Senate Standing Committee on Governmental Organization

Good morning once again. The Senate committee, on government organization will come to order. I am state Senator Susan Rubio, chairwoman for this committee. The plan today will be to start with our informational hearing on the second amendment to the Yurok tribes 2006 compact followed by our regularly scheduled bill hearing. We expect our informational hearing to last approximately ten to fifteen minutes.

If bill authors can please start making their way down to Room 1200, it would be appreciated. We will begin our bill hearing again immediately after this informational hearing. But before we move forward, I wanna just first of all say that I've been in this committee for seven years. But on this month, women's history month, I wanna take a moment of privilege to say that I am the first female chair of this committee in senate history.

But equally important, I think it's, important to note that the vice chair, Senator Valladares, who will be coming in shortly, is also the first woman.

And together, we make up the first female team, in California history. So I think it's important that we recognize that, to keep encouraging our young ladies out there listening to keep breaking barriers. So thank you for indulging me in this moment. So we will begin with again, once again, our informational hearing. So I'd like to invite Matthew Lee, senior advisor for tribal negotiations of the office of governor Newsom to join us here in front.

Joseph James, chair chairman of the Yurok tribe of the Yurok Reservation in California, which I believe he'll be joining us remotely. Is he on?

Yeah. He'll come on out.

Okay. So welcome. Thank you for being here today and when you're ready, you may begin. Thank you.

Thank you very much, madam chair. Good good morning. Good morning, honorable members. Thank you for the opportunity to be here today to talk about the second amendment to the tribal state gaming compact between the Yurok tribe and the state. Fairly straightforward, amendment in front of you this morning.

The Yurok tribe has an existing tribal state gaming compact that dates back to, I believe, 2006. This amendment would simply extend the expiration of that existing compact to preserve the status quo while Yurok and the state engage in negotiations for a long term compact to replace that, which we expect to have back in front of you in the not too distant future. For now, we are simply proposing to preserve the status quo by extending the existing compact to December 31 year.

Thank you. Thank you very much. I will now invite Joseph L. James, chairman, Yurok Tribe, to join us for this testimony. Welcome.

Thank you for being here today.

Thank you. Good morning, Chair Rubio and members of the Senate Senate Committee on governor governmental organization. My name is Joseph James. I come from the village of Shreigon located on the Lower Klamath River. With me today is Raymond Bacon, executive director of the Yurok Tribe Economic Development Corporation, and Sarah Dutschke, partner of the Kaplan Courage LLP.

We are honored to be here today on on behalf of the Yurok Tribe to testify and answer questions that you may have on the second amendment to the tribal state gaming compact between the state of California and the Yurok tribe. Madam chair, I wanna thank you for recognizing the importance of the timing to ratify this compact amendment by holding this emergency hearing on the same day as your committee's first full hearing of the year in commencing and ratifying process.

I wanna thank you for your your staff and for the next year teams leading up to the state's hearing. I also wanna thank governor Newsom for executing the compact extension on behalf of the state, and thank mister Lee, the governor's senior adviser, for working with us and the Yurok Tribe team to negotiate an extension. We are here as you have heard, this is a narrow and technical extension.

It does not change the substantive terms of the current compact. It simply extends the compact by one year, which gives the Yurok tribe time to have negotiate a new compact with the governor's office while allowing us to continue to operate our 99 slot machines at the Redwood Hotel Casino in Klamath under the existing framework. That continuity is important to us. While the Redwood Hotel Casino is modest in size, it supports something much larger. It is part of a broader vision for our people in our region.

Our homeland is a remote, rugged, and breathtaking part of the state. A place of rich with life, beauty, and responsibility. The setting shapes up shapes the challenges we face in the future we're holding, working to build. We are restoring the Klamath River and its fisheries through historic remove removal of dams. We are introducing condors to the wild.

We are deeply invested in the forest, watershed, and wildlife management. We are bringing telecommunications to the region. For Yurok, this extension will help strengthen our tribal government, enhance self determination, and build a better future for our people in the region we call home. We are very very we are very grateful for today, madam chair, and members of the committee for for holding this important information hearing on our compact agreement. We are here to answer any questions that you may have.

We expect to ask for your support for AB 1389 which is taken up on the Senate floor for a vote. Thank you for your time, madam chair.

Thank you for that testimony. And thank you, mister Lee as well. Now that we have some members, I welcome any questions from members on this dais? Okay. Seeing none.

Just real quickly mister Lee, if I can ask if you can provide some background as to why compact extensions don't need approval from the Bureau of Indian Affairs.

That is a great question. Just to shed a little light on how the compacting process works in general. You have of course, two governments at the bargaining table. The tribal government and the state government. They reach a deal, and, as part of the process of adopting that deal, on the state side that has to be ratified by the legislature.

After the state and the tribal government have both given their approval, to that deal, there's a third sovereign in the room which is the federal government represented by the Bureau of Indian Affairs. And so whenever you have a substantive compact or a substantive change to a compact, the BIA has a role in either approving or disapproving or sometimes sort of allowing to go into effect that compact. Here, because we don't have anything substantive, it's just the deadline extension. There's no substantive change in any term.

That straight extension, will be publicized by the BIA, but it does not need to be approved by the BIA.

Thank you for that. And I also wanted to thank just, chairman and of the tribe for everything that you provide just in general. I've been on this dais seven years and again, we do a lot of tribe tribal compacts. But just wanna note all the good things they do for for students as an educator. I also also wanna point out that it's always important the collaboration with our local community.

So thank you for that. I would like to now invite anyone from our community out in the audience to to come forward if you have any public comments. Okay. Seeing none. I just want to say once again, thank you, for your testimony.

Thank you for being here today. And that concludes oh, sorry about that. We have Senator Richardson. Go ahead.

Thank you, madam chair. And of course, first of all, let me say congratulations. I didn't realize the, historic nature of the leadership of this committee and I know that we're in good hands. So, congratulations. I did have one question.

I was here, although it'd be brief, back in 2006 and 2007 when all of the compacts were authorized. Do we anticipate all of them coming forward and needing authorization which I completely wholeheartedly support?

Most of them have actually already passed through that point. I am tracking at this point a small single digit number of tribes that still have expiring compacts but otherwise need a new compact. Perhaps a small handful of potential amendments. But most of the compacts that would have been expiring in the past couple years have already been resolved, one way or the other.

Great. Thank you very much. Thank you for that. And again, thank you mister Lee and thank you chairman for for participating in today's hearing. And with that, we will now move to our bill hearing and this concludes, the information we're hearing.

Thank you. We're just taking a few minutes to establish who will be here. I know that we have our first bill and we're missing the second author. So we're gonna wait on that just a bit. We'll just pause, take a break for a minute to to allow the other author to join us.

Okay. So we understand that'll take a little longer for the second author to to join us. So before we begin our Bill hearing, I wanna make sure everyone knows what the plan is for today. We will be taking up file item 12 AB 2156 by speaker Rivas and Pro Tem Limon after we allow our first author, to present, which will be, Senator Reyes. Oh, and we just saw the other author walk in.

So we're gonna scratch that, and we're gonna go back to the original plan. So once again, we will take up file item 12 AB 2156 by speaker Rivas and Pro Tem Limon. After that, we will move through the agenda and file order. Now that we have, I think, enough members here, we might be missing one. Requirem.

Okay. So we will move as a subcommittee until we can establish a quorum. I'd like to invite the authors to join me up here, to move forward with AB 2156. Ladies, when you're ready, you may begin.

Great. Good morning, Chairwoman and Members. Thank you for the opportunity to present AB 2156 on behalf of speaker Rivas. I also just wanna say thank you to the speaker and the pro tem for moving swiftly on this matter and being able to, present here today. AB 2156 will designate March 31 as Farm Workers Day in California.

This state holiday will be a time for California to honor the farmworker movement accomplishments of the past, reflect on the present day status of farmworkers, and renew our collective commitment to advancing the rights of farm workers. Members like many of you, I'm still processing the news that came out last week. It's been difficult, painful. Even, for many of us, especially those of us who grew up looking up to figures like Cesar Chavez as heroes. As a daughter of farm workers, this is very personal to me.

My parents were immigrant farm workers from Mexico who worked long exhausting days in the fields. I remember being in those fields as a little girl alongside my parents and my sisters because we knew that helping our family meant doing whatever we could. That's what farmworker families do. We show up for each other. And even then, we understood something powerful.

While we were working to survive, there were others in our community organizing, marching, and fighting to change the count the conditions of our lives. The farmworker movement was never about just one individual. It was about thousands of men and women who found their collective voice, people who stood up for dignity, for fairness, and for justice.

This movement belongs to the farm workers, the people who put their bodies on the line, who have risked everything, who believed in a better future, not just for themselves, but for our generations to come. I stand before you today because of brave men and women who have stood up.

With your vote today, we recognize the importance of the farmworker movement by acknowledging that it was because of hundreds of farmworkers that we've made the progress and improved the lives of not just the workers, their kids, but of an entire Latino community. I respectfully ask for your aye vote today.

Thank you, madam Chair and Members. On behalf of, of Pro Tem Limon and the California Latino Legislative Caucus, I join my assembly colleague, Assemblymember Soria, in support of AB two one five six and the naming of March 31 as well as Farmworker Day. We are all blessed to live in this wonderful state, the world's fourth largest economy and the economic engine for the nation, and we would loudly boast the largest share of agricultural production in the nation.

And none of us none of this would have been possible without farm workers, those that define the term essential workers truly. They're representative of the great mosaic of diversity that defines our amazing state.

And we are grateful to the thousands of women and men who have worked hard to feed this nation and whose brave bravery fueled a persistent fight to secure essential worker rights. This holiday will be a time for all Californians to honor and advance the lives of our farm workers, but also a time to reflect.

While the circumstances that brought us here today are very tragic and it had been very heavy on the Latino caucus, I'm so grateful for speaker Rivas and Pro Tem Limon for bringing this forward with us to be able to rename this, wonderful holiday that really is about a movement and about a group of people that have done so some incredible work in our state. So on behalf of everyone, I urge your support for this Bill.

Thank you. And first, let me just, highlight that our presenters are assembly member Esmeralda Soria. Senator Lena Gonzalez. Thank you for presenting on behalf of, Pro Tem and, Speaker Rivas. But, we will take a pause since we've just I think we have a quorum.

So we're gonna make sure that we move forward with, a quorum. Madam Secretary, please call the roll.

Rubio. Present. Rubio, present. Valladares. Here.

Valladares, here. Alvarado-Gil. Present. Alvarado-Gil, present. Archuleta, Ashby, Blakespear, Cervantes. Dahle.

Here. Dahle, here. Hurtado. Ochoa Bogh. Padilla. Present.

Padilla, present. Richardson. Here.

Richardson, here. Smallwood-Cuevas. Here. Smallwood-Cuevas, here. Wahab. Weber Pierson.

Here. Weber Pierson, here.

Okay. We have established a quorum. We will now, move to consent calendar to get this out of the way, which will consist of the following items. File item seven, SB 1340 by Senator Ochoa Bogh. File item nine, SB 1340 by Senator Richardson.

File item 10, SB 1235 GO committee Bill, file item 11 SB 1236 GO committee Bill. And with that, do we have a motion? So. Moved by, Vice Chair Valladares. Second madam secretary, please call the roll.

Rubio. Aye. Rubio, aye. Valladares? Aye.

Valladares, aye. Alvarado-Gil. Aye. Alvarado, aye. Archuleta, Ashby, Blakespear, Cervantes. Dahle.

Aye. Dahle, aye. Hurtado, Ochoa Bogh, Padilla? Padilla, aye. Richardson.

Aye. Richardson, aye. Smallwood-Cuevas. Aye.

Smallwood-Cuevas, aye. Wahab. Weber Pierson, aye. OKay. We'll leave that open.

We will hold that open for, those that'll be joining us shortly. And thank you for that. We'll now move back to, the Bill at hand, AB 2156 by Speaker Rivas and Pro Tem Limon. I would now like to invite, anybody in, wishing to speak in support of this item. Please come up to the microphone.

It will only take one lead witness on this Bill. You may proceed.

Good morning. Genesis Gonzales on behalf of Lieutenant Governor Lenny Kunalakis in support. Thank you.

Anybody else wishing to speak? Okay. We will now move to witnesses in opposition. Please come up to the microphone. Okay.

Seeing no interest, we will now bring the discussion back to members. Anyone wishing to speak? Move the Bill. Okay. Anybody else wishing to speak?

Okay. You do? Go ahead. Vice Chair, Valladares. Thank you.

And it is an honor to serve with you on this committee too, Chairwoman. I'm sorry. I missed our opening here. It's an exciting historic time. There's only two men on our committee.

So this shows that women are taking over. We love it. I wanna thank the authors for, presenting this Bill. I join, with you in the the importance of the necessity for this. And I appreciate the swift action from from all sides on getting this done so quickly.

This is personal for me too. My family first came to Kern County in 1911 and 1917. My family first lived in tents for years until my grandfather saved enough to buy a piece of property off of Myrtle Street in Lamont. My grandmother was one of 11 sisters. My grandfather, one of nine siblings who all worked the fields.

They, picked grapes, peaches, cotton, you name it. They went wherever the work was. My great grandmother woke up before sunrise to make breakfast for her children and and my grandfather. And would make lunch, pack lunches and go work in the fields herself. And when I hear those stories today from my family, it doesn't feel like history.

It feels like it's a part of us. And because that was their life. Long days in in the heat of Kern County, Delano, Tulare, too often without reliable water, rest or basic facilities. Wages that change with the season and families moving constantly just to survive. And for generations, farm workers were excluded from the basic protections.

No overtime, limited rights, little ability to change wage theft, to challenge wage theft. And that is a part of our history. And yes, the labor movement brought needed change. But it was complex. And those stories, both the prod those stories were were were there were two sides.

Both the progress and the pain that families lived just like mine. What I remember from my grandmother was that farm workers came from everywhere though. Different backgrounds. Japanese, Filipino, Mexican, but all the same hands in the soil. The same goal to build something better for their children.

And that's what my family did because behind every field in California, there's a family story like mine. And that's why as chair of the Hispanic caucus alongside Assemblywoman Ali Macedo and members of our caucus, we called for this change immediately. And I think it's important to recognize that this is a bipartisan call to action. And Californians wanna see more of this type of work. Because honoring farm workers should never be about one person.

It should be about people. The generations who built this state. And in light of these recent allegations, I think we have day reflects the the dignity of all farm workers. Not the legacy of any one individual. So today, this Bill is about getting that right.

I'm I'm proud to be a co author and again, I wanna thank the authors for presenting this.

Any other member wishing to speak? Okay. So I I do have something to say and if anyone knows my work is really rooted on victims and trying to ensure that victims have a voice in this capital. So I'd like to read a statement if I may. First and foremost, I speak as a victim's advocate but also as a daughter of farm worker, Bracero farm worker.

In recent days, we have seen deeply troubling reports that remind us of a painful truth, and that is that victims often carry their pain in silence for years before they feel safe enough to come forward. And they do that, quietly. And our job is not to dismiss or doubt their statement, but support them and give them dignity and respect. And whether the harm came from a trusted leader or someone in their own home or community, we have a responsibility to listen carefully, compassionately, and without prejudice.

As someone who understands physical and emotional abuse and has secured multiple restraining orders, throughout a 10 period, including as recently as a few months ago, I can attest.

There's nothing more harmful to a victim than to be questioned, especially by elected leaders when the evidence is clear or compelling. We must do better as a society, not only in how we respond when victims come forward, but also how we create spaces when they feel safe enough to come forward. We must support that. Because justice begins the moment we all start listening. So today, we stand with victims past, present, and those still finding their voice in this moment.

This legislature is taking swift bipartisan action to remove the name of a man who according to personal and compelling accounts by his victims violated a community's trust. And as difficult or conflicting as this moment is for so many of us, we must acknowledge the victim's pain and trauma. I wanna commend the women who have come forward. Their courage matters. Their voices matter.

And as we make this change to farmworker day, we are making a broader statement to honor farm workers who labor day in and day out under the hottest sun to put food on our table and sustain our communities. We are choosing to elevate the dignity of their work and recognize their sacrifices and contributions. And with that, I ask madam secretary, please call the roll. Oh, I'm sorry. Would you like to close?

Just wanna say thank you for the opportunity to present and I ask, respectfully ask for your support.

Thank you, madam secretary.

AB 2156. Motion is do pass to the floor. Rubio. Aye. Rubio, aye.

Valladares. Aye. Valladares, aye. Alvarado-Gil. Archuleta.

Aye. Archuleta, aye. Ashby, Blakespear, Cervantes. Dahle.

Aye. Dahle, aye. Hurtado. Ochoa Bogh.

Padilla. Padilla, aye. Richardson. Aye. Richardson, aye.

Smallwood-Cuevas. Aye. Smallwood-Cuevas, aye. Wahab. Weber Pierson.

Aye. Weber Pierson, aye.

It's eight. We'll hold it open.

8-0. We will hold the roll open for the next, for Members that are joining us. We will now move to file item number three, SB 1044 by Senator Reyes. Senator Reyes, welcome. We will also invite witnesses in support to join us. Senator Reyes, when you're ready, you may proceed.

Thank you, Madam Chair. Thank you for the opportunity to present SB 1044. This bill updates California's Small Business Procurement and Contract Act by raising the contract cap from 250,000 to 350,000 and tying future adjustments to inflation through the Consumer Price Index.

Under current law, certified small businesses, micro businesses, and disabled veteran business enterprises may be awarded contracts with state agencies and the California State University System valued between 5,000 and 250,000.

However, the $250,000 cap has remained unchanged since 2009, even as the cost of doing business has risen significantly. This outdated limit restricts the state's ability to contract with small businesses on larger projects and effectively shuts many of them out of opportunities they are fully capable of delivering.

As a result, we are not only limiting competition, but also missing the chance to invest in diverse local businesses. Adjusted for inflation, that 250,000 is equivalent to about $350,000 today, making this update both practical and necessary.

Here to testify on the bill today are Anthony Butler-Torrez on behalf of the California Hispanic Chamber of Commerce and Jazmine Advincula on behalf of the California Asian Pacific Chamber of Commerce.

Hi. It's Mr. Cañete. Sorry. Just wanna make that. You may proceed when you're ready.

Thank you. Good morning, Madam Chair and Committee Members. Julian Cañete, President and CEO, California Hispanic Chambers of Commerce. And thank you for the opportunity to address you this morning. And Anthony came down ill, so I'm the fill in today.

I would like to thank, first of all, let me thank Senator Reyes and her staff for their dedicated work on SB 1044. And I and I also wanna thank the Senator for her past and ongoing efforts to create more opportunities for California small businesses. Thank you.

As Senator noted, Senate Bill 1044 basically just modernizes California's Small Business Procurement Contract Act by raising the ceiling from 250 to 350,000 and tying any future adjustments to the CPI.

We believe this bill will expand critical contracting opportunities for small businesses, micro business, and disabled veteran business enterprises. Currently many certified businesses and DVBE firms are struggling.

Not because they are... Not because contracts are too big or they lack the capacity, but because opportunities are structured in ways that move them out of reach. A primary driver of this outdated, of this outdate is the $250,000 cap, which no longer reflects the actual cost of doing business in California.

When contracts exceed the current threshold, they often shift to procurement pathways where small businesses are less competitive or no longer prioritized. In practice, maintaining lower cap results in fewer accessible opportunities. We must be careful not to define small businesses only by their constraints.

Many firms have built capacity, formed strategic partnerships, and are ready to grow. Holding the cap at the current level keeps these businesses in a holding pattern. Now, while you will hear access to capital in regards to being one of the issues here.

While access capital is a valid concern, the challenge persists regardless of whether the cap is $250,000 or $350,000 Addressing capital access should be part of a broader solution rather than a justification for maintaining threshold thresholds that are no longer no longer aligned with market conditions.

The fundamental issue is not whether every small business is ready for $350,000 contract, but whether our policies create pathways for those that are ready while still preserve, while still preserving lower level opportunities. We believe SB 1044 is a vital step in the right direction. Thank you for the opportunity this morning to address you.

Thank you. You might proceed when you're ready. Thank you.

Thank you, Chairwoman and Members of the Committee on the opportunity to provide our support for SB 1044. I'm Jazmine Advincula, and I'm here on behalf of the California Asian Pacific Chamber of Commerce to express our strong support for SB 1044.

And I wanna take a moment here to thank the Senator for her ongoing support and commitment to supporting our small business community. Our Chamber represents more than 700,000 API owned businesses across California. Many of which are small, family run, and deeply rooted in their local communities.

Our mission is to expand economic opportunities, strengthen access to procurement, and ensure that small businesses have a fair chance to compete and grow within the state's economy. This bill is important because the current small business procurement cap of 250,000 has not been updated since 2009. In those seventeen years, costs for labor, materials, and operations have risen dramatically.

As a result, contracts that once fell squarely within the small business and disabled veteran business enterprise option are now pushed into full and open competition, unintentionally excluding thousands of capable small firms from opportunities they can absolutely deliver. The issue is not capacity.

It is an outdated threshold that no longer reflects today's economic reality. Updating the cap to 350,000 simply restores the value the program was designed to offer and aligns procurement practices with current market conditions.

Access to procurement opportunities is essential for small businesses because state contracting remains one of the most powerful economic mobility tools the state offers. For many small and emerging firms, state contracts provide steady revenue, credibility, and a pathway to scale.

But when those thresholds remain stagnant, fewer contracts are accessible, and the environment naturally shifts towards larger firms with more resources and administrative capacity.

Modernizing this cap brings more opportunities back into reach by ensuring that projects reflect today's costs and remain eligible for the streamlined small business and disabled veteran business enterprise option.

This process reduces administrative assurance contracting timelines, and ensures small businesses can realistically compete without large proposal teams or extensive cash reserves. For the Cal Asian Chamber and the communities we represent, this bill is a commitment to economic equity.

It removes outdated barriers, strengthens the small business pipeline, and ensures California continues to invest in the entrepreneurs who drive innovation, job creation, and economic health. By raising the cap to 350,000 and indexing it to inflation, the state ensures that the opportunity keeps pace with economic reality both now and in the future. Thank you for your time.

Thank you. Now I would like to invite those speaking in opposition to join us upfront, please. Oh, I'm sorry. Yes. I would like to invite those speaking in support here in Room 1200 to come up to the microphone. My apologies.

Sorry about that. I didn't wanna get up too early. Or too early to... Anyway, thank you. So thank you, Madam Chair and Members. Lori Kammerer with the Coalition of Small and Disabled Veteran Businesses along with the National Association of Women Business Owners California. I want to thank Senator, the amazing Senator Reyes, for bringing this bill forward.

We are just about there in support. We are certainly more than neutral, but we wanna have a few more discussions to make sure that the access to capital at the increased level will not be an issue for the smaller, the micro businesses. And so with those discussions, and we have the commitment of the Senator, I'm sure that we are gonna get to where we need to be. So thank you.

Thank you. Anyone else wishing to speak in support?

Support. Good morning. Charles Wright from the California Association of Veterans Service Agencies in strong support.

Thank you. We will now move forward with any opposition. Please come forward. Good. Alright. We will now bring the discussion back to Members. Anyone wishing to speak on this item? The move has, the bill is moved by Vice Chair Valladares. Anyone else wishing to speak on it?

Well, first of all, seeing none, I just wanna say thank you to the Senator and thank you since, Mr. Cañete, since you and I have done so much work in the past years to support small businesses. I think this is an important step to ensure that access is extended to more businesses. And I appreciate your testimony. And with that, would you like to close?

I sincerely appreciate the testimony from the Hispanic Chamber of Commerce and the Asian Pacific Chamber of Commerce. It's really important to be able to build our small businesses and to provide more opportunities. And with that, I respectfully ask for your aye vote.

Thank you. The bill has been moved by Senator Valladares. Madam Secretary, please call the roll.

SB 1044, motion is do pass to Appropriations Committee. [Roll Call]

The bill has 10 votes. We'll keep it open for missing Members. Thank you so much. And we will now invite Senator Cabaldon.

It seems we're gonna have you for quite a bit here. We have, three bills. So please be patient with mister Cabaldon as he's gonna be presenting SB 1114 first and he has two after that. So I'd like to invite your witnesses in support to come and join us.

Alright. Thank you, madam chair. I'm here first to present SB 1114 and I wanna begin by, highly highly highly recommending, the committee analysis. I know all of you who've read it, but anybody who's, watching this in the audience or or on the Internet, it's an excellent analysis and recount of the of the history and the reasons why and the nuance of the use of data for the in the LGBTQ committee community.

The SB 1114 is a simple measure in in in some respects, but it it touches on some really, key issues.

California has led the nation in in the collection and the use of of what's called SOGI data, sexual orientation, gender identity, and other care special characteristics data in order to do what California does best, which is to make sure that we attack health disparities, that we identify and remedy discrimination, and disparate outcomes. And California has worked hard to collect and protect the data of of Californians in in order to accomplish those goals.

So they've we've, can last year, I carried legislation that helped to connect, Californians with additional benefits and insurance as a result and access to public services. So we've done a good job of using data, protecting it, but importantly to use it to make sure that LGBTQ Californians have access to everything that they need, including the protection against discrimination. Of course, we're in a situation today where the federal government is now asking for, and demanding datasets, in for other purposes.

And I would wanna point out that just the federal government decided at the beginning of last year to itself stop collecting any data whatsoever with respect to, the LGBTQ community. So the the federal government, if it's interested in this data, could have continued with the orders in the Department of Health, Health and Human Services, and others in order to collect it, but they haven't.

Instead, the concern is that they will be requesting this data as they have already to target, health care professionals that that treat transgender Californians as an example, but just directly go after, folks whose marriage might be at risk. Their their access to to health care may be at risk as well.

So SB 1114 simply says that state agencies will not share that data with federal agencies unless it is part of a of a unless it's legal, that that that we are that we are required to comply.

But in all other cases, we are not our state agencies will not be providing that data to to federal agencies. As I say, if the Federal Government wants it, they should be collecting it themselves. And I wanna also emphasize because the original versions of my of of all of our documents on this describe this as highly sensitive data. It's not highly sensitive data. My identity as a as a gay man is not itself sensitive.

What's highly sensitive is the abuse of the data to target, and deny to deny benefits, safety, and protection against discrimination. That's what we're trying to grapple with with SB 1114. Be happy to answer any questions at the appropriate time, madam chair. I'd like to introduce, our witness on behalf of, Equality California, our legislative director, Craig, Craig, Pulsipher.

Thank you. And, Craig, you may begin when you're ready. Thank you.

Good morning, madam chair. Craig Pulsipher on behalf of Equality California, a proud cosponsor of this bill. I wanna thank the Senator for his leadership on this issue and just echo his thanks to the committee for the really thorough and thoughtful analysis as well. Equality California has long championed efforts to collect comprehensive data about LGBTQ people. In 2015, we sponsored legislation that requires several state agencies to collect voluntary data on sexual orientation and gender identity, when gathering other demographic information.

And that law has since been expanded to include additional state agencies and to incorporate data collection on intersex people. Members of our community share personal information with state programs because they need access to essential services such as food assistance or health coverage. And they trust that their data will only be used to administer and improve those programs.

However, over the past year, we have seen numerous instances in which the federal government has had expanded access to state held data often done under the guise of reducing waste, fraud and abuse. Just a few recent examples.

The federal government has sought detailed in immigration data from food assistance programs, shared Medicaid data with the Department of Homeland Security for immigration enforcement, and sent subpoenas to multiple hospitals seeking confidential information related to transgender patients. These actions are not only deeply concerning, they also undermine trust in the government's ability to collect and use data responsibly Which makes people less likely to participate in these routine data collection efforts.

SB 1114 is a straightforward measure to help restore that trust and establish clear guardrails for the sharing of state collected data about LGBTQ people. It ensures that data related to sexual orientation, gender identity, and intersex status cannot be, disclosed outside of the state except under very limited circumstances, and also importantly clarifies the information that could be used to infer that a person is transgender or intersex is also protected.

At a time when LGBTQ Californians are increasingly being targeted across the country, SB 1114, will ensure that data collected to support our communities cannot be used later to cause harm.

And I respectfully urge your aye vote.

Thank you for that testimony. I would like now now like to invite, anyone here in Room 1200 to come up. Please state your name, affiliation, your position. Thank you.

Good morning. Angela Pontus on behalf of Planned Parenthood Affiliates of California in support.

Thank you.

Jennifer Robles with Health Access California in support.

Thank you. Anyone else wishing to speak? In support, we will now move over to main witnesses in opposition. Anyone wishing to speak in opposition, please join us up here. Okay.

Seeing no interest, anyone here in Room 1200 wishing to speak in opposition, please state your name, position. Seeing no interest, we will now bring it back to member discussion. Anyone wishing to speak on this item?

No, they're done.

Okay. The bill has been moved by Senator Akila Weber. We will now turn it over to you wishing to close.

Thank you, madam chair, I ask for an aye vote.

Thank you, madam secretary, please call the roll.

Aye.

SB 1114 motion is do pass to privacy committee. Rubio?

Rubio, aye. Valadares?

Aye.

Aye.

Valadares, aye. Alvarado-Gil? Archuleta?

Archuleta, aye. Ashby? Blakespear?

Aye.

Aye.

Padilla, aye. Richardson?

Aye.

Cervantes, aye. Dahle? Hurtado? Ochoa Bogh? Padilla?

Blakespear, aye. Cervantes?

Aye.

Smallwood-Cuevas, aye. Wahab? Weber Pierson?

Richardson, aye. Smallwood-Cuevas?

Aye.

Aye.

Weber Pierson, aye. That's nine. Hold it open.

This bill has nine votes. Thank you so much for your testimony. We'll hold the roll open for missing members. And we will now move on to your second bill presentation today, SB 1248. Senator Cabaldon, when you're ready, you may begin.

Thank you, madam chair. This bill attempts for the first time to apply a set of standards to the use of automated decisions and systems within state government. The legislature and governor have enacted several pieces of legislation over the last several years with regarding automated decision systems in the private sector. And we've, also passed legislation to require reporting about the use of high risk automated decision systems in the public sector, but there is no framework.

And so this bill proposes to to begin the development of such a framework.

It's motivated in part by the successes that we've been have that we've been having. Last year, I I carried legislation that told CSU to automatically admit without the need for an application or a prior prior notification every single student who met their their admission requirements using statistical modeling. And I I should note, automated decision systems is not only AI that includes systems that deploys statistical modeling and other, quantitative techniques, not not not only on, artificial intelligence.

That bill will mean that over 300,000 high school students in California will automatically receive letters of admission in August, with no changes to the staffing levels or anything else inside of CSU. Probably more important though is our our success with medical eligibility determinations and the automatic determination of millions of Californians for medical.

We are at over 80%. We're able to automatically determine at the state level, reducing the the tremendous backlogs while not eliminating them. The backlogs at the county level for determination for both medical and for CalFresh, That that, that automatic determination is under threat a bit by HR one. There's separate legislation to try to grapple with that issue.

But I know my colleagues on the budget committee and our special hearing on this, we're working very hard to get that number as high as possible because we recognize that automatically determining, will mean that's that Californians will not lose their Medi Cal coverage or their their CalFresh coverage as a result of procedural barriers that have been put in their way.

The so what a what SB 1248 proposes to do is to expressly authorize the use of of automated decision systems, but as I say, there nothing prevents them today. But under certain conditions, and and those include that they cannot a system cannot be used as the sole basis of an adverse decision. So you can use an automated decision system to grant to to to determine Medi Cal eligibility or to grant CSU admission. You cannot use that system all by itself to say no.

That requires human review and human judgment.

And so that's a centerpiece of of of the legislation is that can we we should be treating a yes differently than we treat a no when folks are are seeking to access the the the services and the benefits to which they are legally entitled in in in California and to allow the human beings and, the rest of us to focus on on the hard cases, the no's.

So when a that that a eligibility worker at the county level can say, I see that your your that automated system, said no to this one because, Christopher Qualden has a has a a a home, and that asset disqualifies him on the on the asset test.

However, the case worker can can take a look at as a human being and say, ah, but I see also that you're providing evidence that you have a restraining order against your partner who is currently occupying that home and you're paying for rent and you have no access to that asset. That's something that an automated system cannot, least in today's world, cannot see or review.

It's why the by by human, by by human beings, looking at any nose or edge cases are so critical to this system.

But in too many cases, they're so busy dealing with the with essentially data entry systems, and we've dealt with this in in subcommittee, budget subcommittee four as well, that they have they're they they are not able to prop to get to the cases that really require their judgment. In my county in Yolo, the the case workers report, there's a six month backlog for CalFresh determinations that require local review.

And if they could if we can remove the the easy yeses and allow them to focus on the cases where their judgment is needed, We can get people food, faster. So SB 1248 is intended to try to create that basic framework at the beginning.

I do want to acknowledge the the opposition letter, because it is an important one, and we're trying to navigate this issue in a way that understands that the the the the strict the specific standards about many of this will will be the subject of collective bargaining between the state and its represented employees, and that is absolutely appropriate for those detail for the details to be worked out there in terms of the specific relationships.

That said, we also know that in in the in the in the if this bill moves forward today, that we want to have we wanna work together with our labor partners to assure that we have the appropriate statutory protections as well. Both protections not not not just against layoffs and reductions in hours, that's an issue but not really. I mean, the state of California, we're not OpenAI.

We're not one of these companies that just announces, hey, there's no more work, and so 20% of the folks are laid off. Off.

We have budget, collective bargaining, and civil service protections against that. But we also wanna assure, in addition to protecting against job dislocation or job loss, that it is the that that we are working together, that departments are expected to work with their with their their teams, with their employees to design the deployment of these systems, because that's where we've seen they work the best.

And of course, it's also our obligation to the employees that as we're improving public services that we're doing in a way, that activates, unleashes, and that allows the the the the the folks who work for the state of California to do the job that they came here for to make they they signed up because they want to help people get health care, because they want to help people get their their benefits and their licenses, and this bill is intended to try to do that.

So I wanna make my absolutely absolute commitment that we are not just prepared, we're we're excited to work with with our labor partners as this if if the bill moves forward in order to start to set the framework for how this will work, not just from the user side, but also for the from the employee side as well.

And I thank, both AFSCME and SEIU and the and the federation for their for their for their, for their willingness to collaborate up to this point. And and and I just wanna share our commitment to continue to do so and and put together a proposal that will hopefully get the governor to to agree about the management side, but they also respects and honors and enliven and uplifts, the workers for the state of California. So with that, this is an author sponsored bill.

We don't have a witness in in in support today, and I wanna thank the committee and the chair.

Thank you for that testimony. I'd like to now invite anyone in Room 1200 wishing to speak in support to please come up, state your your name, affiliation, and your position. Thank you.

Chair members, Nick Romo on behalf of the city of San Jose. We support and concept. Look forward to working with the stakeholders. Thank you, Senator.

Thank you. Anyone else wishing to speak? Now, we will move over to any witnesses in opposition. Just please come up.

Good morning, chair members. Janice O'Malley with AFSCME California representing public employees across California in regrettable opposition to Senate bill 1248. We appreciate the authors include inclusion of and consideration of certain guardrails for the use of ADS. Those are absolutely necessary when it comes to automated decision systems in government. But respectfully, this bill does not establish guardrails first.

It authorizes use first and ask questions later. Senate bill 1248 effectively green lights the use of ADS across state government and licensing and public services while relying on agency discretion, future guidance, and internal review processes. This is not the same as clear, enforceable guardrails in place before deployment. From a government operations perspective, true guardrails would include consistent statewide standards before systems go live, independent oversight and auditing, and meaningful stakeholder engagement and system design and implementation. We've already seen this pattern.

A similar proposal last year move forward without stakeholder engagement, raising serious concerns among our members. We were told that there would be more collaborative approach moving forward, but that has not occurred here. Instead, the bill assumes agencies will get it right on their own while the workforce is left to implement systems they had no role in shaping and to fix problems after the fact. We've seen this in practice.

When new systems are rolled out without frontline input, it often leads to errors, backlogs, increased workload, undermining the very efficiency the bill is trying to achieve.

So the concern is not with guardrails. We strongly support them. The concern is that this bill defines guardrails as internal agency processes rather than enforceable standards developed with the people who will actually make these systems work. If the legislature is going to move forward in this space, we believe the right approach is engage stakeholders first, establish clear standards first, and then authorize use. This bill reverses that order.

And for those reasons, we respectfully urge a no vote on Senate Bill 1248.

Thank you for your testimony. We only allot one witness in opposition. Come forward if you wish to speak in opposition, but just state your name, your affiliation, and your position only. Thank you.

Good morning, everyone. Beth Nonalski of SEO California. As was noted by the author, happy to speak with his staff yesterday afternoon. We're gonna lay our letters not in yet, but we will be opposing the Bill Look forward to conversations going forward. Thank you.

Thank you.

Good morning, madam chair and members. Ivan Fernández W with the California Federation of Labor Unions in opposition.

Thank you. Anyone else wishing to speak? Seeing no interest, we will now bring it back to to members of this committee. We'll start with, Senator Padilla. We'll move over to Senator Blake Spear and, Senator Lola Smallwood Cuevas.

Thank you very much, madam chair. Congrats on your inaugural hearing. Well done. I wanna thank the author for your work. I've seen this bill before.

Ran an indented bill last session which the governor vetoed. To set ADS procurement standards and I appreciate the author narrowing this. I just wanna put on the record, I am sensitive, very sensitive to the concerns of the opposition. I think chief complaint there was really focused around process as much in terms of engagement and input in the in the legislative sort of development prior to anything else.

And I that's what I hear and I would I I appreciate you acknowledging that fact and I would encourage you to continue engaging them in a way that might improve that engagement.

I'm, you know, I will be supporting the bill out of committee to let you keep working this bill obviously reserving the right that I could change that position on the floor. But I think collaboration model is is how I roll. It's it's what I believe in on the front end. You and I have talked about this with respect to some other significant pieces of legislation. I think that solves a lot of problems on the front end rather than waiting until the end.

And so good bill, right approach, long overdue in terms of the overall framing. I would just encourage that engagement. I appreciate your work. I appreciate your thoughtful narrowing of this bill in a way that makes it perhaps movable. And so with that, I'm happy to help you move it out of committee today and to continue working.

I wanna encourage you to do the same. Thank you, madam chair.

Thank you. Senator Blake Spear.

Yes. Thank you. I wanna also thank the author for introducing this bill and trying to tackle this problem. I I perceive, from my constituents in Southern California, Orange County, and San Diego County that the frustrations of dealing with the state bureaucracy are enormous and substantial. And we need to try to have our processes be more responsive.

So you the background information in this, the, staff reports says professionals applying for licenses to work as nurses, teachers or contractors experience similar delays, unable to earn a living while bureaucratic processes grind forward. These administrative backlogs create real hardships where families go without needed support, qualified workers sit idle, and California's economy suffers. The delay also takes a toll on the public servants processing these applications. And I think this is so true.

We also have this particularly with childcare providers, which is an urgent need in the state.

And yet, you know, we're, it's can take almost a year to get a childcare license. And so figuring out how to automate what can be automated and have people use discretion in the places where discretion is needed and warranted and having the guardrails. I very much agree with that North Star, and I'm glad that you're tackling it. I wanted to ask the author if you could just address, the concerns that were raised by the opposition, about, not feeling like they're at the table.

And then also to my colleague who introduced a similar bill, how is this bill different?

Or how do you see this bill? It's narrower, but what specifically do you think has changed that would make it more likely to make it all the way?

Madam chair, if I may. Alright. Thank you. So I I would say two things. One is the and and as as your colleague from from San Diego also mentioned, last year we had I I or maybe it was the beginning of this year, I introduced a a a a bill or a set of amendments that was in the same basic space, although it applied more broadly to to to local governments as well.

We didn't move the bill in part because our labor partner said, no no thanks. We're not it's too fast. Go back and do it next year. So the the concern is as as Senator Padilla mentioned is that we didn't handle this. I did not handle this as well as we should have the the last round.

We caught it, which is why we didn't move it move the bill at all. But still, it was it was important particularly on this issue because it it just you know, I I know this from my own as you all probably all do. I work with a lot of state workers, and they are both excited. They they they believe in this, but they're also scared. Like, how is it gonna work and and all that.

So it's absolutely I I I completely get it that that folks are, like, okay. We we we do need some guardrails and we need a we need a policy around this. In most in a lot of cases, it'll make sense. But but but they're anxious. So I think that's that's the reason and that is that is principally on on me for for not for not doing exactly what Senator Padilla said about launching a much longer stakeholder process in advance of that of that.

And so I think that left a that's left a a, you know, bad taste, but we're trying to do it right this time and begin beginning the the full year process. With respect to the admin with the the governor's office, this is a a it is a it is a challenge because, you know, the for the for the administration, their view is nothing stopping us to do the from doing this however we want to today.

And so, you know, that that that that but so that that there they there's no imperative for them to to sign anything in this space. So we're trying to find the the the sweeter spot. Our focus this year on really trying to, you know, kind of say yes to the affirmative, the non adverse decisions, which lines up with where we and the administration have been trying to push a lot of these issues on higher education and Medi Cal and others, I think will will also help.

And then the express recognition that some that these that the governor does need to come to the table in the collective bargaining process. That's outside the scope of the bill, but both things need to happen at the same time.

We need we need a framework that protects and advances the interest of the you of the of the the clients and the and the beneficiaries, but also a set of of of rails that will that will protect workers, but that's gotta be that has to be appropriately tuned to the collective bargaining process as well. So I we don't have a green light from the administration. We there's I don't wanna pretend that that they've said, yes, this one this version is narrow or tight enough.

It it may not be, but I think our my first priority is to deal with the first part of your your question first and try to try to to try to craft a proposal that will both meet the privacy needs and the needs of the users and also be something that are that the that the representatives of the of the folks that do the work in state government can be behind.

We'll now move over to Senator Smallwood-Cuevas. Thank you very much,

madam chair and congratulations on your inaugural chairship today. Appreciate the author, bringing this bill and and we have to keep bringing and keep bringing and keep bringing and keep bringing these bills because we are in the moment of AI and we are not prepared for it. And I really do think, and and want to, ask you again to to address some of the comments that were raised by the opposition because, you know, we know who is going to get caught in the grinds.

It's going to be not just the workers, but the communities that rely on their sales tax, their property tax, their income tax, our whole society. And so I think it's very important that we, in this moment, because we are what the moment requires, we are going to have to tackle this issue.

And have to figure out how to develop a strategy that puts all of the right stakeholders at the table. I you know, what struck me about the opposition's points were this notion of implementation first and then questions and refinements later. I don't in most scenarios, I wanna say I do believe it's important to begin in the policy framework with the end in mind. That the implementation has to be really critically thought about as we're in the policy process before we move forward.

So I would like for you to address that statement.

And where in the process do you see labor unions that represent our state workers being at the table in this this process. I, I know that we have kicked the can. Your bill, the can just keeps getting kicked. And the only way we're gonna actually move forward and have some progress is if we come to some agreement. And unfortunately, we don't have guiding principles.

We don't have a master plan on how to really integrate this technology. We are all fighting one bill at a time, trying to figure it out, which is a total disservice to the people of California and a waste of our time, quite frankly. I would like to think, would like to hear from you. I think you're very thoughtful on many issues and very thoughtful in how you are approaching your policy.

And I wanna see how you plan to lead in this discussion about where and when do we bring the folks who are most impacted by the speed up of work, the folks who most understand the nuances of the process that know what strategy is gonna work or not gonna work, the folks who are potentially going to have to transition their classification and responsibilities to address the the ways in which we become more, mature and how we use these technologies.

The folks that may lose their job, if the technology gets so smart, that it can do more of the functions that are currently done by Californians who, again, we rely on to sustain our safety net, our programs, both as workers, but also as consumers and as taxpayers. So if you could answer that question, I think it's like the $64,000 question, but it has to be addressed. It has to be taken seriously. It's not about interest and what side.

It really is about how we are going to do this, and I think we need a model that works.

So I I would love to hear your thoughts on that.

Well, I could not agree more in terms of the the this larger challenge that we're facing. And and and I'm I'm I'm hopeful that both your committee and the and the and the new one that I and several other members sit on as well. That this has to be, you know, that at the at the top of the list as you as you say.

Generally, in California society, state government is the in some ways, you know, if if we can't get it right, if we can't figure these questions out at the state level, you know, folks who have constitutional protection, collective bargaining, and a supportive government by both the governor and the legislature, then heck, how you know, how will how will Tesla and OpenAI and everyone else be held accountable?

So part of the part of my hope through this legislation is to is to us in our own world, can we figure out among well intentioned, good meaning people, both within the administration but also in the workforce, can we figure figure these issues out when they're when at the table together?

So this this is an attempt to try to do that. It is putting the the the legislation the let the legislative policy first as a Senator Padilla attempt to do. But it is the case, not the bill itself, but we're already into heavy implementation as as, you know, a couple million people on Medi Cal can, you know, and hundreds of thousands of folks getting CSU admission. We're doing it now.

And so in the absence of this bill, there's no other bill that's tackling this issue in state government right now.

In the absence of this bill, we will continue to move forward with no framework, and it will simply be done by by individual department directors and and and others in the administration who are who, you know, who have no guardrails whatsoever.

So my view is that this is this is a, you know, vehicle to try to get that right internally or writer, maybe not perfect, but writer internally, and that we can then together use that use what we're doing in state government, learn from that about how we how we rescue California workers, more broadly as as this as this message says changes are hitting us as a result of AI, you know, workforce wide.

And and to the question about implementation, sort of the the way in which we're we're doing this, where in the in your process do you see the opposition sort of concerns and questions being raised to do the refinement so that we don't leave it to the administration to just, you know, do what they want

Right. How they want.

Yeah.

Right away, I think we if we we're just like everybody else, we were getting our election council stuff in for this week. But, yeah. As soon as as soon as if if this bill were to move out of this committee, then we'll we'll be convening folks both one on one and collectively at this in among the stakeholders to to to start tackling these issues.

Well, I I'm prepared to support this bill leaving committee today, but I cannot commit to supporting this bill in any other on the floor or in any other space if we don't really bring in the workers on the front end versus us having to then pass a bill three years from now on the back end.

Because we didn't do the hard work of making sure that we, have a bill that we can bring all of the key stakeholders together and help to put it in a in a framework that can be replicated in other bills, that we can build agreement. I know we can do it. I hope that this is an opportunity to see that happen. And, and I will certainly support and do whatever I can to make sure that that those conversations happen.

Senator Pearson. Whoever Pearson. Sorry.

That's fine. Thank you, chair. So I guess I I am a little confused and like some clarification from you, please. About your bill versus what the opposition's concern is. So the opposition when giving testimony said that this bill kinda gives a green light and authorizes this.

I guess I guess you were she was referring to the automated decision system. But it's already is it already happening?

It is already happening. Yes.

So

Well, I okay.

We'll give you one minute to come up.

how is your bill I mean, I completely understand the desire to have and and the fact that, our workers should have been at the table. Actually, do you mind if I have the opposite can the opposition come up to clarify what her concerns are?

Yeah. Just go on. So if what I read in the bill is that this system has already been deployed. It's already being used. There are no guardrails.

And therefore, it's just kind of rogue out there. That this bill, and you can correct me if I'm wrong, is actually putting some guard rails, but it's not green lighting the use of this decision this system because it's already being used. So I'm I'm trying to get a better understanding of what your concern is with his particular bill since this is a current system that's being used with absolutely no rules and regulations around it.

Thank you, Senator Weber Pearson. Our concern is that, you know, as Senator Cabaldon said at the front end that this expressly authorizes the use of ADS. And the yes, ADS is being utilized in state agencies. Our concern is that by the legislature essentially green lighting this use of a d ADS without proper input in stakeholdering that the state agencies could utilize that in a way that surpasses our rights to collectively bargain.

Okay. So the system is already being used now without the legislature saying yes or no. It's already being used. And so the opposition is that you you don't want any guardrails around the system that is currently being used.

That is not correct.

Okay.

We use because it's already being used. We do want guardrails related to automated decision systems in AI. The problem is that this is this is an implement first and ask questions later is how we interpret the bill. And, again, there has been no proper conversations between the Senator and all of the labor stakeholders in this process.

No. Okay.

So what you're looking for are conversations around the guardrails because the implementation has already occurred. So you're so the conversation should be around these guardrails that he's trying to create. Is that what the concern is?

Yeah. We want to be part of this process. We need to ensure that the that the system that's being implemented has the workforce in consideration. Having a couple conversations with some folks in in local government, does not constitute proper stakeholdering.

No. I completely understand that. And I do agree that there should be, conversations and, you know, you must include stakeholders. I guess I was just confused by the language of green lighting or giving the authority for something that state agencies currently use. So because it's already out there, the gate is already open.

It's already being, you know, utilized like, unfortunately, so many things in AI. It's just out there and we're playing catch up to figure out how we can, regulate it so that it does good and not, you know, harm individuals or workforce and things like that. So I guess I was a little confused by that because it made it seem to me like this bill was allowing for this system to occur when it's already occurring.

So what you really are saying is we just wanna be at the conversations. We wanna be at the table.

We wanna be a part of the stakeholder process when creating these guardrails. Correct. Thank you. Thank you.

We're gonna give Senator Paje the opportunity to say a few more words. Okay. When you're ready.

But you just follow-up to this, I think productive conversation part of my good colleague from other colleague from San Diego and I think the a question for the author just to affirm.

I mean, the fact that we're moving legislation now not only deals with the fact that there's an existing deployment by state agencies for state systems and and protocols, but it also as most legislation does is looks prospectively that the assumption being that there could and will be a continued expanse of this deployment, new applications and use of this technology and procurement technology in these spaces that would have future as yet unrealized harm going forward because bills are always about going forward.

I just do you wanna comment on that? I mean, or acknowledge that at least for the record that I mean, I think the the relevance here of the opposition is that in so far as this will continue into the future. I think their point is wanting to have quality input into the mechanisms prospectively looking forward.

Would you not agree?

I I would. The horse is already out of the barn. Right? There's been In partnering. For for for three years now 3,4 or five years now.

So we're we're just this bill is really like, can we can we run after the horse and try to get the saddle on while it's moving, which is a dangerous it's a dangerous enterprise. So, yes. And and and and it's gonna get farther. If we don't do anything this year Right. And we try to pick this up again next year, you know, we never the legislature never expressly authorized the use of the Internet or Right.

Spreadsheets or anything else. There's nothing that will ever require this issue to come back if we don't affirmatively take take action on it. And so, I I I can't I I don't know that we'll find something that will that everybody will get to agreement.

Although, I I appreciate Senator Smaller Cuevas' confidence that we can that we have the capacity to if we really try, but we have to try, because simply letting it go, without any of these guardrails at all around, bias and discrimination, around the right to human review and adverse decisions, you know, the other elements are here. We can't do we we have to make this work and also make sure that these systems can deliver the the services and benefits to Californians, starting this next year.

Great. Thank you, Senator. Thank you, madam chair.

So I'll go first to Senator Valladares. She says she hasn't spoken, but then we'll go to Smallwood -Cuevas if that's okay. Thanks, everybody. Okay. Thank you.

Yep. I kinda see this as a reasonable framework of guardrails knowing that there's gonna ever be evolving it's gonna be an evolving discussion as technology advances. I mean, we've seen how far it's AI has advanced in the past year. Right? What I'm not clear about though is has the opposition offered any amendments to you?

No. Not not not at this point.

Okay. Because there's no from my understanding, there's no specific language to make your bill better at this point and this is a great starting point. I'll be moving the bill and ask and voting I. Senator Small Aquila. So

I really appreciate the conversation. I just wanna add one point and that's what the purpose of collective bargaining. Why it is important for us to do what we can to refine the guardrails to make sure that there's adequate input because collective bargaining, it is incredibly difficult when you're looking at wages and benefits.

When you're looking at retirement, when you're looking at all of the things that have to get addressed in collective bargaining, to get into the weeds of how a technology works and to get the research and to get parties to agree in those in that space is not we should not be legislating in collective bargaining.

We should be setting guardrails that are real, that can withstand us some level of test of time and and and advancement in the technology to help us get to the next collective bargaining agreement, which is every four years.

So that means or three years, some five. So to me, why it is important to have the rigorous conversation now, and yes, so many things have left the barn that are impacting our lives. I mean, I had a bill on self checkout. I mean, we're looking twenty years after. What are the impacts of self checkout on the consumer, on safety, and all those things.

So we know that there is a lot of things that weigh on the workplace, and technology is sort of this added piece that is gonna be incredibly difficult for unions to try to negotiate in collective bargaining. It is important for us to get adequate information from the workforce that helps also create some some relevant, I wanna say, breathe space or breath within the policy so that these issues can live between these bargaining contracts.

I I I I I just wanna stress that what I hear the workers saying is that, these things cannot be all handled in a collective bargaining space. Let's do some of this on the front end. Let's have the conversation now.

Let us who are the experts in how this process actually works before technology and post technology so that we are as efficient as possible and also respecting the health and safety and and and rhythm of the workplace.

And also, let's let collective bargaining do what it's meant to do, which is to really talk about the wages and the benefits and the safety and working conditions, but not in, you know, whether or not this automated system and this particular technical aspect, and how it relates to the worker, has to be figured out. I think the there is room for the policy and there's room for collective bargaining, and there should be some some relationship.

We that can't happen if the workers are not in the discussion on the front end because, it this technology is going to be changing. So much is going to be changing.

We've gotta be sort of forward thinking about what that looks like. And some aspects we can't come up with just through understanding how the technology works or understanding what the end goal is for the agency. It's also in the folks who actually are the means of that production.

So I I I just wanted to add that because, I think what I heard is that, you know, this will have an impact on the collective bargaining process, which means they will spend all their time trying to fix this technology versus us having the conversations on the front end.

So just wanna stress the significance of that stakeholder table and all the pressure that we're putting on you to figure out how to bring these parties together so that we can have a model that can be replicated in other places that allow us to think not just for this particular group of workers and this particular function, but we know AI is being introduced across and in our sub four, we see in every aspect, every aspect of of agency operation, there is some process.

So we it is our responsibility to look at this, even with the

collective bargaining lens in mind that we

have got to be able to create an lens in mind that we have got to be able to create an environment where this technology works, where it doesn't negatively impact, the efficiency of process, where it maintains and actually helps to strengthen the workforce, but also that we can figure out between now and then, you know, what are the processes that we need to think about as the technology changes and what impact that will have as we work between these collective bargaining agreements.

So I just I I wanted to just make that, point and as another, way of saying we really need, to see the stakeholder engagement on this and to see ways that we can, again move the ball forward, and have a model that can be used in other opportunities around this issue. Thank you. I will turn

it over to Senator Weber Pearson who also wants to make another comment.

Thank you. And I am I'm sorry, Chair.

I hope you're doing great. We're here to support you.

I guess I I'm still now even more confused. Because what exactly in this bill would impact the collective bargaining process, which I wholeheartedly support. But what help me understand what in this bill would impact the collective bargaining. Because what I see is just some guard rails. So how is that help?

Yeah.

Thank you. I I nothing in the bill as it does affect collective bargaining. I think the the the the point that the opposition has made is that it should, that one of there should also be guardrails with respect to, what the impacts are in both in the workplace, but also the the workers engaged in the design, which we have seen over and over again is a major contributors to success. But the bill itself does not in in in any way implicate collective bargaining directly.

There has been I should note there's been a and I'm it's whether it's I really appreciate it.

Senator Small-Cuervas' dissertation just now on on collective bargaining is that there has been some discussion about should all should all of this be happening in in collective bargaining, and I think even some of our labor friends have said that. But I think that's the point is that that's also problematic. So there there do need to be some state policies that are in that space.

The bill doesn't currently address those, and I'm and and but that that's what we're I'm committing to to try to work through some of the some of those baseline issues, the foundational issues that collective bargaining can then work on top of.

So I when I read your bill, it was very simple, very straightforward in my opinion. Because this, as I stated before, system is already being used and we are trying to provide some guardrails, some direction as to when human involvement should occur. Because as of right now, it's not. When I look at things like collective bargaining, I view that as a time when we're discussing when and where these systems should be used at all.

And, you know, we definitely don't want it to replace actual, you know, human beings and we don't want jobs to be lost.

And I think that that is an extremely important conversation that we should be having and we need to figure out, and we need to get on top of because if we don't, then these things will just continue to be implemented on its own. But I didn't really see this bill talking about that process. It was about this is happening. We need to get a handle on it.

And so I was just getting confused with conversations about collective bargaining and things like that because that should happen, as to when and where and why and for how long these systems should be implemented.

But they're already currently implemented and and we need to get a hold of them before things continue to get worse and people continue to be hurt, as a result of no human oversight. So thank you for that clarification. Anybody else wishing

to speak? Senator, Wahab.

Thank you. So I I just wanna be very clear. I think that technology is something that, a lot of folks cannot fight or kick the can further on. This is an argument that we have in this building all the time. And oftentimes we see a lot of stakeholder groups that just don't want to engage, don't want to have a conversation about technology.

I am probably one of the only people both in the Senate and assembly with a technology background. And I I will say this wholeheartedly, is that policy does not move fast enough to catch up with technology. And that is why we are in the space that we are. There's also a lot of stakeholders that have historically not engaged. The tech industry has actually not engaged in California policy making, for many, many years.

In fact, I think in the last three years, they've started to slowly engage and more so more pronounced this year and last year. With that said, you know, when we are talking about automated decision making or any type of AI or any type of, you know, algorithms being created with very little oversight and much more. We have ensured that there are some safeguards when it comes to health care.

We have ensured that there are some safeguards when it comes to some of the other, areas of interest. I don't think that we have had an opportunity, and I know that the senate has now created a, privacy committee, that touches to some degree on, some of the technologies that we are talking about and the future.

My district is very much focused on advanced manufacturing, but very much on AI machine learning and much more. With that said, I have been very, very clear, at least to folks in my district, that we do have to prioritize the human being first and and life in general. So whether we're talking about data centers, whether we're talking about new algorithms or new technology and much more. So I I just want to be very clear.

I will support the bill today and have you work on it as as you've stated on some of the things that, you know, you would like to work with opposition groups.

But I would also like for Labour to have a seat at the table to just talk about what their concerns are. And I'm sure you could thread the needle on what we wanna see moving forward. But there's a lot of fear with technology. Right? And some of it very much well founded.

Some of it not. Some of it just because it's a new, you know, tool, let's say. And it's a lot of job security. And so I just wanna be able to have the meaningful discussion. I know you will have that.

So, I will check-in as this bill moves along through the year. But I I would like to just stress how much people are afraid, and they are completely legitimate. And we do have to, listen to them and also try to figure out how we can thread the needle on these types of issues. So, with that, I'm I'm very happy to support the bill for today.

Thank you. Anyone else wishing to speak? Okay. Thank you. Yes.

I I just wanna share that. I I think everyone that spoke on this diet has something, you know, to say that that's relevant and truthful. But, you know, you know, everyone is right and in so many ways we just have to figure out that middle ground. I I know this bill attempts to fight the middle ground between technology, making sure that we include our labor friends in the discussion.

But AI, I think it was smallwood-Cuevas that said AI is here and we're just not ready for it.

And in so many ways, bills like these, encourage that dialogue and conversation and having a framework is critically important with safeguards and and and, you know, quality discussions. And I wanna acknowledge what the opposition said. It is scary to imagine that their jobs are gonna disappear. So stakeholder, discussions is critically important, quality discussions. And I just wanna share something, you know, it just stuck with me.

I've been a teacher for twenty years. Twenty twenty years when I started teaching. It was early two thousands, I believe. I went to a conference. And at the time, we have very little technology.

And someone said to us, you know, be prepared for the future because in fifty years, 80% of the jobs that our students will be doing have not been invented yet. And here we are twenty years later and, you know, who knew there would be Zoom and, you know, you know, these cars that drive themselves and and there's so many things that we're doing now that we didn't have before. And so it's growing exponentially.

And I always think of what that, person said and we have to figure out how to be prepared. We have to figure out how to be prepared in a responsible way that really does take into consideration the fears and and, considerations that the opposition stated.

And the good news is that this is not the last stop. We have created that privacy committee where this bill will go next. And so I hope that the conversations do happen. And thank you for acknowledging that perhaps there was not enough stakeholder discussion. And I know that you will work towards that end.

And so I'll give you the opportunity to close.

Thank you, madam chair. And and very much appreciate the extremely robust, discussion about about this issue. And and also just to rein restate what you just said, which was I I take full responsibility for for all that for for how we got to this point in the messier way. And also, we have to act. We we we absolutely must.

But I wanted to end on a higher note because the note that Senator Blake's here focused on as well. Because nationwide, the automated systems for Medicaid increased successful renewals by 21.6%. Overall renewals by 7.7% and procedural denials down by 8.3%. We've seen in California our efforts in the budget to try to increase the share of Medi Cal eligible Californians who can have their debt eligibility automatically determined rather than going to the search to prove that they worked enough hours and everything else. That's been critical.

And we know we can provide services that uplift the Californians that are already entitled to them. So that's that's the point here is how do we accomplish that while also at the same time making sure that it's not a blank check to go do anything and that that that we we not just not human human judgment isn't just legally mandated, but it is essential. It's an essential part of what government is all about.

We are not a government of robots and that we have to guide we have to protect Californians against the use of automated systems to deny and to to result in adverse consequences. This bill attempts to try to capture that balance as we go forward.

We'll definitely be trying to tackle all of all of these issues. You have my my my commitment to try to accomplish that. But I think it's we've we've seen success both in California, but I also wanna emphasize we we laid off zero eligibility workers. CSU laid off zero admissions, staff. We as we read, the fear is real because so many companies are reporting, oh, we just cut half our employees because of AI.

So, of course, my constituents who work for a bunch of state agencies here, they're seeing that and they're worried about it too and they should and they and it's that's completely justified. But California state government should be a sandbox for how to get this right, how to do it right, deliver the best services and benefits for our people while also not just protecting our workers, but lifting up, uplifting them to achieve for the very reason that they chose to devote their careers to public service.

And with that, I ask for an I vote. Thank you so much.

Thank you for for that presentation. The bill, SB 1248 has been moved by vice chair Valladares. Madam secretary, please call the room.

Aye.

This is file item five. SB 1248. Motion is do passed to privacy committee. Rubio?

Rubio, I. Valladares?

Aye.

Valdez, I. Alvarado-Gil.

Ashby Blakespear.

Aye.

Archuleta.

Alvarado-Gil. Aye.

Aye.

Dahle.

Dahle, Aye.

Blake Spear, Aye. Ceurvantes.

aye.

Aye.

Hurtado. Ochoa Bogue.

Ochoa Bogue, aye. Padilla,

Smallwood-Cuevas, aye.

Richardson.

Aye.

Richardson, aye.

Smallwood-Cuevas.

Wahab, aye.

Weber Pearson, aye. Hold that open.

Wahab.

Weber Pearson.

We're gonna hold that we have 12. We have 12 votes. We're gonna hold that open until we have our missing members, and we are not done. We have one more to go with, Senator Cabaldon, SB 1273. I'd like to invite your witnesses to join us up front.

And when you're ready, you may proceed.

Okay. Thank you, madam chair. The SB 1273 deals with the use of short form videos for instructional or educational events that are being held at wineries. I'm I'm gonna do with the presentation of short form also. This is sort of a relic of some of our advertising rules.

This is but short form videos on TikTok and Instagram elsewhere are a primary way in which adults identify products and places which to access. Current law prevents the wine industry from using it from using them with all the headwinds that the wine industry is facing. This is a very, very modest, small improvement in order to assure that they can reach the market. This is not the advertisement of wine itself. It is for events that are occurring at the in the Vineyards and at wineries.

So with that, I'd I'd ask for an aye vote and like to introduce on behalf of the sponsor of the Napa Valley Vintners, Tim Lynch.

Welcome, Tim. When you're ready, you may proceed.

Hi. Good morning, madam chair and members. Thank you for the opportunity to present. Tim Lynch on behalf of the Napa Valley Vintners, the 550 vintners members in the Napa Valley. The Senator got it exactly right.

This is a very modest improvement to, legislation that was passed back in 2018-19 and simply recognizes that our consumers interact in a very different way over social media today than they did back then. And so this bill simply allows the use of short form videos in advertising for instructional events we may do at a retail site, for example, and and allows vintners to present themselves in an authentic way and consumers to meet us where we are. So with that, we ask for your aye vote.

Thank you. I'd like to invite anyone here in this room. If you wanna come up and testify on behalf of this bill. I'm sorry. You please state your name, your affiliation, and your position only.

Thank you.

Michael Miller, California Association of Wine Grape Growers. We're in support. Thank you.

Thank you. Anyone else wishing to speak in support? We will now move over to those wishing to speak in opposition. No one in this room. We will now bring it back to our members on this dais.

Anyone wishing to speak?

Move the bill.

Okay. I will turn it over to, Alvarado-Gil wishing to speak. K.

Thank you.

I just wanted to make a few comments to our author, Senator Cabaldon. Thank you so much for bringing this bill forward. I have been kind of a a a strong advocate for the wine industry, since year one of coming to Sacramento, and was very delighted to find that we had a select committee on wine. And I will say that the work that Senator Cabaldon has done on these issues in the last year have by far, been the best impact on the wine industry.

I think California wine is part of the history, the rich agricultural diversity of California.

And you know, short of it, short of the wine industry issues not being part of the AG committee, but us having a very select committee to do that. I think we have some very large wins, and I wanna thank the author for leading us in those wins. We have a lot more work to do.

And this is the least that we can do is to help create avenues where you can compete with other ag products here in California and continue to to level up the wine industry. So thank you, Senator, for bringing this forward and thank you for continuing to not give up on California wines.

Right.

Anybody else wishing to speak? Well, thank you. I just wanna say thank you as well for creating the select committee on such an important issue and I happen to belong into it as well. And I just think that our businesses are struggling. So I think this is, as you stated, a modest change that will absolutely help our our small businesses.

But, you know, I'm pleased also just in general that, you know, that current authority still has safeguards around how to responsibly drink. And so I always appreciate that. And with that, would you like to close?

Madam chair, thank you and thanks to Senator Alvarado-Gil for her comments as well. And as the chair of the new private technology committee, would please ask that if you see one of these short term videos for a second time while you're scrolling, you've been on too long, please stop. But this is an important way to reach the market and would respectfully ask for an aye vote.

Thank you. This bill has been moved by Alvarado-Gil. So SB 1273 motion is do passed to Appropriations Committee. Secretary, please call the roll.

Rubio?

Rubio, aye. Valladares?

Aye.

Aye.

Aye.

Alvarado-Gil, aye. Archuleta?

Aye.

Valadares, aye. Alvarado-Gil?

Ashby? Blakespear?

Aye.

Aye.

Aye.

Ochoa Bogh, aye. Padilla?

Blakespear, aye. Cervantes? Dahle?

Dahle, aye. Hurtado? Ochoa Bogh?

Aye.

Richardson, aye. Smallwood-Cuevas?

Smallwood-Cuevas, aye. Wahab?

Aye.

Aye.

Aye.

Padilla, aye. Richardson?

Wahab, aye. Weber Pierson?

Aye.

Weber Pierson, aye. Hold it open.

We will hold the roll open for those that are absent and, finally, you're free to go today. But we would like to invite, Senator McNerney who's in the audience. Oh. Oh, wait. We have mister Laird who wasn't here earlier today.

So my apology. So we will now move over to our first item that we skipped earlier today, SB 917 by Senator Laird. I'd like to invite your, your witnesses to join us in the front.

Welcome, Senator Laird. When you're ready, you may proceed.

Thank you very much. Madam Chair and Members, I'd like to begin by accepting the committee amendments and thanking, the Chair and the committee staff for working on this Bill. Senate Bill nine seventeen supports California's wine businesses at a time when the industry is facing an economic downturn and declining sales. California's wine industry struggles last year marked the lightest California wine harvest in twenty years, down 23% from the previous year.

Currently, only wine made with a state grown grapes is allowed to be sold at farmers markets, meaning a winery must use grapes that are grown on its own land.

A significant percentage of family owned wineries are small wineries that do not grow their own grapes. So this prohibition prohibits them from selling wine at at farmers markets. This bill removes the estate grown requirement to allow family winemakers and other excluded wineries to participate in farmers markets. Opening more pathways will help given the current situation. The amendments that I accepted from the committee limit this to three small wineries per farmers market.

The Bill also modernizes and increases safeguards by requiring responsible beverage service training for the licensee or designation staff member on-site during the instructional training. So, with me today in support is John Phillips on behalf of the Family Winemakers of California. And here to answer questions is Michael Miller from the California Association of Wine Growers. At the appropriate time, I would respectfully request an aye vote.

Thank you. We'll turn it over to your witness in support, Michael Miller, California Association of Wine Grape Growers. You may proceed. I was absolutely. Thank you.

Good morning, Chair Rubio and Members of the Senate Governmental Organization Committee. My name is John Phillips, and I'm the owner and winemaker of Inspiration Vineyards and Winery in Santa Rosa. I'm also an active member of Family Winemakers of California. I've been in business since 2002.

And at the beginning, I owned both a Chardonnay and Zinfandel vineyard in the Russian River Valley. To produce a full portfolio of wines, I supplemented what I grew with grapes I purchased from other Sonoma County independently owned grape farmers. None of which had their own wineries. When FWC sponsored the legislation that helped to create the type 79 permit, I jumped at the chance to sell my wines locally in the Santa Rosa's Farmers Market. I loved the experience, but also found that there were two limiting restrictions.

First, even though I was producing eight different wines from locally grown grapes, I could only sample and sell my two estate grown wines. And notably, today, because I no longer own a vineyard, I'm unable to qualify for this permit. Second, while the market manager could allow multiple wineries to have a space to sell their wines, only one winery could pour samples at a time. Providing those opportunities for that education, which in turn discourages winery participation at each farmer's market.

Since the type 79 permit was established, the type 84 permit was created to support small breweries.

Likely learning from the wine industry, their permit type doesn't face the same estate grown requirements and gives the market manager the authority to approve who and how many producers can participate. At a time when the entire wine industry is facing declining sales, here's an easy opportunity to create additional local marketing and direct to consumer sales channels that will not only benefit small wineries like my own, but grape growers we who we rely on will also be supported. Thank you for your time.

I respectfully ask for your aye vote on senate bill nine seventeen and I also would be available to answer any questions that you may have.

Thank you for that testimony. You may proceed, sir.

Thank you, Chair Members. I'm Michael Miller with California Association of Wine Grape Growers. I wanna thank the author for his leadership in carrying the Bill and the committee for its thoughtful consideration and thorough analysis. We appreciate that. We very much align ourselves with John's comments entirely.

We think that's very important for local wineries, local growers to connect with local consumers. The farmers markets will allow us to do that in part and we very much appreciate that nexus that was created there. Sacramento, we're a farm to fork place. We like farm to fork. We like buying to glass.

There's a local restaurant in town where you go and it's all about farm to fork. But you look at the wine list, 30 pages long and it's mostly imports. And maybe a small percentage of California and about five or six are from actually the area. So for us, it's really important to create that connection and this Bill helps to do that. We thank the author and the committee.

Thank you very much.

Thank you. I would like to invite anyone in the audience wishing to come and speak in support of this Bill to come up to the microphone. Seeing no interest, I'd like to invite now anyone speaking in opposition to come up. Seeing no interest, I'll bring it back to our committee members. Anyone wishing to speak?

We'll start with Senator Padilla. Oh, okay. Senator I'm sorry, Senator Archuleta moves the Bill. Anybody else wishing to speak?

Well, thank you for for that testimony and for the Bill. It's clearly important that we try to support small businesses in any way we can. And so so I'm glad this will help and also removing, you know, some of the language that required.

Let's see here. Bottles wine from grapes entirely grown by the wine grower also would help expedite and and help small businesses. And with that, I will turn it over to you to close.

I appreciate the comments in the motion. I wanna thank the witnesses. I think this is a good Bill in a difficult time, and I respectfully ask for an aye vote.

Thank you. Madam secretary, please call the roll.

SB 917 motion is do passed as amended to appropriations committee. Rubio. Aye. Rubio, aye. Valladares.

Aye. Valladares, aye. Alvarado-Gil. Aye. Alvarado-Gil, aye.

Archuleta. Aye. Archuleta, aye. Ashby. Blakespear.

Aye. Blakespear, aye. Cervantes. Aye. Cervantes, aye. Dahle.

Dahle, aye. Hurtado. Ochoa Bogh. Aye. Ochoa Bogh, aye.

Padilla. Aye. Padilla, aye. Richardson.

Aye. Richardson, aye. Smallwood-Cuevas. Aye. Smallwood-Cuevas, aye. Wahab.

Wahab, aye. Weber Pierson. Aye. Weber Pierson, aye.

We'll hold that open. Thank you. We'll hold up the roll open for absent members. We will now move over to our last Bill of the day. Oh, wait.

Wait. Yeah. We do have two more. Sorry. We have a member up here on the dias, but we'll go over to mister McNearney, SB 1240.

Please, join us. And anyone wishing to speak in support in opposition, please make your way up to to the front. Hello, mister McNearney. When you're ready, you may proceed.

Morning, Chair Rubio, vice chair Valadares, and distinguished members of the committee. I'm pleased to present SB 1240 which would establish the office of, Nonprofit Empowerment, also known as ONE or ONE. I'll start by accepting the committee amendments. I thank the committee for working with my staff. Everyone has nonprofits in their districts.

So I'll just show the committee this list of nonprofits that have already become supporters of this bill. But not everyone realizes how effective nonprofits are in servicing the community and also the enormous impact they have on the broader economy. Nonprofits are the largest employer by wage or the third excuse me, the third largest employer by wage among key industries in California. And one in every 14 Californian's jobs is with a nonprofit. So this is a significant portion of our economy.

However, nonprofits do face significant hurdles in navigating Californian's, state government. Current procurement and grant making processes are needlessly complex, and payments for services are often delayed, which is very hurtful to the many employees that nonprofits take on. The nonpartisan Little Hoover Commission published a report this year, examining these challenges and made several recommendations. One of which is creating a nonprofit liaison, which is what SB 240 would establish. With me today, I have two witnesses.

In support is Jennifer Fearing from the California Association of Nonprofits and Jillian Keegan from the California Community Action Partnership Association. And I'll turn it over to Jennifer.

Thank you, Senator. And good morning, chair Rubio and members. I'm Jennifer Fearing, the Sacramento advocate for the California Association of Nonprofits. And we are 10,000 member organizations, statewide policy alliance. We're proud to sponsor sb 1240.

And as the Senator mentioned, we have already been joined by 300 nonprofits from across the state calling for the creation of the Office of Nonprofit Empowerment, which speaks to both the, the scale of our sector and the need for this office. Nonprofits diverse in size, geography, service, and mission are united by a single urgent goal, a more efficient, functional, and collaborative partnership with the state. And it's time to institutionalize that with one.

Providing the structure necessary to ensure California's nonprofits can continue delivering essential services to our communities with fewer barriers is not a nice to have, but a needed pathway to supporting and bolstering one of the state's leading economic engines. Nonprofits in California manage more than $766,000,000,000 in assets, and we contribute 15% of California's GSP.

We're the state's primary frontline partner. But as the Senator mentioned, the state's grant contracting systems are a maze of red tape, chronic late payments, and inconsistent, duplicative, and burdensome processes. They don't just cost non profits, but also hurts the single mother waiting for childcare or the senior needing a meal. For too long, we've been told that the complexity of the estate is an excuse. But it results in inequity.

The current system favors well funded organizations and shuts out smaller, especially BIPOC and community led organizations that are among the most trusted. Twelve fifth SP twelve fifty would fix this by creating one. And just like the state has go biz to help businesses succeed, non profits need a small but nimble and centralized home in state government to help all non profits succeed.

By institutionalizing the goal of numerous bills that this committee has passed over the last several years as part of California's nonprofit equity initiative, one can help level the playing field. So we are very excited by this bill and grateful to Senator McNerney for his leadership, and we urge your yes vote today.

Thank you.

Thank you. Anyone wishing to speak in the audience, and support, please come up, state your name.

Well, we have a

Oh, I'm so sorry. See it. That's why I have good people next to me. You may proceed. My apologies.

Good morning, Chair Rubio and members of the committee. My name is Jillian Keegan, and I'm here representing the California Community Action Partnership Association, also known as Cal Kappa. We strongly support SB 1240. Across California, our network of nonprofits and agencies have administered over $1,400,000,000 in resources annually to create opportunities for low income families. Whether it's providing energy assistance, food security, or job training, the state depends on members like ours to deliver vital services.

The nonprofit sector employs 1,700,000 Californians, but we are often treated as an as an afterthought in state bureaucracy. Despite being essential partners, nonprofits face significant red tape and hurdles navigating California state government. There are over 230 different state agencies, and almost all of them have different rules and processes for how they partner with nonprofits. There's no voice for representing our interests to navigate this maze. This isn't just a headache, it's a barrier to service.

Such complexity leads to serious payment delays that put a financial strain on our organizations, complex paperwork and insufficient coverage for the full cost of services we provide, and barriers for smaller groups, especially those led by people of color or located in rural areas. SB twelve forty creates the office of nonprofit empowerment for one. Just as the private sector has a dedicated home in the state government through GoBiz, it is time the nonprofit sector had a home too. One would be a central hub for nonprofits.

Why doesn't the state also prioritize nonprofits when millions of Californians depend on us?