I'm trying to draw the connection to tribal consultation. So are you saying that every time we exempt something, somebody from CEQA, we are exempting the trigger for tribal consultation?

That's my understanding.

And why would we want to do that?

Well, we, we have many exemptions for CEQA.

I mean, I know, but we're doing it in this bill. And the concern is, is that it's exempting tribal consultation.

If one wanted to make it, propose that exemptions would be treated differently in terms of tribal consultation, someone could do that. But there's a huge number of exemptions to CEQA in the law. This is a drop in the bucket compared to the existing exemptions.

So how we're, so how these exemptions come into play is identical to every other exemption that has in that respect that has been enacted by the legislature. So that is a much, much broader question than this bill or any one.

Well, it's a broader question, but this bill is doing it for certain instances.

And there are other bills this year in the legislature that do it as well and other ones that have passed last year and the year before. And query, I will say for the record, when I first started with this bill, this bill was the exemption piece of it was a very, very tiny piece of it.

It was overwhelmingly about structurally reforming CEQA. And so, for example, if we had done the fair argument change, which we're no longer doing, that would not have been an exemption. That would have been making CEQA work better and that would have meant triggering tribal consultation.

And so what happened was there was so much pushback to the fair argument change from labor, from the environmental community, and that's fine. It's democracy. I'm not criticizing people for not liking it. There was enormous pushback for it. So that piece, fair argument, got changed to a few exemptions instead. And I stand by it.

I think it's still a really good bill. But what this legislature always does, not always, but often, is we can't touch CEQA. We just have to do more and more exemptions. That is what it is. And I've authored some of those exemptions, so have others in this room.

But that means that you're taking the X project out of CEQA entirely. And so that's a trade off the legislature has decided to make by deciding not to fix CEQA and rather to create more and more exemptions from it. That's a broad institutional issue that I hope will continue to be discussed.

Then a last question that has been raised, that the definition of natural and protected lands includes hazardous waste sites but not for habitat for endangered species or threatened species. Is that correct?

That is not, that was not one of the amendments that got included in that definition out of committee. Various people have raised it. I'm sure that that will be a topic of conversation.

No, but I don't know what you mean when you say that amendment wasn't included. I mean is that the situation in the bill now?

It's that, that exclusion is not in this bill.

The exclusion for hazardous waste sites. It's not in the bill.

Oh, hazardous waste is in the bill.

That's the point. I'm saying hazardous waste is in the bill but endangered and rare species is not in the bill.

Where do I have? Elisa, can you give me, do we have the statute itself, the bill. Can you give me the. No. We don't.

Senator, I would be happy to read the whole list of all.

I don't want the whole list. I just want the answer to.

There is an exclusion for hazardous waste sites. There are many other. A number of other exclusions, including around. You're about to get an answer or something. No, I just want. I'm going to. Okay. Natural and protected lands. It includes the state park system.

It includes a wilderness area, a marine protected area, national park system, national recreation area, national monument, national wild and scenic river system, any ecological Reserve or wildlife management area, et cetera, hazardous waste site. And then that's sort of defined in a very detailed way within a regulatory floodway as determined by the federal. By FEMA.

Lands under conservation easement on or within 300 foot radius of a wetland as defined an environmentally sensitive area within the coastal zone, lands protected as preserve areas or Reserve lands pursuant to an adopted natural community conservation plan, et cetera, within a. And then certain standards for. If you're in a very high wildfire severity zone, prime farmland.

So there's a whole list of that and hazardous waste area is one of them. The other area that you mentioned is not included in there.

Okay. Which could be an issue. And I know that in one letter it said that the Natural Community Conservation Planning administrators say that this bill won't protect habitat within their plans. It sounded like you just said that they were included in one of those lists. Yeah, sort of. I'm sorry, which one?

It's the NCCP is the usual acronym, but it's the Natural Community Conservation and Planning.

I believe so. And it's usually federal. I believe so. And I'm happy to have a conversation with them if they are reading it differently.

Okay, then a closing comment. I think that the questions that have happened are the reason we try to do these bills in the policy Committee so that we can have the discussion and make amendments and not have a binary choice of whether to go up and down on a policy bill.

And I voted against the previous version of this policy bill in a Committee. And now even though there are amendments made, I'm being asked to support it as a budget trailer bill, even though I posed it for some of the reasons that have been raised.

So I just Reserve the right to look at this when it gets to the floor.

Thank you, Senator Laird. It's good to have robust debates in Committee.

I like that in policy.

Yeah. In budget too. We're not so boring in budget. Okay. Senators. Senator Smallwood-Cuevas stepped out. I'll get back to her when she gets back. Senator Wahab.

Well, I just want to highlight a lot of my comments and concerns are very similar to those that were raised. I do just want to flag so in my district, we are along the Bay Area shoreline and I did have the very same concerns regarding protected species, protected lands. What are we doing?

A lot of the local cities have actually invested significant amount of money. For example, in Hayward alone, I think in the next 20 years or so, we have dedicated roughly $1.0 billion to protect our shoreline and continue that expansion and that protection.

I will also say that there are pieces of this budget that, yes, I do understand and share the concerns regarding putting policy in budget like this and being pushed to do so.

And we have historically supported the budget to ensure that those communities and those efforts that we are trying, trying to prioritize with funding get the necessary funding, especially during this economic uncertainty of the Federal Government and much more. I do want to raise that.

I will also echo the comments of, you know, policies should be largely vetted in the policy committees and at least go through the floor. That is definitely one of my concerns. We do need significant reforms on a lot of different issues that we talk about.

And I just want to highlight some of the things that we are doing that are actually a win in the housing piece. We are trying to address a lot of the concerns and I will share that. I am also looking at my Republican colleague who is sitting next to me, her notes.

And we agree on a lot of similar areas. Right. So we are expanding homeless funding with accountability. We are trying to cut some of the red tape. I will also add that we are putting a significant amount of money in areas that really needed for development.

So for example, $500 million for the Low Income Housing Tax Credit, $500 million for the HAPP funding which most local cities require and need.

We are prioritizing $120 million for the multifamily housing program and we are updating some of the areas that our chair has referenced as one of the topic of debates for literally years upon years, whether those are reforms or addressing any of the other concerns.

I will also highlight that we are trying our best to work with a lot of stakeholders. Here's the reality.

I have made sure that we have had multiple conversations with our stakeholders and the conversation has largely been that yes, there are areas of this bill that we have to revisit and make sure that there are going to be amendments and some of the issues that we have raised, whether that is again, my district has the most amount of manufacturers in the entire State of California.

This is a deep concern of mine. You know, making sure that localities have a say when we talk about CEQA. You know, a lot of people just want to cut regulations. Those regulations were put in place to protect communities, protect the environment, and do what is right when it's not necessarily profitable.

And so I have significant concerns about reducing those protections. And this is something that is put in the budget. And like I said, it's very hard because we also want to fund the projects that I just referenced. I will also flag the big concerns around labor.

And again, you know, cutting regulation should not equate to cutting good paying jobs, cutting good benefits that have taken years and years to actually be there. And people have fought for it and people have wanted to expand upon it, not cut it. I will also say that the tribes are deeply concerned, right.

With their input, and they are the nation's first people, and they have a say and a right to have concerns just as much as all of us. And so I will say that I share many of the concerns that were brought both by Republicans and Democrats. And.

And at the end of the day, I will also say that I know that this Legislature and I believe our chair is committed to addressing those concerns. And one of the things that I do want to highlight is that when we are talking about policy, when we are talking about these big efforts, nobody is happy. Right.

It really takes a significant amount of effort and conversations and a balancing act to strike the right deal for everybody. And so I am committed to continuing that work and continuing, making sure that we are prioritizing the needs of the communities we are here to serve, and it's the people first.

And so I wanted to flag that as I have many of the same concerns, but will support the bill. Thank you.

Thank you, Senator. I just. I'm happy to be the recipient here. But of course, these two bills have various policy bills. One was mine, one was by Assemblymember Wicks, one was by Speaker Rivas, one was by Senator Wahab. And I think there might have been one other that I'm forgetting about.

I do just want two things to clarify, and I appreciate your comments and appreciate the thoughtfulness. Areas protected by habitat conservation plans are excluded. Just to clarify that. Understood? Yes. And also in terms of manufacturing, local decisions about whether to have manufacturing and if so, where and whether to grant permits is not changed.

So cities can decide we don't want any manufacturing or we only want it in this area. Cities can put their permitting requirements in place. This bill doesn't change that.

Yeah, I think, I think one of the things that, you know, many people are concerned with and also the line of questioning is the clarity of what is covered, what isn't covered, and how we can do that. So, like I said, I will be supporting this. I think that there's a lot of good effort in the budget.

I think that there's also a lot of conversation that still needs to be done to address some of the concerns that were raised. So I'm committed to doing that. I'm sure you are, too.

Yeah. Thank you so much, Senator. Okay. Senator Smallwood-Cuevas.

Okay, thank you. And apologies for my in between committees here.

I wanted to just say off the bat, and I appreciate the history of how we've dealt with CEQA and what needs to be done and how we've tried to do things, but I just want to say that CEQA is not the enemy, that CEQA is utilized by so many communities, particularly vulnerable communities, communities of color, to have an opportunity to interrogate, to vet, to make a determination of how a project is going to be good for their community.

We'll keep them safe. We'll ensure that there are good jobs and opportunities. So I understand what sounds a bit of frustration with maybe how this has been handled in the past, but. But also want to be clear that streamlining can't mean abandonment. It can't mean that we're abandoning CEQA because so many communities rely on it.

And if we keep this exemption happening, we essentially, as you were saying, we are not going to have the protections that so many of our communities need and deserve. My questions, and I want to align my question, my comments and my questions with what has been said.

And I want to relitigate things, but I do want to understand how does the trailer bill ensure that there are mechanisms or maybe more direct, what is the mechanism now that exists to guarantee that CEQA exempted manufacturing projects will still be able to provide an opportunity to ensure that these are quality jobs, to ensure that there will be community benefits that can be connected to projects, to ensure that these are safe working places.

You know, advanced manufacturing means a lot, right? We're, you know, there's a question about whether it means nuclear, but we know for sure it means semiconductors. We know it means battery plants, lithium and processing industries. And these are industries that are documented with histories of toxic impact.

But also these are industries that we are trying to build in a way that helps us get to a renewable energy future. And so if there is no way for communities to really ensure that these are good jobs for Me, that's a real problem. So my question is what are the mechanisms now?

If we're exempting manufacturing, how will that.

Work in terms of. I guess I'm answering the questions.

I know and I appreciate my Department of Finance, the double duty you're pulling.

I'm happy to do it. I do want to say I appreciate your comments at the beginning and I'll be honest, there are people who say we should repeal ceqa. I've never been of that view. I think CEQA plays an incredibly important role, role in certain respects in protecting communities and protecting health and environmental contamination, et cetera.

We also know that there are situations where CEQA can play a harmful role in stopping, stopping projects that have nothing to do with the environment.

In fact, sometimes projects that are beneficial to environment, you probably read in the paper, paper in San Francisco we had a 500 unit apartment building with high affordability, Union Construction, right by a BART station like everything you asked for. And CEQA was used to kill that project.

And so that's just one example of it can, you know, it cuts both ways. So the question is to me at least is not how do you get rid of SQL?

I don't want to get rid of CEQA, but how do you make SQL really, really work to advance our state's goals without inhibiting goals that we share as a state in terms of advanced manufacturing, this does not change any of the like environmental standards for how you have to, you know, we know that manufacturing in the state is strictly regulated by many protections that frankly are much more specific than anything in CEQA, which CEQA just sort of depends on who raises what issue.

We have agencies that, you know, we have regulations and agencies that enforce these regulations. So you can't just do whatever you want. And in terms of jobs, we want these to be good paying jobs. And we're having ongoing conversations about how we make sure that they're good paying jobs.

So there isn't. And I understand the first comment about we have to thread this needle, I get it. And we also can't throw the baby out with the bath water. We have to make sure that this tool is still in the toolbox of many communities.

But are you saying that the projects that are currently exempted, that there is something, there's some language in this bill that helps us address the question of whether or not there's a real tool and process for communities to determine the community benefits, the quality of jobs. And. In this iteration.

So the bill does not override any kind of local permitting. So when the cities will decide whether to zone anything because it only applies on industrial zone land. That's the only place. And cities decide what they want to zone or not zone for industrial.

They can zone nothing in their city for industrial and then the exemption simply doesn't apply. Or some areas or broad areas, cities can create whatever permitting system they want to. And so for example, they could create a conditional use process for permitting for certain kinds of manufacturing and then it has to go through that.

And so there are plenty of ways that cities can create public process totally separate from CEQA for permitting for zoning, however they choose to do that. And we see conditional use. I mean I come from the capital of conditional use, San Francisco. San Francisco loves conditional use.

And I know there are other parts of state that have a lot of conditional use as well, which means that it's a allowable use, but it has to be approved by the Planning Commission or by the City Council and they can put conditions on it.

So those tools are there. But this particular, there's nothing in this bill that speaks specifically to these exempted projects and what opportunity there is to, to utilize any of those safeguards that CEQA would have provided. Those are gone. We'll have to rely on what's left.

I get that now and I think that continues to be a bit, it is concerning, especially depending on what, you know, what city you're in, whether they understand the importance of protecting communities or whether they are, you know, putting other priorities ahead of them. I think that's, I understand that point.

The other, the other question I have is, has to do with, and I think Senator Laird talked about this and this is the tribal consultation and I, it sounds like the conversations are still happening with that. But the 45 day timeline piece of that 130.

Okay, that's in the, not in the bill that originated from my bill. Okay. That's the one that originated from the Assembly Bill, the, that passed out of the Assembly. Just to be clear, the the tribal issue and that new structure with the 45 days plus 15 days is in 130 which came out of the Assembly.

So just a.

Well, I, and I know that there is concern about the lack of opportunity for some of the tribes to engage in this conversation in terms of AB131.

And I want to just say that I hope that we can clarify that because I think between the two bills there is some confusion and I also think that the trigger, if you exempt, there's no trigger. So then there's no opportunity for consultation. And I think that has serious implications when we think about the tribal resource piece.

The other question I have is about, and I think you mentioned this, but how does the the trailer built ensure the environmental justice communities are not further burdened by some of the toxic manufacturing?

And this is a big issue in my district because we've got the urban oil fields and then they are aligned near the wetlands and there's always some additional proposal to develop up in that area with, you know, either trash. Trash. Facilities and other facilities up in that area.

So I'm curious, what are the ways that we can mitigate some of that without this review tool?

Yeah, it doesn't cover any of those kinds of projects. Those are just simply not part of what this bill is about. And so, you know, so I just don't. That's not part of this and I agree with that.

I wouldn't want to streamline oil fields or garbage dumps or any of those other really toxic uses which burden disproportionately low income communities. So that's just not part of this bill.

Okay, so those are not. Those are also. Those are up to local government safeguards. Yeah.

And in fact, for the near miss piece that we were talking about before and administrative record and the pieces that actually change CEQA, it excludes fossil fuel and like explicitly says that's simply not part of the bill. Same with warehouses. Thank you. Thank you. Okay. Sorry, Senator. I'm playing the role of Chairman, chair and author right now.

I've never done that both at the same time. Senator Blakespear.

Thank you. Chair. I want to speak about some concerns I have on 131ABSB131. I've been grateful to serve as the chair of the Senate Environmental Quality Committee and have been supportive of measures to streamline CEQA and cut green tape to get projects built faster.

And I worked closely with the author of our budget chair on earlier versions of this bill. But there were some things that were in the bill, but there were many things that weren't.

And I think it's important to recognize that it actually has changed substantially and in its current form it could jeopardize key elements of CEQA that are important to protect and that's particularly habitats for endangered species. 131 introduces a number of new CEQA exemptions and I do fear the loopholes and unintended consequences of some of these.

My main concern about the habitat for endangered or threatened species it being exempted. It's actually just absent from a long list of areas where the Exemptions do not apply. And the chair read off the long list of different areas.

But my hope is that, and I think this is the case, that it was inadvertently left out, not that it was specifically excluded because the state across many years has expressed that it's a priority that we protect our endangered species, for example, monarch butterflies and some species of, of bears and bighorn sheep and all sorts of different species that are threatened and protected.

And when we say that we're protecting them, but we're not protecting the habitat they need to live, then you know, we're really, we're not effectively protecting them. So jeopardizing those whole ecosystems, I think is a risk that we don't want to take.

And we have to remember that if we're not doing CEQA for a project that would be built in an area where endangered species live, then there's no mitigation.

So the lack of mitigation means that the failure to mitigate for the loss of habitat means that overall we could have less and likely would have less habitat, which would result in declining species that could be pushed closer to extinction. And I think that this is not what the state wants.

You know, we talk about our 30 by 30 work, which is meant to stop the extinction crises. And you know, this is something that really needs to be, to be cleaned up.

So my hope is that there will be cleanup legislation that can address specifically the definition of natural and protected lands, that that would include the habitat for protected and threatened species. That's, I think, what really needs to happen. And I want to make sure I say that for the record.

And then I'd also just like to ask one follow up question about the Delta, the Delta conveyance project that Senator McNerney was asking about. Maybe you want to listen to the answer to these questions. So, you know, my understanding is that the Delta is actually not part of natural and protected lands.

So if, for example, there was an advanced manufacturing project that a city or community, a city or county along the Delta rezoned for industrial and then wanted to build along the Delta area, wouldn't that be something that could happen without CEQA?

I'm not sure what land you're talking about. The Delta is a very large and diverse area.

It would be any city or county along the Delta.

What does that mean, a city? Because there are many cities along the Delta. Right.

So advanced manufacturing, if it's in an industrially zoned area that the city, city or county has zoned industrial, then it can be built. It can. It is exempted from The CEQA process.

So because the Delta is not part of natural and protected lands, to me, it seems like it is possible that there would be projects along the Delta. And I just wanted to understand that better. I think it's possible we don't have an answer to it, but I just want to pose that it's not clearly excluded.

So just to be clear, you're not talking about the Delta tunnels. No. You're just. But you're now looping in the Delta for something else?

Well, I mean, I'm just talking about the Delta, which I think is of high priority to some.

I think I'd have to have more specifics about, like, where on the. I can't answer that. In General, because you're talking about cities along the Delta. There could be areas that are protected or areas that aren't protected. I would have to have more information about where exactly you're talking about.

And Chair, would you mind if the Department of Finance answers the question? Question? Because they answered the previous question directly to the Senator about it, so I wanted to know what their answer was.

Yeah, I can turn it over to them. Although the previous question was about the Delta tunnels, so you're asking something different. I'm happy to have them answer it.

Andrew March, Department of Finance. Nothing more to add. I would note that the Delta is a large area, so depending on which definition of the Delta that you're using, it could already encompass many manufacturing sites in the cities of Stockton, Sacramento, West Sacramento that may be already industrially zoned, that would be subject to local control. Thank you.

Thank you, Chair.

Okay, Senator Cabaldon.

And so from the Delta to the Delta. Yeah. So to the Delta. I just. I do want to. On this Delta question because I concur with Senator McNerney's analysis of its impacts with respect to the conveyance.

And I'm less concerned about the impact of 131 in the delta in particular, because the Delta has two land use overlays, essentially both the Resource and Land Use Management Plan that is under the purview of the Delta Protection Commission, to which cities and counties must make their plans compatible, as well as Delta Stewardship Council's Delta plan.

And so a rezoning of a site for an advanced manufacturing facility, in most cases, if it's in the primary zone of the Delta, would qualify as a covered action and require approval of the Delta Stewardship Council. So much more, much more rigorous review than elsewhere in the state on the bills themselves. The.

Though I think, you know, I concur with I guess Senator Ochoa Bogh's initial comments about the, you know, some of the reasons why that, why we're here. And I very much appreciate the concerns about the trailer bill process and the policy process and whether this is appropriate.

But I also, as a counterfactual, wonder whether it's, it would be possible to do an actual policy bill in this space that was comprehensive enough and profound enough to really get at the issues that both we and the Governor have been talking about with respect to the structure of how much cost we drive through the procedures and processes that we have.

And it's just very challenging in our regular legislative process to grapple with it. You know, if I propose that we give three days notice instead of four days notice for something, everyone will come out of the woodwork and say, zero my God, everybody's going to die.

This is just the way that we talk about these issues and in a way that it's very hard to have a complete conversation where everything doesn't turn into yet more trade offs. Okay, you can, let's loosen up on CEQA here.

But in exchange for that, you're to going, everybody has to agree to a rooftop garden on top of every housing project because we can't let those people get a CEQA exemption for nothing. And then the next year comes along, you're like, well, why is nobody building from that CEQA exemption? Well, it's because they can't.

The rooftop gardens cost just about the same as the CEQA process did. And so it's just, you know, I'm a Member of the local government Committee. I voted on this bill when it was SB607. I have heard that process too, but I guess I've been around here for 35 years.

I'm not convinced that we could produce a workable, comprehensive bill that would get to the core of what the challenges are. So I'm a big supporter of CEQA in its original intention. It has definitely created, along with a lot of other regulatory frameworks, many, many unintended consequences.

And those consequences have very real impacts in terms of our ability to deliver for the people of California in water, you know, water quality, water supply, housing, so clean energy, so many other things. And so I wish this could be a policy bill, but I, but I'm not sure if that could work.

And so I'm supportive of this in that way. That said, there's a, there are a lot of things to continue to work on. Not a big surprise if you try to tackle something that's been a feature of the California legal and economic landscape for decades and that everything else has been built on top of.

There are going to be some things to clean up both in the coming weeks and in the coming years. I think that's inevitable. But there are plenty of stuff to clean up in the existing law that needs to be. Need to be done otherwise. So I wanted to highlight one small and then one big.

So the small is advanced manufacturing just as an example. So this is, this is language and it's not a cause of concern for me to vote for the bill. But the advanced manufacturing applies to lands that are zone industrial. Any lands that are zoned industrial. Well, industrial zoning is a, is also a wide set of categories.

And so you can have an industrial zone that is fully industrial, but the allowed uses for which might only be light warehousing, might be startup space, it might be office actually. And so it's not. The category is not big enough for that.

And you would normally, unless you're going to rezone, you would need to do the CEQA work on that space. So it's not problematic. But I think it's an example of where how the pieces all connect together. We're going to have to look at line by line of this just as we do each year with CEQA itself.

The more fundamental one for me is the tribal issue and it's on 130 and it's not on 131. And the issue is real because the. It's a no, it is a high regrets action.

You know, when I, when I was mayor we had a, we had a developer in the city who did not engage in appropriate consultation, misled us at city hall about what was going on and destroyed destroyed cultural remains, human remains in, in the city that could not be restored like you could not you.

There was no way to, to make that right again and had to be referred to prosecution. So these laws are, they're not. That is an example where it's not just a question of like the process, but it is about the process to make sure that that doesn't occur. And so I don't. It's not the timelines alone.

It is about having enforceable agreements. I know this. The 6. The 130 approach is intended to say hey, but what if nobody will make an enforceable agreement? Or what if somebody says I'm going to take six years to do it? That's real and we need to make sure that the battle is joined in both directions.

But I don't think the protections in 130 are sufficient to assure that we're making good on California's promise to protect tribal resources, cultural resources. And so I'm looking forward to follow up work that will allow us to expeditiously fix that piece of it. And that said, I think this is an important step forward.

Obviously I love the HAPP portions of the Bill of 131. We need it.

I'm appreciative of the negotiations and the governors coming around on HAPP funding and also the expectation in 131 that we will have additional follow up legislation on the HAPP accountability side which I support and is absolutely necessary and look forward to pursuing that as well. Also just want to end by thanking the chair.

I know this is this is both an exciting opportunity to move something forward that's been pending for a long time but also a big challenge has been deftly navigated and I know we've got a lot of additional work to do but appreciate the work and looking forward to moving this to the floor. Thank you.

Senator Grove has waited patiently.

Zero I'll give you. Thank you Mr. Chair. Thank you. I just want to make some comments on both bills obviously that everybody is talking about particularly on SB130. So right. You're 131. So just want to make sure I'm right. So 130 I echo my colleagues comments.

Yeah I echo my colleagues comments about you know CEQA does need to be streamlined and but there are when we make decisions in this building they're not always completely thought through and we do pick winners and losers and we do have side effects of this bill or collateral damage.

One of the things that we're going to have collateral damage in and 130 was mentioned several times by my colleagues regarding the tribes and I would expect that like my colleagues said once you remove those remains and you dispose of them or get rid of them there's no, no mitigation possible that could ever restore that or make it right.

The other thing that 130 affects is vehicle miles traveled.

Now it's not going to affect my colleague in San Francisco or my colleague in Los Angeles but we have a development that we've worked on in spite of CEQA years and years and years of litigation in the Tejon Mountain Village area, the Tejon Ranch area where we have the brand new outlet malls, we have Tone Mountain Village which are all these beautiful homes where people have already bought properties, they've already secured the building construction Kern we've unleashed them ready to go build make these beautiful facilities.

Los Angeles we're having some problems with CEQA because we've been sued. Adding the VMT or the Vehicle Miles traveled adds roughly $375,000 per unit. That is a. Hopefully you guys didn't think about that and go. We don't care that it adds $375,000 to the cost of, of the home.

I'm hoping that it's something you overlooked because in that area, not like Los Angeles or San Francisco where you walk to the rail station and you go to work, they drive, they drive and they pay extra to live or pay to live in this mountain community that's up in the beautiful hills over in the Grapevine area where you have the Tejon Mountain Ranch behind you.

It's beautiful and people want to live there. But the Vehicle Miles Traveled will add 3, $370,000 to each unit, not the whole housing project, but to each unit. And so that number has been confirmed. And I just think, again, I hope you guys overlooked it and it wasn't something that you did purposely.

I do have to agree with my colleagues that CEQA was. I mean, Ronald Reagan talked about CEQA, right? He talked about CEQA. It's started it. Yeah, he started CEQA. And so. But CEQA in even the language in this bill, and I'm going to read it, CEQA is never, ever intended and it should not be provisions.

It should not be primarily, it should be for primarily economic interest and not to stifle competition or gain a competitive advantage or delay projects.

Our Kern County EIR is the most stringent and I know this doesn't cover oil and oil production, but you have the most stringent, environmentally sound 1724 inch thick binders with mitigation and concerns honoring setbacks, all that stuff.

And I know it's going to freak everybody out that I'm talking about oil and I know oil is not included or that this is not in this language. You have that and it's been litigated for 10 years.

And the environmental group that this body funds is excited about their ability to stop oil drilling in Kern County for 10 years. They're proud of it. I mean, they're proud of it.

And that is part of the catastrophic cliff that we're about ready to go off, of which I hope everybody is realizing there's no guarantee it's going to be fixed. But you know, just want to bring that up. But CEQA was never intended to delay projects. Project Home Camera.

We had a guy that bought an old beat up Hotel, had 150, I think units in it wanted to convert it into single rooms where you could get homeless people off the street.

They came in, they extorted environmental concessions, labor concessions, and by the time the whole project was, he was estimating the project, it was going to add almost $1.0 million to the project, which would not be affordable housing for people to get off the streets. So I applaud the author for trying to address the issue because.

Because while CEQA should not be abandoned in any way, shape or form, while CEQA should be, you know, put in the places for the right reasons, whether it's preserving wetlands or lands, whether it's preserving or making sure that the tribes have an ability to get the remains or the artifacts that have been buried deep in the, you know, whatever it is, right.

They should be, there should be some type of mitigation standard for that. And CEQA should be applied, but it should, should not be used as an extortion tool, which we've seen over and over again that it has. Because if it hadn't been and it had been used, right, and people weren't extorting people out of this.

I'm frantically looking through this document that somebody gave me. I was hoping they highlighted it. They did not. Where they told me that in order to get a project done, they had to spend, they had to give an environmental group $150,000. There is something in here for 25,000.

I haven't found the 150, but when I find it, I'm going to bring it to your attention because all that does is add cost to the project. And all this developer is trying to do is provide affordable housing so that people can get off the streets.

I talked to Frank Siller at Twin Towers Tunnels to Towers when I was in D.C.

and he said they would love to take over that hotel across the street from Wishlist Boulevard and get all those homeless veterans off the street so that they could, so that they could just walk across the street street, have services, wraparound services on the bottom floor and the rules and CEQA and all the requirements, they build these, convert these facilities everywhere, Texas, New Mexico, everywhere.

They convert these hotels into facilities for our United States military veterans, those that have put their hand in the air to swear to defend this country and they live on the streets in Los Angeles across from Wilshire Boulevard because developers cannot get low income affordable housing so that you get people off the streets.

Because you have to go through this entire process. There's litigation and tied up with CEQA and environmental groups and labor groups. To be honest with you too, that file lawsuits, that demand project labor agreements even when no state resources are there.

And like the argument or the argument, the debate we had the other day when we were in Committee, even though you set a floor, you know, and say you can't pay less than 20 or 22 or whatever the dollar amount is, even though you set a floor, there's no way you're going to get a carpenter or anybody to go out there.

A plumber that's certified or I had a call out a plumber where I live here today. It was $350 for the call out. No one is going to respond to those jobs. If you're going to only offer $20 an hour, that is a floor, it's albeit pretty low. But no one is going to do that job.

If somebody said from the Department of Finance, hey, we'll offer you a CPA job, I know you have a skill set. Will you come and do it for $20 an hour? You would go tell them to pay pound sand because you're worth more than that. The same with these labor trades.

These individuals who perform this work, whether they're signatory, union or non union, they are not going to do that work for $20 an hour. And they I was looking at wages the other day. San Diego was like $95 an hour. Louisiana was $75 an hour. Kern's like $80 an hour.

Just depends on the region and where you live, where the average wage is. I do have a concern over the Tejon Mountain Village on the vehicle miles travels. So my question is, did you overlook that or did you do that on purpose in 130? It's not your bill.

Hi, Allison Hewitt, Department of Finance. So. Vehicle miles traveled, that's an existing CEQA standard. There's nothing in the bills either 130 or 131 that changes the requirements for vehicle miles traveled under CEQA.

What ABSB 131 does is it creates a statewide mitigation bank where in order to meet the requirements for VMT under CEQA, developers can make a contribution that is in turn used for other for affordable housing projects or related infrastructure that then in turn reduces, that has the impact of, of mitigating vehicles mile travel.

But it won't increase what's in the bills itself, won't increase the costs for any projects. It's just an option. Just like there's existing mitigation options under guidance from LCI for how to mitigate vmt. That is an existing standard under existing law.

So you it's not in addition because I'm getting texts right now that it's in addition to what's already current in law and you're saying it's not in addition it's another option. Exactly. Okay. And you said can meaning not forced, not required, not demanded, not extorted.

I don't know what other language you can use to make sure that we understand that it's a option and can be used. Not what? Zero.

There'S nothing in law that requires it. It is another option that developers will have in addition to the options that already exist under LCI guidance.

So before the Committee's over, can you provide me that language? Because I'm still getting text messages that said is not an option. It's in addition to so if you could point me to that, I'd really appreciate it so I could address yeah, absolutely.

It's the language is absolutely may and I can provide the sections.

That's what I thought. See, look, another thing I have in common with my colleague from the other side of the aisle. It's may for the local government, but it is shall for the developer. So the Tejon Mountain Village shall pay this additional fee. So are we both wrong?

Yeah. There's nothing in the Bill that requires anybody to pay into the State Fund. So I think we can happily clarify that for you.

But there's nothing in language does it. Say local development may do this and then the developer shall. Like S H A L L, like that means you will in our world.

No, this is. Again, it's that. And there's also legislate. I apologize that I don't have the section of the Bill in front of me. I can turn to it. It'll take me a minute. There is lots of legislative intent language that basically that bans this, that this is an option.

There's nothing in the Bill that is intended to make this a requirement. It is just an option that developers have. So that is. That's the way. That's the intent. There's legislative language around it and there's flexibility provided flexibility in the Bill. So, no, to our knowledge.

Thank you. So you have time to get to that. I'm going to ask a couple of more questions. So you look up that for me so I can share that with my colleague next to me as well. I do have on 1:30.

The tribal communities, like my colleagues mentioned, are very concerned about their ability to be able to use CEQA to preserve either remains or vital artifacts that they believe where their tribal leaders in the past and their communities lived. And mainly around waterways. I mean, you know, waterways, because you had to have water back then. Is there.

Has there been a commitment? And I apologize for not being here the whole hearing to address that issue moving forward, because I do know it's tied to the budget being passed or signed.

I mean, I know that provision was put in there that if it doesn't get out and it doesn't get signed, then the whole budget is null and void and we have to start this whole process over. But is there a commitment moving forward to address the tribal issue concerns on 130? Yes. 130. Yes.

Is there an opportunity in General?

I don't know. Is there a commitment? Are we just going to throw the tribes to the. Are you guys going to fix that issue that the tribes have? I mean, there are first nations people. Yeah.

So I will say, and again, 130 comes out. Unlike the other one. 130 did not come out of any Bill that I authored that was negotiated in the Assembly. What I can just say what I think. Obviously this is all three party agreements and that Bill did not come out of the Senate

When they say three party, they mean the Governor, the Speaker in the Assembly and the Senate pro tem. No Republicans. Okay, go ahead.

The Senate, the Assembly and the Governor.

Thank you.

Including the elected leadership of those two houses that all 40 people voted on. So I personally, I mean I strongly, strongly believe that tribal resources absolutely have to be protected and taken into account in streamlining laws.

It has been a contentious issue in this building for decades, long before any of us was here, going back to when AB50. oh you. Were you here for AB50 too. Okay. So my apologies, Senator Laird. Yes, Senator Umberg was probably around for part of it too.

But there has been, there's just been a lot of contentiousness around this issue because people this desire to protect, but also to have some sort of timelines and certainty. And so I think this will be an, I think this will be an ongoing conversation and I really my.

I would love it and I'm happy to be helpful if I can to get there to try to have some sort of grand agreement where we can have a model that we create that everyone can buy into and then that becomes the global agreement in all of these laws.

Because right now it's a little bit ad-hoc in every law and that I'd rather it just be consistent. Personally.

No. And I appreciate the Chair's comments. I just again, I think that we lose out on so much as Californians when we allow these projects to be stifled because of CEQA. I could name 10 projects off the top of my head, starting with BNSF Railway, an inland port.

Trains already go from the port to this location out in the middle of nowhere, in the middle of the desert. It could be an inland port, reduce carbon emissions, truck transportation. It's going to take them years to get through CEQA. And the environmentalists are worried about the blunt nosed lizard or a lizard.

The trains already go through there. The lizard has already moved. I mean these things that come up to stifle progress, reduction of emissions, reducing carbon emissions, addressing California's whatever green new future. You actually create more carbon emissions by delaying these projects on.

You know, again, I have to do it and my colleague, the former Chair of natural Secretary of Natural Resources is going to make fun of me. I used to represent the number one oil producing county in the nation. We get no permits.

You would rather import fuel from foreign countries that are hostile to us, that are hostile to communities that we say we care about. They bulldoze down the Amazon Rainforest, which is the world's lung. And we buy their oil because California consumes 1.8 million barrels of oil every single day.

And Ecuador's oil that is produced, one state buys over 50% of Ecuadorian oil and that's us. And then we ship it here. And according to California Air Resources Board, I have it in a document, they don't count emissions from point of origin to point of destination.

They let all that over our ecosystem, whether it's from Saudi Arabia, wherever it's from, or Ecuador or wherever. And they bring those ships here and they only count the carbon emissions exposed 12 miles off our coastline. That is not addressing climate change or emissions in a fair standard.

So I think that, you know, I applaud at least every CEQA exemption I practically support. I can't think of if I've ever missed one vote on a CEQA exemption because CEQA has been so misused. And it needs to be addressed specifically in the areas of housing.

We invested billions of dollars in housing and it got like 25% worse. We have the highest unsheltered population in the entire nation. And part of it is because we can't build affordable housing, especially in infill areas. And so I do support those bills.

I do want to make sure there's some type of commitment to make sure that the tribal community is taken care of and that we really look at projects and think, wow, that would reduce carbon emissions if we would just approve that project. Or we could reduce carbon emissions emissions globally.

We could stop funding countries that are hostile to us or hostile. And I said it on committees before, and I'll say it again, and he's going to laugh at me. My producers in Kern County have never invaded another country and killed anybody.

Please don't laugh.

So look, and we still don't produce energy here for Californians, by Californians, because you're concerned about climate change and global warming while you pollute the ocean bringing ships over here from these foreign countries. And you have the asset and the resources right here.

You won't even look at geotest, which is using old oil wells to heat up water and gives you 100 hours of battery storage. 100 hours of battery storage. You won't even look at the project because, oh, my God, what is it? It heats up the water underground, water is already heated up underground.

Just look at the project has millions of dollars committed to it from the previous Administration, the Federal Government And California State still won't look at it. I had my colleague from Los Angeles just now talk about these. The word she used, toxic industries, I'm thinking because of the industry that she was mentioning.

And she mentioned battery storage right after that in these low socioeconomic disadvantaged communities. I mean, how are you going to move a whole community if battery storage catches on fire again? So I'm just saying there's a lot of things that need to be done.

I appreciate you guys at least bringing it forward, appreciate the governor's courage to try to bring it forward. I know you have an uphill battle because of, you know, people that want to delay those projects that make a substantial amount of money extorting those projects. And I thank the Chair for bringing forth 131 as well. So thank you.

Mr. Chair. Mr. Chair, if Kern County were a state. It would be the fourth largest oil producing state in the United States.

Yes, absolutely. Sorry, I apologize for not seeing you before. The Administration, I think wanted to respond.

Thank you for that, Senator. And as testament to that commitment, Miles White, Deputy Legislative Secretary for the Governor and happy to talk through some of the questions you had about the proposed VMT mitigation bank.

And ultimately it's a project that we're very familiar with, Tejon Ranch and the bank actually in a lot of ways and also had a chance in the audience here to pull up the statute.

And it's in Section 58 of Assembly Bill 130, subdivision B, paragraph 3, where a project applicant so purpose of CEQA, that's developer project applicant may use the fund as one of optional strategy to mitigate a significant transportation impact.

So again, as you're well aware of the this is only specific to projects that have a VMT impact that exceed the significance threshold. It's usually based on the regional VMT average. So anything in excess of that must be mitigated.

This is really providing actually a very efficient mechanism that's at the discretion of the project applicant, subject to the lead agency's determination of whether it's feasible and proportional. But what's really innovative about this tool and its really modeled off of other tools that we have in CEQA context.

Actually your point about wetlands conservation or other kind of offsets, this is really building off of that effort by providing actually targeted gap financing.

So instead of a project applicant having to offset full hundred cents on the dollar, targeted gap financing for infill, location, efficient affordable housing and also what's really neat about it is on infrastructure, horizontal water systems, capacity, everything else to help unlock these sites that's long term, 55 plus years affordability, everything that you have certainty on to help.

But also it's an option if it's more effective for project applicant to use existing transit demand management tools or other kind of transit, other resources that can be in addition or also as a complement to this strategy.

So again, just trying to provide another framework and the mechanism that's available to actually in a lot of ways reduce what their mitigation costs are based on more kind of leverage funding, federal, state, local sources that are tied to these projects.

No, and I appreciate that. I appreciate the fact that you're giving options to developers to be able to address that issue. But again, it was proposed to me as it was an addition and it was a shall. And so I just wanted to clarify, you know, that it was not shall.

It's an option out there for other developers, including those that I mentioned. Thank you, sir. Thank you for your time.

Okay, thank you very much. We next have Senator Perez. I can't remember who was first, Perez or Allen. Do you want a Rochambeau? Okay. Okay. Senator Allen first, followed by Senator Perez and Senator Richardson.

Yeah. I just quickly want to associate myself with a lot of the comments, concerns have been raised about the bills, particularly those raised by Senator Laird and Senator Blakespear. I would like to just get a better understanding of what commitments are in place to clean up the Endangered Species Act Language.

My core concern is I don't see why we're not just conforming the language with what we've already agreed to in SB130. So that's my concern that's out there. If any of you want to comment on that, I'm happy to hear.

But that I'm certainly going to be following that very closely as this, as this makes its way, because from my perspective, this is, you know, one of the many very concerning aspects of the bills we're looking at today.

Thank you, and the bills before us today are three party agreements, as I've indicated, as part of. They're integrated as part of the budget. And as I, as you and I discussed this morning, there are various aspects I'm sure different stakeholders have raised, and that's a fair thing to do.

But the bills before us today are in the form that they are as part of the budget. I wish I could make unilateral commitments to do all sorts of things in the budget, but we operate as part of a ecosystem with two branches of the government. So. Yeah, Senator Perez.

Yeah. So a couple of things. One, you know, I want to just highlight and I think just appreciate all the work that's gone into making sure that we're including round seven of the HHAPP funding, or the Homeless Housing Assistance and Prevention Program.

We know those programs are incredibly important, and we've heard from so many local council members, local mayors from all across the state about how critical those dollars are to ensuring that we keep shelters open, ensuring that we have shelter available for those that are unhoused.

As somebody that has, you know, faced the tragedy of losing family members living out on the street, shelters do make a difference. They have a tremendous impact. On top of that, they help us to reduce encampments that we often see on street sites that we hear so much from our constituents about that they are frustrated with.

So this was a very important and critical investment. But in addition to that, and I see that highlighted, you know, here in AB131,130 also lays out important metrics for us to perform oversight and accountability.

We know one of the major questions that has come up from people is understanding how those dollars have been invested and what are the results that we've seen from the millions of dollars that have been invested in homeless services in shelter.

And so making sure that performance metrics on rounds 1 and 2 are being reported out on that there's oversight of these shelters and these facilities. I'm sure many of you have read in the news, including myself, really disturbing and shocking stories of how many of these shelters are being operated.

Oftentimes they've become places that can be very dangerous, and so I think us ensuring that we're having tighter oversight on these locations and that we're really being intentional with driving some of those key outcomes that we want to see is really, really critical.

And I want to highlight that here because I know there's been a lot of back and forth between local leaders, as well as the state and local leaders wanting to ensure that we're getting that funding, but the state really demanding more accountability and oversight.

And I think that's what you see reflected here today in both AB130 and AB131. And I do want to highlight, you know, I think in many ways this is just the beginning. There's more that we could do in terms of oversight and accountability.

And a lot of that is due to the fact that many of the data systems that we use to gather and assess these metrics are in some cases outdated.

And I say that, you know, as somebody that's worked directly on these types of projects and issues with LA County, and they've made huge investments to make updates to their massive system, but not every county's done that.

And so even the way that we report on data, the way that we talk about these measurements of success, they're different for every county. So we need to get more on the same page here. This is a great start to make sure that we are assessing these things.

The other thing that I wanted to bring up, and I think this is, you know, in following with some of the comments that Senator Allen had made, and I know some of the concerns that had been raised, you know, I, I understand the need for CEQA reform.

I think we've seen so many cases of projects, particularly housing projects, being denied for reasons that we don't quite understand.

Oftentimes housing projects that would be great and would be placed in areas such as a parking lot where there would be no net housing loss, and it being denied for reasons that are beyond certainly my comprehension, I think, but beyond many members of the public's comprehension. And that's created a lot of frustration.

And so we've seen CEQA be weaponized, unfortunately, in some cases. And I know that there's been a desire for us to have reforms around that so that we are able to build more housing, to build more affordable housing, and we aren't running into many of these challenges.

At the same time, you know, CEQA was a law that was created in order to ensure environmental protections.

And that's something that is so critical, we know, for so much of our state as well as so many of our stakeholders, you know, and doing a quick overview of the bill, and even in the review that was provided of 131 under item number 10, where it says exempts from CEQA for all the following types of projects, and it lists a number of types of projects.

New agricultural employee housing projects, specified wildfire risk reductions, daycare centers, rural health clinics, you know, all places that I think are important and very meaningful. But when we get to item number H or item H, it says a project that consists exclusively of a facility for advanced manufacturing, as defined.

And so wanted to kind of better understand what would fall into that. I think I've heard, you know, from several environmentalists in my community that are really concerned about what that would mean. I know my colleague, Senator Grove, obviously just spoke very passionately to the importance of oil and oil drilling, particularly in her community in Kern. County.

But I think for many communities, particularly in Los Angeles, they do not want to see new oil drilling happen and want to make sure that those types of projects that could create environmental harm, that could create toxic substances, substances in the air and the water, you know, in the ground, are being properly reviewed and are not being expedited on this timeline because it's important for community health.

And unfortunately, we've seen so many times that black and brown communities are disproportionately impacted by these types of developments and so want to better understand what is and isn't included in advanced manufacturing and how we're making sure that we're protecting the public's health and we're protecting the local environment.

And also just wanted to ask about too, whether that would include labor standards. And you know, I know it was mentioned earlier as well, but just how that might impact locations where there are tribes and if tribal consultations would be included on cultural sites. You know, I think this is important.

CEQA reform is important, but also being very intentional about not undoing CEQA in such a way that we're also having a negative impact on our environment, on our surrounding communities, I think is really critical as well.

Yes. Megan Tokonaga Block, Department of Finance the advanced manufacturing in the Bill references an existing definition and statute, and that's defined in Section 26003 of the Public Resources Code, and I'm happy to share some of the eligible uses there.

Just to be clear, it is defined. It does not include oil. That's not part of advanced manufacturing. We had a discussion earlier about tribal consultations. This Bill does not change the structure of tribal consultations. AB 52 from several decades ago requires consultations. The parts of the Bill that change CEQA itself don't change at all.

Tribal consultation is still required. When a project is exempt from CEQA, tribal consultation is not required. And, and that is true of the huge number of exemptions that we already have under the law. This Bill adds several more exemptions to that, but it's a drop in the bucket compared to the existing exemptions.

So this doesn't change anything about the structure of tribal consultations. When you have to do CEQA, whether under this Bill or under the existing tribal consultations are required.

And so what would fall under advanced manufacturing then? So what is defined in that code? So Senator Wiener saying oil is not included, so what else is included?

Certainly the statute defines advanced manufacturing to include a number of uses such as microelectronics and nanoelectronics, including semiconductors, advanced materials, integrated computational materials engineering, nanotechnology, additive manufacturing, and industrial biotechnology.

And can I better understand why that was included for exemption? What was the sinking there?

AB131 references the existing advanced manufacturing definition that I just referred to. So it's just pointing to an existing definition statute.

Are you asking why the exemption was included?

Yeah, for advanced manufacturing.

Well, I mean, I think when you look at the various exemptions that are included in this bill, including advanced manufacturing, including childcare, including certain water projects, projects, et cetera, et cetera, the exemptions that are included are exemptions that will improve California, improve life for people in California.

And so, for example, when we look at the CHIPS Act, which signed by President Biden, which was, I think, I hope it remains intact, was an important statement step in terms of there's bipartisan agreement to have an industrial policy in this country and to try to bring manufacturing, including advanced manufacturing, back to the U.S.

when you look at the CHIPS Act, there was some CHIPS Act money that went into California, but not for the actual creation of this technology, not for the actual manufacturing. It just skipped over California, went to other states because it is too hard to actually do it in California. And there are many reasons for that.

CEQA is just one of them. And so that's why that particular piece went into the Bill. It's not all manufacturing. It's this one subset that's well defined under state law. And it only applies if land has already been zoned industrial or it's industrial zone. And it does not override local permitting.

If a city does not want to have manufacturing, it can just zone accordingly. A city can set up any kind of permitting system it wants. It can set up conditional use permitting for manufacturing. So cities still retain broad local control to decide whether to have manufacturing, if so, what type, where, conditions to put on it.

Okay, that's helpful. I mean, for me personally, I think some of the other items that are listed in here, you know, daycares. You know, wildfire risk reduced projects, rural health centers, AG employee housing projects, nonprofit food banks. I mean, I think that those just fall into a very different category than the advanced manufacturing should.

Just wanted to better understand that. And you know, electronics, semiconductors, you know, some of this technology, I mean, it does, it does have. It is produced, you know, using chemicals and does have an impact. But also helpful to know that these projects can't happen in anywhere that's not zoned industrial already.

Because I think that that's something incredibly important for local municipalities as they're making some of those decisions.

You know, I would like to just kind of better understand, as was raised earlier by Senator Allen around the Endangered Species Act, just some of the language and how, you know, this Bill is having an impact on that act in particular.

So it doesn't change that act. It has a number of exclusions for what we call, I mean, it was labeled in the Bill as natural protected lands, but it's a number of exclusions for land that is environmentally sensitive. There's a whole laundry list of those exclusions.

There's one in particular that some folks in the environmental community and some members of the, of the Legislature have asked to be included. That's not in the bill. There's always space to have conversations. And as we've heard today, there are various pieces of both bills that there's an interest in having continued conversations.

And I look forward to those.

Okay.

Yeah. I mean, I, as I mentioned before, I think that there's a need for CEQA reform. I think many of us recognize that especially, especially when trying to approve some of these housing projects.

It's been a major hurdle that, you know, many even affordable housing developers have faced as they've gone through this process, but also want to be mindful of the potential impacts that we're having on some of our, you know, protected land, other areas.

I think that that's something that's important, important for us to take into account, as well as local cities and their perspectives around some of these issues as well. So I think it would be very valuable for us to continue having conversations around this.

I recognize it's moving through a bit of an expedited process because we're adding this into a budget bill which is making it so that we can't have quite as many conversations that we would, if we would have done this to the, the policy process, so would be really interested in having further conversations about what is excluded and also what's not and how to make sure that that makes sense.