Assembly Budget Subcommittee No. 5 on State Administration

Good afternoon, and welcome to the Assembly Budget, sub five on state administration hearing today. Apologize for running a little bit late. Today, our hearing will focus on the Department of Veterans Affairs, cannabis control, and consumer affairs, and the cannabis control appeals panel. This is an in person hearing with all panel panelists testifying in person. We will take questions from members of the subcommittee after each panel, and public comments will be taken at the end of the hearing and will be limited to one minute.

If you are unable to attend this hearing in person, you may submit your comments via email to [email protected]. And just to let you know, some of our, members are going to be moving back and forth. So they will be coming and going, and I may as well as I also have a JLAC hearing at the same time. With that, we will start with our first panel, which is the Department of Veterans and would ask our panelists to come up to come forward.

We wanna welcome our secretary from CalVet, Lindsay Sin, and we're gonna have you kick us off if that's okay. And if you can introduce yourself as you speak.

I appreciate the opportunity to be with you here today and to share the important ongoing work of our department. The dedication of our staff and our progress towards the vision of ensuring our California veterans are the most connected, protected, and respected of any state in the nation. Over the last year, we've achieved some significant milestones on important ongoing projects, and my team and I look forward to discussing a few of those with you today.

Our progress over the last year is in alignment with our longer term strategic goals, which when simplified are a strong focus on the approximately 1,500,000 veterans and their families that we have the honor of serving, a strong focus on our department's workforce and culture, and being courageous enough to solve our challenges in innovative and future focused ways.

Because of our staff's commitment to the veterans we serve and with the ongoing support of the administration and legislature, we do many things at Cal Vet very well, including achieving consistently recognized high quality care throughout our eight veterans homes, maintaining strong lending performance and excellent customer service, and our one hundred and five year old home loan program, including exceeding our annual lending goals of 200,000,000 a year through competitive rates, historically low rates of foreclosure, and a robust full coverage insurance policy.

We've also increased the number of permanent supportive housing units for veterans into the thousands through our VHHP and Homekey Plus programs. And we're adopting innovative pilot programs such as the California Veterans Health Initiative, which provides thousands of free mental health care appointments for veterans and their family members, and the veteran service to self reliance part program, which helps aged veterans achieve housing stability and permanent supportive housing.

We're meeting veterans where they are with the resources they need through our statewide transition assistance program and through the ongoing partnership with our county veteran service officers and community stakeholders. These programs only work through the consistent dedication of the talented leaders and workforce within our department and the continued collaboration with strong partners throughout state government, the legislature, and local communities.

I wanna wrap up my opening remarks by thanking chair Quirk Silva for your ongoing and steadfast dedication to our veterans of California, both serving as the former chair of the Assembly Veterans Affairs Committee and through your continuing support for our Southern California veterans. Thank you.

Do we have any other comments? So we're going to go ahead is this on? We're gonna go ahead and move into some questions. I think I'll go ahead and start here. Do you have any questions right off? Or?

Okay. So our first item is the Southern California Veterans Cemetery, and we have been in close communication. And one of the factors that I like to focus on is making sure that as we make progress, which we have had significant progress, that we're also transparent and that the public knows. So with that, I know that right now there is a study going on. So if you can go ahead and update us exactly on where we are and what next steps would be. Okay.

I think what I'll do is make a couple of remarks. First, introduce our other panel members and then kick it over to DGS. So joining me at the diocese today is my deputy secretary for legislation, John Spangler, as well as chief deputy director at DGS, Jason Kinney. So to begin, of course, this is regarding the Gypsum Canyon site for the Southern California Veterans Cemetery, which was really selected by community members in 2223, and also approved by the city of Anaheim.

The initial feasibility study was completed in 2024 by DGS, and currently, we are in the process of revising that study in order to look at cost containment for what would potentially be a smaller footprint than what was originally decided upon in the initial study.

So that is going well. I do wanna first acknowledge that DGS has done an excellent job of accelerating this process, and we do expect to have something by late April. That will give us the opportunity to look at those revised numbers, not just for some of the higher ticket items like grading, but also look at, revised numbers for plans and drawings and next steps. So with that, I'm gonna go ahead and pass it over to, chief deputy director Kenny.

Thank you. Madam chair, committee members, thank you. Again, Jason Kenny, chief deputy director at the Department of General Services. Thought it would be wise, maybe provide just a little bit of background on the cap outlay process in general just for any questions that might come up on timing sequencing, those sorts of things, and then go into a little more detail on the specifics on the study and where we're at and what we're kind of seeing.

So with that, it'd be helpful to maybe start out by noting that the state's CAP Outlay process is designed as it is because of the financial stakes in projects such as these.

CAP Outlay represents a significant expenditure with ongoing resulting obligations like operations and maintenance. So the process is designed to be deliberative, transparent, and offer numerous opportunities to reevaluate the wisdom or need to proceed. So because of that, the cap outlay process is typically completed in three phases, preliminary plans, working drawings, and construction. You might hear me refer to them as PPWD or C, that's just the shorthand, but preliminary plans, working drawings, and construction. Each of these are typically authorized in separate sequential budget cycles.

So you might receive preliminary plan funding in July, say, '26. Typically, you receive working drawing funding in 2027, and then construction funding sometime in July 2028. Again, three budget cycles, three different, deadlines for funding. You might complete a phase faster than that, but, typically, appropriations, are one year at a time. Preliminary plans are where a lot of the initial work begins as the term, implies.

Design begins. All, required environmental reviews. In the case of Egyptian Canyon, there's no CEQA review required, but there is NEPA, the federal version. Real estate due diligence, those sorts of things. At the end of the phase, the goal is to have a really well defined sense of the the the project scope, risks, mitigations, cost, etcetera.

The next phase after that is working drawings. That phase is pretty simple. Any remaining design is completed. The project achieves its permits, and then it goes out to bid. And then I'm assuming the construction phase is funded, of course.

And then the construction phase is exactly as it sounds. You build the thing, whatever it is. There are a couple of other phases that typically happen in a CAP Outlay process depending on the project. You might have a study phase as this project does. You typically do that when you have a lot of unknowns, uncertainty, and you really wanna make sure that, again, what gets forward to the legislature is clear and accurate.

Wouldn't do to submit something and say it's x dollars and then it's 15 times that, you know, next year. The other phase that typically happens if we're not talking about existing state property would be acquisition. So that would be a separate phase typically when when property is purchased by the state. Couple of really important notes on acquisition. As a general rule, we typically purchase properties that are design construction ready, meaning clear title, adjacent utilities.

Otherwise, if you were to acquire something that you don't have those rights to or couldn't do it relatively quickly, you're essentially buying a temporary liability until those those can be addressed. And then second, while typically acquisition precedes design, it doesn't have to work that way. You can, begin design without acquiring a site. Now with that said, and that kind of overview of the cap outlay process, turning to the Gypsum Canyon sites, as secretary mentioned, maybe just a little bit of additional background for the committee.

We're talking about a site that's in the city of Anaheim. It's a 283 acre site. There's a new cemetery district, the Orange County Cemetery District that was formed, and it's essentially a two part development. You have the cemetery district who is doing a locally owned cemetery, non veteran for the lack of better term, and then the idea is the the Calvet Cemetery on the other portion of the property. So about a 156 of those acres, of the 283 acre site would be the the context for the, Calvet Cemetery.

As was mentioned, in January 2024, DGS and CalVet in partnership completed the initial study, again, part of that study phase, to identify the costs associated with Gypsum Canyon.

The study identified that the cost for Calvet's portion, just the 156 acres there, and just phase one, was a $126,000,000. Now a typical cemetery would be more like 10. And so if it helps to explain the price tag, it is important to note that the the site is very much a large hillside, and so there is a lot of dirt, a ton of dirt, no pun intended, to be to be moved.

And, and Calvet's, portion of this, is is designed, or intended to begin after the cemetery district, mostly because there's no roads, no utilities, and then because the district actually has to have access to the Calvet portion in order to grade their property. And so because of all of that, the original study was actually based off of the cemetery's district's grading plans.

As you can imagine, one big hill. Right? And so you can't really just pick and choose how you you would develop it. Their overall plan kind of drove what we studied in 2024. And the reason why that's relevant is in late 25 we we were notified from the cemetery district and Orange County Public Works officials that they had substantially revised their grading plans in the hopes of reducing the overall site work costs.

So Calvet fairly immediately authorized us to begin an update to the study, which would normally take at least six months, but we have been working together and with the cemetery district and with Orange County and 24 other, entities, it's a large group, to try to get this done as fast as possible, and we are targeting the April.

And a big part of that is, again, revised site plan, revised grading plans, reevaluating, you know, how much of the footprint we have to touch at the beginning in order to drive the cost down as much as possible. And so we are looking forward to the April. We are on target to hit that, and I think once we do, the committee, anyone interested can see a revised understanding of what would cost to do a cemetery at Gypsum Canyon. So I know that was a lot.

I'll pause and take a breath and let you ask any questions you like of me.

Do you have any additional comments? And any additional comments? Alright. This is one of those projects that there's a lot to say, but we wanna keep it very focused and appreciate the moving forward with the new assessment by the April. I think one of our question would be, is there anything that you can see that we need to do in this budget regarding a trailer bill or any language that would be help move this along or that you think is necessary.

Thank you. Currently, we have authorization for about $5,000,000. So right now, the state has about $35,000,000 in reserve and most of which is in the master cemetery development fund. But we have the statutory authorization, but not the budget expenditure authorization for that.

So are you saying that we should add additional funds to be used or with the 5,000,000 that is there, is that sufficient for the stage we're in?

Right. Given that the study, the the initial study showed, about $30,000,000 in plans and working drawings, price tag, it's possible we would need that money. What I would like to do is come back to you in April, the end of April, if possible, to when we really can look at those numbers and see what the kind of updated revised study says.

Ok. Appreciate that. And then as far as the state taking ownership, you mentioned several steps need to transpire before that happens. And you just mentioned those in your talking. Can you just kinda give us step 12 and three if you could?

Yeah. Yeah. In order to well, importantly, as I mentioned to Secretary Cintz Point, acquisition can be divorced from design. I mean, design can begin without taking possession of the site. It's not like those have to be sequentially linked.

But but, yes, ultimately, without utilities, road access, easements from the locals, and the the cemetery district having done whatever they need to do on the Calvet portion of the site to develop their own or at least make their own grading, those would be the the necessary steps, I think, before the state would be able or or want to take over their property. Otherwise, we don't really have side access control.

As you can imagine, if somebody were to trespass up there, start a fire, get hurt, we'd be liable but with no ability to remedy. And so looking, to make sure that all of those things that the locals are planning on doing in order to make our site able to be developed, those would be probably the reasonable, steps.

So in essence, the infrastructure to utility road and so forth.

Alright. Appreciate that. I think those are the questions I have. Do you have any questions related to this project?

Right.

I know this has been something you've been working on, for your your tenure and had a most recent hearing in your district on this where I saw so many organizations and veterans came out so that we can get this built. So just wanted to thank you for your leadership.

Thank you, chair. I don't have any questions. Thanks for the presentation. I just wanted to appreciate the chair's work and leadership on this.

Thank you. And I appreciate that, but it has always been about the veterans and moving this forward. So we appreciate not only what Calvet has done, but your leadership. Thank you for being out to the site. Thank you.

We do hope to get one more visit out there in the near future. You should be getting an invitation on that. Okay. And with that, we will then go ahead and open this up for the public if they have any comments.

Members. Oh, thank you. Amy Jenkins here on behalf of the Orange County Board of Supervisors. I wanna first thank you for your tremendous leadership over for more than a decade in bringing this project forward. It's been a pleasure to partner with you on that.

Also, I wanna thank the secretary and mister Kenny for their comments. I would just say, as I said many times, this is a very significant priority for Orange County and Orange County veterans. Appreciate all the work that's gone in, and, you will hear I would just urge support for additional spending authorization probably as part of phase one and two, which I know is possible. The county is moving very aggressively forward. We certainly appreciate the clarity as it relates to the expectations for the property.

It is entitled, we're ready to go, ready to break ground, and so look forward to further collaboration. And, again, we just urge budget authority, spending authority this year. Thank you.

Thank you. Alright. So that is then going to take us to item number two, Veterans Home of California, Yountville, the skilled nursing facility. And, if you wanna go ahead and begin.

Okay. On to thing number two. It's going well. So, with me, now replacing deputy director Kenny is Kobi Peterson, deputy secretary for the veterans homes at Calvet. So we first wanna start, with a little bit of background.

The skilled nursing facility at Yountville is a 240 bed, more than 317,000 square foot facility that will replace the aging Holderman Hospital. This has been a project that's been in the works for some time now, and I'm happy to report, it is going well, and we look forward to an absolutely beautiful new building. The reason it's so important that we achieve this is, we do need a state of the art skilled nursing facility at our Yountville home.

Yountville is, of course, the largest home in our systems of home of homes, if not the largest and oldest in the country as it was built in 1884. Not all buildings go back to 1884, but there may still be some buildings that go back to 1884 on that property.

So to be able to have, a state of the art building that is reflective of modern long term care that includes really important considerations for accessibility, ADA, as well as memory care facilities that support populations with specific types of dementia or Alzheimer's is a wonderful addition to that campus because it is reflective of modern quality care. It also is more efficient because we'll have a central kitchen along with many kitchens on each floor.

That means that rather than having to move meals from one building to another or across the campus, we're able to do it all right there. And it's a 240 bed facility, so we'll be able to house about 60 memory care 60 memory care beds and the rest are sniff beds. So this is just a wonderful project.

It also is reflective of the kind of style and architecture of the other buildings. If you haven't had a chance to visit, you know, we would welcome tours and visits, of course. Ma'am, I know you were up there recently, and I hope that you got to see kind of that campus and that building for all of all it is right now. It's really incredible. So with that, we are still in construction, but that is wrapping up.

We did get a certificate of occupancy from the fire marshal this week, which means we're able to go in and start adding some additional systems and equipment that's needed, including shelving for pharmacy, for supplies, etcetera. That allows us to then continue on our really important punch list with the contractor, make sure that our home is ready for licensing when we do bring licensing in there.

So our next steps after we complete construction, which will be in the, little bit later this year, is to continue some of that work along with, bringing in CDPH, to start the licensing process. Once we achieve licensing with them, then we go to the VA for the VA to start VA survey process so that we can be, kind of approved by the VA.

And the reason that's important is, obviously, we have a relationship with the VA in caring for these veterans through per diem as well as medical cost reimbursement for managed medication, etcetera.

They're also one of our oversight agencies and survey our homes as well as providing the state home construction grant program. So of the $330,000,000 cost for this facility, about $209,210 of that is reimbursable through the VA, and we are in the process of being approved for that reimbursement, and that will happen over a number of years. But we obviously have to go into survey and have full approval from them first. So we do expect to bring veterans into the facility starting later this year.

I don't wanna promise too many timelines and dates because things do shift a little bit, but I think we're on a really good track right now to continue the final stages of this project.

Thank you. Appreciate that. Any additional comments?

I don't know that I can add too much more to that, but appreciate all the support. We're really excited about where we are along the process. This has been a this has been a project that's been in the works for many years. It's a beautiful facility. It'll completely transform that campus.

It's what the veterans deserve, and and we couldn't be prouder of of where we are, and we'll keep everybody posted.

Well, I did have the chance to go out and visit maybe a month ago, and I was certainly very I felt a really great experience, not only just as a first time to see the large large acreage, but all of the programs that are provided for the veterans, certainly the new building exceptionally well done. And, you know, sometimes we when we're in these positions, we don't always hear the positive things. Sometimes we'll hear about homeless veterans or other.

And so it's definitely, excellent experience to go out and see, that we, as Californians, are doing, what we can to house veterans, and so I'm excited for when this opens.

We also had the opportunity to be out to the Los Angeles campus and see that veteran's home. And so I've been very happy to see the progress there as well. At this point, any questions, Assembly member?

Thank you, chair, and thank you for your presentation, Secretary Sin. I think this is, you know, a great project and facility. I haven't visited it myself, but please do keep us apprised. Yep. Exciting that you got your certificate of occupancy this week.

That's a big deal. Working towards, you know, ribbon cutting and and actually getting more folks through the door to get the help that they need at this skilled nursing facility. Can you just walk us through what the process is once you move veterans into this new facility? How does that work when you transition them out of the older facilities, and what's gonna happen to those older facilities?

Sure. And I may also pass some of this over to mister Peterson as well. But essentially, the 240 beds are not additional beds on the campus. They really are to replace the skilled nursing facility at Holderman and what we're what we have residents in occupation for the Eisenhower Building and the Roosevelt. Roosevelt Building.

All of the buildings, by the way, are named after former presidents, except the new Skilled Nursing Facility Building is named after the the only woman who has served in this role prior to me, which is Virginia May Days. And she will be that will be the only building that's named after a woman on that campus, and I think that's a point of pride. So those residents will leave those buildings, go into the new Skilled Nursing Facility Building.

Meanwhile, we will be transitioning residents into those formerly occupied buildings of Eisenhower And Roosevelt. That will be our assisted living RCFE level, which is the level below skilled nursing.

So we will have occupancy in those buildings with a focus on single room occupancy, which will be great. And then we'll still be using the Holderman Building for outpatient clinic mostly, work and some storage and things like that. So we have, plans to use all of those buildings continuously at the moment as we continue to look at that campus and see where care is best held, and we think that Eisenhower And Roosevelt Buildings in particular will be well suited for our lower levels of care.

Thanks for sharing that. And can you share how is there a waiting list right now with your agency? How many veterans are waiting to to get care?

Right. We do have a waiting list among our higher levels of care at a few of our homes, including Yountville. I'm not sure what the waiting list is at for skilled nursing at Yountville. We may have to get back to you.

So in Yountville, we have about a 100 resident or people on the waiting list for skilled nursing and about 73 for memory care.

Thanks for sharing that. And just a kind of a last question from me, from some of these older facilities that I know you have a current use for, could any of them be retrofitted or used in a different way to get some of these veterans off of the waiting list? And I know, obviously, that would mean additional cost to the agency. Right.

I think one of the reasons why I'm asking, I think this is a great investment from the state, is in my district, I have a number of veterans who live in my district as well, and we see a lot of veterans homelessness.

And, I'm always trying to figure out how can we reuse some of these facilities, turn them potentially into housing, veterans housing. Have have there been any discussions of that? Well, it's

oftentimes a very different population. So to begin, when we look at how we're going to utilize the buildings on a campus like Yountville, which is certainly unique among all of the campuses and the the homes that we have, There are there would be a number of costs to do something significantly different to any of those buildings.

So I don't think it's feasible for us to be investing dollars in some of these much older buildings simply to either add capacity that we don't need to add or retrofit them, you know, which might take years and years and years. What we have right now are the ability is the ability to serve the veterans on that campus with the buildings and the facilities that we have right now.

But then in addition, as we look at increasing, like, capacity to serve more veterans, that would really be achieved through filling the beds that are vacant currently.

And we do have some beds that are vacant currently at Yountville. But we would be doing that when in particular adding additional staffing in order to help fill those beds.

And in doing so, we are walking through any additions of staff and any admissions and filling beds very carefully because it's just not as easy as saying, okay, we're gonna admit 20 new veterans and make sure that we have their care plans, their admissions needs are set, that we've gone through all of the processes to be able to admit them so easily.

We often find, unfortunately, when we're talking about veterans who have been experiencing homelessness, that they are not necessarily suited for long term care settings with a vulnerable population. So it's really other types of housing that we also look at and focus on when we're talking about housing, unhoused veterans, in particular, permanent supportive housing.

And they may be more suitable for models within our veterans housing for our BHHP, veterans housing homelessness prevention program that was funded about a decade ago, or now in the new home care Homekey Plus program, which is a billion dollars from prop one for us to build behavioral health housing. That's the most suitable places where we can, work to build capacity, build more units and programs to help house veterans.

We do though, however, when appropriate to communal living setting and to care, and if the need is there, we will actually admit veterans who have been and have done that probably 20% across the board of our facilities. Our eight our eight homes include veterans who have been unhoused. So where it makes sense from a care model, we absolutely do it, but it is not necessarily a one for one.

And then in addition, when we think about what else can happen at that Yountville campus or any of our campuses or even in consideration for building another veteran's home, Something we've really focused on for the last six years, as we represented it in our system wide master plan in 2020 is where it makes most sense to build future veterans homes or add capacity to current veterans homes, really.

And that really means that you have to have a workforce you can tap into, health care facilities in the in the nearby vicinity, veteran demand in in the general population, as well as proximity to VA care because we do rely considerably on VA care as well.

I can tell you that Yountville and a number of our other homes don't meet all of those criteria, so that's another reason why, other than what we're doing at our skilled nursing facility with Yountville, I would not advise expanding capacity at a place like Yountville.

Thank you, secretary, for the very thorough response. I really appreciate it. Sure. I would love to follow-up with your agency afterwards just to figure out how we can bring maybe some of your resources, any work that you do in the community, into my district, some of the outreach that you may you're already doing Yeah. To some of the veterans, organizations.

So, we'd like to follow-up, and thank you for the presentation.

Thank you. Just related to the some of the same questions related to the buildings, at least on Yountville. And I walked out for a moment, so you might have covered it there. But I thought I remembered when I was at Yountville that that you were going to go through a steady process possibly for the future of those buildings, or are you just planning on not using those buildings

at all? So we are using the buildings that will be vacated, the Eisenhower And Roosevelt Buildings that will be vacated when those folks who are currently in those buildings at skilled nursing level move into the new facility. They will be backfilled by residents who are at that lower level of care, assisted living level of care. So really, it's what we've represented in the master plans.

The latest one being the 2025 kind of facilities wise master plan that talks about where we see the need for care in the community going and how we plan to meet that need through the veterans' homes.

And Yountville is a good example of that where we are adjusting these levels according to those buildings and also trying to reflect as much as we can the current kind of care level models, which really focus on single occupancy rooms. So those will be utilized for that.

Thank you. And, I think one of the things that, that we'll probably talk about next, but is related to this is it does seem at, at least at Los Angeles and at Yonville, some of the nursing getting the staffing related to nursing has been difficult because it's very competitive out there. I know we heard that nurses can go other places and make larger amount of money somewhere else. So having them at maybe Los Angeles or Yountville doesn't always pay what they need.

Maybe on the list of ideas, and I know it might sound random, is perhaps using some rooms for nursing, kind of like the traveling nurses, and maybe that's not even a model that you could entertain, but I do know that the traveling nurses, they seem that's a growing part of the profession that there seems to be more and more nurses that want to be in that particular space of being a traveling nurse.

With that, any other questions on this particular item number two? Item number one, Department of Veterans will go to item number three.

Oh, I don't think I asked. Do we have any comments? Nope. Item number three, a vacant positions. Okay.

So the department identified a 178 roughly positions, a 150 of which were skilled, were certified nursing assistants positions that would be then eliminated through the through the process of the state looking at positions to be eliminated. And I can first assure you that while those positions did get removed primarily from Yountville and the West Los Angeles Veterans Homes, we went through this exercise extremely carefully.

We wanted to ensure that first and foremost, we were able to meet the needs of the veterans that are currently in our care. Veterans and We also wanted to ensure that we did not essentially cut our nose off to spite our face and eliminate all vacancies that we were not able to then backfill and continue to grow and fill beds as needed.

So even though we have put these positions up to be eliminated, we are confident that we are still meeting our excellent quality care needs, and we're still able to bring veterans in and and still fill beds.

And the reason that's critical is it means that what we've been looking at is achieving greater efficiencies in our staffing models and our processes and in our financial systems within the veterans homes. And that's represented partially through the new electronic health record project that we are doing, where it's been rolled out to five homes, three more homes to be completed this year.

And it also means that we're looking at the processes that are most important to us from starting with evaluating a veteran for admission, what that care program needs to look like for that individual veteran, and then bringing them into the appropriate level of care and ensuring we have the staffing to back it up.

We feel that this was the responsible thing to do because these positions had been vacant for some time, and our two most, kind of like highest competitive and most difficult homes to fill with positions tend to be Yountville and West Los Angeles. Going back to my earlier comments on if you could build a veteran's home or expand capacity, where would you do it?

Where would you not do it? Those two homes are probably, represent different challenges for different reasons. West Los Angeles is, difficult commute times, high competition among other medical facilities, not always the easiest, place for people to work just given those commute times and high cost of living. Likewise, Yountville is a little bit out of the way, and might represent a higher commute as well, and is not a place, where people are living right out in the community typically. So again, in kind of a longer commute.

So it was important for those positions to be evaluated because fiscally, we're able to be responsible enough again to be able to meet that care need, but also look at the budget, realize we still have cost savings to achieve across the board, especially as we as we get leaner and meaner in what we do. And that is that is our big focus right now, especially with this electronic health record project.

And that means that even the 15,000,000 that is associated with those positions is not a big hit to our budget at this time.

Alright. Thank you. K. Any questions?

I don't have any questions. Just a comment just to say thank you for your leadership, and to your agency. It's not often where we're reviewing an item or Yeah. You're eliminating positions, and I know that's really tough. Right.

But want to thank you for, you know, being fiscally responsible and coming before us to say that you've done your own assessment. You know, we're in a tough budget year, and you're making some tough choices to to really right size the agency and and and trying to figure out where you need resources. So I just wanted to commend you for doing that. Thank you.

Okay. My only concern is the vacant positions that we're talking about here. How critically I guess, how do you analyze whether or not we were gonna be needing those to be able to meet the level of care and and sufficient support you have at these facilities on an ongoing basis.

Right. I think ongoing because we are starting to see employment and hiring trends trend in the right direction. We're able to backfill our current vacancies. That means that we are already meeting the the patient hour per day need as well as being able to increase that a little bit if we do bring on veterans and admit veterans to fill those beds right now.

Where in the future, hypothetically, if we were to need to fill dozens of beds overnight, 20 beds, 30 beds overnight, yes, we would be looking at some challenges with being able to bring on critical staff to do that.

But I don't think that's probably where where our reality lives right now. I think we are in a good spot to be able to continue to remake a number of our processes first, to continue to look at how we can maintain the appropriate patient hour per day. At West LA, we're running right at the license requirement for that. At Yountville, we're actually running a little over that. So I think we have the ability to continue to grow.

And then if we do, at some point, need to come in and look at additional vacancies or, you know, needing additional positions, we would ask for it.

And it would be my strong preference that we do that rather than contract out for ongoing work as well too. So definitely, I'd also commend and, like, my colleague that you're thinking critically about where to find savings in a very challenging fiscal time. Yes. But definitely don't wanna throw any babies out with the bathwater too if we're thinking about the long term solvency of your mission.

Definitely understand your point, sir, and we wanna make sure that we still have that buffer of positions that we can still continue to fill. We're also looking at a lot of our time in HR and our our team at the homes in particular headquarters. They're also looking at retention and how important it is to continue to keep people in positions.

And so between filling vacant staffing vacancies now, as well as looking at what it is when somebody exits and leaves, and what retention looks like, We have plenty of activity and hiring activity going on currently, and the retention piece is going to be the key going forward, ensuring that we are making the department and continue to make the department a great place to work. We've done things like expanded our mentorship program.

We're expanding the ways that we recognize our employees throughout the homes. We have put on a number of hiring fairs that include on the spot applications, on the spot fingerprinting, sometimes tentative job offers. Homes like West LA have increased that considerably. And we were also able to achieve, thankfully, some hiring pay increases over the last couple budget cycles, and then a hiring above minimum for some of those CNA positions as well.

So we're starting to see this trend upward of being able to fill those vacancies that we currently have.

That's really the first step, as this whole health care kind of industry starts to recover from COVID, before we start looking at how we're gonna massively increase the staff that we're gonna need to fill all of our beds.

Thank you. Appreciate those comments. I think that, again, being on both of those campuses over, I think, twice to West Los Angeles and, Yountville, it's definitely a community feel that I see there, and I even, not necessarily in nursing, but in some of your food service and others. I was told and I saw firsthand, you know, you have some generations that have been working their family members and so forth, and I think that's really important as far as the care the veterans get.

So we appreciate that.

We're gonna go to public comments on both item two and three because I believe I forgot to call up on item two. Anybody wanting to speak on item two or three from the public? Alright. Seeing none, I do want to, thank, the secretary for joining us in person. I appreciate it.

And, I've had, the firsthand experience of of seeing veterans in action with the military tour down in San Diego. And just a last comment on that, we had the chance to go to visit and go down into a submarine. And in this time of conflict, one of the things that I was not only surprised by, but just taken by was that our young enlisted men and women in the area where they actually have the torpedoes, which is very heavy.

These enlisted men literally sleep right next to them. And when I say right next to them, here is where they're sleeping, and this is where the torpedo is.

And they are there on shifts, and I don't think we all, as Californians or Americans, realize what that job is. And now those exact vessels and ships are, I believe, probably since we were there, which was six weeks ago, maybe en route. So we wanna say a prayer for them and thank them for their service. Thank you. Thank you.

It's not. Okay. Alright. Next, we'll be calling up the Department of Cannabis Control, and we have item number four, enforcement and legal affairs adjustment. Alright.

We have lots of people here. That's why we have people on this side, and that says usually, we have everybody here just so people are trying to get their beer bearings here. Alright. We have our director from DCC, Clint Kellum, who will be making opening remarks. And then as you speak, if you can remember to introduce yourself.

Welcome.

Good afternoon, Madam Chair, Members of the Committee. My name is Clint Kellum. [Unintelligible] control. I appreciate the opportunity to be here today to discuss

Pulled the mic up. Oh, sorry. Yeah.

To discuss the department's budget with you and the proposals before you for consideration. I'll provide a brief overview of the department, how we're doing our work, and then I'll pass it off my colleagues here to get in a little more detail on the proposals. So who we are, the Department of Cannabis Control regulates the full legal cannabis supply chain, right, from cultivation, manufacturing, distribution, testing to retail.

We also have a law enforcement arm focused on the illicit market that complements this regulatory work given where we are in the space. And a quick overview of our budget, if these proposals are approved in totality, our budget will be approximately a $198,000,000.

A 104,000,000 of that is funded through licensing fee revenue. The other 94,000,000 is funded through the cannabis excise tax including $10,000,000 for academic research grants. A quick overview of the scale of our, like, programmatic operations. We have about 240 people in our compliance division. They're really doing the field work on our licensed staff.

They do inspections, complaint visits, and that type of work. We have about a 110 people in our licensing division. They do the typical application work, ownership reviews, license modifications. And then we have 93 staff in our law enforcement division. 75 of those are sworn, 54 are the actual line detectives, boots on the ground.

And then we have the standard department divisions that would support that work. When we think about our mission as a department, we're just like any other regulatory agency. We wanna protect consumers, youth, the environment, but we're in a unique situation given our market. Only about 40% of California's consumption is coming from our legal space even after eight years of legalization. And so a priority for us is really just actually increasing the consumption that's coming from our legal market.

It provides consumers tested product. It has youth protections, and it provides an environmental standards. We we see that work being done. And just to be clear on that front, I'm not advocating in any way for more consumption, just that it's happening from the legal space that we offer in California. We're delivering on that work across sort of four continuums.

Your standard hallmark work, trusted and safe product for consumers. That's our value add in the legal space, and that's how we're able to, show the this the typical regulatory work. We're wanna continue pressure on the illicit market. It's large in scale. That'll be discussed.

The proposal is before you for consideration on that front. We another important piece is the amount of consumer confusion in this market. It's complex, local control, intoxicating hemp. We want to we are restarting our public awareness campaign on that front to help consumers understand when you're when you're consuming cannabis in California, check to make sure it's legal.

We also wanna have a conversation to invite, you know, intelligent conversations into retail access at the local level to make sure that folks understand that the without legal options, the illicit market persists.

And then the final thing is is reducing friction on operators so that our legal market can be functional, not in a way that reduces trust and safety in our products, but in a way that is thoughtful for everyone involved. These all work together. There's no silver bullet here. Everything we discuss is gonna be one piece and sort of build momentum to a long term sustainability and getting to where we want.

With that, I'll pass it to chief Kevin McInerney, who's the chief of our law enforcement division to get into our budget change proposal and enforcement.

Thank you.

Thank you.

Good afternoon, everyone. As the director said, my name is Kevin McInerney. I'm the chief of law enforcement for the Department of Cannabis Control. I've been in this role for approximately six months, but I've worked in cannabis enforcement since it began in 2018. Prior to that, I worked in traditional law enforcement for about twenty years now.

As I've taken over the role as chief of the law enforcement division, I've changed the strategic direction of the division to some degree to align with the director's goals and mission that we've set, And that is to push more people into the legal market. With that said, it's an uphill fight. This is a large problem that we have in front of us. It is significant. And we're gonna talk a little bit about that over the next couple of

minutes.

Thank you. California's listed cannabis market. Total, our our market produces approximately 11411,400,000 pounds that's grown illegally. And two thirds of the sales Yeah. Two thirds of all sales are on the illicit side.

There's also an incredibly high export value mostly to Europe at this point. Historically, a significant amount of cannabis was shipped east to the Eastern States because it was just more lucrative for illicit market producers to send there. As the market has begun to produce more and more cannabis across the country, and more states have turned to legal production and their own illicit markets have grown, the they're a significant portion of cannabis is now moving to Europe and specifically to England.

As the director said as well, enforcement is not the only solution here. We can't enforce our way out of this problem.

We can't arrest our way out of this problem. This is going to take a multimodal approach that includes educating the public on why they should be buying from the legal market. It's gonna take us enforcing across the spectrum of the illicit cannabis market and across the across the entire market. There is no silver bullet to solve this problem. So we're using as strategic an approach as possible.

This illicit market is dominated by organized crime. There's a significant amount of organized crime throughout the entire supply chain from from production, and cultivation sites both indoor and outdoor across the state. They're not focused in any particular areas, and it it can be found in just about anywhere. Distribution is one of the places that we have the ability to make the most impact, and we're we're focusing our investigations on this at this point, both both at the distribution level, but also at the financiers behind it.

And we'll talk more about that in a moment.

We're focusing on the highest priority cases, which are prioritized based off both public safety and health risk, but also based on how much of an impact we can make on illicit market operators. The strategy that we've adopted is an an intelligence led program. Intelligence led policing is not a new concept, but it is probably one of the most effective means of enforcement, especially for investigative agencies like our own, where we do not respond to patrol calls, and our focus is strictly on the illicit market.

We're building relationships with all levels of law enforcement, federal, state, and local to gather information. We're working on initiatives that build our ability to gather information and intelligence on what the what the illicit market actually looks like so that we can focus our efforts where we can have the most impact.

We have prioritized education and outreach because we only have 54 detectives, which with 58 counties in the state, that is one less than one detective per county. We focus our efforts on using leveraging the expertise that we've built to educate prosecutors and law enforcement officers from all levels on what the illicit market actually looks like and where they can make the greatest impact as well. We hold the cannabis enforcement summit every other year.

We have we're historically, we've had about 300 people, law enforcement officers and prosecutors attend, and we've provided insights on trends, what things look like day to day, how they can make a larger impact, and the dangers that are inherent in doing this type of work. As I previously stated, we focus on high harm criminal activity.

We're trying to develop and have developed extremely competent, effective, and knowledgeable investigators. We recruit from federal, state, and local law enforcement. We have people that work for us that were previously supervisors with the Drug Enforcement Administration, other state agencies, and many sheriffs and police departments from around the state where they've served as SWAT officers, investigators, everything from narcotics to homicide and white collar. We've developed an incredibly eclectic high performing team.

We use in innovative investigative models, and we're developing innovative programs to disrupt mostly distribution at this point because that is the choke point where we think our focus and efforts will have the most impact.

And we're working to support local agencies with the BSCC grant and funding that will allow them to focus on, the the retail sales and the cultivation where we assist and we work with them because they do need our expertise, and we need their information and intelligence to push our investigations further and make a greater impact. Our current request or or BCP request is for North State office as well as, more analytical support.

So in in law enforcement, there's in our program specifically, we have eight sworn officers per team, one supervisor and seven detectives. It takes all of them to work many of the cases that we work. And the reason for that is every case has worked as a team.

These are complex cases. They often require significant amounts of surveillance, both static and dynamic, meaning following people from location to location, following money couriers back to locations, and following people when they re up on their supplies either after we've served a search warrant at their location and attempted to shut them down so we can find out where their distribution hub is and shut that down as well or because we're trying to identify where the money is going.

Since this is all the list market activity is associated with money, and when I say money, I mean billions and billions of dollars. We're currently working cases where we've identified somewhere between 2 and $3,000,000,000 that's moving through escrow accounts to fund the purchase of properties as retail investments. There's a tremendous amount of money in this.

The more we're able to defund these organizations, the more difficulty they have buying new properties to invest in to either sell from or to produce more product from. So we focus a great deal on trying to disrupt their financial abilities. That also lets us pursue money laundering charges and tax evasion charges that we would not be able to get if we were purely pursuing the lower level sales or cultivation charges by themselves. And it's all interrelated.

The more we're able to defund these organizations, the more difficulty they have buying new properties to invest in to either sell from or to produce more product from. So we focus a great deal on trying to disrupt their financial abilities. That also lets us pursue money laundering charges and tax evasion charges that we would not be able to get if we were purely pursuing the lower level sales or cultivation charges by themselves. And it's all interrelated.

The other part of our request beyond the North State team, which is centralized in the Redding Shasta area because it's easier to recruit in that area, It is centralized to the the the area that we'd like them to serve, which is a significantly underserved portion of the state when it comes to our operations, mostly due to the amount of the logistical issues when it comes to having teams travel from Sacramento, which is the closest team to pursue investigative leads.

It can take six it can be a six hour drive till they get to the location where they need to go. We have to pay for overnight travel. We're paying for per diem. Having an office in there would help us offset that a good bit. And it's just fiscally responsible for us to do.

We're also adding analytical support because a lot of the initial investigative work that comes in can be taken care of by crime and intelligence analysts. Crime and intelligence analyst do open source intelligence gathering. They look at Instagram and other social media. They gather information on these operations. They go to the depart secretary of State's website and pull relevant documentation.

They can actually do a significant amount of information gathering before a detective ever gets the case and puts the detective at an advantage so that they can focus on things that only a detective is allowed to do, writing and serving search warrants, pursuing the investigation further, suspect contact, being out in the field. The less time they have to do that, the less effective they are overall.

So we're trying to maximize the amount of work our detectives do while giving us a significant, tactical advantage when it comes to, the work that our analysts can do. I believe you all have the PowerPoint presentation, and you can see the map that we have up there up at the moment where it shows that the 36 northern counties of the state are currently covered by two teams.

As I said before, those two teams have to travel sometimes six hours to get to a location, And often, we're doing surveillance for eight to twelve hours at a time.

Currently, the MOU that we have the with the union only allows us to work sixteen hours at a time. So we're at a we're at a limit because of travel time and logistics because of that. Placing the office in Shasta gives us that logistical advantage. We also have a significant number of cases up there too, but that's a secondary problem. And that issue is related to the fact that a lot of the sheriff's departments in those areas are understaffed.

They have resource constraints, and we are the most knowledgeable people when it comes to this issue. So they seek out our assistance on a regular basis as well as CDFW's cannabis enforcement officers as well. The next slide that you have is our prioritization schedule. This has been in place for a while. We try to focus on the highest harm and highest impact to, cases that involve the highest impact to the illicit market with our main focus being public safety.

Our focus is on human trafficking, labor exploitation, activity involving volatile sub solvent extraction labs, which are a fire and explosive threat, and occur throughout the state occasionally. In fact, many firefighters were actually injured a couple years ago in LA at a large BHO fire. Violent criminal activity associated with this. The interesting the interesting point I'd make about that is when it comes to the major criminal organizations and the the more business oriented organizations that are involved in this, they tend to avoid violence.

They don't want violence because they don't want police attention.

That doesn't mean the street gangs are actually operating retail sales locations and others don't use violence, intimidation, threats, to protect protect their businesses. But the larger organizations tend to stay away from that. They don't want law enforcement focus. And in in the current state of this where enforcement is somewhat limited, if they avoid the violence, they avoid the attention to the police and law enforcement in in general.

We also focus on substantial environmental harm, and we partner with CDFW and the water board for that in most cases.

And any activity that's close to a school, we target as much as possible. Now even when we target those individual locations that are close to schools, our detectives are attempting to take those cases further. They're attempting to identify not just who the shell corporations are that are renting or leasing the location and following that trail. They're also looking at who the distributors are that are providing for this place.

They're looking at who the money couriers are that are coming in hourly or every couple of hours to pick up the cash.

A lot of these retail locations, because they've had been hit by local law enforcement and we assert search warrants at many of the locations have adapted, they often have less than 40 pounds of product in there instead of the hundreds that we're getting three, four, five, six, and seven years ago. They are sophisticated in their operations.

And even though it's a common MO across the board, it's it's effective enough that if we can only pull 40 product 40 pounds of product at a time at $2,000, not taking the 100,000 that we used to get, it allows them to continuously operate at limited risk and limited cost. And any activity involving minors, we prioritize as well.

Our priority two is basically any cases where we have good solid information to act on or it was referred by another government agency, whether that be police or a regulatory agency.

And then priority threes, I'll be honest with you with we get approximately 1,200 cases per year. We have the ability to clear about 400 of them a year. So every year, we get end up with about 800 cases as a backlog that's continuously adding up. The other point I'd like to make is, as I said in the as we said in the BCP, the reality of the situation is just to just to catch up with the backlog, we need approximately 300 officers.

We know that is a significant ask.

We're trying to be fiscally responsible, and we're trying to close the gap in the North State instead of having to send officers up there at increased cost because of travel. So our focus is on making a fiscally responsible ask that will allow us to close the gap to some degree. And it's not specifically focused on cultivation. It's focused on cases that identify and disrupt the distribution cycle, the choke point in the chain.

Thank you. Do we have any comments from our LAO?

Heather Gonzalez with LAO, nothing to add.

And from

John Parsons, Department of Finance. DCC's proposal for additional sworn enforcement staff and a new field office in Redding reflects a targeted investment to close geographic gaps where DCC's existing presence is stretched thin in the areas where there is known distribution of illicit market activity. Additional legal staff will help BCC take on cases of increased complexity and volume related to environmental compliance, testing standards, manufacturing standards, and pesticide use.

This proposal reflects phased in enforcement and legal staffing levels that is achievable and realistic for the department to hire in '26, '27, and '27, '28. Thank you.

Thank you. Members? Assembly member Ward?

Thank you for the presentation. Certainly well justified, and I hear the stress that you are conveying for the ability to meet the demands that I know you care very much about. I'm curious for these positions being proposed to be able to come out of the cannabis control fund. Where might this leave the, level of the fund, with these positions included?

So, in last year's budget, we actually moved our illicit market cost, and and expenses and our track and trace system to tier one in the cannabis excise tax fund. And so that's where these funds will come from.

And then how would that leave the status of the

There basically, that fund works in the stage of whatever revenue comes in, it funds tier one and tier two, and then whatever's remaining flows to tier three. So there's no sort of, you know, existing expenditure level. It doesn't sort of run a deficit for lack of a better term.

Great. And it it would not, cause a cost overrun or it wouldn't withdraw

that time. Right. Yeah. In theory and also, I think when we're spending either cannabis excise tax on enforcement, I think we obviously can't pinpoint or guarantee this for you. But logically, what we're trying to do is shrink the illicit market to the extent those actual sales turn up in the legal market, it should actually increase or at least offset the cost by

Of course. By more excise tax coming into

I, I guess related to that, I know there's been some ongoing conversation this year about the rate and the actual tax rate that we're looking at for that. The impact that were having to legitimate businesses is the whole point that we worked on with voters under Prop 64. Right? Is that we would be able to, over time, self regulate and be able to do the enforcement that you're talking about, the the management, the testing, and everything else that we're responsible to be able to do.

You know, how how how are we how are we seeing this, I guess, in balance?

Can you talk a little bit or can anybody else from the department talk a little bit about the proposed increase in in rates to legitimate businesses?

Well, in, in last year, there there was a a trigger on of the tax excise tax from 19% that the legislature reduced back down to 15%. Right. Moving our illicit market cost over to and track and trace over into the tax fund avoided a 40% licensing fee increase on operators. So there at the state level, there is no near term cannabis excise tax increase or licensing fee increase.

The what happens, there are sort of different local measures in relation to how they tax operators and with the outside of our control. Right.

And I think that goes in varying directions based on the budget at the local level. I've seen reductions recently. I've also seen increases. So it just kinda depends on the locality.

Okay. Great. Thank you. Very supportive.

And that was late action on the, I think it actually went into July, and we were very concerned about that 40% increase for the legal market. And then the governor did step in and address that. So we appreciate that as we know that we have been all talking about enforcement.

We know that state of California is quite large, and I can definitely see why when we look up into the Northern California part of the state, which is pretty broad, that it would be difficult to travel and do all of things that you have noted that would cost additional dollars over time and so forth. Any other questions?

Thank you, chair. Thank you for your presentation to director Kellum and your deputy director and your entire team. Also, I just wanted to commend I think it was in January where you put out an announcement that the administration had 1,200,000,000.0 in illegal seizures, which was 18 times more than 2022. So thank you for your work in that space. I know that's been tough.

So I just wanted to thank your team for that work. And and the task force that you have, the Unified Cannabis Enforcement Task Force. And as a follow-up to that, with your request to open this additional office, I know the task force, you guys also work with the California Department of Justice, Fish and Wildlife, Water Resources. Is there any potential opportunity to work with any of those agencies?

Do they have any offices in Shasta or Redding where there's potential opportunity to to collocate or or to join forces since you already conduct operations together?

I'm just thinking ahead of, obviously, the tough budget year ahead. How do we, obviously work to support the enforcement actions that you hear consistently from this budget, but also knowing the reality of the budget that we're facing this year.

For sure. We we have had some just preliminary thoughts about agencies up in that area that we were to see if closed location is an opportunity. But none of those have sort of materialized in any sort of specifics at this point. And I would also note that this is not coming from the general fund. It's coming from the cannabis excise tax, which isn't sort of, you know, subject to fortunately, the challenges that before you on the the bigger budget problem.

No. Thanks for for for clarifying that. That comes from the cannabis fund. I think, you know, I would love to to follow-up with you on on that piece on on this budget request that you have before us. I don't have any additional questions at this time.

You know, I have, you know, a number of cannabis legal cannabis dispensaries, licensed cannabis dispensaries in in my district. So I know there's as I see from the number of complaints that your agency gets comes from Los Angeles, which is the part of the state that I represent. And so would love to work with you on on that piece and how we can support your efforts. I guess it I do have one last question.

Is there an opportunity or do we incentivize people in the public to report any illegal grows that we see or what does that look like?

Or is it all from what your agency is seeing?

There there is public complaints that go into the department, licensed and licensed across the board and then shared into our law enforcement division and then triaged across the priority list. I think what I would say to people regularly is, we appreciate when people point out the the sort of bad actions. But what is important given that our resource level is that we're taking out the the most impactful ones.

And so I think in some of the discussions leading up to this, I had heard some of the challenge of, like, the illicit storefronts and how those are available. I see them in my jurisdiction, and, you know, it and I can understand that challenge where we're trying to focus our sort of limited resources on our on those higher level investigations to disrupt further up into the criminal organizations that are supplying those storefronts to just make it harder in general, ultimately.

And then I would also say that we've been partnering with the board of state and community corrections on their prop 64 grant that's been prioritized for illicit market enforcement. And we really made a conscious decision, with them to put that around bigger population centers. So that's gonna go to the local law enforcement agencies in those districts because they're more likely to do the storefront closures. And as those move, they'll be more more attuned to be able to kind of follow-up on that work.

And so we see these our proposal in the North State helping advance our sort of deeper investigative work across the state, and then the BSCC grant helping to fund more populous local law enforcement jurisdictions to kinda get at that illicit storefront issue.

There there really isn't a piece of the supply chain that's solving the problem by itself. It's kind of everything and and all. Locals tend to focus on whatever's in front of them locally. We're bringing that up a level and seeing where we can connect the dots across jurisdictions to get to that deeper level investigation, and that's and then the feds do that even a level above us. And so that's kind of how that Continuum is working on that front.

Thank you. I any other comments? See no other comments. We're gonna go ahead and open up this for public comments on enforcement and legal affairs adjustment.

Thank you. Thank you, madam chair and members. Amy Jenkins here on behalf of the California Cannabis Operators Association. Really appreciate, the discussion today and the focus on enforcement. Just wanna emphasize that, you know, any augmentation, any augmentation to bolster enforcement against the illicit market is critically, critically important to the legal industry.

As was noted by director Kellum, we have a 60% illicit market that is that is entrenched. It has not gone down. It has remained stable throughout this ten years since we passed proposition 64, and so really would encourage additional investments in this area particularly around illicit retail. So I appreciate the comments that were made today as it relates to retail. That is a really, really critical component that is lacking funds, and I do recognize that there were changes to the BSCC grant program last year.

We would argue that is still insufficient. We would like to see more investment of sworn officers in urban settings. That's going to be terribly important as we're looking at addressing this illicit market to allow operators to effectively compete. And as it relates to, the cannabis tax fund and the questions that were raised by Assemblymember Ward, I would just comment that the more we can migrate consumers by addressing that illicit market, the more we can increase tax revenues for all those vital programs. So thank you.

Thank you, saying no additional folks coming to the mic. I would reentry just those last comments that if we want to see the tax benefits, that we all, were hoping for in this market, then we certainly have to have the strong enforcement. And with that, we will continue to push for that. Thank you. We appreciate that.

We're gonna go to item number five, hemp enforcement and regulation related to a b eight. And I think we have some of the same folks here. Here we go.

Good afternoon. Thank you for hearing this issue. My name is Christina Dempsey. I'm the deputy director of government affairs. So this is the second half of your slide packet.

So I'll start by just saying briefly what a b eight does. It addresses a gap in which intoxicating hemp products were being sold throughout the state without real regulatory controls to protect youth, to ensure product safety, and really bypassing the regulatory structures that are in place under the cannabis, supply chain and and governing that. This bill really does two things, and I'll talk about our budget request, separately in the context of these two things.

The first thing is that it strengthens enforcement by closing loopholes that have existed around intoxicating hemp products. Those provisions went into effect January 1.

And the second piece of ABA is that it it's it brings hemp under the cannabis regulatory framework starting 01/01/2028. And so at its core, what it's doing is that it's ensuring that intoxicating cannabinoids are treated consistently regardless of whether they came from cannabis or hemp, and ensuring that state agencies and law enforcement have the tools that they need to address this sort of proliferation that we've continued to see with intoxicating hemp products.

So starting with the the first piece of strengthening enforcement by closing loopholes, there is a a a fairly coordinated state structure, that that started to to form after intoxicating hemp products began to emerge.

And so the general division of labor among state agencies is that DCC addresses illicit cannabis retailers, the Department of Tax and Fee Administration addresses tobacco retailers that are selling illegal hemp products, the Department of Alcoholic Beverage Control addresses alcohol retailers that are selling mostly hemp beverages, And then the Department of Public Health addresses food manufacturing where they are using and producing hemp products. So this coordination exists.

It's continuing under ABA. It's strengthened by ABA, and and many of the challenges that that our four agencies have have dealt with are are resolved by some of the closure of loopholes. It takes away the excuse that that we've heard from from people when they have something that that truly is illicit cannabis or or very similar to illicit cannabis, very intoxicating, and and people would previously claim that it was hemp. It takes away that excuse.

So it really strengthens all four of our, approaches in that way.

One of the gaps in that that coordinated structure, though, is online sales. It doesn't fit nicely into any of the the four agencies, and so that is our our budget request related to a b eight here. It is it is not a, a that we we are intending to stop, addressing this in illicit cannabis retailers as we've seen it or continuing to support our partners at, CDTFA, ABC, and public health who are addressing it from their various vantage points.

It's really to develop new capacity to address the gap that we've seen. The so what we're requesting is staff to form a civil enforcement unit.

So it's a bit of a novel way to approach this issue using civil penalties, bringing cases. So it partners attorneys, with special investigators to identify people who are continuing to sell hemp products into California illegally, and cut off that distribution chain into California. In addition to that, on the enforcement side, we are asking for some field testing equipment for our law enforcement team that Kevin leads.

So this is equipment that allows our officers in the field, whatever they're dealing with across the supply chain, to rapidly test products that they're finding flower that they're finding to identify whether it is actually meeting the definition of hemp under state law or whether it it is cannabis. So the second component of ABA is preparing for hemp entering the cannabis supply chain and being regulated under this broader structure.

So this is a fundamental shift for us and for this market and in the way that it is regulated. To date, cannabis has operated as a closed supply chain in which everything is grown from seed to sale and stays within this closed network all contained within California. Allowing hemp plant material to come into that supply chain means that that we are allowing something from outside of that supply chain to come in.

And the the a b eight also allows, finished products that only contain hemp to to go out and be sold outside of the state. So it it really breaks this closed supply chain, that, has previously existed.

And so we are really looking at this as controlling the entry and exit points for hemp. So some of the key risks that we're trying to mitigate ahead of this shift is the increased risk of diversion of legal products out into an illicit market or inversion of illegal products into this supply chain.

And then the other risk here is that one of the things that that we've we've seen in California and regulators have seen across the country is that hemp is a a brutal source of CBD, which is a positive thing. But there are many people who have figured out how to chemically manipulate CBD to convert it to intoxicating cannabinoids like THC or even fully synthetic, cannabinoids that do not occur naturally in the plant. It's a dangerous, chemical conversion because it produces byproducts that are not easily controlled.

And it's also a risk for our market here in California because if there is synthetic production of cannabinoids from hemp, it could undermine our licensed growers. So we're really looking at this as a risk point that needs to be monitored and controlled for. So our budget request directly ties to the risk risks that we see in the type of infrastructure that that we're expecting to need, to prepare for this integration.

So we have, certainly, inspection staff, who will be primarily focused on distribution sites where hemp is coming in and out. So, again, that, like, control of entry and exit points, but who will also monitor at manufacturing sites for that cannabinoid extraction and to ensure that there's not a synthetic conversion process that's happening or to investigate when there's suspicion of that.

Laboratory staff within The States within the department's run reference lab in Richmond who are going to be working on the capacity to detect synthetic cannabinoids through testing. So this will feed into our post market surveillance that we do. So if there's a product that's suspected of having synthetic cannabinoids, we would be able to test it and identify whether it does or not and take appropriate action.

And then a track and trace specialist for, again, this monitoring and reporting and a policy specialist to serve as an in house expert, both for regulation development initially and on an ongoing basis and really just, help us keep, a good pulse on this very rapidly changing landscape, across the country. The country.

And then sorry. I have one more I'll I'll be done in a minute. So speaking about implementation really quickly, so the enforcement provisions we've already begun to implement. We've held meetings, with our partner agencies, to try to identify how we can better support them. Notices have gone out to licensed businesses, alcohol retailers, public health manufacturers, and tobacco retailers about the changes in the law.

And so this is really about, enhancing our capacities, which we're already working on. In parallel to that, this year and next year are the time that we have to prepare for 01/01/2028. And so, if this, budget request is approved, we expect to hire our staff, train them on what is a pretty nuanced area, and then start developing test methods for our testing lab, develop regulations, solicit public input on this area, build track and trace updates, and so on, build any licensing infrastructure that's needed.

Yep.

Thank you. Appreciate that. Do we have any comments from our LAO?

Heather Gonzales with LAO. Nothing to add.

Thank you. And from our department of finance. I'll just, you know, comment as somebody who is not has not been in this space. I do see a lot of products out there, but on some of these more informal spaces like farmers markets or various places, and they're often packaged as kind of wellness products, How hard is that to enforce when it it could be, you know, even at church bazaar, these type of because they've been, you know, so accepted as kind of holistic prod products.

Yeah. I I I think that feeds into, director Kellum was speaking to this a little bit earlier, the cons the consumer confusion around this, as intoxicating hemp products have proliferated. And and even as cannabis legalization has continued to roll out across the nation, there is this expectation that products don't have risks and and a lack of knowledge about the type of regulatory controls that you would want to have for these products.

I don't think most consumers know that these plants, themselves are bioaccumulators, so they suck everything up from the from the soil, heavy metals, pesticides, and that's why testing is so important. I like, these are things that we can't expect consumers to know.

The places that we've seen the most really problematic issues in terms of sale of these products have been in smoke shops, which we've been supporting CDTFA on enforcement of that. And and there were quite a few provisions in ABA that really sought to to create more of an incentive for those businesses to comply.

And then in online sales, I think most of, generally, most of what's sold in, like, a farmer's market or church church bazaar would be, like, a CBD type of product, and certainly would carry some of those risks from a a product safety perspective, would still continue to be regulated by CDPH if they don't contain THC. But then, certainly, we would be very interested if they did contain THC and they were selling them there.

Assemblymember, any question?

I don't have any questions. I appreciate your very thorough presentation. You answered a bunch of the questions that I was gonna ask. So I know our majority leader championed this last year and worked really hard to make sure that we get some of these products off of the market that we're targeting a lot of kids and minors, specifically. And so I look forward to the

AB implementation of 8. Thank you. Thank you.

Thank you. And I have no additional questions. Do we have anybody from the public who would like to speak on this?

Sam Rodriguez was unable to stay in committee. So just wanna express our very very strong support for the both of these budget items. We were very involved and and actually sponsored a b eight, so appreciate the work that is going into effectively implementing this bill, which is critically important to the legal industry as as noted by miss Dempsey. Intoxicating hemp, has has directly affected the legal industry.

It's bottom line, they're public safety implications, so we again appreciate the investments, as it relates to the enforcement components, but as well as the implementation of the integration provision.

So, I wanna express support and thank you.

Seeing no one else approached the mic, we will be closing that item, which is item number five. And we appreciate you coming, and thank you to the director. I appreciate that. Welcome. We have item number six, which is cannabis control appeals panel establishing ongoing funding for the cannabis control appeals panel.

Welcome.

Good afternoon. Madam Chair and Members of the Subcommittee and staff, I am Anne Hawley, the executive director of the Cannabis Control Appeals Panel, and I'm joined here today by my colleague, chief counsel, Christopher Phillips. Thank you for the opportunity to speak today. First of all, I'm I will provide a brief overview of the panel's mission. Second, an overview of the panel's budget proposal.

And third, I'll discuss the panel's anticipated workload. Proposition 64 established the panel to provide an independent review of disciplinary licensing decisions issued by the Department of Department of Cannabis Control. This quasi judicial appellant function ensures fairness and due process for applicants and licensees in California's cannabis industry. The panel performs functions similar to other quasi judicial appellant bodies such as the ABC appeals board on which the panel is directly modeled.

Since its establishment in 2018, the panel has built the capacity to carry out its mission by hiring staff, promulgating regulations, drafting administrative reports, and initiating stakeholder outreach and education.

The panel requests 3,400,000 to sustain our operations, maintain staffing, and execute its mission. The request will support 12 positions and operational expenses. The authorized staffing is reduced from 13 to 12, but funding is requested for a legal secretary. The panel has operated with limited term funding since its establishment and with provisional licenses being phased out, this proposal provides an opportunity for baseline ongoing resources for the panel. This stability is essential for the panel to effectively fulfill its responsibilities under Proposition 64.

Since 2018, the panel's caseload has been limited because most licensees operated under provisional licenses. Provisional licenses do not have appeal rights, and therefore the panel does not have jurisdiction. However, there has been a very important fundamental shift as of 01/01/2026, except for a narrow exception for local equity retailer applicants, provisional licenses are no longer in effect. Licensees must now hold an annual license, and the panel has jurisdiction over these. Today, according to the department's website, only 14 provisional licenses remain compared to 7,730 active annual licenses.

This transition is significant and expands the number of licensees with full appeal rights before the panel. We have two cases currently on the docket, and we expect our caseload to expand. Some comparisons have been made between the panel and other appellant bodies. Compared to the ABC appeals board, which has more than seventy years of presidential case law and a well established legal framework, the panel operates within a relatively new statutory and regulatory structure. There is no established body of presidential case law to guide future decisions.

So as a result, the panel must frequently work through novel legal questions without prior decisions to rely on or guide decision making. This significantly increases the level of research, analysis, and drafting that is required for each case. The cannabis regulatory framework and the case law interpreting it is still evolving, and the proposal for ongoing funding will ensure that the panel has the authority and the resources to perform its critical role in providing due process and independent review.

So thank you for the opportunity to present today, and we would be pleased to answer any questions.

From our LAO. Hi. Heather Gonzales with LAO. Good afternoon, Madam Chair and Members. With respect to this item, we recommend that you modify the governor's proposal by providing funds to the panel on a three year limited term basis rather than ongoing.

We recommend that you direct the panel to provide you with a workload justification and comparative analysis that shows how the panel's caseload, tasks, positions, salaries, and budget compares to similar entities in state government. This could include the alcohol alcoholic beverage control appeals board and any other state entity that the panel would deem appropriate. And our reasoning for this is as follows. First, although the panel has been in existence for many years, it has only recently begun hearing appeals as you've heard.

You had your first hearing this month, I believe, on March 10, and the second appeal is is scheduled for May.

It's been argued that the reason the panel has had so few cases is because there were so many provisional licensees and provisional licensees do not have appeal rights. If this reasoning is correct then with the phasing out of most provisional licenses as of this past January, we should expect to see more cases reaching the panel and indeed now we have two.

But we do not know, however, what an average annual workload will look like yet such as the number of cases, the complexity, the actual amount of staff time and resources that will be needed going forward. Additionally, as was mentioned, we do have similar types of these kinds of entities in the state. The Alcoholic Beverage Control Appeals Board, for example, has fewer staff, a smaller budget, and hears more cases.

They hear 20 to 35 on average. Now it can be quite tricky to compare government entities because even those that appear similar can have qualitatively different workloads. So we are not recommending that the legislature simply align these entities rather in a few years after we know better what the true workload would be, we recommend that you seek a comparative analysis that will allow you to benchmark the panel's workload, assess the qualitative differences, and then make any desired changes then before funding is made permanent.

Here to answer questions.

Thank you. Appreciate that. Department of Finance.

John Parsons, Department of Finance. Proposition 64 established the panel to provide an ongoing and permanent function to hear appeals by cannabis license holders. With provisional cannabis licenses being largely phased out As of this year, the governor's budget includes permanent funding for the panel's existing and anticipated workload to align with its permanent statutory responsibilities. The continuation of 3,400,000.0 cannabis control fund ongoing will provide a baseline level of resources to support five panel members and seven operation staff to perform their required duties ongoing.

These duties are not anticipated to change.

Thank you.

Thank you. I do have a few questions on this. Can you speak to who is on this panel and how do people get on to the panel? Sure.

So the governor has three appointed positions. The speaker has one, and Senate Rules Committee has one. And when it was first established in 2017, there were three panel members. And with state I'm sorry, Senate Bill 94 in, I believe it was 2018, they added the two additional positions from the legislature.

So it is a five member body and as was noted, you have not been hearing, you haven't had a huge amount of cases for you. So how often do these members on this panel meet?

Well, it typically, like, since 2018 when we were established, usually on a quarterly basis. And most of the work that we have conducted up until recently has really focused on administrative matters matters, outreach and education, strategic planning, things of that nature, also regulatory or regulatory promulgation. Chris, did you wanna add anything with that?

No. So correct. We we had a lot to do to stand up the the entity, regulations and and things of that that nature. But, yeah, recently, we've seen the shift from more administrative type panel meetings to more substantive, getting into our our core mission now.

So we're now looking at, as far as each appeal case, will take about, three publicly, noticed meetings, whether they're open or closed session. And we're entering now into a cadence of having a meeting once a month now, because of that. And then one thing, if I might add real quick, just to to emphasize the why we need the the seven staff positions.

In addition to the adjudicatory adjudicatory work that the panel does, we also have a minute a lot of administrative work that we have to maintain on for ongoing operations. So, obviously, reporting for compliance, HR, procurement, budgeting, accounting, all those things.

So we're just looking to have a consistent baseline level staffing regardless of the fluctuations in cases. So

So I wanna get back to the panel. So there are five appointed members. This this board or panel was brought forward because of the proposition Yes. In 2018, and up until recently, you've met quarterly. What is the compensation for a board member?

It the compensation's in statute with and it's listed in government code along with the other other boards that are of, appellant nature. I believe it's roughly a 185,000, but I can get back to you on the exact exact amount.

And up until recently, you've been meeting quarterly? Yes. And about how long are these meetings?

They are it can range typically, they're around an hour. And then we can also if we're doing a strategic plan three or four years ago, then those meetings would last longer.

And do the these panel members need to, do they meet remotely or in person or both?

They they meet both, mostly in person.

But they're not allowed to have the option to be remote. Yes. Yeah. And who set that compensation for a 185,000?

I cannot speak to that. That was during oh. Yeah. Go ahead.

I believe sorry. Charlene Manning, Department of Finance. I believe Anne just mentioned it was the compensation is in statute. Yes. Yep.

So, yeah, it wasn't determined by the Department of Finance or in coordination with us. So, I think we can look into that, get more details, and get back to you. Okay.

This is a general question. And, again, if you don't have the answer, it's okay. How many of these type of boards do we have that gets this that receive this type of compensation? Do you know?

Any but yeah. Heather Gonzales with the LAO. So, yes, this is in statute. I can get you the statutory reference. The this particular panel was put into a part of the statute that sets salaries for like the FPPC, the CPUC, The statute that provides the payment for ABC is a separate statute and is not in the same same portion of the code and that is set at 255.

I'm having a hard time digesting this. So we have elected panel members that make a $185,000 a year to maybe attend four meetings. But now in the future, there could be more, and sometimes these meetings are about an hour?

I think our meetings in the future will be much longer now that we're having the hearings. But, yes, in the past, they've been relatively short.

Yeah. One thing I wanna build upon that too is just taking, for example, the the March 10 hearing that we just had. The it's not just the meeting that frames the workload. It is the the prep that goes into that. We had and I can let Chris address this as well, but there's admit for example, administrative record testimony, other documents that they need to review and also the staff as well.

It was over around 2,000. So it just gives you an idea of the volume of the work that that goes into even gearing up for one case. So

Yeah. Yeah. That's that is a good point. Like, for this this first matter that we had, the the volume of of documents was well over 2,000 pages. The the briefs and and things like that that the panel members do need to read.

So they are they are working significantly more now than they have in the past.

And please forgive me because it is not anybody here that I'm I know you didn't set the statue or I don't believe anybody here, but it is shocking to me For all of the boards that are out there that I know there are boards that people spend many, many hours on and don't receive any compensation because some of many of our board, I believe there's 4,000 boards. Maybe I'm wrong about that. I completely completely wrong about that.

Or maybe it's 2,000, but I do know many, many Californians apply to be on these boards, and there's zero compensation. So I'm having a hard time with a 185,000 for just say each meeting is ten hours because you have the additional work.

It's just shocking, and it's it seems unjustifiable, particularly when we know, that, there's many Californians trying to figure out how they're gonna pay their utilities or pay rent. Again, not your problem necessarily. I'm just going on record for that, and I do agree with the LAO that this certainly should be looked at as we are going to be going through major exercises this year to cut many, many programs.

And, again, I know this comes because of the proposition, and we have these type of boards across the state, whether it's from the tobacco dollars. All of these come with this, but a 185,000.

I don't care who it is, whether it's a former colleague of mine who is elected and or an appointment. It just is outlandish. I was a teacher up until I I came to this job. There's no elementary school teacher that I know make makes that kind of dollars. And when they do work, they're working all day long into the evening on weekends.

This is shocking, and we should be reviewing it. But, again, not your problem. Any comments? Nope. Anybody from the public?

Any other comments? Thank you. Appreciate that. Thank you.

Okay. Okay. I am temporarily filling in for our Chair. We are now on issue number seven, the Department of Consumer Affairs budget change proposal. We are gonna take up our first panel with our acting director.

If you can, please go ahead and begin, director Lally.

Are we on? Yep. Perfect. Good afternoon, Vice Chair, Madam Chair, and Members. My name is Christine Lally.

I'm the acting director for the Department of Consumer Affairs, and I thank you for your time in this opportunity this afternoon. The Department of Consumer Affairs, often referred to as DCA, is a special funded consumer protection agency comprised of 36 boards and bureaus, a commission, committee, and a program. We accomplish our mission by licensing and regulating over 3,400,000 licensees across more than 200 professional license types.

The dedicated staff are the heart of DCA and the ones that carry out our consumer protection mission daily on behalf of the state of California. The 36 boards and bureaus that comprise DCA are supported by dedicated and highly skilled staff of legal, technical, and administrative professionals at the department.

DCA provides a wide range of support services, including human resources, information technology, investigations, communications, professional examinations, training, strategic planning, fiscal operations, and more through various offices and divisions. The department has seven budget proposals included in the governor's budget for your consideration with two on today's agenda for discussion. The first proposal is for the contractor state license board, which requests $2,000,000 in ongoing funding to address increased information technology costs.

The board currently operates with an IT budget of only $497,000, which is insufficient to meet its operational needs and support maintenance and upgrades to the board's IT network and security infrastructure. The growth in cost is being driven by inflation, transitioning to cloud based platforms, replacement of critical systems and infrastructure, and necessary IT security requirements.

The second proposal is for the California State Board of Pharmacy, which requests $251,000 in one position on a two year limited term to serve as the board's chief of licensing. The position will be responsible for developing and implementing licensing policy initiatives based on proposition 34, serving also as a subject matter expert to the board's licensing committee, performing comprehensive evaluations of the board's licensing programs, and identifying and resolving potential barriers to licensure.

I am joined today by colleagues from the department, the contractor state license board, and the state board of pharmacy. We welcome any questions you may have and respectfully ask for your support.

Sorry about that. Did the LAO have any additional comment?

Heather Gonzales, LAO, nothing to add.

Okay. Department of finance. Taylor McGraw, Department of Finance. We have no comment at this time. Okay.

Did any of your additional panelists have anything to add? No? No pressure. Sorry. I got left for the gavel.

So I'm You're doing great. You're doing great. So, thank you so much for your presentation on these two BCPs. You know, for the first, item, you know, will this increase in funding, increase some of the response times?

And and specifically, I think you're talking about the contractor sale license.

Specific to the contractor sale licensing board. Yep.

I'm Jason Piccione. I'm the chief information officer for the Contractors License Board and Department of Consumer Affairs. The funding this funding request supports, central maintenance and security infrastructure that supports the board's current operations. These activities are focused on sustaining current operations, ensuring continuity, and keys keeping system functioning at their current existing levels of performance. As a result, both staff and licensees should experience consistent system performance, reliable access to critical systems, and help maintain overall system stability and capacity at its current levels.

Good afternoon.

So specifically, it the question regarding response times would be status quo. This is these are these funds are requested for maintenance and operations at a current level.

Okay. And just in general, is is the contractor's state license, what are you guys seeing an increase in licensees? Or what are some of the challenges that you guys are, seeing that this additional funds would just be to maintain the status quo and not to increase services?

Yeah. Hi. Thank you, Members of the Committee. I'm David Fogt. I'm the registrar for the contractors board, and I just wanted to to mention that we we licensed 287,000 licensed contractors, and we are always seeking opportunities to add to that licensed population.

We know there's a lot of construction work in California. This funding is needed to maintain our existing programs, which we are always looking at to see if they can be fine tuned to provide greater services. But this isn't a a BCP that's asking for funding for a specific project. But we do we do anticipate additional licensees. We wanna meet the needs of our consumers that are filing complaints.

We do wanna maintain our existing programs.

And and just to follow-up on the complaints that the agency is receiving, are you seeing an increase? Obviously, there's a lot of construction, a lot more housing that we're trying to build as a state, a lot of things that we've passed in the legislature. What are you seeing on on your side as it relates to that?

Yeah. If I could, I'd like to mention three things. One, we're very active with the LA fire rebuild. And so in that area, we want a real proactive approach. We're trying to help consumers.

They don't need to file a complaint, and they have a satisfactory contracting experience. To answer your question, yes. We are seeing an increase in complaints. And, unfortunately, we're may we're continuing to see an increase in solar complaints. So a lot of solar projects, we do have, we've had some contractors that have engaged in egregious acts we've had to address, and we're seeing an increase with the excessive, accessory dwelling units that are being built.

While the vast majority of contractors do a fantastic job, there are some, that have harmed consumers, and it does result in complaints. And often, it's because the consumer maybe doesn't make the informed choice or decision they need. That's another reason why our IT program is so important. It's about educating consumers, educating, contractors, and making sure that everyone's aware of the consumer protection rules legislature has supported and we put in place.

Thank you for that, and we'd love to follow-up, with you and your agency, to learn more in Los Angeles. We obviously have a lot of building going on. If I could take a wild guess, I'm assuming a lot of your complaints probably come from Los Angeles County, if not one of your highest number of complaints. So I would be interested in working with DCA on that. So I'll have my team follow-up.

Absolutely. And then, second, related to the board of pharmacy, one of the questions that I had was, can you just provide us provide staff with updated fund condition summary? We needed to evaluate budget proposals and determine if there are sufficient resources.

Good afternoon. Taylor Schick, chief fiscal officer for the Department of Consumer Affairs. We will follow-up with an official fund condition statement, for you to review, but we can say that the fund is in good standing. I believe it has projected for the end of this fiscal year of 202526 about $25,500,000, which represents about a 7.8 months in reserve balance for the the board's fund, which we believe is sufficient to support this proposal.

Okay. And then when can we expect an official response by? Can you give us a deadline?

For a fund condition statement, we should probably have one to you by, I would imagine, by the end of the week.

Okay. Thank you so much. We appreciate it. I don't have any further questions, and I'm the only member here. So it sounds like this item is what?

We're gonna leave this item open. Sorry. But thank you for your presentation. Thank you so much. Oh.

Oh, yeah. I apologize. Yes, please. Item is open for public comment now.

Hi. My name is Michael Mark. I am a first contractor state license board board member. Okay. Past chair, governor appointee representing as a labor representative.

Is your mic on? Okay. Apologies.

I'll start over. Much better. My name is Michael Mark. I am a current board member of Contractors State License Board as a governor appointee representing labor, and past chair. So I just appreciate your the committee hearings, Contractors State License Boards, BC, and P, or make for this particular funding proposal.

We really appreciate hearing us. And, again, the questions that were asked regarding enforcement strategies and whatnot, that is much needed. These funds overall would help the whole mission of CS will be for consumer protection. So thank you.

Thank you for your comments. K. The final item is the non presentation items. Are there any public comments on the non presentation items on today's agenda? Wonderful.

With that, on behalf of our Chair, Quirk-Silva, I will adjourn this committee hearing. Thank you. Do I gavel? Yeah. Okay.

I'm just sorry.