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

Good morning. Welcome to Assembly budgets of four. We have seven items in front of us for presentation, 23 non presentation items. At the end of all the items will take public comment. Each member of the public will have up to one minute to speak.

If the members of the panelists will introduce themselves when they begin to speak up here, we're ready to jump right at issue number one, DMV, state of the state verification systems, and project and TBL. Morning, Rachel. Right. Mister Gordon, will you be just starting us off?

Lee Scott will be starting us off, sir.

Okay. Great.

Okay. So, good morning everyone, Chair, Members.

You gotta bring out microphone a whole lot closer. So do Aye. Right? You see that? Alright.

How am I doing now? Good. Yeah.

There you go. Well, that's I'm gonna give everybody a piece of advice. The better thing is to take the microphone, put it to the side of your notes, and then just bend the microphone around your around you. And now you can pull the microphone to you. That's why I say put it inside of your note there.

Even even pull it more if you don't mind. Thank you very

Okay. Just constant constant about that. That there's often.

much.

Thank you.

Okay. So good morning, Chair Members. Thank you for the opportunity to be here today. My name is Lee Scott, chief budget officer here at the California

Thank you.

You're still not close enough. I'm sorry.

How about how about this?

That see see that when you get there you go.

How about alright. Here we go. I'm definitely the first one, so everybody can do it next time.

The guinea pig for us each day.

Yes. Yeah. Yeah.

Okay. So Lee Scott, Chief Budget Officer here. And with me today is our director, Steve Gordon. Kristen, our a policy expert. DMV is focused on two priorities today, federal compliance and modernization, both of which directly impact California's ability to access essential services.

On state to state, this is not discretionary. It is a federal requirement under the Real ID Act. If California does not comply by February 27, our residents risk losing the ability to use their Real ID use for air travel and access to federal facilities.

We are the last state to implement this system, and the proposal before you ensures we meet the deadline while maintaining strong privacy protections. On DXP, this is our core modernization effort.

It replaces aging systems that process billions in revenue annually and support over 30,000,000 driver and vehicle records. We have reset the project, stabilized costs, and are now focused on delivering vehicle registration by the end of the calendar year 2026 of using existing resources.

So the proposals are about protecting access for Californians, safeguarding data, and ensuring DMV can continue to operate as a high volume revenue generating department for the state. I'm happy to walk through any details and any questions.

Thank you very much. You know, this is really an important issue that we get right. We've we've spent twenty years over $200,000,000 trying to make sure that we get the real ID thing right. 21,000,000 Americans have opted in, taken in their their documents. We're at the final stage of implementation.

We appreciate that we had representatives from the governor's office talk to us yesterday about this. But getting this right and dealing with legitimate concerns that people have who have signed up is is really important.

So we're gonna have some important questions that we hope you'll be able to answer and and increase our chances of making sure that that we do get this right. But this is a unique position that we find ourselves in.

I appreciate that my colleague, Assemblymember Rogers is here as we begin the hearing on this one and stuff. So alright. Thank you very much. Next. Anybody else from DMV with questions or comments? Alright. Department of Finance, anything?

Bowen Peterson, Department of Finance, nothing to add.

LAO.

Good morning. Rachel Ehlers with the Legislative Analyst's Office. Regarding the state to state proposal, we understand there are legitimate concerns around the use of these data and and personal information.

However, in our review and conversations, it seems like the state's in a pretty tough place. We don't wanna be the only state in the entire country that is not participating in this.

The option of forcing Californians to have to have a passport in order to fly domestically doesn't seem like an equitable or practical solution. So, really, based on our review, it seems like, the the big role for the legislature is to try and figure out what kind of guardrails we could put in place and what kind of options are available.

But it does seem like moving forward probably is is one of our only options at this point.

K. Great. The You I'm gonna jump I'm gonna jump right to our question, sir. Mister Rogers, I'm sorry. I'm trying to make sure that so bottom line is we'd like you to present sort of what state to state does, how the system works.

You guys have a PowerPoint. I think it's important for us to try to go through that and make sure that we get these questions answered. I'm gonna read you all the questions that I have so that you can kind of work those in.

And that is the communities are you know, we're they're facing really aggressive deportations of US citizens. So the confidence in the Federal Government has been shot in terms of them.

We've asked people and encourage people to to get these driver's license so that we you know, it helps keep our streets safer, etcetera. And so we also have reproductive rights and gender rights under attack, criminalization of individuals who travel to California to exercise their rights.

It's just there's a there's a lot out there in terms of this. The communities that fear a real ID implementation. You know, those it's real fear on their part.

So I think we have to be careful when we go, well, we don't wanna be inconvenience taking our passports to the airport. And somebody's going, I'm talking about my family's literally, my family safety, my family being torn apart, etcetera.

In my district in particular, we've seen lots of abuses that have taken place. And I referred to our current climate as a national nightmare. That's what people are living through personally at this point in time.

So we have to make sure that we get this right. So what entities have access to the database? Will other states be able to see the entirety of the driver's record data or just match information that the state already has?

Would someone have to log in and make requests manually by inputting in information for certain transactions or would request be automatically happen upon somebody making an application for, a new driver's license in another state? What if the database is hacked?

What information would be available? What information is required by the AAMVA, but not federal regulations? In other words, are there things that we are committing to beyond federal regulations as being part of this process?

Will individuals be notified if their information was accessed in the system? And will DMV know if other states are accessing mass batches of records on California, not just individual records when an individual moves?

For could records be pulled on all individuals with the same last name or with the same five Social Security numbers? What protections or penalties exist if there's a belief that other states are accessing data? And how will this be detected? And could a delay be requested?

Beyond February 16 as people have questions about that.

So I'm trying to relay the questions that I heard from my colleagues yesterday. I know the answers to some of these questions, but I think it's very important that we at this public hearing get these answers out there.

I will repeat the questions if if as we go through, if I haven't heard the answers to them. But you you have a PowerPoint here on this issue. And would you like to go ahead and put it up on the screen and and go through it?

Sure. Actually, I'd prefer if we could just sort of walk through how the system actually works. We can start with that. The PowerPoint could be supporting as, if there are particular questions, mister chair. Steve Gordon, California Department of Motor Vehicles.

I guess I don't need I don't need to say it's from California. I'm not from Nevada, of course. But Department of Motor Vehicles, the the essence of the system is this. We are loading first name, last name, date of birth, last five of Social Security number into this shared system as as every other jurisdiction in in The US.

The goal of that is to be able to allow another jurisdiction when a driver approaches them, applies for a driver's license in Nevada or in California, then it allows that system to be actually referenced as a pointer and points them to the other jurisdictions that that person may have hold it, may have held the driver's license.

And then if they do find a match, then that state where that again, the 99.9% use cases, that person is standing in front of the agent at a department of motor vehicles like California's department and has filled out an application, supplied all this particular information.

The application is now being completed by the agent. The agent then is verifying that that inform that the driver history, that other the drive where the driver came from.

And and by the way, most of us when we go to another jurisdiction, I know when I moved, I bring my driver's license with me because the state wants to know, well, where where are you coming from?

And and so I'm presenting them with a full case which would allow me, even with a complicated name like Kristin Trippke to my right, you know, we're gonna have a fully qualified query and we're gonna be able to do essentially a one to one match.

So we'll find it in the pointer system. In my case, let's say, I moved to Nevada. Nevada would say, oh, Steve Gordon. His last state of record was the state of California. They would see a response from the state to state system from the data that California has put into that system.

One response, they would see that information, they would select that response. And then at that point, they would then trigger a point to point to California request from Nevada to California to pull across the driver history record.

And I wanna underestimate that, you know, the safety aspect of what you spoke about a moment ago, mister chair. The driver history record contains my driver record from California or wherever else I've lived.

We wanna be able to move that from jurisdiction to jurisdiction so a driver can't have multiple driver's license in multiple records and hide, you know, bad driving behavior, DUIs, and so on.

And so the importance of actually sending that information along with the driver when they move to a new jurisdiction is paramount. And and that's very important for us to have safe safety no matter where we go. Now there are a lot of other questions about, well, what happens when and where?

But the core system itself contains a pointer to another jurisdiction. Everything else, the driver history, the detail about their driver behavior, any additional information is actually stored by the jurisdiction that holds the driver record itself.

So there's none of that information is actually being populated in this court system, but it's being sent, in my example, from California to Nevada based on a qualified request from Nevada. There have been questions about, well, what happens if this happens or that happens?

There's as with most systems, as as is with state to state, there are layers of of access controls. There's, of course, training and so on to make sure people are using it correctly. There's oversight by our association, AMBA.

AMBA is an association that's actually run and operated by its members. We are a member of AMBA. And the top level management of that system is done there. They're looking for anomalous behavior as is, in my example, the state of Nevada.

Once we get to the point where information is actually sent from California to Nevada, now California has visibility that information has been requested.

And in some cases, it has has already responded when there's a one to one match. And so we have visibility to who's who's requesting data on the state of California.

And that way, we'll be able to see, is it a particular jurisdiction if there's an anomalous query, if someone's askin the same question over and over again, which seemed unlikely that that person would be visiting the DMV 27 times in one day.

So we would have visibility to that that would trigger an alert and and and beyond reporting that we'd be able to then take not only with our neighboring jurisdiction, but also with AMBA. And we could potentially, if needed, you know, request a cease and desist from AMBA to block any first transaction.

And, of course, we can just not supply the driver history record, which is where the detailed information about the driver. But in that driver history record, there is no information about the address, things like that, but it's strictly driver behavior.

So I wanna be clear. There's no information on address that goes.

That's right. No information in the driver history record has the address or anything like that. Now remember, the person is in front of the agent at the other DMV with their driver's license, which has an address on it.

They filled out an application with their address on it because the DMV needs to mail them a driver's license. So there's a lot of other places where information is exchanged, but it's exchanged by the participant, not the state. K. So I'm sorry. So there are a couple of couple of the topics you you brought up.

Correct.

Wanna make sure I didn't miss him. If I can now read my writing here. Maybe you you wanna step in.

I think just I think the point that we're trying to underscore initially is that there is an an initial upload into the system, but it's not for if we're looking at it, it's not a database of Californians, if that makes sense. It's more of a pointer system.

And so we're only uploading what is required by the state to state agreement that all states are agreed to of what we're gonna upload into the system that we we can find you.

More than likely, when you did move to Nevada or you did move to another state, you probably would more than likely submit your driver's license, say, this is my California driver's license.

And more than likely, we would be able to find out that, Chair Bennett is who he says he is, and we'll be able to find you in that initial upload.

But there are no bulk searches. There are no, queries. Like, it and it's really for me, the best way I understood is transaction based. So I need to physically be there in order for this system to start working.

And the minimum query requires name and date of birth. So that's the minimum query. But, again, the standard use cases you are when you're moving to another state as I've done a couple of times, times, you're presenting your driver's license a full application.

So you have a very full query that is very specific to you. But you can minimally provide a name and date of birth, which will generate then a response from multiple jurisdictions.

Because if, let's say, you have a common name like Mike Smith, you might get a bunch of jurisdictions that are responding. Yeah. I got a Mike Smith. But which Mike Smith? So and so that's so there are no bulk query capabilities.

I think I know people are concerned with that, but there's no bulk queries built into the application or to the process.

And if the database is hacked, the only thing they have access to is what?

Well, the hypothetical so this is sitting inside of AMBA following good business practice. First, they encrypt in transit. So when the data is being shipped from point a to point b when we're making a request, all that information is encrypted. It's also encrypted at rest.

So you can imagine that if you hack the system in this theoretical, you might get some visibility to some data, but the data that is important, especially the PI data, would be encrypted.

So you wouldn't have visibility to any of that. And plus, the information as I mentioned doesn't contain anything beyond the first name, last name, date of birth, and the last five of Social Security, which would all be encrypted.

Anything in AMFA that is not required by federal regulations, but is required by AMFA?

The matching criteria is not specific in federal regulation, but it the federal regulations point to you need an electronic interchange state of, interchange for states to exchange this information. So that is required in federal regulation.

And the only system that does that is a system at AMBA. So it's a bit circular, but it is indirectly re pointed to in federal regulation. But the electronic interchange, and there's only one of them, is a requirement based on, you know, conversations with TSA, DHS, and other federal agencies.

Are individuals notified if, if if there's been, if their information's been accessed? The I would assume

Chair, the Senator, the the point I was making, I guess, is that the the standard use case is you're standing in front of the agent. You are there. They've visually identified you. You provided information. So they technically have requested their information to be moved.

So in essence, they yes. They've been notified.

Standard use case. But if is is there an automatic, you know, text message that's sent to everybody that There would be There wouldn't be a text message. No. There's nothing like

that. But, again, the the jurisdiction, when that driver history record is requested, we'll have visibility to that. And if there's an issue where we see repeated

And I know the answer to this question, but will the DMV know if other states are accessing multiple request on people, etcetera. If you have 27 people coming in, will will California know that?

We will if they if they select if they select one of the candidates. If they select one of the candidates and request the driver history record, we will know.

Got it.

Okay. And what are the penalties that exist if other states are are accessing the data for nefarious reasons? We have some states that are joining in on the hostility towards California or the retribution towards California. What are the penalties if a state is somehow abusing this?

There's probably a few. I'm not a a lawyer, but what I do know about this the various agreements we have for using the system. So the first level would be severing them from use being able to use the system. So there are agreements between every jurisdiction and AMVA.

There are federal federal rules that regulate how this information can be shared, and and there's state rules on this as well.

So there are probably many different penalties and and remedies for this. But the the most pressing one would be, you know, severing their ability to connect once they violate the agreement to use the system.

And even to maybe add on and and we could go back and double check this, but I think that state would be risking having their real IDs be noncompliant in that state. Every every citizen that has a real ID in that state would no longer be access to go ahead. Yeah. Sorry.

Assembly member.

Yeah. If you don't mind me jumping in, I think the question the the heart of the question is I keep hearing in compliance with federal law. I keep hearing other states could have their real IDs not recognized.

We're in a situation right now where you have documented cases of Doge taking people's Social Security numbers and giving it to, servers that we don't know who it was.

We don't know what its purpose was for. So I think for us, it'd be helpful not just to hear what the current federal administration says the rules are going to be, but from a protectionist standpoint of our communities and the data that it contains, what remedies does California actually have to try to protect this data?

And in the event of misuse, we're trying to figure out, do we have the ability to, first of all, see if it's being accessed in a in an inappropriate way, if it's being misused? And then what how do we make sure that that data is secured and then we protect the people in the event that it is used inappropriately?

Right. So the the remedies are gonna be legal. And so in our case, if there was a an event, we would go to the State AG's office. We would seek legal counsel from the State AG. We would file some sort of motion to start some some action in in the courts, you know.

But before that, we would go to the association to make sure if somebody is misusing that information, that they would be severed from the from the ability to communicate with that system until things are sorted out. And then back to the back to the broader question, you win information is exchanged.

As I mentioned, once a driver record has been requested, the jurisdiction, California or some other jurisdiction, will know that has occurred, and we'll be able to see that pattern.

And our it'll be our job to make sure we're watching that pattern, acting on that pattern, to make sure we protect the cons the constituents of California as we do today. And so it'll still be our job to make sure that those systems are protected and make sure that, in fact, we're watching who's doing what.

And we do that, by the way. We do that with our employees all the way up to make sure that nobody's actually things they act accessing things they should not be.

And I understand that, and I understand you're looking for patterns and looking for so in the event, use a hypothetical, you have an undocumented individual in California who is trying to get a driver's license, say, moves states trying to get a driver's license.

And you have ICE immigration enforcement that is accessing or has someone at a DMV in another state that is looking for a specific individual, can they pull that record? And would California know that they were seeking that record of that individual, for that purpose?

If it's not if they're not doing just throw a a blanket net out and catch as many folks as they can?

I think the only way I would answer that is that, you know, it's it's anything is theoretically possible. It could be a bad actor with access to the system, but we would see that bad actor today. We look at our business partners and so on. So we see that pattern. We would see that bad actor.

Would you see it on the first instance? Maybe not. But on the second instance, you see a pattern with that person making these queries and maybe someone being subsequently arrested or whatever.

So we would certainly be looking at those patterns, but it's very difficult to say, okay. You've got this other person, and they're doing one time thing.

And I'm guessing it's a bad bad it's a bad actor. But we do have visibility to the data request.

Dig into that a little bit for me. So then following it to the conclusion that you were saying. So then if we have an individual that has moved states and they are picked up by ICE in that state off of some of the data, how are we tracking that that individual was picked up and that it would trigger for us that the data was being used that in that manner?

Yeah. I'm not sure I'm following the hypothetical assembly member. But, again, when requests are made from our system, when that driver history record is requested, our job is to watch and see if there's any patterns that we are seeing that are unexpected.

And I don't I don't know if this would help as well, but there are pros and cons to get California DMV going last. So there will be the fiftieth state to come on board. We've talked to multiple other states about exactly how the system is working for them or has continued to work for them.

What kind of issues have they brought up? A lot of scenarios. I mean, we've talked to a lot of folks, but a lot of different scenarios. And so far, you know but that so far is a general statement. So far, nothing has happened.

I appreciate the question and that something could happen in the future. But at the moment, it really is about, you know, someone moving to another state, verifying that they are who they say they are, that there's only one record, one ID for that person.

And then when we're gonna we confirm that it is. We want to then exchange and move that information over to the new state that's gonna be the new home state. And that that's really what this is about.

But, different scenarios from where you have come from and multiple other questions that we've received, we haven't heard of anything like this at the moment.

Yeah. I think that the haven't heard of anything like this at the moment is where it gets lost a little bit for some legislators is we have seen the weaponization of people's personal data, happened just recently with Doge. Right?

We know even if it's not government a government actor, it could be an outside actor. And so just saying, just trust us. We haven't seen it. It's not gonna happen. We are literally seeing it in other regards where that web that where that data is being stolen and used against people.

Again, our job is to make sure that we're watching who's accessing this data. Again, the only people that have access to this are other member jurisdictions. There's no Federal Government, no federal agencies, no external agencies other than driver license authorities like ourselves.

Those are people that have access. Is there could there be a bad actor in the in the mix?

That could always be the case in any any department anywhere. Our job is to watch for those patterns and make sure we take action. Quick action when we see something that we do not expect.

And and then I'll turn it back over to you. And I understand that if the Federal Government goes to the agency and says give us this data as they've been doing with voter rolls in states, which theoretically they're not supposed to have access to either, what's the response going to be from the agency? It would be the

same as I'm sure that the secretary of state would do. They would seek to quash whatever subpoena if they're trying to do that. We would go to the the AG's office as we've done and with other other subpoenas to to seek to quash that based on, you know, the whatever the foundation is if they're seeking that information.

And you have that from that from the agency? Which agency? That oversees that collects all of the data or that has all of the access points for the data.

AMV only has a minimal set of data. And if we have in our contract that they will we will be notified if if there is a request on our data by a non state agency. We would then be we would notify, of course, our legal team.

Our legal team would take action to this, you know, the attorney general who is our who is our technically, our attorney, and we would chase that down the courts. We haven't had that issue with this particular system.

But we have had, you know, odd subpoena requests for other things. We've gone to the AG. We've fought it in court, and we've won. And so we're gonna try to take all the prudent steps that you would expect us to take because this is sensitive data, and we're trying to be, again, responsible.

Alright.

Thank you for the questions.

I know that there are 18 states that allow undocumented people to do this, and most of those states are already in the system. Have you had communications with those states in terms of what their experiences have been, and have they had, any issues yet with, abuse of this data?

Yeah. So we we're in regular communication with all the jurisdictions whether whether they are red or they're blue or they're purple. To date, as we've said, there have been no reported issues, that are that were, you know, theorizing here. So so yes. And there are some that are very aggressive.

Maryland's one who's taken on the Federal Government at every turn, and they're in the system. And, again, we stay in close contact with all states to make sure we're aware of anything that they're seeing so we can see it early.

And we have in our notes here about what will happen if we don't do this. One of the questions that I have is if you go to Nevada if I go to Nevada and we're not in this system, right, will I be able to get a driver's license in Nevada?

Well, you won't be able to get a real ID in Nevada. I can't speak for what the Nevada state laws are. But the key thing But

you won't be able to get a real ID.

Won't be able to get a real ID. But the but the key thing that I would say that we have to be most worried about is the driver history record itself. And what we're trying to make sure is that you don't go to Nevada. You don't try to seek another license as Steve Bennett with an extra with three t's versus two t's. Sure.

And you know, be able to get out and lose your driver history record. But I really would, I guess, depend on Nevada law. And I don't wanna

I get that. I think we get it. But I'd like to point out that you and we, everybody in associated with California government, we really have multiple responsibilities here.

And one of those is the one that you just highlighted is to try to make sure unsafe drivers aren't gaming the system and for a variety of reasons. That makes all of us safer.

But we also have a responsibility to not further erode trust in government Yeah. That unfortunately, has happened, but instead go the other way and try to increase people's trust in government.

So I can't emphasize how important sort of this moment is in terms of there are millions of people watching and concerned about this as as as we try to deal with this perplexing problem.

I'm sure we'd all prefer to not have to deal with this at all, but that's where we are right now, in in terms of the Federal Government. So it it reminds me that how valuable trust is.

And, if people really have trust, you don't have to put a lot of safeguards in everything else. Everything works. But trust is at an all time low here in this country, and therefore, we have to work harder to do the same thing.

So I you will be repeating the things you repeated yesterday to us in our session and today, and you're gonna be repeating that over and over again.

Part of maintaining trust of the public is not to have us not display any frustration with having to repeat it over and over.

Okay.

Because that's going to be part of our thing, but it is this is one of those moments where your agency gets to step up and demonstrate. We did our part to try to help make people more confident in their government by how you handle this.

And that's a golden privilege to have to be somebody that gets to help make people feel more confident and have more trust in their government. And so I hope you'll accept that.

Final thing I would say with this is that because you've checked off all the questions that I asked you.

I checked them as as you went through them. And that is this, that we will rue the day that we have created such a hostile environment trying to intimidate immigrants, and that day will come sooner than we think.

We will be really desperately needing and wanting the energy and the talents that come with people who have always wanted to come to The United States. And there will that will really be a challenge for us in ten or fifteen years as we go down the road.

So with that, we have concluded this item, and we have I have one note here.

I want to make sure. I've already asked that question. So, it's questions about address. I've asked a question multiple times about the address also. But you've said that the address is not in the system, but the person standing in front of them probably has their address with them there.

But so other states won't see the address unless the state requests to cancel California ID and transfer the full record. So what if the other state, request to cancel a California ID and transfer the full record? Then when that happens, do they get the address?

I think the driver history rec my understanding is driver history record does not include whoops. Hang on. We're gonna we're gonna shift to Kristen Trippie, who's our policy lead, so that maybe she can address this more specifically. Thank you.

I think it's still morning. Good morning, Mr. Chair. Yeah. So I think at that point, right, when you're providing that record. Right?

So your your example your example was director Gordon is in Nevada. He's applied. There is a request. So there's everything's been processed, and now there's that exchange between the two states and California. It's gonna say, yes.

Right? You You're making your request. Here is director Gordon's information. All that information, including his current address that we have on his record, would be provided at that time.

And that would include the address? Correct. Alright. And so is there a safeguard in the system that they cannot make the request for this information until the person actually presents and and ask for for this?

Is there is there like a penalty of, you know, perjury of there is there some kind of penalty built into the system that a that a state can't just I have to tell you, years years ago, I know people would just sit there and look up IRS data information because they were employees and they would just sumptuous.

I wanna find out how much the director makes. Right? And I wanna find out what he how he filed his taxes and all that kind of stuff. This is different. They have to go to another state to try to get that information.

But are you aware of any penalties there that people have specifically if they do it before the person presents? Because if the person is there presenting, I think we have a much less chance of risk being involved. Yeah.

Yeah. So I mean sorry. So back to back to trust, and we wanna demonstrate trust. I'm completed from your earlier comments. On this particular issue, not sure what the laws are locally in a different jurisdiction, but there are federal rules in place with respect to sharing this information.

So there certainly would be yeah. I think I'm thinking the driver's license, drop off the DLP, whatever that is. But there are federal rules in place about sharing this information, and they would be in violation of that. There are probably local rules.

I can imagine in Nevada, back to this example, this bad employee, there would certainly be a violation of their their work agreement.

There'd be probably breaking a half dozen state laws for sharing information, making requests that are illegal. They've committed a fraudulent act of some some sort by requesting this information. So I would think they would be covered by a half dozen laws.

I don't know the specifics of each one of those. But, certainly, when we have employees that are looking up information, maybe they're trying to you know, they have taken a bribe to help somebody get some information.

They are often arrested, often charged under California law. So I believe there's no shortage of laws. We certainly can get back to you with maybe some of the specifics.

That'd be helpful if you could.

Thank you so much.

Great. Thank you. And with that, unless you have anything else, some of the number. Alright. We're ready to move on to issue two, and that's a digital experience platform, DXP project that the governor has.

Okay. Absolutely. Do do we have any questions on DXP? Did you want me to give an overview? Or

I have a few I have a few questions, but \and that is when will it be completed? The what efforts are being taken to keep the cost low and reach a timely completion? And my most important question is to date, is the project on schedule and on budget?

Yeah. So I'll take the last one first and maybe Lee, you can go into them with greater details. So today, the the the schedule has been revised a couple of times. So I don't wanna say, oh, it's on the original schedule, but it is on the current schedule. It is still on track.

We're actually making sure that we're moving some funds along with us into the the request is to move funds along with us into the next calendar year, next fiscal year, because we wanted to make sure we did not spend those funds faster than we could have consumed them.

So I would say based on the current schedule, course, and speed, we are on track. Our goal is to launch the system, the vehicle registration portion of the system this calendar year.

So I would say yes to your question that we're on budget and we're on track for the system based on the revised budgeted schedule.

Yep. And I can even add on that we have three phases, occupational licensing.

Yeah.

Yeah. Occupational licensing, vehicle registration, and driver's license. And so occupational licensing is finished, so we're done with phase one. Vehicle registration will be done by the end of the calendar year. And that's why the bulk of the funding that is coming forward into next year, and we're reappropriating about 30,000,000 into next year also.

So we definitely haven't wasted any any work that has been done. We can still build off of. So we've kind of shifted a little bit. I wouldn't say waste, and I wouldn't say that we're behind schedule.

I would more say that we are ensuring that we are keeping costs down, asking questions about why we are receiving certain costs coming in, making sure that they agree with them, that we validate them.

And so by the end of the calendar year, VR will be finished, which is probably the most crucial part of the DXP system because vehicle registration, as we all that's the bulk of the revenue that comes into the motor vehicle account. We collect about $15 billion a year.

Roughly a third goes to cities and counties, about a third goes to Cal Trans, the other third goes to the motor vehicle account, which is us and CHP.

And so ensuring that this sixty year old system is is doesn't fall apart and we can have it going forward and and ready on schedule is is probably the most crucial part.

So when will phase three, the the the ID part be done?

For for drivers, like, we I the driver's licenses, we have already started it in the current year. We will get it even more off the ground next year. And I think over the next couple of years, we'll see driver's license come to completion.

There's other legislative bills that have come across our desk that we have to then incorporate into DXP. It there's various other things that we need to take into account to make sure that that deal stays on track.

So it's not so much can DMV finish the original scope of how the project is working over the last couple of years, in the current year, and over the next couple of years as different legislation comes out across our desk, and it gets signed and it comes into play.

We need to make sure that how do I not only follow the law, but then incorporate that into what our DXP system's gonna look like.

So will the you say the next couple of years, nothing more specific than that in terms of being able to say this is when we will have phase three completed?

Yeah. So I let me sort of take this. I believe there is a date, which I think is the is is in fiscal twenty twenty nine.

Yeah. But we are, Chair, we are releasing driver's licensing and ID cards in phases. There's a pilot ID card phase out right now. There'll be a series of pilot smaller implementations of DXP.

2029.

We're trying to we're trying to build it in an iterative fashion, an agile fashion, which has been challenging from state procurement policies, you know, and how, you know, CDT and others want us to buy stuff.

But we're trying to buy things and build things in smaller chunks so we can actually implement and not have the big bang that we're unfortunately going to be doing with, the vehicle system. So you'll see if you went out to well, there's a handful of select field ops today.

You'll see ID cards being processed in the new DXP system today. And by the end of the calendar year, you'll see all of the ID cards processed in in the new system.

Then we're gonna add, you know, the next portion, the next slice of the bill.

It could be a driver's license. It could be a B1766. It could be a number of things that we'll be adding to the system. And by the time we hit 2829, the system will be complete. Everything will be modernized.

We'll be able to turn off our legacy mainframes. CDP will have to repurpose those funds resources so they can actually, you know, work on modern technology like we're trying to do.

Let's see. So by the end of 2829 fiscal year

You're saying you For the replacement. Everything will be everything will be completed Yes. With phase three.

Yes.

And it's also important to note, Chair, that when we work with Department of Finance and LAO and we submit our BCPs, more than likely the BCPs are only approved maybe one year at a time.

That allows us to not only make sure that we're staying on track, but at least once a year, we get to come back and check-in with you and let you know where we're at. And we can give updates too.

Just because something might be delayed, it might be, well, because of x, and and we would be off of same understanding of how that is.

So this is an opportunity and I hope that the administration will view this in partnership and particularly Department of Finance people will take this back, but we don't have a great track record of implementing tech updates in the state of California.

Over and over again, we have literally blown it and wasted hundreds of millions of dollars. If you go back and look at everything all the way back from what they were trying to do with the Department of Justice and the court system and upgrades and all of that.

So one thing that I think is missing is we just don't have expertise. Each department is not going to have the expertise they need to to be able to compete with the vendors who do this all the time.

Yeah. And that is a contract with all these departments and, you know, we contract with these vendors and they try to help us do these IT implementation updates. Well, the vendors, it's like buying rare coins from an expert and you're you only do it once every twenty years.

You're gonna get you you we need expert at the whole concept, and this is what I hope you can tape at the whole concept of it so that IT is getting ready to do this.

We have this expert team of x number of people that go, okay.

Make sure the contract has this. Make sure this. We're looking at this and that. And then they go to another department and and also help. In other words, they're generic experts at implementation of of IT.

That department doesn't exist to my knowledge like it should in the state of California. And so every department is sort of it's at the mercy of their their limited ability to manage an IT implementation program with maybe they've got a couple of IT experts, but they're not experts at implementation.

They're experts at the actual working of it, but not how do you how do you implement these great big upgrades and etcetera as we go forward.

I would hope everybody would raise their voice and sort of saying that's that's an advantage. You talk about how there may have been adjustments in the schedule as you're going along, but I think departments should welcome that kind of help.

But that's not been the experience. A lot of time departments go, we wanna handle this ourselves. We don't want some other somebody else doing that. So that's just a overall comment that I think we'll continue to try to push from our angle.

And with some potential changes coming philosophically in terms of how we do things, hopefully, that's something we might be able to do.

And Chair, if I may comment, we are working, of course, with GovOps. I know they're looking at actually trying to do some of that work. We're part of that inner council. So we agree with you that there needs to be that sort of competency.

We have to also have to separate at the departmental level the what versus the how. Sometimes we come in and say I wanted I want this, and I want it to work exactly like my systems used to work within a modern technology. And you wouldn't wanna do that with a modern tech.

You wanna take the best of that tech and put your what in that system. And that's something we have brought to the department, but these systems are very complex.

And we've modernized a bunch of our edge systems as well, and we put them into the common platform, a Salesforce platform, one customer record, one user record.

But it's government is very, very complex. And there's a lot of rules. As you know, you write many of those rules. And it's maddening maddeningly complex. But we are trying to suss out what needs to be there and making sure we're doing the right thing, make sure we don't violate the law.

We can still collect the revenue we need to do, get vehicles, title, and so on. Very important, but also extreme government is extremely complex.

Well, I appreciate that your public testimony today can be helpful for us just to remind everybody that you agree. Right? And Yes. In terms of that concept.

Great. Thank you very much. Any other questions on this item? Thank you very much. We're ready to move over to issue number three, and that's high speed rail office of inspector general.

Appreciate it. Alright. Again, you have a heavy and important responsibility. I hope you implement it properly. Right?

Alright. We're ready to begin, and whoever wants to begin.

Yeah. Good morning, mister chair and members of the committee. My name is Ben Belnap, inspector general for the California High Speed Rail. I have with me Amanda Millen. She's the, deputy inspector general over administration investigations.

For the last two years, we have been working with the administration and with members of the legislature to resolve some gaps we identified in the in my office's enabling statutes when comparing those enabling statutes to other inspector general offices and to the professional standards for offices of inspector general, current state law does not require that my office publish reports on various operational reviews of the high speed rail project. Rather, state law only requires an annual summary of findings and recommendations.

I have at my discretion published reports for all the reviews and investigations that we've completed. But if pressed, I would not be able to point to a particular statute authorizing me to do so. State law also does not establish a framework for retention and disclosure of my office's work papers.

We have, based on professional standards, prepared and retained work papers for each review we have conducted. Nonetheless, without a statutory framework, questions over the release of those work papers would be difficult and time consuming to resolve. Appreciating the potential significance of these problems, the administration has agreed to carry a trailer bill that would establish a statutory reporting and work paper retention framework for my office.

To provide further assurance that these problems will be resolved, assembly member Lori Wilson, chair of the Assembly Transportation Committee, decided to author AB 168, which would establish the same reporting and work paper framework, but would also strengthen my office's ability to conduct its reviews in a timely manner by giving my office access to needed job classifications and authority to purchase needed goods and services.

As a policy bill, AB 168 had the benefit of a public debate as it moved its way through the legislative process.

Based on feedback we received during that process, AB 168 was amended, and this amended bill recently passed a floor vote in the assembly. The administration has been following, the discussion regarding the AB 168 and is considering amendments to the proposed trailer bill to be included in the up upcoming May revision. One of the initial critics of AB 168 was the first amendment coalition, a nonprofit that advocates for a free press and for the public's right to access government records.

We met with representatives of the coalition, heard and addressed their concerns with amendments to AB 168. As a result of these efforts, the first amendment coalition switched their position from oppose to support and stated in their position letter that the amendment the amended bill is a model framework for how independent offices of inspector general can balance legitimate confidentiality needs with the public's right to know about government activities.

The traded bill you have in front of you today, even with those particular amendments not yet included, increases transparency on the High Speed Rail project by establishing public reporting requirements as well as a work paper retention and disclosure framework. Those requirements do not currently exist in state law. Some individuals have expressed concerns that the reporting framework in 1608 and in the trailer bill allow for confidential reports. I wanna address that concern.

The leverage my office has to improve the high speed rail project comes directly from public reporting of findings and recommendations.

That is why I am pushing for, asking for a statutory framework that requires public reports. Nevertheless, there are certain situations like pending litigation or weaknesses in information security, physical security, and fraud detection controls where revealing details about those weaknesses would allow wrongdoers to take advantage of those weaknesses before the authority can address them. Therefore, in rare instances, pending litigation needs to be resolved or weaknesses that could be exploited need to be strengthened before full public reporting should occur.

Generally accepted auditing standards, the statutes of other inspector generals, and auditors allow for confidential or redacted reports in these situations. AB 168 will allow us to implement these same best practices, but as amended, establishes an even higher standard for transparency.

The amendments to AB 168, which the administration is currently considering, requires the inspector general to do three things. One, publicly articulate the underlying risk for which any report or portion thereof is temporarily held confidential. Two, to regularly assess, and publicly

Coul you say number one again, please?

Sir, one, publicly articulate the underlying risk for which a any report or portion thereof is temporarily held confidential. Two, to regularly and publicly reassess that determination. Then and third, then to publish that report once the previously articulated risk is no longer substantial. Meaning, when the underlying weakness that could be exploited by those wishing to inappropriately benefit or harm the project is resolved, you will not find that type of framework anywhere else.

That is why the First Amendment Coalition has chosen to support this model framework, and that is why I asked for your support of their revised trailer bill the administration is currently considering putting forward in the May revision. Thank you.

Thank you very much. I just LAO?

Helen Kirstein with the legislative panelist office. We haven't identified any concerns with the proposed trailer bill language.

Department of Finance.

Neil Cashun, Department of Finance. I'd like to note that we are taking into consideration the feedback the policy bill is receiving, and any potential amendments to the trailer bill will be released along with the May revision as the budget process does not allow for amendments midway through the year.

Okay. Thank you. Assuming the passage of this trailer bill, assuming that we do pass it, right, does your office have what you need to provide effective oversight? Is there something missing?

Yeah. The trailer bill absolutely help. As I mentioned, there are provisions in 1608 that are not in the trailer bill, and that would be to give us access to job classification that other agencies use. And 1608 also gives us a purchasing authority up to a million dollars. Those two things are absolutely essential.

There is one other thing that I wanna bring to your attention. It's it's a more of an emerging issue that I've talked to the administration and also legislative staff about. This did not make it into the trailer bill or 1608. State law requires my office to review proposed agreements that the authority has to determine whether they're in the best interest of the state. It also authorized me to develop policies for how those reviews are be to be conducted.

However, based on the authorities' recent responses to a draft of these policies, I believe state lawmakers may need to statutorily define the term proposed agreements, and may need to require the authority to provide notice to my office when these, agreements are being internally reviewed. My office interprets the term proposed agreements very broadly to include draft contracts. This would be for construction and and building the the rail.

The authority offered that that's proposed agreements is a different term to them and and actually only refers to third party agreements, which is very narrow and limited. They've also right and they rightly pointed out that the term proposed agreements is not defined in state law.

It is not. They've also pointed out that there is no notification requirement for them to tell me when they're looking at a proposed agreement. They are right. There is no such requirement in state law. But for me to effectively do my responsibility to review those proposed agreements, I do need that, that term defined, and it would be great to have a notification requirement on the authority. Thank you.

Thank you. I appreciate that. So Assemblymember Wilson, I know you just just arrived. Appreciate you being here. Assemblymember Conley also.

Assemblymember's from the other side there, Gallagher and Tangipa. The we are at an item where your bill is being discussed, also 1608 with the trailer bill coming from the administration. So the authority I mean, the inspector general just pointed out that there are some things in your bill that are not in the trailer bill and that he identified those things as being essential in response to my question. Does your office have what you need to provide effective oversight? He's identifying that he needs those things in your bill.

In addition, so the trailer if we just pass the trailer bill, we wouldn't have the full package, that he's asking for. Subsequently, he also said there's something that's, I believe he said, something that's not in your bill that, he's suggesting should be in your well, he's suggesting they need, not that it should be in your bill, but that that they need. And that's this issue of what is a, what is a proposed agreement.

And so I say that because I know you were just walking in, and I wanted to try to catch you up where that all is. I think I'll turn it over to you first if you're ready because that's the only question that I have. And then I know that we'll get some comments about high speed rail overall in a moment, and I'd like to stay focused on this part of it right now. Okay.

Any other any other comments about this specific? And we and it'll be high speed rail, but about this specific trailer bill. Assembly member Gallagher.

Yeah. Just on the discussion about sort of shielding certain things that highlight weaknesses or otherwise, it reminds me a little bit of when we were trying to have oversight of the Oroville Dam Spillway, disaster where especially as policy makers, I feel very uncomfortable with someone shielding entire pieces of a project under the auspices of, you know, infrastructure weaknesses, especially when that was exactly the problem, you know, with Oroville. Was it, you know, many different deficiencies in design and and, maintenance that were discovered during that.

So is I mean, is that what you're saying here? Is that there are certain things that you can't reveal about? And look, this thing isn't even built yet. Right? I mean, we're a long way, from actually building this thing. So at this point in time, is that even really an issue, where you need that kind of shielding?

You raise a great point, particularly about physical security. Right now, we're in construction. Yes. They have security there, but there are no customers yet. So maybe that particular element is not as crucial.

But if you're talking about fraud detection controls, we are in the process of building something, important. There's procurements going on. Any weaknesses and fraud detection controls need to be strengthened before I tell the world what those problems are and make the authority a target.

So the weaknesses you're talking about are not actually the infrastructure portion of it, but actually in the fraud detection?

That would be one category. So weaknesses in the infrastructure itself, I Okay. You're talking about, like, a bridge that would have a poorly poor design or something?

Yeah. So that I mean, that's why I'm worried. I mean, like, look, we need to be fully focused on fraud detection. Right? I think, especially with how much the cost have ballooned on this project.

So you're telling me that there's certain pieces of fraud detection that would not be publicly disclosable? And what would those things be, I guess?

Yeah. Let's let's say we found a a a weakness in their fraud detection controls in a particular area in high speed

in the authorities?

In the authorities. Yes.

They were not monitoring a particular type of of fraud scheme, like bid rigging. And let's say I want to criticize them about about that that absence of that. I would write my report and let them know, hey, you gotta fix this. I'm I'm going to be publicly disclosing that you don't have these controls.

But you you need a period of time to close that loophole, to close that so that people you don't you're not a target and you don't have fraudsters coming after you in that particular area until you've strengthened that that weakness.

Yeah. I don't know. That doesn't sound good to me. So what yeah. But

Could I help could I help? I I really just I

I don't know how you can help it, but go ahead.

But so let's say there there was a way that people could actually drain money out of some part of the authority's account. Right? And that the the the

Wouldn't we wanna know that?

They they would. But and the inspector general finds that. Okay? Now before the inspector general announces, hey, there's a way to drain money out of this account that if you have, you know, the right technology, you could you could drain this out. You you're right.

They they would wanna close that. So what he needs what he's saying is he's gotta go to them and say, close this because tomorrow, I'm getting ready to go public with with this criticism of you. And what's nice about what he's asking for is he's saying, unlike some, inspector general situations, sometimes they reveal that and they don't ever go public with it. But he's saying they're gonna go public with it as soon as they close the loophole. So I I hope that that that that helps. Right?

Can help too in terms of definition. We're not talking about fraud detection and detecting fraud and whether that could be in the closed disclosed or not. It's fraud detection controls. And I think that's been a key thing that people have have picked up on the first part of the word and not the Sec the not the latter part of around the controls. And to the chair's point, if some level of fraud is exposed, currently today, they don't have to report that out publicly anywhere.

That could be just between the office of inspector general and the high speed rail authority. What, this now will allow them to do is to talk about the fact that fraud was detected, not how it was detected. And then later at a time, disclose after a period of time after it's been resolved to disclose how it happened. But fraud will be I mean, if they're I guess to the to our office of inspector general, mister Belknap, I wanted to call you Ben. I didn't want me to be so familiar. But if there is fraud, that would be included in the report.

Absolutely.

Right? But how you found the fraud and the weaknesses related to that would not be included. Right?

Yeah. If those weakness continue to persist and have not been resolved, then there would be only a period of time. Things that are confidential would be held confidential temporarily, not permanently. That is the fundamental difference between this framework and any other framework you'll find in generally accepted government audit standards or other enabling statutes.

Which which is which is remarkable. But again, I want to emphasize the preventative side of this, which is if his office finds the potential that somebody could access and and drain an account. Nobody's done it yet, but they just have identified that it's it's possible. He then goes to them and says, you've gotta fix this because tomorrow, I'm gonna go public with you had this vulnerability. We caught it.

Fortunately, we caught it before everybody else did, but now we gotta go we have to go public with this.

I got that. But then and if they actually address the issue, right, and close the loophole, you would then though disclose the issue. Right?

Yes. Okay.

So that would come to light. Okay.

And that's what nobody else in the country is doing, which is this is, like, beyond the gold standard in terms of inspector general, but transference transparency. Right.

Well, cool. But we've been doing this for a little while. We got $15,000,000,000 spent right now over on the project. Have you guys been providing the oversight the whole time?

We were created two and a half years ago.

Okay. Right. Okay. So that was just two and a half. So you've been doing it for two and a half years right now?

Yes.

And have you guys discovered any issues, you know, with contracts, payments to date?

We published all reports at our discretion. Again, state law doesn't require that. And, yes, there is something in our recent procurement, report in which we found that they did not comply with state law on a particular amendment. And then I can't speak to anything we have ongoing.

Okay. And what can you specify what that was on a it was, like, on a change order?

It was not a change order. It was a amendment to an existing contract that we found violated state law. It added services to that amendment that were not in the original contract.

Did it increase the cost? How much?

The particular part that was not allowable was 600,000. The whole amendment was 6,000,000.

K. So the whole amendment was 6,000,000. Okay. And I guess, lastly, I mean, since you're gonna be doing this work, I mean, can you comment at all on, like, why the cost of we went from 33,000,000,000 originally to now 236,000,000 236 sorry, not million. Billion.

33,000,000,000. And now the latest analysis is $236,000,000,000. I mean, can you explain why such a huge increase?

Yeah. So I'm not gonna get into details of which

Summary as best as possible

Ballpark is is right. So it went from one number to a much bigger number. So let's let's say that. Yeah. There are a couple of things.

One is as you further design, as you further further figure out where your right away is at, you start to realize what the costs are gonna be. So some of it is cost realization. The other is, delays associated with construction. Those have been really critical on this particular project. Every jurisdiction along that long line has the ability to slow that that project down and and in some cases have.

And every utility along that line has the ability to slow that project down. The way those contracts with the design builders were were structured, those delays, the contractors could ask for payments for those delays. Those are those are probably the two biggest issues.

But does not seem like a pretty big I mean, this is way bigger. I mean, I've I've seen a lot of infrastructure projects where certainly cost increase, but to go from 33,000,000,000 to 236,000,000,000, I guess, you know, how many times over is that? I was gonna try and do the quick math. It's a lot. Yeah.

Is that normal? Or is this would you say this is out of the norm? Yeah.

I'm the inspector general for the California High Speed Rail. I haven't done, like, wide studies on other construction projects, so I couldn't answer that.

Yeah. I think it's 700%. That's a lot. So you wouldn't say that's out of the norm for an infrastructure project?

I don't know what's no. I mean, I'm very focused on the California High Speed Rail project.

Okay. Who was doing it before you guys doing the oversight of

There was no Inspector General over the California High Speed Rail. And so I I don't know the answer to that.

Yeah. Okay. That's all I have.

Thank you very much. I appreciate that. And I I would like to offer my own additional answer to the question, and and I think it is a good question for us to keep reminding people on. But the the answer I would offer is when you launch a project like this based on a citizen initiative, you're gonna start with a completely broken project.

And this project was broken when it was approved by the voters because you would never if if if this if state government was designing this, right, they would never have designed it the way they did committing the things, starting construction before they had right to ways, not having an inspector general on board, all of those kinds of things. So you you it hopefully, this will be a lesson to the voters of California.

This way because it was under it it was underestimated the challenges, and it started and it started in a way that actually increased cost because of how inappropriately they sequenced the items.

And so trying to get those items back into proper sequence and and all of that, been been a nightmare for for for this project. I'm not trying to defend anybody or anything else, but I'm saying that's you identified two major things I would identify. The third is it was the absolute wrong way to start the biggest infrastructure project in the history of California. Right? So alright.

Anything else on this item? Yeah. I didn't. I didn't. Alright. Assembly member.

Well, thank you, and it's good to join everybody here. And and, I mean, I will say those are some interesting comments, mister chair, especially when it talks about the voters and the voters approving the initiative back in 2008. I always make it clear. I did not vote for high speed rail in 2008. I was 12 years old, So

it didn't happen. But but I think it's interesting to say that the voters shouldn't support a project because I think the voters supported the legislature and the business plan, and that's what they wanted to give a chance. And what high speed rail has now turned into is a monument of inept failure. And and it's why I I essentially have my questions today on this. One thing when you you were talking about, why this budget trailer bill is needed and why the bill is needed initially.

I don't you're you're saying that it codifies into law your mandated reporting side of things, but there's nothing that actually prevents you from releasing your report right now. Correct?

There is no statute that says the OIG cannot produce a public report. There's no statute that authorizes me to do so either.

And you and you have been releasing reports.

We have. Of of our discretion. Yes.

they've had gone ahead and done it.

Yeah. But you you have openly been released in your report. And it also codifies into all what the I believe the what is it? GAO, actually looks at as part of your auditing that when it comes to security and when it comes to personal information, you already have the powers to not release that information, especially if it's a security risk to individuals and their personal information. That's under, I believe, section four of the GAO's auditing reports.

Section four of the GAO's auditing report. So you're talking about generally accepted government auditing standards or yellow book?

Yes. On the yellow book.

There is a section in the yellow book that does allow those who follow that particular standard to hold that information confidential. And there are auditors and OIGs that are required by statute to follow Yellow Book. I'm just short hand. My office is not required by statute to follow Yellow Book. So that requirement is not a statutory mandate upon me. So no.

And just okay. So you're saying, like, with that's the inclusion in this bill. It allows you more or less to do that. But have you been doing that already when it comes to keeping people's personal information or security risk alone? Is it is that often found in your reports that you've been able to put people under?

That Correct. Those those two issues have not come up yet, so I I no.

Okay. And see and that's why when it comes to why I have so many questions about this bill is one, it codifies something that actually you are already legally doing. There's nothing that actually stops you from doing so. And two, there hasn't been any issues that you've talked about when it comes to the security side and on the personal information side.

But the one part That I think people have issue with is the confidentiality around what you can hide and how broad it is under the definition of weaknesses.

I think that's where we struggle because it does grant the power to remove, as you've already stated earlier today, areas that you have seen weaknesses. If there are potential issues on the project, it essentially gives high speed rail authority, the legislature, chair of the transportation authority, chair on the Senate side, the ability to remedy that in order to secure financing in the future because you have identified this as such a risk.

That is the part where, for me, I mean, it it like, Bernie Madoff would be happy to have that where he can correct all the issues of the past and then, therefore, we can secure financing in the future. It it makes it makes it very hard to support something that in a time right now where people are asking for accountability and open transparency, it's not here.

And and while I do also understand as well that even though you have to repeat release your confidentiality report, it states in the bill that it can stay and remain confidential as long as you release a written statement or you send a written statement to the authorities.

Correct?

It would stay confidential until that weakness is resolved, and we'd be pushing for that weakness to be resolved.

So but you you could do that in perpetuity every single time until the weakness is resolved. And and one of the things that I would ask for, like, a general weakness, would be, as we know, that the early necessary works on California high speed rail were not done right. I mean, the chair even just pointed out right now that the project itself was broken from the beginning.

And especially when the high speed rail draft plan that was just given to us, and I don't know that that thing was thrown out the window, states that funding on the current high speed rail plan is gonna be around 35 to 47%, and that private business is gonna be needed to come and make up, in rough estimates 60% of it.

That how are we gonna go out and procure business investments into this and do it properly when these areas of weaknesses can really be held information while we're in the procurement phase as we're also remedying some of these issues.

And excuse me. My my role is partially to protect witnesses from being put in a situation where they have to answer questions that they are not responsible for and stuff. So I just want to emphasize that this is the inspector general. It's not his responsibility to to come up with all of the solutions to how we build high speed rail. His responsibility is to come up with, are we actually, you know, or is is there is there fraud?

Is there abuse? Is are we not following the law, etcetera? So feel free to be able to just identify what where your role is and where your role isn't. So I just wanna emphasize that.

And I completely understand. And especially on the the side of in this bill and in the trailer bill, talks about weaknesses that can be held in confidence. And what would you say is the, like, what could be identified as a weakness? It's such a broad term that I I just feel like the easements, you know, and the easement replacements, some of the early necessary works that weren't done that we still aren't able to do. Could that be identified as a weakness held in confidence?

I'm hard hard time imagining why that would be. So these would be weaknesses that could be exploited by individuals wishing to inappropriately benefit from the project or harm the project. So physical security, information security, fraud detection controls.

Yeah. It's not limited to that though. It doesn't say anywhere that it's limited to those specific areas because it also includes the word weaknesses. That is such a broad definition. And if the bill wanted to say only limited to fraud, security, personal details, then it would say that. But it does not say that. K.

Because could there, in in the future, some other category of finding be used by individuals wishing to exploit the project? There could be. Can I think of that term right now? No. But I can think of those three that I've mentioned to you. So the bill allows some discretion for a new category that is not currently contemplated.

So so where I would as an example for the weakness side would be on, like, the non execution of contract side, where, essentially, contractors that can't do the work because we haven't been able to move the easements or permitting or access. They're owed a $170,000 a day, $5,000,000 a month in perpetuity. But if there's a business that is looking at trying to invest in high speed rail because they see that it's a never ending money pit, Change order delay fees.

Could that be seen as a weakness that could be hidden and held in confidence until it's fixed? You said change order The change order delay section of high speed rail.

No. I don't believe so. And and why I believe I would report on on chain the change order process is actually on our work plan. We plan on actually doing a review of that, as soon as we're done with the business plan. And no, I don't believe that would be, a weakness that we would hold back, at least what I'm understanding right now, that process to be.

So okay. In your letter to High Speed Rail board recommending the rejection of the proposed business plan, you cited several violations of state law, including the absence of a funding plan with estimates of funding gaps for completing the Central Valley segment. Given that the board will also be considering a new plan next month, would you agree that any of that business plan, that the board approves would similar similarly be in in violation of state law if it does not include a detailed funding plan? Could that be identified as a weakness?

Yes. And I would already I would make that public immediately as I have already in my letter to the board and and and in my communication to your office, I let you know that that the bill that you offered offered was not being complied with.

Well, exactly. And that's what I see as a broad definition of weakness. Right now, California high speed rail is in violation of the law. And I understand that you may not you may openly release that, but as we've seen just this last week, the chair of High Speed Rail is not even the same chair from a week ago.

And it's my worry that if a different inspector general is on this, that they can identify what you just stated right now as yes and hold that in confidentiality and keep that until when?

And I'm I'm gonna interrupt here because that's exactly what we're doing here today is to decrease the likelihood that this is just being released because we have an honorable person in front of us. This is actually saying it must be released. Right? As this this trailer bill language is doing exactly what you're asking for. So the implication, I think, is, you know, the implication is we're we are going from a voluntary system that we have to commend the inspector general for voluntarily releasing it.

He's coming to us and saying, this shouldn't be. If I'm gone, somebody else should have to release this. And the only thing and I want to try to emphasize this difference. Every weakness is not held in confidence. Only a weakness that can be exploited immediately by somebody for nefarious gain is held only long enough to close the loophole, not in perpetuity.

Alright? It's just to close the loophole. So when he talked about this change order request or the the the the other things that he's agreed to, He can't hold those in confidence if this if if we if we pass either the bill or the trailer bill language. You can't hold those things in confidence because they're not things somebody could exploit. He'll have to say that right away.

The only thing that could be held in confidence is something that could be exploited for somebody else's inappropriate financial gain.

But mister chair

try to clarify that.

in So It it doesn't say that in the bill. I understand that's the interpretation, but in the bill, it actually just talks about as long as it's in the best interest of the state of California. So it's very broad definition. Well So it doesn't say that physically. Okay. Great. As long as it remedies fraud protections and all that. But but but but it specifically says that.

But you you have been on that for more than ten minutes in in terms of this, and I think it's time for us to move on to some other aspect of this.

Mister chair, I do believe that this is the most expensive infrastructure project happening in the entire world right now that I think it's yeah. I mean, we just heard a a yes from talking about a potential weakness that could be held in confidence on a major project that I think is important.

I I I think we have I think we've I think we've we've been mining this pretty pretty thoroughly. But I'm gonna let the inspector general make one more comment here, and then I'm gonna move us along.

So Assemblymember, I hear your points, particularly of okay. So you voluntarily the OIG has put out public reports, but another IG might decide not to do that. K? So a bad actor in my position.

The controls you have on that are are two. They have to articulate the risk for re for for why they are holding a report back, and they have to eventually release that report. And you will be able to see what was in it, and you'll be able to know whether or not you you believe that was just, an inappropriate use of that authority. That's those are the controls. No. I think those are very strong controls for that.

I think you have more trust and confidence in that than I do, especially as I mean, again, the chairs even stated that this project started as a broken project from the very beginning. You know, I think that's just those are the main issues that I kinda have when when we're looking at it just to to see. But, hey, we'll figure it out when we get there, I guess.

We appreciate you pointing those things out. Thank you very much. Assembly member Wilson wants to be on. Assembly member Rogers put his hand up. Do you wanna respond directly here to this, or do you wanna go on the assembly member Wilson?

All right. So first of all, I appreciate your candor in this discussion. And regardless of whether you support high speed rail or oppose high speed rail, I think we all should agree that an additional level of oversight is a good thing for our constituents and for our state. And I appreciate that you've only been in the role for a couple of years and are trying to change the process.

I think that, just to jump on one of the comments made by the Chair, I oftentimes do think about what rules would you want in place if you don't know who is going to be in that seat.

Right? I think my colleague would probably hate it if there were no constraints put on and then Gavin Newsom needed a job in a year and became the Inspector General. Right? And so having clear guidelines of what you are expected to do and how you are expected to do it, regardless of who the actual individual in that role is, is a really important thing for us to be considering as a legislature.

And I know, before my colleague got here at the beginning of the discussion, you had mentioned that you do not currently have statutory authority.

And if pressed in a legal sense on the release of some of these reports, it might be hard to justify. And I can appreciate that you were caught at the moment between a rock and a hard place, trying to do what is expected in your role without having the actual framework in place to be able to legally say that you were following it correctly. And so that's, first and foremost, why I'm supportive of going this direction of actually enumerating what that could look like.

Then it becomes a question of how much is too permissive versus what is too strict. But I think that we're all going to just generally disagree at different points.

I think that, out of the eight legislators sitting at the dais, seven of us have served in local government and have seen instances and cases in which data or information is presented in a closed session setting, not with the intent of preventing transparency, but because there is a legitimate concern where there could be more harm done to the public in the disclosure of that immediate information than in allowing for an opportunity for rectification and then disclosure and discussion.

And so it's something that, whether you agree with high speed rail or disagree with high speed rail, it is a process that most of us are very familiar with that can lead to better outcomes if done well. And I understand that that's what the negotiations between the budget language, the trailer language, and the piece of legislation are: to strike that correct balance between it.

So I appreciate you coming here to answer those questions, removing some of the heightened theatrics around high-speed rail as we saw on the floor in particular, and having an in-depth conversation here, I think has been really important for allowing the public to better understand what the intent is and how we are going to move forward, and how this, frankly, is going to be a better product for constituents and for taxpayers as the project moves forward.

So thank you.

Assembly Member Wilson.

Thank you, Chair. I appreciate the discussion around this, and I appreciate all the discussions we had in working on this bill, or actually working together since I was able to be Chair not too long after you were able to get in the position. And so thank you for your work. So I think that the trailer bill language is really important. I think that ensuring that you have authority to review a broader range of agreements is extremely important.

So whether it makes it into the trailer bill or makes it into 1608, I would hope that my colleagues would support that, because I think that's critical. This was created in 2022 because it needed effective oversight and accountability. That was the whole point of creating the Inspector General.

And one of the things that we did in 1608 was first changing your title slightly, because what happens, like in the conversation a little bit here, is that your original title, or your title as law today, is the High Speed Rail Authority Inspector General. You are in an independent office. You are established as an independent office, but the title in some way suggests that you are kind of like an internal auditor for the High Speed Rail Authority, which you are not.

You are completely independent and separate and can account for what they do. You hold them accountable and provide oversight, but you are not responsible for their actions or involved in their business decisions. So the first thing that 1608 does is change your title to Office of Inspector General, comma, High Speed Rail Authority. Very similar to what we have for our other inspectors general.

The other thing from 2022 when we set this up, and some of this wasn't really realized until later, which is why we have the proposals before us, is that you use full discretion for what is made public.

Not just the reports and answering, but even what's included in the report. Full discretion. And so we know, since this is a big project and part of your job is to ensure that public funds are used in the most efficient and effective way possible, that part of that is transparency to the public.

And that it was important that it wasn't your discretion on what reports you made public or what was contained in it, that it really was something that was statutorily mandated, which my colleague eloquently talked about. And so this allows for everything to be made public.

And then when you are using your discretion, you have to justify it, as was noted. You have to articulate it, and then you only have a period of time where it can be remained. It's temporary, and you have to keep reviewing that. And that was something we negotiated and worked out with the First Amendment Coalition to make sure that our intent of the bill actually matches the language of the bill, and I appreciate their work.

The other thing that we're doing in 1608 is the fact that the procurement process to get specialized services or whatever you need has to go through a more encumbered process through General Services.

As you are an independent body, we want to make sure that you have the ability to do what you need to do, and have some authority to procure services and what you need. And so our bill includes that. And the last thing that it includes is the right classification so that you can hire in the right way for the job that you're doing. I think that's critically important.

So I've identified four things that our bill does, plus noted that the ability for you to review a broader range of agreements is extremely important.

That's at least five things. I know the Chair had asked you earlier, did you have everything you need? With those five things, given now your experience in the role, and having come before this body in particular multiple times, is there anything else we're missing?

Those are the five things. If I could speak about the proposed agreements, I'll state that I would prefer it be in the trailer bill because the effective date is critical. Immediate. There are things coming forward right now through the High Speed Rail Authority that I don't want to be not notified of or blocked from reviewing.

Public private partnerships, financing, I need to get access to those and have it be required that they provide that notification. So

I'm asking if it could be put in the trailer bill because the effective date is what I need.

And I a thousand percent support that, and I hope my colleagues will as well, because, as it's been said, this is a very expensive project. It's gone on a really long time, much longer than most of our, not most, all of our, all Californians expected it to go. And so we do want to make sure that it's done in the most efficient and effective way possible.

We do want to make sure you have the authority to give it proper oversight, so that we as the legislators who are elected to hold folks accountable can hold them accountable to their use of those funds. And so anything that you need immediately, I would say we should be able to do that.

My last comments on this is there were a few statements made around who gets the confidential report. It was noted that there was some, like, veto power or something to that effect. It also noted that this could be related to financing, which it's not. Right? That you don't have a role in financing.

You have a role in reviewing, but you don't have a role in financing. And there was an issue around the term weaknesses, which, weaknesses, yes, is a broad term. However, it's an audit term, and it is related to internal control deficiencies. And as we've said from the entire time that I've been working on this bill, willing to tighten language to make sure that it's very clear that our intent matches language, which is the work we already did with the First Amendment Coalition.

So my two follow-up questions, and then I'll give it back to the Chair, were: the members that are identified, members of the government that are identified in 1608, that relate to the governor, the High Speed Rail Authority, the governor, the, I think, transportation secretary, the chairs of the two committees, those are listed.

Could you explain why those are listed? And then the second question, could you clarify what role you would have as it relates to looking at how the High Speed Rail Authority finances the projects.

Okay. So let me handle the first question regarding financing of the project. So we do have a provision that requires us to look at proposed agreements. We would consider those agreements, whatever form they take, would be within that scope. And we want to make sure that that definition includes that type of issue.

So I do have a role, I just want to make sure it's in statute what those proposed agreements mean. I guess a third control that I should have listed to the Assembly Member is that confidential reports are not held by me. They do need to be provided by an oversight body. So, yes, the High Speed Rail Authority is one, of course.

But the board itself, the bill talks about those who can act. So this is chairs of the Assembly Transportation and Senate Transportation Committee and the governor's office. So those reports go somewhere to oversight bodies that can put pressure on them to act.

Thank you.

Thank you very much. I would only like to comment on one item, and that is that a concern I have is that if the trailer bill language passes without the other provisions that you have in your bill, that we may only get the trailer bill language and not get the provisions of your bill, because that may not make it all the way through.

Oh, I'm happy to give up 1608 into a budget trailer bill. All of it.

But it's

100% of it.

But it should include the other provisions of your bill. Because an answer to the question: "Does your office have everything you need to provide effective oversight?" The Inspector General has identified some things that are in your bill that are not in the trailer bill.

So, from my perspective of this moving through budget subcommittee four, and I hope that all my colleagues would say if it's going to go forward, it ought to be as complete as possible. It ought to have everything the Inspector General is identifying.

And so that is what I will likely be recommending to my colleagues up here, that that's our position: that, yes, let's move quickly, but let's not move quickly and leave out the two major things that have been identified that should be there. So, if anybody wants to comment on that specific thing, I'd take that real quick. I saw some heads nodding. So I'm assuming yes. Go ahead.

I mean, just real quick, maybe these are just clarifications. One, only one thing that was brought up is, like, on the confidential reports, I think the language is only to committee chairs and the governor. Could we consider adding in vice chairs of the relevant committees to that? And look its similar when we have US congress, intelligence reports are given to both Chair and Vice Chair.

I think it's a very legitimate request. I'm glad you got that out. That's exactly why we have these hearings, and it's a request. I'm not saying I agree or disagree with it at this point in time, but I'm glad you got it out on the table. It's something that should be talked about. The transportation chair has an issue moving an Inspector General, so now you've got it out here in the public.

Okay. Well, yeah, I would ask that that be reconsidered, and I think that would be helpful language. I just wanted to confirm with you, and I think you said this, but I want to confirm it. What if, for some reason, they're not resolving the deficiency in the fraud controls? Does that become public at some point?

Because, you know, one could argue, hey, they could just not do it and it continues to be confidential. Like, if there's a big problem and they're not responding and closing that loophole, I imagine at some point it becomes public. Is that right or not right?

So holding something confidential, the way the bill is written as amended, is at our discretion. We don't have to hold it. We're not required to hold it confidential. I can imagine a world in which they say they take a year, the OIG would just simply say that's enough. We're releasing the report.

It was discretion for us to hold it. Now it's discretion for us to release it. That's what I imagine would happen.

Well, there's nothing that would require you to.

No. There's nothing in the bill that requires that. Likewise, there's nothing that requires us to hold it confidential to begin with. It is at the discretion of the Inspector General.

And there's nothing that requires them to currently as well.

So this is an improvement. I would point out this is an improvement, number one. And number two, it would almost take a corrupt Inspector General to not reveal that at the same time. But at some point in time, when it is discretionary in the first place, if the Inspector General has found it and said this is a problem, this needs to be fixed.

And once I've told you it needs to be fixed, I have to legally go out and tell people that I've told you this.

I'm going to give you some time to fix it. If you don't, then I will have to, because, I think, the Inspector General actually loses the discretion, because the discretion is you can hold it because it's in the public's best interest to hold it so that there's time to fix it.

If they refuse to fix it, then the Inspector General doesn't even have the legal right to hold it any longer, because it is not being held to protect the public so that it can be fixed. It's actually a sign of incompetence or corruption or whatever.

Well, that's where you might just, if we're talking about language,

we might consider putting a timeline on that. Right?

Well, we're

Well, the problem is because you don't know. And what I would say is that the Inspector General has to articulate why he's holding something, and you're using the example of fraud. Right? So the Inspector General notices that a fraud detector control led to fraud or could potentially lead to fraud.

So, and the Inspector General can correct me if I'm wrong, in the confidential portion that you're withholding, you're going to say that we've identified an area of concern, and it has been relayed to the Inspector General, I mean, I'm sorry, to the High Speed Rail Authority and/or whoever else you gave it to.

And if it actually had a dollar amount, you would be telling what the dollar amount is.

Certainly. Yes.

Okay. So then once it's fixed, then he would automatically release it.

But let's say it's something that could take two years. Then it would be up to the Inspector General to determine, okay, it took two years to fix. Now it's reasonable that you should have fixed it already. So now I'm going to release it. Or, and part of why the chairs are listed as oversight, it could be legislation.

The only way to fix that is statutorily. So you're notifying the person who can introduce a bill to provide oversight, because, remember, we give oversight to the High Speed Rail Authority as the two transportation chairs in each house.

And so it's about articulating, and then letting the discretion of what is a reasonable time to fix versus a non-reasonable time. If you put a time period on it, I think that would limit the ability to be effective.

And what time period we did include, that was worked with the First Amendment Coalition, was it had to be reviewed every three months. No.

Twenty days.

Hundred and twenty days. So every hundred and twenty days, they would have to say, I'm still keeping this thing and why I'm keeping it, why it's still confidential.

Hundred and twenty days.

Yeah.

So we all would be able to see, the whole public, because this is not to us. This is to the public. We'd be able to say, wait a minute. This is outstanding and it's been outstanding for some time. What's going on?

So we would all know that something was held in confidence, because now they're required to be public where they were not before.

Yeah. And all I'm saying is, if there is something that they're not doing that the inspector has told them, hey, you should do this, it's a great public interest that people know that. Like, if they're willfully not doing it, for example, and that's what I'm saying is sort of gray right now. What if that's happening? I hope at some point that's going to be revealed so that people understand, hey, they're not doing what you recommended.

They do to protect against fraud or waste of public dollars.

And I'm going to, can I

respond to that?

Yes.

So in the notification that's required and the redetermination, you would see that they have not fixed what I haven't described in detail, a problem in a particular area. You would see that they haven't done so.

And then, yeah. And I'm going to try to summarize this and bring this to a close. And that is, I think we've had a healthy discussion about the fact that in any bill, there is no perfect bill that closes every loophole in every situation. But things have been appropriately identified here by people on both sides. And I think this has been healthy, and it's still a work in progress in terms of where we're going with trailer bill language and with this.

And so I really appreciate that this was a helpful discussion. Yeah. And I see two people. And so, in my bipartisan benevolence, I will go here and then here if you can keep it quick.

Very quick. But I just want to make sure, too, that I appreciate your comments. When it comes to what we can do to make adjustments where, you know, maybe we do feel comfortable with where we want to be, I do want to make my point clear: I do believe the state of California should have modern infrastructure. I believe we should find ways to get there.

And I agree with the Assemblyman Gallagher when it comes to, you know, I would feel a lot more comfortable with this if we put a specific, you can only hold a report in confidence within one year.

Even if

Great. Thank you.

It takes six years to fix it, you know, that is the part where we need transparency. Because, again, when it comes to high speed rail, we're six years beyond the full completion date of the San Francisco to LA period. So if we can lock that part in where it's an automatic release on that, I think we'd feel comfortable to it. And with some of the changes made that the Assemblyman Gallagher mentioned, I think we can get a lot closer to that.

Assembly Member Wilson.

I was going to ask, and apparently it was asked when I wasn't here, about DOF's concern about 1608. So I'm good, and I look forward to working to figure out how we can get the language in there in a proper way that addresses some of the concerns. I think that, one, putting a time period on it is just not valid.

Because if you expose it, then you are running into the same problem of why it was held confidential in the first place. I, I

I agree with you, and I'm going to end with, I talked about the beginning of this project. The beginning of this project, the concept of high speed rail is not broken. The concept of launching high speed rail with the process that they identified in the original initiative, that process was broken. And it, for example, didn't even include an Inspector General.

It should have from the beginning. And how much more helpful that would have been, and how many billions of dollars, if an Inspector General right at the beginning would have been there saying they're starting construction that they're going to have to stop, and it's going to cause a big cost increase because they don't have the right of way for the next piece that they're going to.

Those kinds of things would have been much better off. So it was a broken process from the beginning, and we're trying to fix that process as we move forward. Thank you very much. Really appreciate it, and appreciate the professionalism that you're bringing to the whole Inspector General's office. And we're going to go on to issue number four, and that's Caltrans SB 150 workforce development trailer bill.

When you're ready to begin, whoever wants to start.

Thank you, Chair. I am Stephen Keck, the Chief Financial Officer of Caltrans. With me today is Keith Duncan, our Chief Budget Officer. He's going to start us off with this item.

Thank you very much.

Thank you, Steven. Mister Chair, Assembly Members, good morning. Happy Wednesday. Again, Keith Duncan, Caltrans budget officer. Issue number four on today's agenda is a trailer bill proposal by the California Department of Transportation, Caltrans, to amend Government Code 14017, which was enacted in 2023, and authored by Senator Durazo.

As quick background, annually, California, specifically through Caltrans, we receive formula funds through the Federal Highway Administration that are invested into both our state and local transportation systems. Government Code 14017 requires that Caltrans transfer a portion of those federal formula funds from the Infrastructure Investment and Jobs Act and transfer them to the California Workforce Development Board for investment into the state's High Road Construction Careers Program that creates reliable career pathways through delivery of high quality training centers throughout the state.

The challenge was, and is, in the use of these federal formula funds, all training purposes, projects, whatever the federal funds are used for, must meet federal eligibility requirements. And when the bill was enacted, Caltrans and the Workforce Development Board quickly worked to develop a scope of work, and we worked with the Federal Highway Administration. And over the course of about two years, we were unable to receive the necessary approval or federal authorization to use the funds in that manner.

So unfortunately, because of that, we were unable to execute the interagency instrument using those federal funds. But instead of simply throwing our hands up and abandoning the idea, the intent of this proposal is to keep the intent of the bill, which was to amend the Government Code to, instead of using federal funds, use state funds, and redirect $30,000,000 from the state highway account to be able to fund this effort.

So I'm joined by a member of the California Workforce Development Board, and we're available for any questions you may have.

Any other speaker have comment on this before we go to LAO? All right. Let's go to LAO.

Thank you, Mister Chair. Frank Jimenez with the Legislative Analyst Office. The proposal raised no concerns for us. We understand that the federal funds aren't eligible for this purpose, and the administration's proposal is a reasonable approach for meeting the intent of SB 150 with state funds, albeit at a slightly smaller amount.

And so, I must very quickly get to the two questions that we have. What funding for high road jobs in the transportation space already exists?

I believe the initial funding that was given to the California Workforce Development Board was part of the Senate Bill 1 when it initially was enacted. Uh-huh. But since then, I believe the funds stopped flowing that way about one or two years ago.

So we don't have funds at this point in time. Great. And then, specifically, what will these funds be used for?

Would you want me to?

Hello. I'm Emily Sunahara, the deputy director of operations and policy implementation.

I'm in love with somebody that's right there on our microphone like that.

I heard your instruction earlier.

So the high road training partnerships are defined in the California Unemployment Insurance Code Section 14005 as an initiative that is a model in its industry based, worker focused training partnerships that are incentivized with funding.

The High Road Construction Career Program is specifically construction industry focused and invests in construction training projects, strengthens partnerships between local building and construction trades councils, workforce boards, community colleges, and community based organizations, delivers structured high quality training that aligns with labor market needs, and provides career pathways for individuals to enter or advance in the construction industry. And for this specific partnership with Caltrans, they have received infrastructure investments that they are investing in projects around the state of California.

So we specifically partnered on the High Road Construction Career initiative to provide a qualified labor force for apprenticeships within Caltrans.

When you say, you know, collaboration and cooperation amongst all these,

I don't, if you could help me, I want to know exactly how does this actually increase careers in these professions. Yeah. How will this money be spent to increase the number of people in these professions?

Absolutely. So construction apprenticeship programs are selective, and they require preparation for most applications that applicants oftentimes don't have. Many people who would excel as tradespeople often have no idea that apprenticeships exist, and they don't know how to access them if they did know they existed. So our program does outreach to workers from underrepresented communities who commonly face compounding barriers to apprenticeship, and we provide supportive services, training, and then a pipeline to apprenticeship. So we deliver a trained and qualified workforce to the apprenticeship doorstep.

So this doesn't fund the apprenticeship program. This funds outreach to people to know how to apply to the apprenticeship program.

And pre apprenticeship training.

And how much do you anticipate that funding being each year?

Well, to date, this has been a pilot program. So the initial investment from SB 1 that was mentioned earlier was $5,000,000 a year over five years.

Okay.

But there have been various funding sources to date that have fluctuating investment levels. And this one specifically will be $27,000,000 in pre apprenticeship training grants that will go out to all regions of California.

One time money?