Assembly Standing Committee on Budget

All right. Good afternoon everybody. Happy Lunar New Year. Welcome to this informational hearing of the Assembly Budget Committee. We are here today to hear two additional bills related to early action. The analysis of the two bills are attached to the agenda. I'm going to offer some extremely brief introductory comments.

Then I'm going to invite our Vice Chair to make some comments. We will then have the opportunity to hear from Erika Li at the Department of Finance and have an opportunity for members to provide questions and comments.

We are fortunate to have Ross Brown from the LAO and his colleagues here for question for questions, as well as Christian Griffith and the Assembly Budget Committee staff. And after questions and comments from members of the committee, we will provide an opportunity for public comment to conclude the hearing. The two bills we have before us today.

One includes a series of technical corrections that streamlines Proposition 4 projects that advance our wildfire prevention goals. And the second trailer bill allows Bay Area transit agencies to borrow infrastructure funding that is already earmarked for the region to support transit operations as they analyze their long term operational plans.

So appreciate everybody joining us today and I will turn it over to the Vice Chair for any introductory comments.

Well, thank you and welcome everybody, again. I'm going to save most of my questions for after we hill- hear the bill presentations and I appreciate the Chair for getting this started on time.

All right, thank you very much, Mr. Vice Chair. With that, we will tune to Erika Li from the Department of Finance.

Good afternoon. Good afternoon, Chair Gabriel, Vice Chair Tangipa and Members of the Committee. Erika Li with the Department of Finance here to present on two bills for early action. The first bill is AB/SB 107, which as the chair mentioned, is a budget bill junior that amends the 2023, 24 and 25 budget acts.

These are primarily technical in nature, such as extending encumbrance periods, amending language to allow for technical assistance, augmenting federal trust fund authority or correcting fiscal agents. However, there are some notable changes I want to present.

The first is that the bill makes various largely technical adjustments to the climate bond or proposition for funding appropriated in the 24 and 25 budget acts.

It adds control Section 15.01 to exempt from the Administrative Procedure Act the development and adoption of program guidelines and selection criteria necessary to effectuate or implement programs that are funded by the climate bond appropriations that were made in the 2025 Budget Act or related trailer bills.

And lastly, it moves 20 million in funding to promote California travel, tourism and economic development from Visit California to Go Biz. And moving on to the second bill is AB/SB 117 a trailer bill on transit. And just for background for the Committee Control Section 91 which was included in the current year budget.

The 2025 Budget Act required the Department of Finance in coordination with the California State Transportation Agency or CALSTA to examine financing options that might be used to provide short term financial assistance to four Bay Area transit agencies. And this bill represents the agreed upon regional approach that is also cost neutral to the state.

And I just want to emphasize that that was very important as we were working with the transit agencies given the state's fiscal condition.

And specifically this bill provides a loan of up to 590 million to support the following Bay Area transit agencies, San Francisco Bay Area Rapid Transit District, San Francisco Municipal Transportation Agency, Peninsula Quarter Joint Powers Board and Alameda Contra Costa Transit District.

The details of the loan are that CALSTA is required to loan up to this 590 million amount to the Metropolitan Transportation Commission or MTC by July of this year and the MTC is then required to use these funds to issue loans to the specified agencies.

The money used to issue the loan is from as already mentioned, already awarded MTC regional projects through the Transit and Intercity Rail Capital Program or TIRCP. It is a 12 year loan term with the first two years being interest only and the interest would be equivalent to the surplus money investment fund.

The bill also includes provisions intended to minimize impacts to regional projects including oversight mechanisms and project protections. And with that I am done with my presentation of the two bills and happy to answer questions.

Thank you very much. Let me just ask the LAO if he has any comments you want to share.

Thank you. Ross Brown with the LAO. I don't have we don't have any presentation but here for questions.

Wonderful. Thank you very much. With that we will come back to the committee for member questions or comments. Vice Chair.

Well thank you and thank you for that very quick presentation too. One of the questions I had with the I understand the technical changes on 107. Can you go over what does the normal APA process look like and why are we exempting it within this process?

Sure. I can give you sort of a high level explanation of the exemption for this particular bill as my colleague comes up to give you further details. But this APA exemption is no different than other APA exemptions that we the state has provided for similar projects.

And so just wanted to note there's there's nothing different in this language and this was actually for it's only for the current year and for those projects that were approved as part of the 2025 Budget Act. So I-

What other projects have that exemption?

Sure. And I will hand it over to my colleague for some details.

Hi, Lizzie Urie, Department of Finance. So all of the previous recent natural resources bonds, including Prop 68, Prop 84, Prop 1 over the last 20 or so years have included the APA exemption. The 2025 Budget act provided an alternative to the APA process through an emergency rulemaking process.

And while many departments have successfully navigated that emergency rulemaking process since the passage of SB 105 in September, many other departments are going through that emergency rulemaking process for the first time. And that is resulting in some programmatic implementation delays.

So this exemption will allow our departments to more effectively and expeditiously implement their programs while still providing public opportunities for the development of programs and project selection.

So when granting these projects, do we have a specific approved vendor list for wildfire prevention that like we've identified?

I think it would be very dependent on the specific program to which you are referring.

The main reason why I ask is because I know, you know, what's out there is a lot of people are spotlighting how is the government spending money and what safeguards do we have in place. And so I just want to make sure, and especially when it comes to wildfire management, it's one of the biggest fears I have.

I represent pretty much the entire Sierras. And you know, when we're granting these contracts, sometimes I believe that we do need these safeguards to ensure that the work is being done. So some of it just seems a little bit expedited.

And that's where I wanted that clarity on, you know, what other projects are out there and then also what additional safeguards that we have in place for wildfire mitigation to make sure that no mistakes are being made and the money is actually going to where it needs to go.

Yeah, thank you for that.

And I would just want to clarify that the AB 107 includes both an APA exemption for the 2025 climate appropriations as well as, I believe, the language that you're referring to the park's exemption from competitive bidding, which gets at a slightly different problem in many rural or remote areas where parks operates, there simply are not sufficient competitive bids.

And this can lead to a stalling in making important progress on implementing projects when there is a very time sensitive work that needs to be done.

Yeah, then that's why I was asking for the pre approved vendor list to see if there is a list out there for people that are already doing the work. You know what- You know, get grants them or how can somebody get on that?

Just to make sure that we have oversight on the vendors who are applying for them and if they're the ones who have the proper mechanisms to make sure that they're completing the work. I have a different question. When it comes to BART, do we have anybody here for BART?

One of our staff can come up and help with that.

Okay perfect. They- They just presented both. Yeah, we're moving quick. Thank you. And could you- Is- You're with the dep-

Yeah, sorry. James Moore with the Department of Finance.

Okay, perfect. So the- Right now, what we're seeing, right, this looks like a $700 million BART bailout. Is that an easy way to look at this bill?

I would. Well, first of all, the amount is an up to 590 million, and it is to address a cash flow issue. It is a loan, not a bailout.

There- There have been needs identified, and as part of the, as I said, the 2025 Budget Act, there was a control section that required finance to work with the entities to come up with a plan. Our structure creates a regional plan that is cost neutral to the state.

So this is using dollars that would otherwise go towards projects in this region, and that- that is- that's the- the structure of this loan.

So it's moving money from other projects that are already approved to this project.

I'll let my colleague speak to the details, but I just wanted you to understand the- the structure of the- the guidelines and the guardrails that we had in place.

Well, and the other question, what's the difference between a bailout and a loan?

Again, we're trying to is- we-re trying to address cash flow needs for these organizations.

James Moore again with Finance. The mechanism that we're using here is not taking money from projects and- and telling them, you no longer get money. We're giving it to someone else. In the Transit and Intercity Rail Capital Program, it's a competitive program administered by the California Transportation Agency.

We make large capital grant awards to various agencies throughout the state. Once those funds are awarded to agencies, there are often a number of years before those projects have aligned all of their milestones and come back and seek an allocation from the Transportation Commission.

At which point the state is saying, assuming an allocation is- is granted, you can go spend those specific funds on that specific project and we will reimburse you. We really are taking advantage of that gap in time between when a project is awarded funds and when the funding is later allocated.

There's over a billion dollars of funds that have been awarded to various capital projects in the Bay Area but have not yet come forward for an allocation. So the funding that is being used in the proposal to loan to the four agencies is coming from that pot.

And so it's not taking money from projects who will never get it back. Our- Our commitments remain with those projects. But because there's a substantial amount of money that's been awarded to projects but hasn't been allocated to them, that creates the wiggle room to- to create this loan.

The biggest thing that I find again concerning is that there's- there's a tax measure that the local area is going to put and that's coming in November, correct?

Yes.

The in what was stated was there is a cash flow problem right now for BART.

I know members of my team have been able to meet with BART and you know, when they talk to me about ridership and activity on BART, we still haven't returned back to pre pandemic. And now I'll share my own personal story. I used to actually ride on BART all the time.

I mean, I even had surgery at UCSF where I parked at Pleasanton and went all the way into the the area. So I understand the need for BART. It just seems concerning to me when especially the Department of Finance and the LAO's office has stated to us that we are entering into our fourth deficit.

It seems like another element that we're adding to our responsibilities as a state prior to the election that the local Bay Area Rapid Transit is going to have in November?

So what safeguards do we have in place that with this loan, BART can actually meet their metrics, pay this loan back to make sure that we're prioritizing the money, especially if it's state money, that areas like Sacramento, Riverside, LA, San Diego and the Eastern Sierras, the district that I represent, if they're paying for this, how do we know that BART has all of the safeguards in place to actually pay this loan back and make sure that they're meeting their cash flow problems right now, especially prior to the election that's going to happen in November?

Sure. A couple of things. I would say that this, the funding that I was referring to the awarded but not allocated is strictly from the MTC region. And so no other area around the state is being affected by this at all.

In regards to the SB 63 measure, while it would create additional difficulties for Bay Area Transit if that measure did not pass, the proposal that we have here is not related to that measure measure. And the securitization of the loan is through the state Transit Assistance Program.

And so if there was a scenario where BART or one of the other three affected operators here that will receive the loan from MTC is unable to make payments from accounts that they were- are planning to use.

Maybe at this point we have a mechanism in there to force repayment through the withholding of regularly allocated or regularly administered SDA Fund.

So let me ask this, last question.

So if- if BART is having cash flow issues right now and that measure doesn't pass and we approve this, how does BART service the loan?

Through us withholding a state transit assistance formula, funds that would otherwise flow to BART that is currently operative every year.

For us withholding funds from BART. And then what would that do to BART?

I think in that situation, in the scenario you outlined, BART is-

BART would have to shut down.

I'm not there would be difficulties, but we're really focused on the mechanisms of guaranteeing repayment of the loan to the state so that the state is not out money on this path.

Thank you.

Thank you, Mr. Connolly.

Thank you. Chair, Good afternoon, everyone. Wanted to follow up on the issue of the ADA and Proposition 4, kind of the flip side of a question that the Vice Chair asked. So looks like under SB 107 it would exempt appropriations of Prop 4 funds in the 2025 Budget Act from the APA.

We know there's a broader push right now, and I believe it's the Alvarez Bill this year to actually exempt all Prop 4 allocations going forward from the APA with the express reason that we want to get this money into people's hands quickly on things like wildfire prevention. Was there a thought or where do

you think stand in terms of the administration's thinking on making that exemption, I guess broader and extending into the future?

Yeah, I think for the purposes of early action, we are really focused on the projects in the current year with the understanding that there would be further discussion on more ongoing on a more ongoing basis. And so for immediacy, we are dealing with the projects that were approved as part of the 2025 Budget Act.

Okay. So further discussions to come. Thank you.

Thank you very much assemblymember. I just want to clarify maybe for those who are watching at home and maybe to put our Vice Chair at ease.

So what we're discussing as it relates to the APA exemptions that are in early action is actually narrower than the bill that the assemblymember mentioned, AB 35 that we passed off the Assembly Floor 76 to 0 a few weeks ago that would deal more broadly with all of the allocations in the climate bond.

So this is narrowly focused on allocations from last year from 2025 to make sure that we don't delay those. We have agencies that are about to take action imminently. So there's a strong case here to make sure that we act with urgency.

But I just want to make sure for our Republican colleagues and others who are questioning those this is a narrow version of a bill that you all already voted for that was on the. Floor a few weeks ago. With that, any other questions or comments? Mr. Bennett?

Thank you. Just very briefly, I want to point out that, you know, the Bay Area transit agencies are struggling with this constantly changing commuting patterns that are out there.

So I really appreciate Department of Finance and the governor's office working to swiftly come up with a compromise to settle the issue so that they have the bridge financing that they need at this point in time.

And the other thing I just want to say thank you for is appreciate you addressing a drafting error that we had about hydrogen and, and heavy duty and medium duty zero emission vehicles. So I appreciate that getting attended to also. Thank you very much.

Want to go, Mr. Ahrens.

Thank you, Mr. Chair. I just want to uplift the city of San Jose's concerns regarding the phase two of the BART to Silicon Valley project. It remains one of the Silicon Valley's highest capital projects and is extremely critical not only for the Bay Area, but for Silicon Valley and San Jose.

And I am concerned that the current language puts some of that funding at risk.

And I just want to highlight that my city in San Jose has also shared concerns by some of our transit partners that it does not have proper guarantees with the TIRCP funds that will be available for the project as the cash flow needs grow.

And I hope that this committee and the author can work with our stakeholders in Silicon Valley and the city of San Jose to provide any cleanup language that strengthens- strengthens those protections. Because, you know, this is- this is probably one of our number one priorities as a region in the Bay Area.

And we want to make sure that we're not going backwards in terms of approving this and not having those fund obligations be presented to our regional partners so we can get some of these transportation projects up and running. And I'm concerned that the current language doesn't necessarily guarantee that. I'm wondering if anyone can speak to that.

Sure. James Moore with the Department of Finance. We have several steps to mitigate any sort of project impacts. And so the CTC and the MTC are going to be constantly monitoring the situation with regard to the region's awarded funds and allocated funds.

If a certain pot, it gets a little technical, but if a certain pot of funds where allocations are going to be coming from dips below $350 million, it triggers notification to all interested parties.

It also triggers an evaluation by the CTC and the MTC to see if there are any project risks and authorizes the CTC to- to create an allocation plan to prioritize projects with- with available funding.

In the event that the allocation plan creates a scenario where there would be some sort of material impact to any projects, it authorizes the MTC to- to look more holistically at the funds that the state provides to it on an annual basis and allows them to prioritize those funds to mitigate any- any project impacts that would otherwise arise because of funding issues.

I appreciate that. I just would ask that perhaps we can look at cleanup language to further codify so that there is no confusion regarding the TRCP funds.

Shy Forbes, Assembly Budget Committee. I've also talked to NTC about this issue and by their calculations, there's $1.5 billion available for these, this pot of funding that is awarded but unencumbered. And so they do have a large surplus that they could pull from.

So it's my understanding, just from those communications, that it would be unlikely that there would be a certain project that every project cash flows at the same exact time. And given the language that he mentioned in the trailer bill, at this point, I would see that as unlikely. But I understand your concerns.

Well, and I'll just end, Mr. Chair, by saying in my short time in th- in Sacramento, I've seen the unlikely be- be the law. And so I just want to make sure we have further clarifying language that- that doesn't occur and that the city of San Jose's concerns are met.

But I'm looking forward to working with you to seeing how we can further clear that up. Thank you, Mr. Chair.

Thank you very much assemblymember. Any other questions or comments from members of the committee? Mr. Gallagher and then Ms. Quirk Silva.

Yeah. Just to clarify. So on the Wildfire funding. Did you mention there's already like approved vendors that you guys have in place? Is that right? Or.

I will turn that to my colleague.

Hi, thank you. Lizzie Urie again, I'm not aware of whether parks has a pre approved vendor list for this type of work, but we're happy to follow up with the committee.

Yeah, I mean, I think the big concern there would be, I mean, certainly the APA streamline is- is good, but you know, competitive bidding I think is important considering that we want to maximize those dollars and get as much work done as possible.

And how do we know that if we're not competitively bidding projects and, you know, we want to get as many acres treated as possible. And so like, that is a concern of mine. And I don't know if you have any response to that.

Yes. Would just note that the competitive bidding exemption is not intended to bypass oversight or undercut these efforts. This is really intended to address areas where it's essentially a competitive bidding. Desert Parks may receive only one or none competitive projects in certain areas. These projects are time sensitive.

So in order to expeditiously implement them, oftentimes competitive bidding needs to be exempted. And this is also consistent with recent investments in this area made to parks over the last handful of years.

Yeah, well, you guys have had a little bit of problem with oversight, so I do worry a little bit about that. And then on the- the loan, are we putting the cart before the horse a little bit?

I mean, look, there's certainly many projects we have out there that would like, have cash flow issues, rural hospitals that have some cash flow issues right now. You know, why. Why are we specifically doing this for, you know, one project that benefits the Bay Area?

But there's a lot of, you know, infrastructure projects and otherwise it would be helpful to districts. They're in the process of navigating through this just like anybody else. Why in- Why in particular are we doing it here.

Specifically for this loan? There was language in the 2025 Budget Act that tasked the Department of Finance to work with the local entities to come up with a financial structure. As I stated before, the structure of that loan from our part was to be cost neutral and to be a regional- have a regional solution.

Given your statement, I think there would be consideration for other areas in the state along the same guidelines in regards to a potential loan. So I'll just- I'll state that more broadly, but specifically for this- we were- we were tasked with finding a solution for transit in the Bay Area.

Okay. I don't have a lot of mass transit in my district, but I mean, is there other projects you think might qualify for plan for this?

I'll turn that to my- my colleague. But the immediate need was for the Bay Area, and that was identified through conversations throughout many months prior to last year's. In prior year, which is why that was included in the 2025 Budget Act.

James Moore with Finance. I don't have the specific details about your district. I will say that, like my colleague said, making this a cost neutral approach that utilized the Bay Area transit's own funds and in a creative way to solve their problem.

While not putting additional funds at the state was something that we felt was- was responsible in dealing with this unique situation in the Bay Area.

And going forward, other regions, if they had the same pot of funds that needed some creative financing that didn't cost the state money, I think that's something we would generally be open to talking about. Okay.

Thank you, Mr. Gallagher. I'll just add here for a minute just to make sure that we're all on the same page. We are filling in the details of something that was agreed to in last year's budget.

This was a very, very high priority for the Bay Area Caucus, something that we heard from a lot of members about, that was important both to that region and both to the state more broadly. Given the economic engine that is the Bay Area.

And again, given the concerns we have about the state's fiscal position, there was conversation about how can we help the Bay Area help Bay Area transit, but also be good stewards of state resources?

And we were able to leverage the state's strong cash position and as was mentioned, be able to borrow from funds that are already allocated, in a sense, advance funds that are already allocated to Bay Area transit agencies as a way to help them navigate these choppy waters, while at the same time, and I think you heard this from the Department of Finance, make sure that there is a security interest built in in a way that we can be good stewards and protect funding for the state in the event that folks don't repay those loans.

So from our position of protecting state resources, of being able to help those regions of the state when they need- when they need assistance, and being doing that in a way that is cost neutral to the state.

I just want to compliment finance and the Legislature and those who work to negotiate this agreement because I think it's a very thoughtful and creative agreement that is able to help a really important region of the state, but do so in a way that protects state resources.

So I just want to make sure, as we have this conversation, we're all on the same page about that and the fact that this is we're not allocating money in a way that is going to impact the state's bottom line. We are lending money in a way that's going to help them, but also protect the state's coffers.

With that, I think we are going to go to Ms. Wilson.

Thank you, Mr. Chair. And you said it so eloquently, but I will repeat some of that for some simplicity's sake for folks because I I want to ask one follow up question to this statement. Now as I understand it, this agreement authorizes $590 million in loans administered by the MTC to BART, Muni, Caltrain and AC Transit.

It is using awarded but unallocated TIR SIP funds available for Bay Area projects only, not anywhere in the state- any else in the state. It's structured to protect existing project commitments and avoid schedule impacts.

Has a 12 year repayment term where the first two years are interest only payments and the operator repayment will be secured by STA revenues and interest rate is tied to the state's investment earnings. So given everything that I said just to affirm for everyone in the room and everyone listening, is there any risk to the state?

No.

Thank you.

Say it louder.

Anything more assemblymember?

Okay, we're going to go to Mr. Patterson.

No.

Great, thank you. What's finance and the LAO's economic projections moving forward?

As I stated at the first hearing of this budget season, we are looking at structural deficits in the out years. Currently our revenues are trending higher than we even anticipated at the Governor's budget. So we are looking at a better upcoming year for budget year but we do have out year deficits that we do need to address.

Hence the important aspect of this being a net neutral loan.

So on the- but the economic conditions I assume there's some built in economic conditions that would cause some out your deficits. Like does finance expect, you know, employment changes, you know, in the state, you know those kinds of things to impact revenues.

Sure. And part of our revenue forecast includes an economic forecast and so as such we look at indi- certain indicators including labor and solid forecast based on the most relevant information and we update that again we will update that at the May revision. So yes.

And not to put you on the spot but do you have any insight into what your economic indicators were telling you?

Our economic indicators that we included in the Governor's budget were more positive than at the at the Budget Act and so I wouldn't say more beyond that at this point not myself being a forecaster, but relying on those in our Department. We will wait to see as we have more monthly data coming up.

Yeah, well I guess Nelio, maybe there's some thoughts on that.

Yeah, so I'll share. As Ms. Li mentioned, both I think Department of Finance and our office are- are seeing out your structural deficits that are significant that the state will likely have to deal with. I think the point that I will note on the economic forecast, our forecasts.

Do not incorporate an assumption of a recession or anything like that in those. In kind of forecasting those structural deficits. I think the main risk, I think we've been trying to highlight, want to highlight, is around the risks of a stock market downturn. Since our revenues are so dependent on the stock market.

We do think that there are some reliable indicators that often precede a stock market downturn. And so our revenue forecasts have tried to incorporate some of that risk, but they don't kind of incorporate a full stock market downturn. If that were to occur, then the revenue situation would be- would be much worse.

Hopefully Bitcoin doesn't precede economic downturn. Well, the reason why I ask is because, you know, obviously this may be net neutral. I suppose. You know, there are a lot of factors, obviously that play into the economics of whether people are going to be taking BART in the Bay Area.

Having lived there for many years myself, you know, one of them, or any transportation agency, you know, in the Bay Area, it's, you know, tech workers taking, you know, BART or whatnot, you know, so ridership, you know, concerns there, but also just generally revenue concerns in general for the agencies if there's an economic downturn in the ability to, to pay off the loan with already existing cash flow issues.

And so just something I kind of wanted to think about. I have a prediction that we're going to be back here on this bill at some point in the future. I'm more of a pessimist than the chair over here, so.

But I'm glad to see that the, at least, you know, the economic indicators that maybe the LEO is using don't predict, you know, Armageddon, you know, in the state. So I think that that's good for, you know, the national picture on the economy. So thank you very much.

Mr. Bennett.

Thank you very much.

Really, I think the fundamental question when you listen to the LAO that's in front of us is the fact that it's very likely because even with very good revenues, et cetera, LAO is projecting a structural deficit in the future, that the state of California is going to have to find some way to live within our revenues.

And I think more and more of us are coming to that recognition. And I just want to make sure, because this issue will come up in budget sub 4.

So for the benefit of my colleagues on budget that are not part of budget sub 4, this the key topic that we will ask and I want transit agencies to be ready for is this.

The transit agencies say in their own letter, they say that COVID 19 profoundly reshaped the geography of work, a lasting change that has hit dense downtowns and rail systems especially hard. If it is a lasting change, the question is what is the sustainable transit level that we can afford out there?

And what I don't want to do is have this action today imply that the state is going to always come up with sort of the shortfall. Every agency is going to have to come up with some way to live within the realistic.

Maybe the ridership is going to rebound, but if the ridership doesn't rebound, we have to find a way to find some kind of sustainable approach because that's what we're going to have to do at the state level also. That will be a topic of conversation.

I just wanted to pass that on and make sure I got that out here at this hearing. Thank you very much.

Thank you very much assemblymember. Any other questions or comments from the committee? Okay with that. I just want to thank everybody. We got Republicans riding BART. We got Democrats talking about living within their means. A little bit of something for everybody here in the Assembly Budget Committee.

Let me just conclude by thanking, as always, our partners in the administration. Appreciate the collaboration. Want to thank, of course, our very talented Assembly Budget Committee staff. Thank you for your hard work, both Democrat and Democratic and Republican staff. To the LAO, to the sergeants who make it all possible. Thank you.

We will wish everybody a very happy and prosperous year of the fire horse. And with that, we will open it up to public comment.

Good afternoon. Chair and members, Julia Hall with the Association of California Water Agencies. Sorry, Julia Hall with the Association of California Water Agencies. Just want to provide strong support for the APA exemption for the proposition $4 that were allocated last year, which is in AB/SB 107.

Also urge continued support for AB 35 as that moves through the process and we consider that for future allocations. Thank you.

Mr. Chair. Members Beth Olhasso, on behalf of Water Reuse, California Inland Empire Utilities Agency and Water Blueprint for the San Joaquin Valley Advocacy Fund, wanted to echo the comments of colleague Ms. Hall.

Thank you all, most of you, for your support of AB 35 and if that doesn't go through, we hope that we can have that conversation in Budget Committee. Thank you.

Good afternoon, Chair and members Colin Stadmler with Brownstein on behalf of the Bay Area Council. The Bay Area Council extends- extends it's support and gratitude to lawmakers for prioritizing the APA exemption for Proposition 4. With this exemption, Proposition 4 funding will be treated like other past water and climate bonds.

Progress can sometimes be slow in California, so it's critically important that we not create new barriers to voter approved water. Wildfire in coastal resilience funding as an urgent matter of public safety. Thank you.

Good afternoon. Charles Watson on behalf of BART, thank you to the Administration and the MTC for developing this language to provide temporary support to Bay Area transit agencies. While BART has not had a chance yet to take formal position on the language, we welcome passage today. Thank you.

Thank you Mr. Chair and members. I would also echo the comments thanking you all for the work you've done with the administration over the last eight to 12 months to finalize the agreement for the Bay Area Transit Loan. My name is Matt Robinson. I'm here on behalf of Caltrain.

Just a couple of things I wanted to note for you very quickly. Pre pandemic we had a farebox recovery ratio of 73%. It was the highest, one of the highest in the country because of our commuter reliance, we saw that plummet. Since then though, we've been working day and day to try to bring those riders back.

We launched electrified service in 2024. As I mentioned the Senate hearing, we were actually just voted or just awarded by APTA, the American Public Transportation Association, as the fastest growing system in the United States. We saw a 60% year over year recovery of riders. So we are doing our part.

However, we do need some bridge funding to get us through to the next local measure which we hope will stabilize our operations moving forward. I would note we have a very large event coming to the Bay Area this summer, with the World Cup. We're hosting six games in Santa Clara and Caltrain.

We're providing enhanced service for those events and so this funding will help us bring those events to California successfully. Thank you again and appreciate your support on this bill.

Good afternoon, Chair Gabriel and members. I'm Megan Cleveland with the Nature Conservancy. Just wanted to echo some comments and voice our support for the APA exemption that's in AB 107. Really appreciate legislatures and administration's leadership on this. It's really critical to get some of those important Prop 4 investments out there this year.

Really looking forward to working with the Administration and the Legislature to address this in the future. Thank you.

Good afternoon Mr. Chair and member. Silvia Solis Shaw here on behalf of City and County of San Francisco Mayor Daniel Lurie as well as the San Francisco Municipal Transportation Agency here in strong support of AB/SB 117. This loan is critical to the operations of the Bay Area transit agencies.

Muni is we are working to make Muni faster, more reliable and cleaner for the Bay Area, we are seeing month to month increases in ridership. We are at nearly 80% of pre pandemic levels. We have also adopted many efficiencies internally and have adopted revenue increasing strategies.

Muni is essential to the continued recovery of San Francisco and the Bay Area and we ask for your strong support of this measure. Thank you.

Good afternoon, chair and members. Rebecca Marcus representing American Farmland Trust, the California Certified Organic Farmers and California Climate and Agriculture Network. And strong Support of the AB/SB 107 APA exemptions per all the comments made earlier by my colleagues. Thank you.

Good afternoon. My name is Diann Castleberry. I'm with AC Transit. I'd like to echo the comments of all the previous speakers to really express our appreciation for your support of the Bay Area Transit loan. Our ridership right now we're about 75% of pre pandemic levels and I would say 60-65% are low income.

43% are those who are transit dependent. And so it's really important that this loan move forward. And we really thank you for all your work on this. Thank you so much.

Good afternoon. Steve Cruz, on behalf of San Jose, Mayor Mahan in the city of San Jose. We don't have a formal position on the bill, but I want to thank Assemblymember Ahrens for elevating the concerns of the city that I know there were a lot of folks that were involved in crafting this language.

As you looked at it, it's not an easy process in terms of operationally how the dollars flow. So we are concerned that there could be a risk for the BART to Silicon Valley project. It's a major legacy regional project, multi billions of dollars in 75,000 jobs involved in it. So Senator Cortese has similarly raised this issue.

We're working with our partners at VTA. Another conversation with MTC this morning, but we're hopeful that there could be an option for some cleanup language as we dig into the details to ensure that those legacy projects are protected in the process. So appreciate your time. Thank you.

All right, thank you all of you for your public comment. Appreciate everybody's attention. We anticipate hearing these bills on the floor later this week. And with that, this hearing is adjourned.