Assembly Standing Committee on Natural Resources

Welcome to the Assembly Natural Resource Hearing Committee. I thought this might be our final hearing of the year, but there may be another one later. But thank you all for coming. We have three items on the agenda today.

Today, noticing the absence of a quorum, we're going to start as a Subcommitee and establish a quorum as Members begin to arrive. If you are a Member of the Assembly Natural Resource Committee, please make your your way to the hearing room. We look forward to seeing you.

I see that my colleague, Assembly Member or Senator Tim Grayson is here. Would you like to present SB237?

We have joint authors with us as well. Thank you. One will be switching out with another joint author after speaking.

Whenever you're ready.

Thank you Mr. Chair and good morning. Is it still Good morning Members. I am pleased to present SB237, a Bill to address the state's high fuel cost and overall market stability, and a Bill that is the result of months of negotiations between both houses of the Legislature and the Governor.

Many Californians see the high cost of living, the economy and inflation as the most important issues facing our state today. One of the major factors contributing to these high costs is California's retail prices for gasoline.

California drivers consistently pay higher than any other state in the continental United States, often exceeding the national average by more than a dollar per gallon. A number of elements contribute to higher California gasoline prices relative to the rest of the country.

In addition to the state and federal taxes, California also mandates a special blend of gasoline designed to reduce pollution and improve air qual. This special blend is more expensive to produce because it requires more processing steps and expensive blending components.

Refiners outside the state only make this blend to supply California's market, meaning that California primarily relies on in state refineries for its gasoline supply. Lastly, supply side issues also contribute to higher California prices.

Most of the gasoline consumed in California is refined within the state due to a lack of petroleum infrastructure connections, meaning that the state is geographically isolated from other U.S. refining centers. Because no pipelines supply California from across the Rocky Mountains and only a limited number of pipelines delivered to the West Coast from the Gulf Coast.

With recent refinery closures in the state and more closures on the horizon, California faces severe supply chain issues and ultimately price volatility.

SB237 seeks to address some of these issues that contribute to the high cost of the fuel that California consumers pay at the gas pump by taking a number of steps to stabilize markets as the state enters a mid transition phase in its ongoing goal to reduce the use of fossil fuels in California.

This mid transition challenge is an especially crucial one, as was noted in one of the recent reports by the California Energy Commission that was commissioned by Governor Newsom in an effort to look for ways to reduce fuel cost for consumers and stabilize gas supplies to avoid price spikes.

Speaking on the challenges of the mid transition, Siva Gunda, Vice Chair of the California Energy Commission, wrote this in the recently released report. If a lack of proactive management during this phase of the transition leads to rising energy prices and less reliable fuel supplies, that instability could erode support for continued decarbonization.

Over the past decade, California has led the nation in adopting some of the nation's most aggressive climate policies aimed at reducing reliance on fossil fuels.

These efforts include major investments in clean energy infrastructure, zero emission vehicle mandates, and regulatory programs such as cap and Trade and Low Carbon Fuel standard we know as lcfs, protecting decades of climate goals and environmental actions taken by the state.

However, California remains heavily dependent on gasoline, especially as the state moves through a mid transition phase in its energy transformation.

As we transition away from fossil fuels and give Californians cleaner, more reliable and more affordable energy choices, we must ensure a stable fuel supply to meet the needs of California's existing vehicle fleet and prevent undue hardship on residents who can least afford the most expensive gas prices in the United States.

SB 237 seeks to bring stability to fuel cost while providing certainty that refiners will stay in the state as we continue transitioning to zero emission vehicles.

Specifically, this Bill will do the validate the Kern County Environmental Impact Report, which would increase the supply of gas in our state with the following a sunset of 2035 with a requirement to revise the EIR by January 1st of 2020, 2036 ensuring the SB 1137 2002 setbacks apply, and then a cap of 2000 wells.

In addition, this Bill will advance the offshore provisions of SB542 Limon and AB 1448 Hart, applying new pipeline safety requirements and revising permitting requirements for the Sable pipeline. It also will require the Governor to suspend the summer fuel blend requirements under certain conditions if the Governor determines it to be in interest of the state.

It will also examine a regional fuel blend as part of the next transportation fuels assessment to expand the supply of fuel available and protect against price spikes when a refinery goes down. Finally, it will formalize the work for the CEC to coordinate across agencies to stabilize fuel supply in the near term.

Ultimately, the goal of SB237 is to help ensure that California continues to meet its bold climate standards and provide the state with the energy supply it needs to grow and thrive as we transition away from fossil fuels.

SB237 will allow this important work to continue in order to provide relief from the rising gas prices that affect Californians as the state addresses the challenges of mid transition and prevent a scenario where much of our state's forward thinking climate policies are undone at the ballot box due to legislative inaction.

With me today to testify in support of this measure and through the Chair and answer any questions, maybe even all but answer any questions is Sivagunda, Vice Chair of the California Energy Commission, Jennifer Lucchese, Director of California Department of Conservation, and Lorelei Oviat, the recently retired Director of Kern County Planning and Natural Resources Department.

Chair, we do have some very short, brief comments from my joint authors if you are so inclined.

I am more than happy to hear them. I do hope that they are brief. I have never seen four Senators testify on a Bill before and while this Committee is extremely gracious, I don't know if we're prepared for 20 minutes of Senate testimony. But if you can keep it to about two minutes apiece, we'd love to hear from all of you.

Well, thank you Chairman Bryan. Distinguished Members of the Committee, I'm honored to be here to defend SB237. Basically, I'm a scientist. I believe in science. Climate change is a real threat to our state and to our country and to the world economy and to the world environment.

So we need to be very deliberate in how we go about transitioning away from fossil fuels. SB237 will stabilize gas prices for our constituents at a time when Californians are struggling with ever increasing prices under the President Trump's America. This Bill ensures that we will study the options for moving to a regional fuel blend.

This will allow us more thoroughly to plan for transition away from fossil fuels across the west and ensure that California has access to more sources of fuel when there are unexpected refinery outages which we've seen and we will continue to see, which would otherwise lead to gas price spikes. This is critical to protecting California's pocketbooks.

This Bill will help ensure a smooth transition away from fossil fuels by balancing supply and demand. I want to thank the Assembly, the Governor and the collaborators for working to us to get the point we are today. And I do ask for your aye vote.

Thank you, sir. Senator, when you're ready. That was perfect.

Thank you, Mr. Chair. Members of this Committee, I have the honor of representing Kern county for the last seven years. And I am proud to call Bakersfield home. It is a place with many wonderful people, different stories, different backgrounds, and people that just give so much to anyone that asks for a little bit of help.

But I also want to talk a little bit about the impacts over the years, because the lack of jobs, the lack of permitting, it has impacted this region, this community, very significant in ways that you probably haven't seen very directly. Right now, the state faces about 5% unemployment. Well, in Kern, county, it's about 10% unemployment rate.

The impacts have been significant. It's something that the legislators that represent Kern county have been talking about, how this lack of support for Kern county can lead to not only less jobs, less opportunities, but also a fuel shortage and also food shortage as well. It's all connected.

We are a place and people that do not mind to share with others, and we give to others. And in this case, I ask you to support this measure not just because it's going to stabilize fuel prices and fuel supply, but it's also because it's going to stabilize an entire community. And for those reasons, I respectfully ask for an aye vote.

Thank you, Senator. Senator Richardson.

Well, good morning. I'm the batting clean up here, number four. First of all, I want to take a moment to thank all of the staff that worked so hard on this. Our staff takes our wonderful ideas and actually makes it into policy. And we certainly would not be here at the table without all of their tremendous effort.

Secondly, I want to thank our legislative leadership, our pro Tem, Mike Mcguire, Speaker Rivas, and frankly, Governor Newsom, who took on a very tough issue that's not popular, not something people want to really talk about, new legislation and took the bull by the horns and knew today is the day and we have to move forward.

So thank you to everyone who did those efforts. Just a couple comments I'd like to make. Number one, what is SB237 and what isn't SB237? What SB237 is, is adopting policies so that we can protect our fuel stability while we transition to additional technologies. That's what it is. I'm old enough.

I hate to admit it, but I recall the days of sitting in the backseat of the car where you only got your fuel if your license plate was an odd number. You went on Monday, Wednesdays and Fridays, and you hoped you could get 5 or 10 gallons. We don't want to go back to those days.

We see what's happening. So SB237 is about protecting our fuel stability. Giving industry an opportunity to evaluate and come up with additional technologies that can help us to ultimately achieve our emission goals. SB237 is not about avoiding our emissions goals.

It's about working, making that transition and making sure we have sufficient fuel efficiency in the meantime and down the road to meet the needs of Californians. I can tell you, I live on the coast, I see the tankers coming in.

And I think we also frankly have to evaluate the stability, the national stability of considering having an industry that wouldn't be here to produce some sort of fuel. We will need some fuel. The question is how much will we need and how we can produce it in the best way to protect our environment.

So I look forward to your support. I look forward to you helping Californians so little kids aren't sitting in the back of the car like I was hoping we could get 10 gallons. Thank you.

Thank you. Senator, to your expert witnesses. Two minutes apiece.

Good morning, Chair and distinguished Members of the Committee. I'm Siva Gunda, currently serving as the Vice Chair of the California Energy Commission. I have a few prepared remarks for you to consider.

Over the past two decades, California has embarked on a transformative effort to decarbonize its economy and has become a global leader through its policy and technological innovations to fight climate change. Thanks to these successes, demand for petroleum based fuel sources have steadily decreased in the state.

This decrease in demand, combined with the COVID 19 impacts, economic factors and volatility of international problems that we have seen in the markets have introduced uncertainty in the petroleum market in California. We have seen higher gasoline prices in state petroleum refinery conversions and exits and a growing reliance on fuel imports to meet consumer demand.

In the recent years, thanks to the authority and tools that this body and the Legislature has given us, we are in a better place to understand the causes behind the gasoline price spikes and develop strategies to protect the consumers. We now understand that we're in the middle of what is called a mid transition stage.

And during this stage, demand for incumbent petroleum based fuels, while declining, will remain substantial and the clean alternatives are still coming up to scale. In this stage, the state must not only support the growth of our new clean system, it might also manage a managed decline of the fossil system.

Investments in both legacy and the new systems are absolutely important. During this stage. However, the confidence to support investments in the fossil system that are still needed to support smooth transition can wane during this mid transition phase.

From what we learned, both domestic and international experiences, proactive management is critical to support fuel reliability and economic stability, protect consumers protect communities, workers and the environment and retain support for continued decarbonization. Since receiving the letter from Governor Newsom in April, our office has engaged with a large multitude of stakeholders, impacted communities, state and local governments.

Through this effort, we have developed a framework to guide a holistic consideration of challenges and solutions and a set of recommendations to support a safe, managed transition away from fossil fuels. We have identified three buckets of strategies to pursue concurrently in order to support a holistic, affordable, reliable and equitable safe transition away from those fuels.

And I really want to emphasize that in the letter. We have noted that it is not an or, but it's an and. We have multiple buckets of things we need to do. The first bucket is to address volatility and risks to fuel supply in the state by addressing import capacity and retaining in state capacity. 2.

Improve investment confidence system wide across the value chain. The entire petroleum sector is connected all the way from the well to the pump and it's important that we have to retain the entire system as we need it. And that includes bolstering in state crude oil supply ensure safe and timely infrastructure for refining, import, storage and delivery.

And finally, the third bucket is to develop a holistic managed transition to further the state's commitment to protecting public health, workers, communities, consumers and the environment. The proposal today seeks to address these strategies in part by bolstering the supply of crude oil in our state and ensure safe and reliable operations.

I'm grateful for the opportunity to be here in front of you and honored to take any questions that you might have. Thank you. Then I'll pass it to my colleague.

Good morning, Chair Good Morning, Honorable Members. My name is Jennifer Lucchesi. I'm the Director of the Department of Conservation.

As the state's oil and gas regulator, SB237 will help us support the managed transition strategy, stabilize crude oil production in California and supply in state refineries while ensuring the production is consistent with critical health and environmental protections, including ensuring no drilling occurs in health protection zones pursuant to SB 1137.

Specifically, the statutory validation of the EIR will provide timely and predictable permitting outside of health protection zones in Kern County and provide for significant, highly beneficial new investments in community water systems, air pollution mitigation and agricultural land conservation funding by mandatory mitigation fees from the oil industry.

Importantly, this legislation does not allow for oil and gas drilling within 3,200ft of a sensitive receptor and caps the number of permits for new wells CALGEM can issue per year unless the Energy Commission makes a finding that additional permits are needed to meet demand.

This Bill also includes a sunset provision acknowledging that this policy change is necessary for California's immediate needs. In summary, this Bill provides a pathway for predictable, legally durable and timely permitting to stabilize production in the short term while ensuring robust mandatory mitigation, protecting communities and preserving the state's through CalGEM discretionary. Discretionary authority over drilling.

That concludes my remarks. I'm happy to answer any questions. Thank you.

Thank you so much. There any is another witness in support or opposition? Support. We'll go for it.

Thank you. Chair Bryan and Members of the Committee. I'm Lorelei Oviat representing the Kern County Board of Supervisors. I am recently retired as the Director of Planning and Natural Resources and led this team for 15 years on this environmental impact report and zoning ordinance.

It's an honor to be here today to support SB237 contribute to a real world solution to stabilizing supplies for refineries. We want to thank the authors and the sponsors of this Bill as well as the Governor. This has crafted a thoughtful solution that provides communities with environmental protections while addressing affordability issues for consumers.

SB237 would allow the certified second supplemental recirculated environmental Impact Report to be used immediately as CEQA coverage for regulating oil and gas activities in the unincorporated areas of Kern County and provide oil for the San Joaquin pipeline system who have refineries that are dependent only on this type of crude.

And this has gone through 15 years of which nine of them were litigation of public process with significant changes over and over and over again to this to address the concerns that have been raised. Why would the industry ask to be regulated?

Because they need the certainty for investors that at the end of this there would be a permit. So we did not overrule CEQA and we are not asking for an exemption. The issue is that this last piece would take two more years to get back through the courts for the three things that we fixed.

And it would be two years before we could permit again. And we have gone three years with limited permitting. It's not a shortcut from ceqa. It's not an exemption. It's implementation of exactly what CEQA was intended to do, provide enhanced environmental protection. So I just want to touch on three important issues.

One, as noted, the Kern County zoning ordinance actually implements the 3200 foot setback and clearly states that we will do no permitting in the health protection zones. The allowance of up to 2,000 new drilling permits a year will be implemented in comprehensive large Kern County oil fields that are many, many, many miles from communities.

And there will be 88 mitigation measures that cover all cultural resources, biology, any. Any issue you can bring up. We have a mitigation measure.

We're over two and a half minutes.

Any final thoughts?

Ask you to vote yes in order to. Great final thought. In order to bring protective permitting to in state production.

Thank you so much. Do we have any primary witnesses in opposition? Can we clear up a couple seats for them?

Good afternoon Members.

Good to see you.

Marie Liu on behalf of CCE at the Central California Environmental Justice Network. CCEJN works with communities in Kern, county, the heart of oil drilling in California. The governor's proposal when the governor's proposal was seen in June, notably Kern county groups said that they would not oppose an expansion of oil drilling if the communities had additional protections.

I think it's really notable that they actually did not come out of the gate saying under no circumstances should there be no expansion. But unfortunately what's before you does not have protections. We for Kern county that we were looking for. First, it does not 237 does not shore up the state's setback rules.

Second, it doesn't have a sunset of the ordinance itself and that is an important distinction. And third, there's no improvements for air quality in Kern. County. Kern county has the worst air quality in the nation and health and the health problems that go along with with it.

According to CALGEM itself, a third of the facilities in the health protection zones leak and many of those those leaks are persistent because the ARB's regulations do not apply. Their leak detection and repair requirements do not apply to heavy oil.

It's not just the leaking of the methane that comes from these wells, but the toxics that go along with it. So yesterday in yesterday's hearing of the Senate environmental quality hearing, Vice Chair Gunda was asked how this proposal might impact gas prices. And he rightfully recognized that gas prices are about are gasoline.

Crude oil is a global commodity and that is what drives prices here. He further said that this proposal might move gas prices a few cents. That's what we're doing here right now. Ultimately, this proposal does not recognize that Kern's oil fields are depleted.

And what the state needs is a comprehensive and proactive plan to phase out fossil fuels and move us towards a green future.

I'm going to close with A quote from CCEJN's co Director Sezar Aguirre regarding this Bill and frankly the end of this session, quote, we are going to have to work to somehow show that we are worth protecting. Please vote no on this oil giveaway.

Thank you hair and Committee Members. Faraz Resvi with APEN the Asian Pacific Environmental Network. I'm commenting in opposition to SB237 as well. It is unfortunate that I have to be here to oppose this Bill after engaging with the CEC and decision makers all summer to try to do right by extraction and refinery communities this session.

This Bill, as it is written, is an unnecessary giveaway to the fossil fuel industry. Intended to stabilize fuel supply in the wake of ongoing refinery closures, this Bill instead creates sweeping exemptions for oil extraction in Kern, county, does little to nothing to protect communities and workers most directly impacted by refinery closures and increased extraction.

In the June letter to the go, CEC Vice Chair Sivak Gunda articulated a balanced three pronged approach to ensure a stable supply of fuel in California. Recognizing the bind that the state was caught in, EJ advocates engaged in stakeholder conversations to ensure that community voices were uplifted.

Unfortunately, I do not believe this bill truly follows the roadmap roadmap laid out by the CEC. Among concerns for refinery communities in this bill, it completely ignores bucket three in the Vice Chair's letter to concurrently develop and execute a holistic transportation fuel strategy.

While there is a nod to the need for refineries to disclose their closures and remediation costs in the intent language, there's no meaningful action to make such a disclosure a reality.

Nor is there any funding to ensure workers and communities are resourced through transitions, which we were supporting through the Displaced Oil and Gas Workers Fund, also known as dogwolf. We need comprehensive solutions to navigate the challenges of what the bill terms the mid transition period. We cannot just hope to placate the fossil fuel industry.

This bill not only harms Kern county communities, but it represents a lost opportunity to create a coherent, comprehensive and proactive plan to ensure and continue our transition away from fossil fuels and ensure the state is not caught off guard again with refinery closures.

Therefore, we urge you to oppose this bill and instead look to create solutions to ensure a stable supply of transportation fuels that does not sacrifice frontline communities. We urge you to vote against SB237.

Thank you so much. I'm almost willing to say, is there a third witness for you? Maybe four even? Are there any persons in the hearing room in support of this measure? Run it, Andrew, run it.

We have the best sergeants, don't we? Keith Dunn here on behalf of the State Building Construction Trades Council. I'll be brief and just say we urge your support. We need to unleash the economic opportunity of Kern county we need in state production.

You're going to hear from a bunch of our Members who are going to say the same thing and we're going to be quick, but we would just really appreciate the opportunity to have them come and be before you. Thank you, Chair. And we ask for your support. Let's go. Just bring anybody.

Good morning, Chair. Members Daniel Barad, on behalf of Union of Concerned Scientists, were aggressively neutral on this bill. We recognize the need for price stability in the near term as we continue to transition to zero emission vehicles.

I want to note that The Vice Chair's 24 page letter is extremely thoughtful and provides a very straightforward and holistic way to transition. This Kern county piece is half a page of that 24 page letter. So we have a lot of work to do in the interim and next session to continue the transition. Thank you very much.

Thank you. And we allowed for a bit more testimony there because he was aggressively neutral for all other people. Name, organization and position on the bill.

Aloha. Mitchell Bechtel, on behalf of the District Council of Ironworkers, in support.

Thank you.

Hello. Raymond Davis, business agent, Ironworkers Local 118, in support.

David Mendez, Local 118, Iron workers in support.

Sean Wallentine, California Independent Petroleum Association, in support.

Joshua Leper, business manager, Labors Local 1130 in Modesto, California, in support.

Ed San Roman, Labors Local 304, Alameda County, in support.

Jose Chavez, Labors Local 304, Alaeda County, in support. Thank you.

Randy Rohs, District Council 16 Painters Allied Trades, in support.

Ryan Thornton, Iron Worker 378 in support.

Raquel Valencia, Iron Worker Journeyman, Local 378 in support.

Jim Mccabe, Iron Workers Local 378 in support.

Jaime Rodriguez, Ironworkers Local 155, Fresno, California in support.

Good morning. Rafael Gonzalez, Labors Local 304, Alameda County, in support. Thank you.

Mark Hennig, Iron workers local 378 out of Oakland, California, in support.

Robert Lucas, iron worker out of local 378 in support.

Mike Miller, disabled veteran, Iron workers local 378 in support.

Brandon Hager, 155 iron workers in support.

Brian Aponte, local 155, ironworkers in support.

Misael Romo, I'm from Labor, from Local 304. I support.

Morning. Luis Perez, Local 270. I support.

Hello. Tabiolana Local 304, I support.

Morning. John Hershey, UA Local 447 Plumbers and Pipefitters here in Sacramento, in support. Thank you.

Good morning. Sergio Ranjel, Laborers Union Local 324, I support.

Morning. Ramon Hernandez, Labors Local 261. I support.

Marta Villalobos, Local 67 and I support 237.

Sergio Perez, and I'm from Local 1130. I'm here to support.

Juan Guterres, Northern California's Labor's Training Center. We're here to support.

Good morning. Olivia Navarro, La Una Labors Local 270 from San Jose in support.

Sean Radford, Labors Local 185 and strong support.

Bertha De La Torre, Labors Local 261 here in support.

Good morning everybody. Francisco Nunez Liuna, Laborers 304, Alameda County. We're in support.

Good morning. My name is From Laborers Local 270 out of Salinas, California in support.

Good morning. My name is Victor Delatorre. I'm from Local 261, San Francisco county and I'm in here in full support.

Good morning everybody. My name is Daniel Garcia from Labor's Local 185 here in Sacramento and I'm in support.

My name is Patrick Quintero, local laborers 294, Fresno in support.

Good morning. James Hammond, laborers local 294 out of Fresno and I'm in support. Thank you.

Good morning. My name is Rodrigo. I'm a laborer from 261 San Francisco in full support.

Good morning everybody. Joseph Sickler, Journeyman Ironworker Local 378 and support. Thank you.

Morning everybody. Local 294, Fred Zone, I'm in here support.

How you guys doing? This is Francisco with the Iron Workers. I'm in support.

Good morning everyone. I'm Greg Hardiman with the Elevator Constructors Local 8 representing Northern California and we are in full support.

Good morning everybody. My name is Jose, labor is local to seven Santa Clara and full support.

Good morning. Sydney De La Torre, Local 67, County of San Francisco in support.

Larry Stark, Labors Local 185. I support.

Good morning. My name is Eddie Torres. I'm a Member of laborers local 294. I'm here in support and I urge you guys to support as well. Thank you.

Morning. My name is Anthony Torres. I'm with the Local 294, Fresno and I'm here in support.

Hello you guys. Good morning. My name is Kendle Robinson. I'm a local 294 and from Fresno and I'm here to support. Thank you.

Good morning. My name is Larry Lee. I'm a Local Union 294 from Fresno and I'm here to support.

Jeff Fagan, Local 294, Fresno. We support.

Good morning. Javier Flora, Local 261, San Francisco. Thank you.

Good morning. Diego Hernandez with Local 261 in San Francisco in support.

Good morning. Members. Gilbert Rivera, County of Santa Clara, in support. Thank you.

Steven Spilly, Local 270 in support.

Good morning. My name is Martin Perez. I'm Local 270 and I support.

Morning. My name is Emilia from Local 270. I'm in support too.

Good Morning. Jorge Morales, Local 304 here to support.

Good morning. Jesus Mesa, Local 767 and in support.

Hello. David Del Torre, Local 261 in support.

Good morning. Arturo Science, Local 261 support.

Good morning. Teresa Foglio Ramirez, La Yuna, Local 261, San Francisco, in support.

Hi, I'm Hector Munoz. I'm from 185. I just get to support.

Rocha, local 185 support.

Darren Judice, Local 3 operating engineers in support. In solidarity with the State Council.

Mario De La Torre, Northern California District Council of Labors and I'm in support.

Miguel Campo Verde, Local 294 here to support.

Jose, Labors 270. I'm here to support.

Fernando Brisloco, 270. We support.

Yeah, Revengeman. I'm. I'm here to support.

Carlos, out of Local 261 labor union. I'm here to support.

Tom Cullenberg, Operating Engineers Local 3 in support along with state building trades.

Russ Stefanich, Operating Engineers in support. In solidarity with the building trades.

Justin Barnard, Operating Engineers Local 3 in support. Thank you.

Scott Dixon, Operating Engineers and support.

Hello. Anthony Croce, Operating Engineers, here to support. Thank you.

Timothy Hague, Operating Engineerss Local union number 3 in support along with the state billing trades.

Jesse Espinoza, Operating Engineers Local 3 here to support.

Thank you. John Gorgas, Labors Local 1130, here for support.

Jose Soyano, 1130. I support.

Jackson Honza, Local 1130. I support.

Lionel Berrigan with Labor's Local 185 and support. Thank you.

Hello. Chair and board Members. Jaime Torres, Sacramento resident Labors Local 185 here in support of SB237. Thank you.

Good morning. Laronda Bonnet, here in Support from Local 324.

Good morning. Rolando Hernandez, Local 67 in support.

Good morning. Chair. Members. Adam Regley with the California Chamber of Commerce and support. Thank you.

Mr. Chair and Members. Paul Darrow, representing the Western States Petroleum Association. Strong support.

Kim Craig with ARC Strategies on behalf of Barry Petroleum, in support.

Mr. Chairman and Member Scott Wesch, on behalf of the California State Pipe Trades Council, the State Association of Electrical Workers, the California Coalition of Utility Employees and the Western States Council of Sheet Metal Workers in support. Thank you.

Good morning. Charlie Lavery, Operating Engineers, San Francisco and San Mateo Counties in support.

Good morning. Mike Pickens, Operating Engineers, North Bay, in support.

Good morning. Dean Fadif, Operating Engineers in support.

Morning. Chris Snyder, Operating Engineers Local 3 in support.

Morning. Christopher Rosas, Operating Engineers, San Francisco, San Mateo counties in support.

Will Brieger, I'm here on behalf of Climate Action California and 350 Humboldt and my climate groups support an affordable transition. Thank you. And there's a letter that's coming in late, but it'll be distributed.

Good morning. Sharon Gonzalez, on behalf of the City of Bakersfield in support.

John Moffett, on behalf of the Associated Builders and Contractors of California in support.

Oracio Gonzalez, on behalf of California's Business Roundtable and strong support.

Sarah Bridges on behalf of the California Manufacturers and Technology Association in support.

Jeffrey Sievers on behalf of California Resources Corporation in support.

Is there any opposition in the room? We will also take anybody who is aggressively neutral.

Christina Scaringe with the Center for Biological Diversity in strong opposition.

Good morning. Victoria Rome with NRDC, respectfully opposed.

Alex Leumer on behalf of Defenders of Wildlife in opposition.

Connie Cho on behalf of our sister refinery environmental justice group Communities for a Better Environment, opposed.

Martha Dina Argüello with Physicians for Social Responsibility. We oppose.

Katie Valenzuela on behalf of the Center on Race, Poverty, and the Environment and Clean Water Action, in opposed.

Allison Hilliard with the Climate Center in respectful opposition.

Mr. Chair. Mark Fenstermaker for Earthjustice. We're in opposition.

Jeanie Ward-Waller on behalf of TransForm in opposition.

Good morning. Raquel Mason with the California Environmental Justice Alliance in respectful opposition. Thank you.

Asha Sharma on behalf of Leadership Counsel for Justice and Accountability in opposition. Thank you.

Natalie Brown with the Planning and Conservation League in respectful opposition. Thank you.

Melissa Romero, California Environmental Voters, respectfully opposed.

Jordan Curley on behalf of the Campaign for Safe and Healthy California in opposition.

Environment California, opposition.

Thank you so much. A quorum is now present, I believe. Yes. Madam Secretary, can we establish a quorum?

[Roll Call]

Thank you so much, and appreciate my colleagues showing up just in time to give their comments, questions, concerns. Now return to the dais. Are there any comments, questions, concerns? Assembly Member Pellerin.

Thank you. I just want to thank everyone for being here. The support, the opposition. These are tough times and tough issues. So the oil wells emit volatile organic compounds which contribute to smog and impacts community health. Emits methane, carbon dioxide, which lasts for decades in the atmosphere, contributing to extreme weather, climate change. And this bill allows up to 2,000 new well approvals annually. So is there a cap on the greenhouse gas emissions from these oil well approvals or is it just a cap on the oil wells?

Mr. Chair, may I make room for the two other expert witnesses to come up here as well?

Absolutely. If you would like to kick the Senators off the dais, you are welcome to, sir.

I wasn't kicking anybody.

We'll be back.

That was a statement, not a threat. Yes, through the Chair.

Through the Chair. Lorelei Oviatt. In the Environmental Impact Report, we analyzed the impacts of greenhouse gases and all criteria pollutants, and we came up with an amount that each well produces. The majority of the criteria pollutants are produced when you drill because you're putting PM 10 and PM 2.5 and VOCs into the air.

And with an agreement with the San Joaquin Valley Air District, which they've done with many developers, called a Developer Mitigation Agreement, there is a chart by which they pay an amount into a fund. So for example, if you drill at 3,000ft, it's 2.6 million tons, times the amount per ton. Right now it's running $13,000 a ton.

That's set by the San Joaquin Air District. That money then goes to the air district and they give out grants. So think of it as it's emitting all. And the methane rules are the modern rules on newer wells that control the methane. So there's a certain amount of greenhouse gases that are produced by that activity that is also mitigated when you do clean projects. So in its simplicity, the well is there for 25 years, but you're taking a polluting source like an old diesel school bus out of the inventory now.

And over the course of the five years of permitting, when we could permit, we sent $140 million to the air district. And they replaced diesel ag engines, they replaced diesel school buses now. Even though the well is still producing years in the future, it's no net increase. So we're not saying net zero, which is a completely different concept, but we're saying there's no increase. And that's just one of many air quality mitigations.

So I understand this as being... And thank you for that answer. I understand that this is a short term solution because there's a sunset on this. Correct? Okay. So, you know, I mean, I'm very committed to trying to meet our climate goals. And so what's the plan after this bill's sunset to keep gas prices stable? Are we going to...

Thank you for the question. I think the most important thing for us as we move into the next three to four years is to think through a holistic approach on how to stabilize the prices in California. As we think about the value chain all the way from well to the pump, we have different pieces that we are trying to figure out how best to stabilize at the moment.

But as we move forward, we need to think through the demand and how do we stabilize the prices by meeting the supply as we need it and operationalize those strategies. One of the most important pieces of this would be coming in the transition plan that CEC and CARB are jointly developing right now, and we'll have strategies to lay out the long term transition plan.

There are a couple of pieces in this statute that allows CEC to continue the work on long term stabilization strategies that we need to think through. So in the immediate future, in the one to two years, you really are thinking about how do I stabilize the industry and the long term through a combination of imports, through a combination of continued investment in reducing the demand. We need to stabilize the system and we'll come back to you with those strategies.

Thank you so much. I appreciate it.

Any other questions, comments? Mr. Kalra.

Thank you, Mr. Chair. And thank you to everyone that's here today and spoke either as for witnesses or did me toos taking time out to do that. And I want to thank Senator Grayson and our other colleagues that are here and that are working on this.

I just wanted to make a more general point that, if this is a direction, even if it's a sunset, a short term kind of step that we feel needs to be made, I don't want to lose sight of the fact that I think we're falling very short on what we need to be doing in terms of electric vehicle infrastructure and incentives and moving in that direction.

I think that we're diminishing our investment in that as the federal government is essentially cutting it off and punishing in many ways states that have been more aggressive on that front. I don't want California's leadership on that front to be something considered in the past.

And I get that these efforts ebb and flow and it's not a straight line or a straight trajectory up. I hope we all want to see when it comes to meeting our climate goals and doing the transition, particularly on the vehicle side, towards automated electric vehicles. Well, that too I guess, but electric vehicles.

But I just want to make that point on the record so that we don't lose sight of how important it is that we continue to lead on that front, not just for our state but for the country. Like on many other issues, there seems to be steps taken backwards. And I'm afraid that this is a little step, a little step backwards, but it doesn't mean we can't continue to take leaps forward.

And I want to make sure that we are all kind of on the same page, including our friends from the building trades and what have you, because there's definitely an opportunity for a lot of jobs in that space as well of ensuring that we're not taking our eyes off the prize. Because I don't believe what we're doing today is necessarily the prize. I think it may be considered a necessary step, but it's certainly not the direction that California has led on in recent years and needs to continue to lead on.

And so I'm hopeful that we, you know, throughout the rest of this decade as that we can not allow the pressures, some of which may be temporary in terms of gas prices or cost of living, things that we all care very deeply about, distract us from our long term goals of what we need to do to be leaders, not just in this nation, but in the world. Because our future generations depend on that and are relying on California to lead.

Thank you, Assembly Member Kalra. Mr. Ellis.

Thank you, Mr. Chair. Thank you, Senator. Thank you for being here today. I'd like to extend a warm welcome to you, Lorelei Oviatt, and congratulations on your retirement and being such an advocate for Kern County and all you've done over the years of service. You have been amazing. So thank you. I was going to rant and rave a little bit about how clean our oil and gas is in this state compared to what we're bringing in internationally. I'm not going to do that today. I think that

We appreciate.

Acknowledged, Mr. Chairman. But I just want to again thank you again very much for the consideration, and I really strongly support an aye on this. Thank you.

Thank you, Mr. Ellis. Vice Chair Alanis.

Actually, I was going to make those comments. I just want to thank you guys. I know we talk about climate change and the environment and we care about that within our own state. But yet we do continue to bring in imported oil where they're not checked, where they get to pollute the rest of our world.

And we do nothing about that. But... Well, I guess we do nothing about that because we buy the oil from them. But I'm happy that this bill actually is bringing skilled jobs in so that way we can keep our workforce going, we can keep our pipelines going.

I know this has a sunset to it and hopefully we'll have a better way of approaching it then. But until then, I think this is a great approach to help fix that in. And I know something was... I know, sir, I know you mentioned something earlier that I took note of being caught off guard on refinery closures.

I wasn't caught off guard. As many regulations as we put on them, of course they're going to start leaving our state, as do other industries and ag and everywhere else. So I applaud you guys for doing this and putting this together. And I'm looking forward to voting aye.

Thank you, Vice Chair. Seeing no other questions and comments. Mr... Oh, Mr. Schultz.

Thank you very much, Mr. Chair. Sorry to be late on the draw there. I have one question and a brief comment for the panel. My understanding is that one of the central ideas of the bill is to streamline permitting to encourage in state oil production. However, some experts have correctly noted that production capacity in Kern may already be limited by aging oil fields and geological constraints. So my question is, are we targeting the right issue?

Thank you. Sorry. Thank you so much for that question. Yes, I think as we think through the totality of the issue, there's a lot of pieces that we need to solve for. I think in the immediate one of the core elements of thinking about what to do is we have nine operating refineries today in California that produce our refined fuel, the CARBOB. Two have given notice, and we have seven.

I think the first important thing is to make sure those seven do not have the kind of the needs to like leave, right. So one of the core issues for them is ensuring that they have access to the San Joaquin Valley crude. And the reason for access to San Joaquin Valley crude is twofold. One, when they import the fuel from outside of California, it comes at a price premium.

Based on the tools that you have provided us, we do see that confidential information, and it does come at a price premium for those refineries. Two, some of the refineries are purpose built to process San Juan Valley crude. So the performance has declined and we see that. They have regular stoppages in operation. So this is one part of the puzzle. But there's a lot more things we need to do holistically to make sure that we transition.

Thank you very much, sir. And I did want to compliment you on what I thought was a very balanced and thoughtful letter. That's very much how I view this bill. Not to diminish any of the hard work of the authors of the broad coalition that have put it together, I think this is one drop in a much larger bucket of problems that we're trying to tackle.

And while I think that permitting delays are certainly a piece of it, I think I would be remiss if I didn't point out that there are many other obstacles that are not accounted for in this piece of legislation. The last thing I want to mention is that I appreciate fully the intent of the authors and everyone in support of the bill about the need to, even if it is only a few cents, lower gas prices, keep critical jobs here in California.

But again, I would be remiss if I didn't point out that in the absence of any meaningful, or dare I say, good faith leadership from the federal government, we cannot retreat on our climate goals and our aims, as my Assembly Member, Mr. Kalra and Ms. Pellerin said.

I hope that this is one of many steps that we will take in having a balanced approach and not retreating, especially in the face of what I see as an outright attack by the federal government and unwillingness to lead on the issue of climate change and climate resiliency. Thank you.

Thank you. And I believe Mr. Schultz had asked Marie Liu as well what she thought about that. I thought so.

Thank you. I really appreciate the question about is this the right piece. Because when it comes down to it, this is a lost opportunity. It is one... You know, having this conversation about what happens in oil drilling in California is just one piece. And we only, and this proposal only addresses that piece.

There is not the pieces thinking about what happens to the refineries and the obligations that the state may be left with if we aren't disclosing how much the refineries are having. We are, it does not address the increased pollution that is going to result on this, on the Kern County communities. And so unfortunately, this was...

There was... Because this was such a late proposal, you know, 237 just had this content put into it in print in the first time. What day is it? It's Friday. Two days ago. So it's definitely not a balanced approach about moving forward. And then I just also want to say one...

I want to clarify one thing about the sunset, because I do think this is that there is a sunset on the EIR in this bill. But what that means in 10 years. Imagine where we were 10 years ago on what we were, you know, on what we imagined, even where we were on ZEVs.

In 10 years, the ordinance does continue. Unless if there's some, unless if someone can actually show that conditions have changed, environmental conditions have changed. And so this is not a temporary increase in Kern County. This is an ongoing increase of oil drilling in Kern County unless if there is a requirement to do additional environmental review.

Thank you. We're going to let that be the final response to Mr. Schultz. Mr. Grayson, would you like to close, if there are no other questions from colleagues?

Absolutely. Thank you so very much. If I understand it correctly, and I can be corrected by this panel up at the table. But I do believe that the sunset does happen for the Kern County EIR as well. So that is in place. And we're in the closing, you know, so I'm not going to have panelists speak. But if I understand it correctly. I also want to state in my closing statements as well that the bill is going to have stakeholder group report back on permitting structure.

As a matter of fact, reporting back will include recommendations to the Legislature, those that are here, and the Governor on potential changes to working group authorities or structures, including on permitting changes and reforms. I would be the last one, or I wouldn't even think of saying that this bill is the panacea to all energy fixes in our state. This bill is one microscopic part of a huge fabric that requires much work and a lot of solutions that need to come.

We need the voices of industry. But at the same time, even more importantly, we need the voices of our friends in the environmental justice arena as well. We have to address the worker, the labor issue. And some folks talk about it being a just transition. I would more describe it as a job protection. And we make sure that our pipefitters are pipefitters, Whether they're at that refinery, or when the refinery close, they transition over to a green and clean energy or manufacturer doing the same job.

Which is why I created the Green Empowerment Zone in Contra Costa County, to be able to address these very things, to be able to stand and address in the next few years the CEC, after stabilizing this market in the near term, is tasked with making sure that we have a plan going forward on when a refinery closes. What does that mean? What does that mean for the State of California?

What does that mean for the local community? What does that mean for the laborers that were on site, and where do they go and continue their job? What does that mean for cleanup and mitigation? As a matter of fact, I've got to give a shout out to Senator Hurtado, who is tenacious in fighting for mitigation policy and measures for the area that she represents.

So with that, there are sources that say that right now Californians are fighting tooth and toenail to put food on the table, to put fuel in the car, to drive back and forth to work, drive to the hospital, take their kids to school, and then also to be able to pay their energy bills, to keep their lights on.

Affordability is a huge issue. We don't want to trade our effort to reach a goal of helping people in California to afford things by throwing the environment out the window. The part of this, the whole intent of this bill is to address affordability while protecting the decades of work that we've done. Does that mean we continue to charge forward at light speed?

Or does that mean we have to pull the lever a little bit and not stop moving forward, but maybe not as fast for right now until we can get our legs back under our feet and then continue to push forward when we have more specific and detailed plans. Staff has done a tremendous job. I want to thank you, Chair, and this committee, for your gracious act of hearing this bill. And I respectfully ask for an aye vote.

Thank you, Mr. Grayson. This has been a process of intense conversation, and as Mr. Gunda mentioned, our demand for fossil fuels has declined rapidly. Our supply has declined more rapidly, and that imbalance is what has brought us here today.

We've also learned of the volatility in the market when there are unplanned closures and when supply is not stable. That's what causes the price spikes. And when the price spikes happen, they happen really quickly, and it takes significantly longer for them to come down. These are the problems that we are trying to solve and address.

This has not been an easy conversation. I want to thank the Governor for teeing off this conversation and being willing to budge from his own initial proposals. I want to thank my Senate colleagues for engaging in good faith. These were not easy negotiations. Many folks know Senator Grayson and I are good friends.

We're not going to tell you how those conversations went behind closed doors. There are many pieces of this proposal that I am individually and personally not thrilled about. There are some parts of this proposal that I know were put in and intended to address major concerns of frontline communities.

And there is more that we can, should, and must do. And because of that good faith negotiation and effort by all parties involved, this bill does have a do pass recommendation from me today. We have a motion by Mr. Ellis, a second by Mr. Alanis. Madam Secretary, can we call the roll?

The motion is do pass. [Roll Call]

That bill is out, but we'll leave it on call.

Thank you, Chair and Members,

Thank you so much. I see my favorite Senator is here. Senator Reyes, come on down. Whenever you're ready, Senator.

So good to be here.

Welcome back to the Natural Resource Committee.

Thank you. It is so good to be here. Feel like I'm coming home. All right. Thank you, Mr. Chair and members. Today I want to present to you SB 352, a bill which aims to move forward the mission of AB 617 to address air pollution and toxic air contaminants in the most impacted areas in the State of California.

I stand before you as only two of the remaining joint authors of here in the legislature, Muratsuchi being the other, who is a member of this committee.

There are a number of areas that have already been selected under AB 617 which have been studied, and I'm so happy to say that San Bernardino Muscoy, an area in my district, are areas that were identified as one of the first AB 617 communities selected for investments in both air monitoring and emissions reduction planning.

And the key word is planning. Although I have never doubted the intention of the program or the dedicated staff at CARB, as well as our local air districts who have worked tirelessly to bring communities to the table to identify and resolve core sources of pollution, it is also clear that the program has fallen short of its intentions.

Over the last eight years, environmental justice communities have often ended up in situations where data has been collected, plans have been made, but implementation has not aligned properly with the urgent conditions that impacted communities feel on the ground.

Critical changes are needed in order to fulfill the promise of AB 617, and I believe SB 350 moves us in that direction. By codifying the Environmental Justice Bureau, for instance, into the Department of Justice, we are ensuring that enforcement of environmental integrity and support for our most disenfranchised communities will continue to be a priority for the Attorney General's Office.

By ensuring that monitoring in AB 617 communities is active for no fewer than five years, we are making sure that the data collected regarding the conditions on the ground and the impacts of emissions reductions are being recorded in a meaningful manner.

By requiring the chair of CARB and the executive directors or air pollution control officers of relevant air districts to appear before the legislature and requiring annual reporting regarding the status of the implementation of AB 617, we are codifying accountability around the new investment being made in this program.

As someone who has consistently fought for AB 617 funding, along with our Chair, I am glad and in full support of the package, committing $250 million annually, continuously to invest in these communities. That has been one of the biggest problems that we have never had the proper funding to fully implement the plans that have been put together.

But even with that, I want to be clear that this funding cannot simply result in more reports, re-articulating the public health crisis that many feel acutely every day. We must take real action in coordination with all partners, including environmental justice advocates, industry, and local agencies to truly accomplish the mission of AB 617.

This means that this program must continue to be overseen with high expectations and nothing in this bill will rule out any future improvements to this program to maximize its impact. I am here committed as a steward of this program to make sure it fulfills its promise.

Now with us today we have Melissa Romero from Cal EnviroVoters and Katie Valenzuela, Central Valley Air Quality Coalition, to testify.

Good morning, Chair and members. Melissa Romero, California Environmental Voters, here in support of SB 352 as supporters of the original AB 617. This bill represents a first step in ultimately getting the changes needed to this program and we are really grateful to Senator Reyes for her commitment to getting there.

The other cap and trade bill you're going to be voting on right after this includes 250 million, as the Senator said of ongoing funding for SB - for AB 617. And this bill makes sure that that we are ensuring that this it results that funding results in actual emissions reduction.

The bill codifies a very successful Environmental Justice Bureau at the Attorney General's Office, which is critical for ensuring the laws that you write are implemented regardless if a community has the resources to hire legal counsel.

The bill also makes updates to the monitoring plans and most importantly requires CARB and air districts to come to the legislature every year to report on expenditures and implementation of AB 617. This will promote meaningful accountability that the investments we're making in these communities are actually generating results.

So, we urge an aye vote today on this bill and also want to elevate the environmental justice communities who are asking for continued work next year on this. There are - these are some important improvements and there were some important improvements that were left out of this bill and of this final package.

So, we would just like all of your assurance and the support to ensuring that we see those changes through. And thank you to the author.

Thank you very much, Chair, members. Katie Valenzuela on behalf of the Central Valley Air Quality Coalition, The Center on Race, Poverty and the Environment, and a broad group of environmental justice stakeholders who have been working for the last eight years to implement AB 617.

And we're working to fight for changes in exchange for the renewal of the cap-and-trade program to keep the promise that was made in 2017 to our communities. We want to like endlessly thank the Senator for her years of advocacy and partnership with our communities.

And we want to thank her particularly for taking this on in the last week of session when things were heating up. She has always been our champion, and she was our champion on this measure as well. However, unfortunately, we are not supporting the bill.

We are also not opposing this bill primarily because the language that we drafted was significantly scaled back during leadership negotiations. That language would have actually taken steps to ensure that emissions reductions actually occurred in our community.

And so we're here today to thank the Senator to commit to keep working with her, but to also ask each of you if you can commit to keep working with us next year so that we can see this promise through and ensure that the emissions reductions that we are so heavily investing in, thanks to our champions, actually occur.

Thank you.

Thank you. Any persons in this hearing room in opposition? Let's hear the opposition and then I'll bring you all up. In the last hearing we get a little wild.

Good afternoon, Chair and members. Adam Regele, on behalf of the California Chamber of Commerce, in respectful but strong opposition to SB 352. I want to begin because part of our opposition is not only on policy but on process.

And I just want to take a moment to say that the tremendous work that this body, this legislature does on any policy runs on good faith negotiations with all stakeholders and ensuring that there's transparency and honest discussions.

And when there's compromise reached on things, there are always folks who get things and folks who don't get things on both sides; that's generally a good compromise. And so, what is challenging on process here is there's been a year's long process to negotiate and come to compromise on a warehouse cleanup bill.

And that was done on Tuesday morning. The components of 352 were part of those negotiations and expressly not included in the warehouse cleanup bills. SB 352 went into print less than 12 hours later, basically taking policies that were negotiated to be not included in another big negotiation as what we view as an end runaround of that negotiation.

And so, to wake up to see that the next day was very troubling for us and personally for me, as someone who worked five years on the warehouse issue, candidly. And so, on process, we don't think 352 can be viewed as anything other than an end run of AB 735 and SB 415.

But to focus on the policy arguments, this bill codifies the Environmental Justice Bureau inside the AG's office. It includes a five-year mandate which we don't believe is justified imposing new monitoring requirements on the AB 617 program; locking up limited resources and preventing CARB and the air districts can lead from having more flexibility for changing community needs.

We think it's duplicative of the statewide blueprint. I'll just end with we respectfully oppose both on the policy, but more importantly on the process of this bill. Thank you.

Absolutely, and before we bring up members of the committee, I will say while I respect those negotiations, no compromise was made with this committee and there were no negotiations that I was a part of. And I'm a strong supporter of this measure.

And if it's possible we're finding out right now from the desk, I would love to be added as a joint author. If that doesn't compromise the timeline on which we can move it. Are there persons in the hearing room in support of this measure?

Hi, Alexis Sutterman with Brightline Defense, in support. Sorry for touching the microphone.

Will Brieger for Climate Action California and 350 Sacramento; protecting public health by enforcing air quality laws, always a good investment. Thank you.

Good afternoon. Alfredo Arredondo on behalf of the South Coast Air Quality Management District. Really appreciate the author's efforts on this and look forward to the continued partnership in the future. Thank you.

Hello. Michele Canales with Union of Concerned Scientists, in support.

Hi. Raquel Mason with the California Environmental Justice Alliance. We're in a neutral position but so grateful to the Senator for all her hard work here and look forward to continued process in the space progress in this space.

Asha Sharma on behalf of Leadership Council for Justice and Accountability. We are also neutral but recognize this bill is a step forward and really appreciate Senator Reyes leadership on these issues. Thank you.

Thank you so much. Any persons here in opposition?

Sarah Bridges on behalf of the California Manufacturers and Technology Association, respectful opposition.

Good morning, Mr. Chair, members, Skyler Wonnacott on behalf of the California Business Properties Association, and our members, NAIOP California. Also want to thank Senator Reyes for all the negotiations on the warehouse bill. And this language is slightly different than what was negotiated earlier. And we would like to work with you on this next year. Thank you.

Mr. Chair and members, Kurt Kimmelshue, on behalf of the International Warehouse and Logistics Association, in opposition.

Nicole Wordelman, on behalf of the City of Ontario and San Bernardino County, in respectful opposition.

Dennis Albiani, on behalf of the California Grain and Feed Association, California Seed Association, California Warehouse Association. We continue to oppose. Thank you.

Good morning. Taylor Triff on behalf of a variety of agricultural associations and respectful opposition.

Chair and members, Trisha Geringer with Agricultural Council of California, respectfully opposed.

Thank you so much. Now turn it back to the dais. Questions, comments, concerns from colleagues? Mr. Kalra?

Thank you, Mr. Chair. I just want to thank the Senator for her great work on this over many years and continued commitment.

I also like the Chair, very supportive of this piece of legislation and thank the community, those environmental organizations that are both in support, as well as those that may not be in support, but have been very been really good partners in this.

And I think this will setting this bureau up, particularly, I think show our commitment, having it in the DOJ that we have the opportunity to really put some muscle behind our values. Thank you.

Thank you.

Seeing no other comments, Senator, would you like to close?

Yes. Thank you. This is such an important measure. I wish that everything that EJ had proposed would have been included because then it would be so strong. But as we know when we are in negotiations there is a give or take. That doesn't mean that we can't bring it up again.

We get to this is the three-party negotiation between the Administration, the Assembly and the Senate. And the part that we are most excited about is the money. And you'll hear about that from Senator Limon in the next bill.

So important that we now have the funding that is necessary not just in one year but continuously that makes a difference.

So, billions of dollars will be used specifically on AB 617 to make sure that what was promised to the communities to help not just to put together a plan and to monitor, but to put together a plan that will be implemented. That's the money we needed.

And then to make sure that more communities are included because they're waiting. We have about 50 communities who are eligible for AB 617 designation, and we'll be able to include more and more of those. This is really important. It's not the final step, but it is an important first step.

And with that I respectfully ask for your aye vote.

Thank you, Senator. As the majority leader who taught me everything about running the floor and negotiating, I know you know how these negotiations work. But also, this wouldn't have even been on the table had you not forced it to the table.

And I think there are disadvantaged communities across California who rely heavily on things like AB 617 and I'm really glad that we've been able to secure that continuous funding together so that it is not in competition with other programs that the community also needs and deserves.

This bill has a motion by Mr. Schultz, a second by Mr. Kalra and a do pass recommendation from me. Madam Secretary, can we call the roll?

The motion is do pass. [Roll Call].

We'll leave it open for absent members, but I feel pretty confident.

Thank you.

I'm sure our next pro tem of the Senate is busy, but if she could make it to this hearing room. You are the last bill of this hearing. And while we wait for Senator Limon, this is our last hearing, and I just want to be very clear.

Martha, Lawrence, Paige and Elizabeth are the most incredible consultants I have ever worked with. And this committee did some incredibly hard things this year. It could not have navigated that without all of them. So, I want to thank you all for all of your work and all the time you spent making California a better place.

Everybody, come on. Come on back for the final bill of this year. None other than Senator Limon. Whenever you're ready.

So much. Chair and Members California program with AB32 in 2006. It was the first. Thank you. Thank you. I do have witnesses here in support of the bill. We have Victoria Rome from NRDC and Keith Dunn from the State Building and Trades Council.

Whenever you're ready.

Good morning or good afternoon. Victoria Rome with NRDC here in support of SB840. This bill maintains California's leadership on equitably fighting climate change while providing funding for key state and community priorities. We particularly appreciate two aspects of the bill. First, it strengthens the integrity of offsets used for compliance within the Cap and Invest program.

An offset enables a polluting entity to reduce GHG emissions elsewhere. Therefore, the emissions reduced with offsets should be of the highest possible quality. The bill also strengthens the integrity by requiring the California Air Resources Board to update protocols more frequently based on best available science.

This is important to ensure we actually get the benefits claimed by the program. SB840 also reforms the expenditure process for revenues from the Cap and Invest program by both continuing support for key programs while providing additional flexibility in the future.

We appreciate the leadership of Senator Limon, Members of the Climate Working Group for getting the package together this year. And we respectfully ask for an Aye vote.

Thank you, Mr. Chair. Members of the Committee, Keith Dunn here on behalf of State Building Construction Trades Council. I will be brief. You're going to hear from some of our Members again as well. I would just say that this is your opportunity to meet the moment to put the rhetoric into action.

We talked about a bill earlier where we talked about opportunity to invest. This is it. I am looking forward to those investments. The State Building Construction Trades builds alternative energy.

You hear me often say not only do we need the petroleum industry because we're not ready to completely flip that switch over yet, but this is our opportunity to make that investment. Put the rhetoric to work. Let's do it. I'm very pleased to be here in support. I understand that some of us aren't thrilled with the process.

I understand that. I'm an Irish optimist. I think it could always be worse. Look where we are. We have agreement. I'm sitting here again with NRDC twice in two days. It's a miracle. We're here to support and ask for your support. You're going to hear from our Members soon.

And thank you very much for the opportunity to be here.

Thank you so much. Any persons here in the hearing room. Expert witnesses in opposition. Yeah, let's hear the expert opposition real quick.

Michael Bocadoro.

Michael Bocadoro, on behalf of the AG Energy Consumers Association. I'm more of a tweener. We do not have a position on the legislation. It's not about what's included in the priority investment plan. It's primarily focused on what's not included in the priority investment plan, and that is funding for Climate Smart Agriculture.

San Joaquin Valley is going to be the big loser in this. The farmer program, the livestock methane reduction program, the FPIP program, are all proven worthy of priority funding. Not included in the priority funding in this legislation.

Equally important, any climate scientist worth his PhD will tell you that reducing methane in the short term is the most important thing we can do. Not a penny in here prioritizes methane reduction funding in California. Not from landfills, not from livestock, not from oil wells. And so that's a huge loss.

We look forward to working with the author and the Legislature on getting that in the discretionary funding as we move forward, but appreciate the opportunity to share our concerns. Thank you so much.

Now, any persons in the hallway in support.

Good afternoon. My name is Greg Hardiman with the Elevator Constructors Local 8 out of Northern California and we support this.

Good afternoon, my name is Victor Delatori. I'm from Local 261 in San Francisco county and I'm in full support of the SB 40.

Ramon Hernandez with the Laborers Local 261 and I support.

My name is Jesus Mesa. I Support Union 7C.

Jose Chavez, Labors Local 304, Alameda County, IN full support. Thanks.

Thank you. Good afternoon. Daniel Garcia, Labors Local 185 here in Sacramento, California and I'm in full support.

Good afternoon. Javier Flores, Local 261, San Francisco, support. Thank you.

Good afternoon. Eduardo San Roman, Labors Local 304, Alameda County, full support.

Hi. Rafael Gonzalez, Labors Local 304, Alaeda County, in full support. Thank you.

Hello, good afternoon. Luis Perez, Local 270, full support.

Hello. Octavio Lara, Local 304. I'm support.

Steven Spilly, Local 270, full support.

Hello, my name is Rodrigo Bustamante, I'm with the laborers 261 out of San Francisco and I'm in full support.

Hello, my name is Carlos Dosias, I'm a. Local 261, San Francisco, in full support. Thank you.

Hello, good afternoon. Laronda Bonner, Local 324 in full support.

Hi, my name is Sergio Perez, and I'm from Local 1130, Modesto, full support.

Good afternoon, everybody. Francisco Nunez, La Una, Laborers 304 in Alameda County. And we're in full support. Thank you.

Good afternoon. My name is Fernando. I'm Brisbane Local 270. Larry Jr. Full support.

Good afternoon. Jennifer Rowe with Capital Advocacy on behalf of the California Hydrogen Business Council, in support. Thank you.

Good afternoon. My name is Christian Resendes with Local 185, Sacramento, and full support.

Good afternoon, everyone. My name is Olivia Navarro from San Jose, California. La Una labor is Local 270, in full support. Thank you.

Good afternoon. Your Honor, my name is Savannah Roman from Local 270, Cedar, California, and I'm in full support. Thank you.

Hi, my name is Dario Salgado. I'm from the laborers local 270 out of Salinas, and I'm in full support.

Hello, I'm Robert Ceballos, Local 270, San Jose, full support.

Raymond Davis, business agent, Ironworkers Local 118, Sacramento, in full support.

David Mendez, organizer for Local 118, Iron Workers, Sacramento, in full support.

Mitchell Bechtel, on behalf of the District Council of Iron Workers, full support.

John Hershey, UA Local 447, Plumbers and Pipefitters, in support. Thank you.

Jorge Morales, Local 304. I support.

Martin Perez, Local 270. I support.

My name is from Labor Local 270. I support too.

Misal Romo with the laborers in 304. And I support.

I'm Reuben Guzman. I'm local from 270. I'm support.

Laborers Local 270. I support.

Jose Mexicano, Local Santa Clara. I support.

Teresa Foglio Ramirez, Labor's Local 261, San Francisco, in support.

David Delatorre, Local 261, in support.

Good morning. My number is Tomas Lopez, 304. I'm supporting.

Juan Gutierrez, Northern California Labors Training Center, here to support.

Diego Hernandez with Local 261 in San Francisco in support.

Matthew Madrigal, Laborers Union, in support.

Mario De La Torre, Northern California District Council of Laborers. And I'm full support.

Arturo Science, Labors Local 261, San Mateo, in support.

Tom Kohlenberg, Operating Engineers Local 3, in full support.

Hello. Anthony Croce, Operating Engineers Local 3, full support. Thank you.

Russ Stephanich, Operating Engineers, full support.

Darren Dries, Operating Engineers, full support.

Timothy Hague, Operating Engineers Local Union 3, in full support.

Scotty Dixon, Operating Engineers Local 3, in full support.

Justin Barnard, Operating Engineers Local Number 3 in full support. Thank you.

Good afternoon. James Throuactor with the California State Council of Laborers and strong support. Thank you very much.

Mikhail Scavarli here on behalf of the California Council for Environmental Economic Balance standing in solidarity with our labor members in support.

Chairmember, Cesar Diaz on behalf of Housing California and strong support.

Holly Fraumeni on behalf of Habitat for Humanity California. We're very supportive of the program overall, but unfortunately habitats have not been able to be competitive as a homeownership builder. We're looking forward to working with the author in futures to hopefully have them be more competitive for rental housing and get funding in the future. Thank you.

Thank you so much.

James Hammond, Labor's Local 294 out of Fresno in full support.

James Cantu, Local 294 and Fresno, full support. Thank you.

Miguel Campo verde, Labors Local 294, full support.

Jeff Fagan, Local 294, Fresno, full support.

Yeah. Julie Malinowski Ball, on behalf of the California Electric Transportation Coalition in support. Looking Forward to prioritizing ZEVs and infrastructure next year. Thank you.

Michael Pimentel with the California Transit Association representing local and regional public transit agencies across the state in support and want to thank the Legislature and the Governor for maintaining investment in public transit. Thank you.

Brendan Tuig on behalf of the California Air Pollution Control Officers Association in strong Support of the AB617 Community Air Protection continuous appropriation. Really appreciate all the hard work on that we've been advocating for years. It'll make a big difference in our shared efforts to improve air quality. Thank you.

Mr. Chair. Mark Fenstermaker for the Bay Area Air Quality Management District, echoing the comments from the previous speaker. Strong support for the continuous appropriation with AB 617 implementation.

Erica Via with the South Coast Air Quality Management District. Thankful to the Legislature, especially Senator Limon, Senator Reyes and Assemblymember Solace for your leadership in ensuring funding for the AB617 program. Thank you.

Good afternoon. Maria Spencer Neider with the California Association of Port Authorities and the Los Angeles Clean Tech Incubator in support. Thank you to the author.

Sylvia Celine Shaw here on behalf of the San Joaquin Valley Air Pollution Control District in support of the continuous appropriation for the community Air Protection program. Very strong support for that. We look forward to continuing the conversation on other air quality funding priorities next year. Thank you.

Gregory Kramer on behalf of the California Alliance for Jobs and the Climate Safe Infrastructure Coalition and support.

Marina Espinosa with the California Housing Consortium and support.

Good afternoon, Chairmembers. Kathryn Charles, on behalf of the California Council for Affordable Housing, the Bay Area Council and The Housing Action Coalition in support

Gracia La Castillo Krings here on behalf of Enterprise Community Partners in strong support of the continued investment to affordable housing. Thank you.

Steve Hanson here on behalf of SPUR, California YIMBY, The Michaels Organization, San Diego Housing Commission, Abundant Housing Los Angeles and the Inner City Law Center in strong support. Thank you.

Martin Radosevich on behalf of Heirloom Carbon and Carbon Capture Inc. in support. Thank you.

Noel Melroy on behalf of the California Compost Coalition, Rethink Waste and the Electric Vehicle Charging Association in support and there is a large letter with conservation folks, electrification folks and others coming in with some more nuance. Thank you.

Nicole Wardleman on behalf of the City of Santa Cruz in support.

Melanie Law, here on behalf of E2 in support.

Melissa Sparks-Kranz, with the League of California Cities in support of SB840.

Mark Neuberger, CA State Association of Counties in support of 840.

Alex Loomer on behalf of Pacific Forest Trust and support. Thank you.

Sharon Gonzalez on behalf of the cities of Thousand Oaks and Merced in support thank you.

Abraham Mendoza on behalf of Central California Environmental Justice Network, Clean Water Action, Rural Community Assistance Corporation, Self Help Enterprise and Community Water center and strong support. Thank you.

Jeannie Ward Waller, on behalf of Transform and support.

Andrew Dawson, the California Housing Partnership in support.

Charlie Lavery, operating Engineers Local 3, San Francisco, San Mateo and Marin counties and strong support

Crystal Moreno on behalf of the California Nevada Operating Engineers and strong support

Chris Steiner on behalf of The Operating Engineers Local 3 statewide full support

Valak Tang with the American Council of Engineering Companies and strong support

Dean Fadif Operating Engineers in support

Margie Lee Sampson Advisors here on behalf of Charm Industrial and EBB Carbon in strong support

Christopher Rosas, Operating Engineers in support

Allison Hilliard with the Climate Center in strong support Very much looking forward to coming back next year to talk about nature based solutions for climate safe investments. Thank you.

Michael Jarrett with the Nature Conservancy echoing the comments related to nature based solutions and strong support. Thank you.

Michelle Canales with Union of Concerned Scientists and strong support

Clayton Munnings, Clean and Prosperous California, 840 will bring investments, revenues and reductions in state therefore in strong support

Marissa Hagerman with Tratton Price Consulting registering strong support on behalf of Water Foundation for the $130 million a year investment in Safer. Thank you.

Brian Shub, with the California Climate and Agriculture Network we support reevaluating offsets the ASIC Salk and Safer funding and appreciate the intent language around agricultural funding Next Year.

Thanks Will Brieger, for Climate Action California, 350 Sacramento and proud California and thank you for support.

Robert Pearsall, US High Speed Rail on behalf of our coalition of more than 50 unions and industry leaders ran strong support of this historic investment. Thank you.

Alexis. Alexis Sutterman with Bright Line Defense and strong support, especially the funding for frontline communities such as the 617 program. Thank you.

Good afternoon. On behalf of Conservation International, Tree People, the Green Hydrogen Coalition, Hcycle and Orange EV in support. Thank you.

Is there anybody here who has the audacity to oppose the Senator today? I didn't think so. We will now turn it back to Committee Members. Any Questions, comments, concerns? Mr Connolly.

Want to thank the author for the work. I will be supporting this, but I wanted at least also flag the ZEV issue, namely that currently there are no funds allocated towards zero emission vehicles. We know the threats now from the Federal Government, namely that ZEV incentives are going away in 19 days on September 30th.

And we also know it's more important than ever to invest in our clean vehicle strategies in ZEV infrastructure. So I guess I would just put it out there. Would there be opportunities in the future to implement ZEV funding as part of ggrf?

I think that that would be at the discretion of the Legislature.

Is that something that I guess we're collectively committed to exploring?

I think collectively committed to exploring, Absolutely. Collectively.

Are there any other questions for Senator Ramon? Mr. Flora. Thank you. Mr. Chair. Senator, good to see you. Sadly, I'm not going to be able to support this Bill today. I'm going to just lay off of it because I do think investments on, you know, for construction workers is important. But Boca Door, Michael just brought it up.

The Central Valley got hosed in this and I supported cap and trade a number of years ago when it came here in 17 largely because of investments for the farmer program. And when we talk about ZEVs and clean vehicles not funding one of the most successful programs CARB has ever implemented in the farmer program is lost opportunity.

We met the Air District's goals faster than what we were supposed to because of that funding and it's been slowly stripped away. So to see no investments made in the Central Valley as it relates to those programs, it is a little bit frustrating. So with that being said, I appreciate your effort.

I know this is kind of a last minute thing and it's been a lot of work and I know you guys have been busting your tails doing it, so I do acknowledge that.

But as we're looking into the EVs funding, I think it's something that we need to look into with the AG programs as well, because they are incredibly successful and we need to be focused on them as well.

Thank you. And I will point out, you know, certainly I think one of the things with GGRF funding is that it doesn't meet the desires and needs of our state completely.

And so I know that one of the things and the pieces that's important there is also to know that as the market kind of stabilizes and hopefully the funds in GGRF are greater.

What this Bill does have is the ability to have a discretionary look at where we may be missing that wasn't existent in actually previous reauthorization versions. I know that, you know, this is something that came up and certainly the chair has been involved in these conversations around Prop 4.

Prop 4 did allocate $300 million related to some of our Climate Smart AG. I have three counties that I represent that all have AG in our top producing count, you know, in the top quarter producing counties in the state. So I absolutely hear the need to keep the conversations going.

And I think that they will be legislative conversations that will require ongoing dialogue, but also consensus on where we think the investments may be. I do think, you know, there are other pieces that benefit, you know, throughout their state in terms of where we see investments.

I do want to acknowledge that we will see great investments in jobs in the Central Valley that are also meaningful to communities there and really the outcome to the state. Thank you.

So just to clarify, Senator, are you additionally committing to conversations?

Always committing to additional conversation, collective conversations. Was that collective conversations that we were having? Yes.

Understood.

Yeah, I know. Yeah. We have to go back on video and remember what that line was, but yes.

Are there any other questions from colleagues, Singh? None. Senator, would you like to close?

I just want to thank everyone for being involved, including the chair who was part of the working group negotiating team. I know that several of you were also part of the greater working groups to that we're having these conversations.

I think that this is an outcome that maybe doesn't have everything that we would all have, but I definitely feel like we can point to things that advance some of our goals in terms of making investments throughout our communities, making sure that our most underserved are taken care of and not overlooked, and also advancing which is the fundamental core of the cap and trade program, the reduction of greenhouse gas emissions for our state.

With that, I respectfully ask for an Aye vote.

Thank you. And having said in those negotiating meetings with you if you have not seen the Senator negotiate. It was masterful. And the program is better. California will be better because you were at that table. And I am grateful to have shared that space with you.

This Bill has a motion by Mr. Conley, sir, second by Ms. Wicks, third by Mr. Schultz and Karla, and a do pass recommendation from myself and Ms. Pellerin. Can we call the roll?

Motion is due pass. [Roll Call]

We'll leave it open.

Thank you. Thank you. Thank you.

No, we'll. We'll go ahead and add on. Absent Members.

[Roll Call]

This concludes the Assembly Natural Resource Committee hearing.