Assembly Budget Subcommittee No. 4 on Climate Crisis, Resources, Energy, and Transportation

[Background]

Good morning, and welcome to assembly budget subcommittee number four on climate crisis, resource, energy, and transportation. Today, we're really pleased to to welcome secretary Garcia and the departments under the California Environmental Protection Agency. We have 10 presentations today, so a lot to get through.

For each presentation item, I'll ask each of the witnesses in the agenda to introduce themselves before they begin their testimony. At the end of the presentation, members of the subcommittee may ask questions, make comments, or request a presentation on any of the non presentation items. We will not be taking a vote today on any of the items on the agenda. After all the items are heard, we will take public comment for members of the public who wish to provide public comment. Please limit your testimony to items that are on the agenda.

Each member of the public will have one minute to speak. Let's begin with secretary Garcia's opening remarks. Secretary Garcia. Happy to have you.

Thank you. Good morning. Good morning. Good morning Chair Bennett and members of the committee. Always a pleasure to be here with you.

Frankly, always a pleasure to be able to share some of our work. I wanna start by just acknowledging the the, fluctuation point that we find ourselves in with so many challenges in front of us. Whether that be from extreme heat to unprecedented wildfires and storms, severe drought conditions, ongoing, etcetera. And needless to say, a unique relationship with the Federal Government that has left many of our communities vulnerable to the intensifying impacts of climate change. I think you would all agree that our partnership at this moment is more important than ever.

And if there's one thing that I want you all to leave here with today, it is the knowledge that we are very lucky to have an incredibly talented workforce all across our state, but including at Cal EPA. I feel extraordinarily privileged to lead an agency where the staff are dedicated to creating real tangible benefits for Californians, to enhance their climate resilience, to improve air quality and water quality all across our state. So, I hope that you see that from our team. I wanna share a couple of examples of our work before going into maybe some of the questions you all might have on, the budget proposals before you. And I wanna focus a bit on two areas of concern that I think you all share with us.

The first is, you know, disruptions and changes in the nature of the Environmental Protection Agency's work, resulting from attacks from the federal administration. And the second is really improving our ability to maintain a nimble approach to respond to some of the evolving changes in our environment as we move forward. I know we're we'll be talking about, some of the work around landfills and and subsurface elevated temperature events, which are one example of those evolving, shifts in our work. So I'll start with, something that we're very proud of, which is, the work that we're doing to address methane. And this is an area where, you know, with the absence of federal leadership in the climate space, there is a real void at the global scale.

And, of course, you all know well that California is no stranger to stepping into the role of of global leadership. And so while we're occupying the space which is familiar to us, it is also a growing space for us. I will I will say that our international partners are increasingly looking to us to demonstrate the leadership that is sorely lacking, with the federal administration. They're looking to us for hope, but also for tangible examples of what they can do to move the needle to reduce, the impacts of climate change. And methane, of course, as you know, is a super pollutant.

It has over 80% the potency of greenhouse gas emissions. So it's all the more critical to dramatically reduce it and slash methane emissions where we can. We're working on this through implementing diversions of our landfill organics going to, our waste landfills. And we're seeing quite a bit of progress in this space. We have a lot more to do, but we are seeing now over 90%, 97% in fact

of jurisdictions offering residential organics collection. A 100% are having edible food recovery programs. We're, issuing so much in, community composting grants, which, carry a multitude of benefits as well on the ground for communities all across our state. At the same time, we're also strengthening methane accountability through innovation and partnership there. We are detecting methane leaks where they're occurring across the oil and gas sector and and other sectors.

And again, this is an example not only of what we're doing to create tangible benefits and reductions in methane emissions here in California, but also across the globe. Now federal rollbacks have also, impacted the extent to which our communities could face threats from exposure to toxics. And this is in air quality. This is in our water systems and also in our lands. So we remain committed to and proud of our work to drive down, air pollution at the community level.

We do a lot of this in partnership with our air districts. We owe a lot of, gratitude to you all for, you know, granting us the the authority, the direction, and the funding to be able to continue this great work. And this is an area where, again, we will be pivoting to see more of a focus on our community air protection work in partnership with the air districts and with local governments. In water infrastructure and resilience, you know, the State Board has provided more than 11,000,000,000 in financial assistance to drinking water, wastewater, and water recycling, as well as stormwater and groundwater projects. Again, we're very proud of this work, particularly as we see the Federal Government roll back, not only on its investment, but also its protection of communities from certain contaminants of concern, in our water streams, our wastewater and drinking water streams.

Through the SAFER program, we're also continuing to bring systems back into compliance. Another area that we will maintain a heavy focus on, as we move forward, particularly under this federal administration. And we're also overseeing the cleanup of more than 6,000 residential properties impacted by lead contamination specifically at the former Exide Vernon facility. This is an area of course where we want to continue the great progress that we've already made, and that is the subject of one of our, budget change proposals. Finally, in addition to addressing legacy contamination, as many of you know well, we're also looking forward into the future to see how we can reduce waste streams from chemical contaminants and chemical products to which we are unfortunately still a bit reliant on, but we're looking at ways to enhance safer alternatives and the access to safer alternatives to, for example, chemical based pesticide products.

This is an area of great pride of of mine personally, of ours through Department of Pesticide Regulation and our partnership with growers, with innovators, with the organics agricultural community, and those who are interested in really moving the needle on how we can, deploy more regenerative practices across our state, which we will only, benefit from, now and into the future. And, with that, you know, I wanna just note that the accomplishments again are great, but in order to demonstrate continued meaningful progress, the challenges we continue to face require us to again stay on our toes. So we have a couple of budget change proposals before you. I'll start with landfill response and enforcement. As you know well, our waste streams are changing and our climate impacts are intensifying, which means that the risks around our landfills, specifically the risks presented to communities, that find themselves in proximity to those landfills are increasing.

And to address these risks, we're proposing a coordinated strategy that strengthens landfill response and enforcement capacity across multiple boards and departments, many of whom are here represented today to answer questions that you might have. But ultimately, we're looking to strengthen our ability to monitor, detect, prevent, and rapidly respond to, subsurface elevated temperature events, which we're, seeing more, characteristics emerge for these while we improve coordination across our boards and departments to ensure a consistent statewide approach. Now recent federal actions have also created uncertainty around transportation, specifically around emission standards, making our leadership in the space even more important, and making our ability to protect the great progress that we've already achieved, really critical. The governor's proposed a new incentive program designed to support first time buyers of zero emission vehicles. This proposal provides a point of sale incentive, which is matched dollar for dollar by original equipment manufacturers for first time zero emission vehicle buyers in order to accelerate consumer adoption of new zero emission vehicles and keep us on track to meet our clean air and climate goals.

You know, the last time we saw gas prices, not quite at this level, but nearing this level, and I think we're at at about a 30% increase, in prices at the pump currently, we did see a significant uptick in, purchases of of zero emission vehicles. It's incumbent upon us to ensure that, we continue to provide this as a realistic option for our residents, particularly as these price fluctuations continue to take place. Now finally, as I mentioned, Exide cleanup, the Department of Toxic Subsances Control is also seeking to do critical cleanup work associated with this, former facility. Our proposal would allow additional residential properties and impacted communities to be remediated. Continuing our progress toward addressing this long standing, area of contamination and environmental injustice here in our state.

And I think many of you are familiar with the details of the former Exide Lead Acid Battery recycling facility. And then again, we're happy to answer questions here. Two last areas of proposal that I wanted to mention to you all, of course, Prop four. We spent quite a bit of time discussing Prop four Here, just about a year ago. And, the State Board is actively now implementing Prop four Dollars, with anticipated awards from four of the five dedicated grant programs within this calendar year.

Very much looking forward to that. And as we are we are approaching that, we're prioritizing critical needs such as enhancing water quality and ensuring safe drinking water with significant funding allocated to wastewater and drinking water infrastructure projects. And finally, the state board is also continuing its work to implement the Bay Delta Water Quality Control Plan. This is one of the most important efforts underway to protect our water resources all across our state. Advancing this work is essential to safeguarding our water quality, supporting our ecosystem health, and protecting the communities, farms, and industries that rely on this critical watershed.

I wanna thank you again for having us here this morning. We are looking forward to answering any questions you might have and certainly look forward to continuing the great partnership that we have moving forward. Thanks.

Thank you very much. We really appreciate you being here. I have a few questions to kick us off and my colleagues here and perhaps will be joined by our vice chair at some point in time later. But, you know, the first overall policy I want to bring up is, you know, we have this polluter pay sort of principle. And I think it's generally good for government to try to, wherever possible, do two things, which is match ongoing revenue with ongoing expenses.

And if if some action somebody is taking is causing an an ongoing expense for the public, for the citizens that we have to address, then those people that are causing that should be the ones that are paying for that. And we try to match that. I mean, the the road tax is a classic example. You know, people do wear and tear on the road, so we try to find some way of matching the people that are causing the problem with with the the solutions, the problem. So that's always a challenge for governments to to try to institute and maintain that and adjust that as as circumstances change.

But it's particularly a challenge right now as we're talking about affordability and, you know, the things that you need to do to try to adjust and make sure that that's the case also have an impact on affordability. So that's the first of all, what what are your thoughts about where are we in terms of trying to match those those two, the people causing the problem with with the solution. And how far along are we? What kind of changes do you see? What kind of things should we be looking at, to to make that policy a more effective policy in the future?

Sure. Sure. So I I appreciate this question. And first I wanna acknowledge, you know, while the while the characteristics of this program are a bit distinct from what I think your your question is getting at in terms of operators for facilities more akin to a landfill, etcetera. I do just wanna give a nod to the extraordinary work that not only this legislature, but also past legislatures here in the state of California have done through the cap and invest, cap and trade program to really provide what has become an emblematic program that embodies the polluters pay principle in a way that makes market sense, that makes good economic sense, and also makes environmental sense.

So, this is something that I think, really runs deep in our state, in our approach to, handling the balance of environmental harms and and economic growth. In terms of some of the issues that we're seeing now that I certainly classify as the the emerging challenges that we want to to maintain our ability to respond to adequately. You know, we're we're first looking at the issue of legacy contamination, and certainly that is a priority to continue to clean up, and to frankly continue to maintain a focus on accountability for this is an area where our enforcement work is critical, and the support that you all have shown us with respect to our ability to expand that enforcement work is extraordinarily important for us. We need to be able to handle investigations properly. We need to be able to pursue claims against operators and hold them accountable.

So as to insulate and protect the general public from, having to absorb that risk. So that's sort of the the way that I see our us focusing, in this space first and foremost. And then pursuing, you know, adequate cost recovery, ensuring that, our penalties and our ability to, leverage cost recovery over time reflect the real challenges that are in front of us. Sometimes this requires, statutory changes, which, I have I have seen a lot of willingness on the part of so many of you and your colleagues to be able to explore with us.

Excuse me. Let me interrupt you right there. Would you pull the microphone a lot closer?

Oh, sure. No problem.

We've had some some requests already.

Of course. I've seen a lot of willingness from you all and your colleagues to help us address the the need to restructure penalties and our ability to really ensure that there is a a deterrent effect for our enforcement work, which again is really critical in this respect and our ability to recover costs for violations, existing violations. And frankly, to to see how some of our statutory authority may need to be tweaked to be able to encompass perhaps new violations, things that conditions that we may not have seen in the past, that do need to now come into the structure, of some of our penalties. So I guess I would again reiterate, I think, enforcement, accountability, and cost recovery are critical, and enhancing the tools that we have to be able to address these issues as they come up are going to be all the more important to ensure that we maintain our commitment to a polluter pays principle.

So we we have in our agenda, we have some significant discussion about the issue of vacant positions and and positions that are funded by special funds, positions that are funded by general funds. So special funding seems to match our principle pretty well. You know, we have a mill tax, and the mill tax pays for the implementation of of the regulatory aspects of that program. We're now we we have a bit of a history here of a great deal of frustration with how we were implementing some of our regulations, etcetera. Mhmm.

And so in partnership with the Governor's office and the legislature, we decided to beef up those regulations and and the staffing for those regulations and pay for it with increases in the mill tax. Even though the mill tax hadn't been changed for two decades I know. We were able to win support for making that change. And now we have we've made the change. We have the increase, and now we're talking about cutting the positions.

So could you help me with your perception? Because we're going to talk about that more today as we go forward with your perception of this issue of trying to balance our budget and the challenges that we have with that using special funds money to cut special fund positions, that don't have an impact on the general fund, although there is some indirect impact on the general fund. And I'm gonna try to pick, pick the brains of our Department of Finance people with regard to that. But but I have concern about that, and I'd love to, at the beginning here at the intro, sort of get your perspective of this because we'll be asking other people in your department these questions also.

Of course. I will kick it over to to my colleague here at Department of Finance to answer some of the, maybe, more specifics around the vacancies and that approach. But I would say from from our standpoint, you know, and we we have been engaged, particularly with stakeholders interested and curious about what this means given, the somewhat recent increase to the MILFI, which again, we're we're very proud to have landed, what I think is a very sound approach to that increase. You know, we we remain committed to the the specifics associated with that MILFI increase, the workloads that it supports. You know, the Department of Pesticide Regulation has already done so much incredible work to ensure that we do not miss a beat in that in the scope of that work, and that was very carefully crafted in a way to ensure that we're able to really leverage, the the fee structure increase.

And I would say more generally, you know, particularly with, the, budget scenarios that we are living, that we're foreseeing, it is time to take a careful look at our fee structures. Yes. You know, these revenue streams can fluctuate. It is not the first time that these revenue streams are, you know, tapped for lack of a better word when we have fluctuations in the general fund. That's something that that's a that's a tool that we've relied upon in the past, and it's something that we should continue to keep in mind as we're looking at the overall health of our programs, as we're looking again to the deterrent effect for certain activities, and as we're also looking at how to support the work going forward.

But suffice to say in terms of the ... increase specifically and the Department of Pesticides regulations work there, we remain committed to fulfilling that work and, we will continue to periodically reassess our revenue structures to be able to reflect the challenges ahead. But I'll kick it over to my colleague at Department of Finance if they wanna add anything on the vacancies.

Good morning. Andrew March of the Department of Finance. Chair, as you mentioned, this will be a further discussion later. But, with regard to the, the various special funds, and I think particularly with the MILFEE, we would note that, you know, reducing vacant positions now would potentially provide us more time before we would have to increase the mil fee again in the future to provide additional buffer.

Thank you. I would. We went two decades without increasing the mail fee, which was a mistake. But we had lots of challenges and concerns about regulations and enforcement, etcetera. And consistently we heard, well, it's because we're underfunded or understaffed.

We don't have enough staff to do this. That's what we heard all the way up to increasing the mil fee. Now we're increasing the mil fee and now we're laying off or reducing the positions there. And so, you know, saying we're committed to, you know, enforcing those things. I really need to hear more specificity later when we get to this, but I I would like to hear the the rationale that we're confident that we don't need these positions because we we we went through a battle.

I mean, we we the governor's office and the legislature used up political it took political effort to increase the mil fee. And I specifically particularly tried to push through, you know, cost of living increases and trying to match that so we wouldn't have these problems. So where is the assurance that the positions we said we needed just eighteen months ago that we really needed because we had all of these shortfalls, suddenly we we think we can get by without those? Or is it just a or is it just a statement that the budget is so bad, we're just not going to be able to enforce the regulations the way we wanted to do that? That's that's the concern that I have. Sure. Could you help me with that?

Yeah. I appreciate that concern. So I wouldn't say that we absolutely do not need the positions. I wouldn't say, you know, that we're we are not challenged to figure out how to make the commitments happen within the department. I think that the challenge and opportunity that we have in front of us is to figure out, you know, all across the board how to build in efficiencies in our approach.

That was always the idea, that that structure to the mill increase. And certainly, you know, once we're able to maintain a bit more of a of a healthy, workforce, we certainly, intend to do that. I think, what you're hearing from me is is a strong commitment to ensuring that we are not left without the ability to do the best that we can to meet the commitments that we made during the the negotiations leading up to to the mil fee increase. You know, we believe very strongly in those and we're we remain committed to those. The vacancies, you know, you'll hear the Department of Finance kind of tick through the details on that as you just heard from Andrew, but I don't want that to to indicate to any of you that we do not still remain committed.

So I appreciate the commitment to do the best that we can, and I assume we had that same commitment three years ago before we had the positions. And the question is, you know, we should we should. And as you say this more often, I think, and I will try to say this more often. If we work for the public and collect the public dollars, we have a greater responsibility than people in private industry to work really hard and to departments coming and saying we can't we can't do this properly because we don't have the positions. And so if we had the same level of commitment four years ago that we have today, which is to do the very best we can to try to enforce it, I remain concerned that we still are losing these positions.

So it is something we're going to to have further conversation with. But I wanted to try to get your perspective to see if you had some sage insights for us as we tried to attack this this particular aspect of it. I have a few other questions, but I want to turn over to my colleagues and see if they have any questions here in the introductory aspect of this. And then we will be hearing all 10 items still, so these are overall questions for the secretary.

Thank you. I just wanted to I know you mentioned Exide, and I wanted to first say welcome back. Congratulations on your new baby.

Thank you.

I didn't actually expect to see you here. So it's nice to see you.

It was a feat. Yeah. Yes.

So are you I know as I've worked and I know we're gonna be talking about Chiquita in a minute, but, you know, it's been clear become very clear to me how important transparency is for our communities to have the information that we have because oftentimes they are the ones who are raising the alarm bells when maybe we should have noticed and didn't or before we even notice or could. And so, you know, I know that there's been work around verification sampling at Exide and I wonder when this is going to be released to the public, if there's plans for that.

Do you mean from the department? Yeah. From the department of toxics? Yeah. I I don't I don't have a date for that off the top of my head, but I'm Is we're happy They are here. Yeah. There. And we could potentially ask director Butler when she's up at the podium Or up at the

Or Dan.

Or Dan. Sure. Go for it, Dan. Okay.