Senate Standing Committee on Labor, Public Employment and Retirement

Good morning, everyone. The Senate Labor and Public Employment and Retirement Committee will come to order. We have 13 items on our agenda today. We won't we'll start as a subcommittee. We don't have a quorum right now.

Let's see. And we won't take up the for the audience, we we have a consent calendar on file items five, six, nine, eleven, and 13 are up for consent today. And, with that, we're gonna again go as a subcommittee. I believe in the audience we have, members file item number one, AB 1048 by mister Chen. Mister Chen, please come up.

Yeah. Just for everybody, each support or oppose, witnesses are two minutes each.

Thank you, mister chair, for your time. I wanted to thank you for giving me the opportunity to present AB 1048. I also wanna thank the commissah for their exceptional hard work, especially Jasmine for all that she's done. She's been great on this bill. I'm also happy to accept the committee amendments.

AB 1048 addresses a challenge in the California workforce compensation system and authorized payment reductions for medical providers who treat injured workers. Currently, providers are seeing their reimbursements reduced without their knowledge due to a third party administrator or silent network arrangements. As a result, these reductions can often fall below the official medical fee schedule. However, most providers are not given the information they need to determine if these payments are truly valid.

AB 1048 brings transparency to this process by ensuring providers may only receive a requested contract once within a three hundred sixty five day period, ensuring that the process remains reasonable and manageable.

This bill does not change the reimbursement rates or create new payment obligation. It simply ensures that providers have access to the information necessary to understand why a payment was reduced and whether the reduction is valid. Here to testify with us today is doctor Basil Besch and also Ryan Spencer.

Thank you for being here.

Two minutes. Good morning. Thank you, committee members for allowing me to testify on this bill. My name is Basil Besh. I'm an orthopedic surgeon who treats injured workers.

AB 1048 is a very modest clarification of existing law. Right now, when a payer contractually reduces the payment to a doctor, they're obligated by current labor code forty six zero nine to demonstrate the justification for that reduction. The problem is that there's current ambiguity in that word demonstrate. You could provide the name of the network or the processor, but not actually the contract that is the justification, accurately and quantifiably for that reduction. AB 1048 is very narrow.

It just seeks to clarify that demonstrate that the contract must be produced. We've met with opposition and heard their contentions and responded accordingly. They were concerned about being inundated with request for contracts, and we agreed that, you get the contract, it's good for a year, you shouldn't be asking for it repeatedly and bogging down the system. The rest of the contentions that were brought up to us are not addressed by October. They are already existing in forty six zero nine.

So for example, if the if the demonstration cannot be made, the fee goes back to the official medical fee schedule, the statutory fee schedule for treating injured workers. This is not punitive. This is already existing law, and October doesn't touch that. All ten forty eight does is provide transparency. It is not anti contract.

It is pro contract. I know my contracts. And so we have two demonstrable examples. One group out of LA was getting discounted consistently for a period of approximately three years. They could not get the contract to justify.

We stepped in on behalf of California North Peak Association to help. And when we finally got the contract, it turned out to be one that had been termed out seven years prior. 4,500 claims, half $1,000,000. That's a lot for an orthopedic group. That makes them think twice about treating injured workers.

Your time is up. Please come to a close.

Thank you, madam. I respectfully request that you support 1048.

Thank you.

And happy to take any questions.

Thank you. Next witness.

Thank you, madam chair. Ryan Spencer, on behalf of the the California Orthopedic Association sponsors of the bill, and I'll be brief. This is the second time you've heard AB 1048, and the reason why it's back before you because of the substantial amendments that we took. And this is a result of extensive conversations we had with the opposition, as well as the administration and the great work of your committee staff, Jasmine. So thank you.

So what we're hoping for, is the same vote that we received last time, which was unanimous, and so we ask for your aye vote again. Thank you.

Thank you. Do we have support witnesses please step forward to state your name, affiliation, and position.

Thank you, madam chair and members. My name is Don Shinske. I'm here on behalf of the Western Occupational Environmental Medical Association in support.

K. We'll move to opposition. Opposition witnesses, please step to the table. And while we wait for them to be seated, I'm gonna ask the assistant to give us a roll call for a quorum.

Senator Small Cuevas?

Present.

Small Cuevas present. Senator Strickland? Here. Strickland, here. Senator Cortezi?

Durazo? Laird? Here. Laird, here.

Perfect. We have a quorum. Witnesses, you each have two minutes.

Thank you, madam chair and members. Jason Schmelzer here on behalf of the California Coalition on Workers' Compensation, and PRISM, which is a JPA, that serves public entities. We are still reviewing the committee amendments and the analysis, but we continue to oppose the bill based on our initial review. I'll provide a big picture overview of our reasons for opposing the bill, and then Lisa Anne from APAN will dig deeper into the details on the data that support our assertions.

So first, we don't believe that the sponsors have clearly established that a real problem exists.

They rely heavily on very limited anecdotes, but the data shows that only statistically insignificant number of disputes, involve network contracts. Second, in talking to the sponsors, it became clear to us, that there are several legal remedies and dispute resolution processes that are available right now, in the anecdotes that he provided and are simply not being pursued. That's frustrating for us. They liens could be filed, the independent bill review process could be pursued, or the dispute resolution process and the actual contract could be activated.

Third, providers are not prisoners in network contracts.

To be clear, they agree to network contracts because it provides them a massive benefit, which is patients' bodies, that seek treatment through their practice. Every contractual relationship is voluntary. Every one of these contracts has a cancellation clause. Providers are in the contracts because they benefit from them. Finally, we think providers are sophisticated business owners who can track their contractual relationships and, frankly, shouldn't need us to send them a copy of a contract that they've already signed.

Despite this general objection, we have offered them multiple rounds of amendments that would do exactly that, provide them the transparency that they've provided. What we've asked is that employers not be penalized financially for failing to timely send a contract that a doctor should already have in their filing cabinet. This is the fifth version of this bill over the last year and a half. It continues to have significant problems. We do not think there is an urgent need to pass this bill.

We don't think there's an overwhelming problem. This is an issue that could be sent to the Commission on Health and Safety and Workers' Compensation, which studies these types of issues and helps the legislature determine what is fact, what is fiction, and where the policy should go. And for those reasons, we urge you no vote today.

Thank you.

Good morning. My name is Lisa Ann Hurt Forsyth. I am the vice president of government affairs for the American Association of Payers, Administrators, and Networks. And while you're all pondering how long that acronym is, it's APAN. I'll save you some time.

My members consist of over 70% of the market of the providers of medical provider networks. So we represent basically the networks in California among other payers. Important when we start talking about these types of topics to put aside the drama and the one offs and look at data. And actually look at the system holistically to see is the system working or is the system in need of systemic change? I think it's important to make public policy decisions that are based in data.

So when this topic came up, which actually dates back to 2024, and we were looking at potential solutions, I said, let's look at the data. Let's see. You know, is this really a problem that we as an industry need to be addressing, whether it be legislatively or systematically? So I pulled some data that may interest you. In any given year, there are roughly 11,000,000 bills that process in the California workers' compensation system, give or take.

About 11,000,000. Of those 11,000,000, I looked at the D W C data and the D W C data looks at how many independent bill review disputes were filed in that year which is as Jason mentioned an option that's available for providers to leverage if they're having an issue with their contract or actually any kind of issue. They they have that system available to them. So I looked at the D W C data. This is state data.

For twenty twenty four of the 11,000,000 bills, 3,958 were challenged by providers. So, doing the quick math, 3,958 is roughly 4,000 is your numerator and 11,000,000 is your denominator.

Your two minutes is up. Please close.

Oh. So basically, 99.96% of bills in California pass without incident, haven't been challenged, or haven't had any issues of any kind.

Thank you. Thank you. Are there any oppositions me to state your name and affiliation?

Faith Borges on behalf of the California Association of Joint Powers Authorities respectfully opposed for the reasons stated by mister Smeltzer.

Good morning. Julisa Seja Cardenas on behalf of the California State Association of Counties in respectful opposition. Thank you.

Good morning, Chair and members. Laura Curtis on behalf of the American Property Casualty Insurance Association in respectful opposition. Thank you.

and members. Laura Curtis on behalf of the American Property Casualty Insurance Association in respectful opposition. Thank you.

Good morning, Madam Chair and members. Laurie Cameron on behalf of the Association of California Workers' Comp Professionals, Medex Healthcare and One Call Care Management, respectfully opposing. Thank you.

Stephanie Lieris, Coventry Healthcare, respectfully opposing.

Thank you. Welcome to the dais members questions, comments. Mister Glenn.

Mister Glenn.

Someone, when I hear from the opposition that there's no data, no data, what brings you forward of this bill, if do you have data? What what made you bring this bill forward, in terms of solving the problem?

This bill actually came to me from the industry when it comes to medical providers, in the sense of the physicians, the medical doctors. It's something in which they have the ability in which they were looking for accountability and information. Like I said before, this doesn't change reimbursement rates or create a new payment obligation system, but ensures that these providers have access to information necessary for them to understand why payment was reduced. These are incredibly skilled highly educated professionals.

But at the same time, when it comes to accounting, that's something a skill set they often delegate to other people.

So we heard this from the medical providers themselves, and it's something that I think also has the opportunity to answer the need for transparency. We've taken the amendments from the committee. It's something that we appreciate the opposition is reviewing, and we hope to have the opportunity to move forward to continue those conversations, Senator.

Thank you, Senator Strickland. It sounds like that was pretty close to a close, but would you like to close, assembly member?

I respectfully ask your aye vote. Thank you, madam chair.

Thank you. We have a motion from Senator Strickland. Please call the roll.

The motion is do pass as amended to the Senate Committee on Appropriations. Senator Small Cuevas.

Aye.

Small Cuevas. Aye. Senator Strickland.

Aye.

Strickland. Aye. Senator Cortezi. Senator Durazo. Senator Laird.

Aye. Laird, aye.

We have a vote of three to zero. It's on call for when members return.

Thank you, madam. Appreciate your time.

Okay. We

Madam chair madam chair, can I move Can I move the consent calendar?

madam chair,

move Can I move the consent calendar?

can I

We have a motion on the consent calendar. Please call the roll.

On the consent calendar, [Roll Call]

Aye.

Small Cuevas, aye. Senator Strickland? Aye. Strickland, aye. Senator Cortezi?

No. Senator Durazo? Senator Laird? Aye. Laird, aye.

We have a vote of three to zero. The consent, calendar is on call. Next, we will move down to file item number four, seeing assembly member Rogers. Please come forward. And if you have witnesses they can come and sit at the front table.

I'm also presenting for Garcia.

You are presenting for Garcia. Okay. And that is file item number three. Perfect. Do you have Let's go three. Let's go on file order. Alright. We're gonna Oh, wait. Never mind.

Do you have

Let's go three. Let's go on file order. Alright. We're gonna Oh, wait. Never mind.

If they're here, we'll go in this order. Hopefully, they'll No need to move. We're flexible here in the labor committee. Thank you. Yeah. Please proceed when you're ready, Assemblymember.

Please proceed when you're ready, Assemblymember.

No. I I really appreciate it and appreciate the committee's time. We're here to present AB 1601. This is a district bill for the county of Sonoma. The way that the county's retirement system has operated means that there's really two options for the board of supervisors in giving a COLA a cost of living adjustment for its retirees.

One of which is a broad COLA that applies to everybody, which is cost prohibitive for the county and doesn't target those who need it the most. The second option is actually to allow for COLA in the event that somebody falls below 80% of their purchasing power, which it can only be paid for out of excess funds that have come in. That has not happened since 2008.

That means that for retirees in a high cost of living area, they have lost about 50% of their purchasing power, and it is a retirement system that is doing exceptionally well, which you will hear from, from our witnesses. We have Travis Balzerini, who's the North Coast Regional Vice President for SEIU Local ten to one, and Julie Winn, who's the CEO of the Sonoma County Employees Retirement Association.

Before I turn it over to them, I will note very quickly, that the county of Sonoma, who would be given the opportunity to work with an actuarial and find a path forward on a COLA for retirees, not be forced to do so, is in support of the bill, as is, SEIU, who is the sponsor of the bill.

You each have two minutes.

Great. Thank you, and good morning. My name is Julie Wine. I am the CEO of Sonoma County Retirement. We fondly refer to her as Sarah.

We I wanna make clear from the get go that this bill will not grant a COLA. All this bill does is provide flexibility so that the retirement system and the county can work together and look at each, individual system's fiscal realities and decide whether, how, and who to grant a COLA to. This bill provides some flexibility in the law that doesn't already exist, in that it allows the retirement system in the county to target a COLA to specific retirees.

The way the law currently reads, we would have to give an all or nothing COLA. Those, as you have heard, are cost prohibitive.

I will mention that the retirement system is 94% funded. That is on an actuarial smoothed basis, meaning that we smooth investment earnings over five years. If you look at it on a market value basis, we're 106% funded. So what does that say? That says the retirement system has been managed very well over a long period of time.

The county likewise is also in a very strong fiscal position. The county has been managed very well. This bill will not change that. It all it does is allow us to talk. It's not gonna change the behavior of the retirement board or the county in being fiscally responsible in managing their their systems.

Finally, the bill does have to have an actuarial study or the COLA, excuse me, before it is granted. That means it goes to the county board of supervisors at a public meeting at a minimum minimum of two weeks prior to any benefits being granted. So the public has an opportunity to weigh in on any funds that are going to be spent out of the county retire of the county of Sonoma into the retirement system.

With that, I thank you for the opportunity to testify and urge your support.

Good morning. My name is Travis Balzerini. I've been a county employee for eighteen years. I've been a trustee for the Snumb County Employees Retirement Association, also known as SARA, for six years. I'm speaking with you as the North Coast Regional Vice President for SAU Local ten two one on behalf of our members, retirees, and their beneficiaries who served for the county of Sonoma or the Sonoma County Superior Court.

Sarah is the only nineteen thirty seven act county pension system that does not offer an automatic yearly co pension cost of living adjustment to retirees and their beneficiaries. Therefore, Sonoma County can only grant a pension COLA using the two ad hoc COLA options available under the County Employees Retirement Law of 1937 or the CIRL. The last ad hoc COLA pension granted was in 2008.

Following massive losses from the two thousand eight global financial crisis, an accounting mechanism in Sarah's COLA policy prevented any pension COLA from being granted. That accounting mechanism was recently removed from the that policy.

In the last eighteen years, since last colo colo was granted, the San Francisco Bay Area inflation has increased by 50%, severely eroding the purchasing power of our retirees. Meanwhile, retirees' pensions payments haven't increased since 2008. Our retirees yearly average pension payment is very modest between 18,000 and 42,000 per year. These retirees won't receive another pay increase in their lifetimes unless in a mechanic can grant an ad hoc pension COLA.

After eighteen years without a COLA, retirees need for financial relief is dire and the two add a cola pension options available in the CIRTL are cost prohibited for the county.

Sarah's actuary produced four cost studies with various pension cola options ranging from 30,000,000 to $366,000,000. Two of those cola options require lanes changing CERR law to target specific groups of retirees and allow cola funding from additional sources. AB 1601 will allow Sonoma County the flexibility to target retirees who are the most in need in any funding using any funding source available.

We urge your support for AP 1601, which provides a viable path forward to deliver long overdue financial support to our aging retirees who dedicated their careers to serving their Sonoma County community.

Thank you both. Are there any witnesses, me too's in support? Please come to the mic and state your name and organization.

Andre Birkett, president, Sonoma County Association of Retired Employees, and I urge you please to pass this bill.

Ed Klytts, Sonoma County retired annuitant, speaking in support of this bill. Thank you.

JP Hanna with the California Nurses Association in support. Thank you.

Thank you. K. Now we will move to opposition. Are there any opposition witnesses here with us? Okay.

We'll move to opposition me too's. Any opposition me too's? K. We will come to the dias. Senator?

Thank you. When I first read the bill, I had concern concern about what the cost might be. But hearing that it's 96% funded and there's not been a cola since 2008. The justice of the situation is really clear. And there was a time, and this all runs together for me now.

I think it was about three years ago. We faced the fact that in the STIRS system, the teachers retirement system, that there had been minimal colas and we did a special bump for people that had retired before the early nineteen nineties because their pensions had inflated out of the point to to be meaningful. And at the time, my 98 year old mother was one of those people because she had retired in the eighties. And to some years, they didn't even get the 2% COLA.

I'm kind of amazed that you weren't here only earlier if there wasn't a COLA since 2008.

But this makes sense and I will move the bill.

Great. We have a motion. And I also wanna thank you for bringing this bill forward and appreciate it also just the and the work to make sure that the pension is always solvent, viable, and strong. We know that when you start making changes, there's always a concern. But glad to hear the ways in which you all are stewarding over this pension and are working together to to address this.

And we have a motion from Senator Laird, so let's call the roll. Oh, wait. We need you to close. We are closing

for you. I'll I'll be really quick. And I I think the Senator hit it on the head that the this bill, it mirrors, fiscal prudence with a heart. And that's why this was the number one ask from the county of Sonoma was to give them the flexibility to be able to take care of people, even knowing that they would have to work through the the potential financial impacts. So with that, I hope, for an aye vote and for us to rectify this long overdue situation.

Thank you. We have a motion from Senator Laird. Please call the roll.

The motion is do passed. Senator Small Cuevas.

Aye.

Small Cuevas, aye. Senator Strickland. Aye. Strickland, aye. Senator Cortezi.

Senator Durazo? Senator Laird? Aye. Laird, aye.

Three to zero votes on call. We'll take it out when members return.

Thank you so much. And

thank you. And so we'll move to file item number three, and those witnesses for AB 1439 can please come to the table.

Long time no see.

You may proceed.

Alright. Well, thank you so much, chair. I'm presenting AB 1439 on behalf of Assemblymember Garcia. Assemblymember Garcia wanted me to start by accepting the amendments. I also wanna start by asking if there are any Golden Bears Berkeley graduates at the dais.

Good. Good. So this bill is a study bill. It would request that the University of California Berkeley, not sure why you chose Berkeley when you have other fine institutions like UC Santa Barbara that could do the research work, but he asked Berkeley to conduct an independent study and analyze labor standard projections in California's real estate and infrastructure development projects funded through the portfolio for PERS and STRS.

Here to testify on the bill is Mike West with the State Building and Trades Council, and I'll turn it over to him.

You have two minutes.

Thank you. Good morning, madam chair and members of the committee. Mike West on behalf of the State Building and Construction Trades Council of California, sponsors of AB 1439. We believe that investments of union members defined benefit pension contributions by public pension funds in construction projects should not go to underground economy developers and contractors who do not pay the construction workers a living wage or ensure that those workers are graduates of state approved apprenticeship programs.

CalPERS and CalSTRS have a responsible contractor policy intended to protect public employees' retirement investments and ensure fair treatment of construction workers on pension funded projects.

However, that policy lacks clear requirements to ensure prevailing wages are paid, workers are properly trained, or labor peace is maintained after construction. Today, contractors simply self certify compliance by checking boxes with little verification or enforcement. As a result, CalPERS and CalSTRS can end up investing in projects that enable worker exploitation and undermine labor standards. Problems such as wage theft, health and safety violations, and poor quality construction are often not visible during the construction phase and frequently only after the project is completed.

These risks can erode project returns, increase costs, and are difficult to correct once they have already developed.

Ultimately, these practices expose CalPERS and CalSTRS to real financial risk including cost overruns, delays, reduced returns, and projects that fail to meet construction standards. AB 1439 has been amended to simply request the U. C. Berkeley Labor Center to conduct an independent study of labor standards protections in California real estate and infrastructure development projects funded through the real estate asset portfolios of PERS and STRS. Thanks for the opportunity to speak today and I respectfully request an aye vote on AB 1439.

Thank you. Thank you. Are there any support Me Too's out there? Please state your name and affiliation.

Good morning, chair members. Elmer Lazarda with the California Federation of Labor Unions in support.

Good morning, chair and members. Martin Vignola on behalf of the California State Association of Electrical Workers, the California State Pipe Trades Council, and the Western States Council of Sheet Metal Workers in support. Thank you.

Vince Agru on behalf of Sheet Metal Workers Local one zero four in support.

Good morning, chair members. Connor Gussman on behalf of Teamsters California in support. Thank you.

Good morning, chair members. JP Hanna on behalf of the California Nurses Association in support.

Arian Adam Chikova, San Francisco resident, resident, a member of CTA, California Teachers Association, and I support.

Okay. That looks like it for support me too. We'll go to opposition. Is there an opposition witness here today? Seeing none, opposition Me Too's.

Please state your name and affiliation.

Good morning, chair and members. Freddy Catana on behalf of the California Apartment Association. Respectful opposition.

Stephanie Jimenez on behalf of the California Council for Affordable Housing in opposition.

Good morning. Julisa Saha Cardenas on behalf of the California State Association in respect Association of Counties in respectful opposition. Thank you.

Good morning. Dorothy Johnson, the Association of California School Administrators respectfully opposed.

Good morning. Vanessa Chavez with the California Building Industry Association in opposition. Thank you.

Good morning. Michelle Gill on behalf of California Association of School Business Officials in respectful opposition.

Sarah De Ket on behalf of the Rural County representatives of California in opposition.

Jean Hurst here today on behalf of the Urban Counties of California also respectfully opposed.

Good morning. Aaron Avery, California Special Districts Association, respectfully opposed.

K. I will bring it to the dais members. Senator Laird.

I know. I'm very confident Assemblymember Garcia could have found a banana slug to do the research. So you can reflect that.

Only because Sonoma State is so well regarded that they're already too busy. But yes.

Yeah. Well, you're the supplicant right now. So be careful. But this is a study. It makes sense.

I would move the bill.

Okay. We have a motion. Would you like to close?

I just respectfully ask for an aye vote on behalf of Assemblymember Garcia.

Thank you. We have a motion from Senator Laird. Please call the

roll. The motion is do pass as amended to the Senate Committee on Appropriations. Senator Small Cuevas?

Aye.

Small Cuevas, aye. Senator Strickland? No. Strickland, no. Senator Cortezi?

Senator Durazo? Senator Laird? Aye. Laird, aye.

We have a vote of two to one. The bill's on call. Great. Thank you. Thank you.

I see Assembly Member Calra is here patiently. Thank you. So we are gonna move to file item number seven. And if you have any witnesses, support witnesses, please come to the table and have a seat.

Thank you, madam chair. AB 1697 will delay the implementation of AB 692, which I authored last year by one year until 01/01/2027 with an urgency clause. AB 692 was signed into law last year to protect all workers being subject to debt traps, stay or play employment contract provisions, exit fees, paid equip requirements or whatever term of art employers use to force a payment when the employee wants the freedom to work someplace else.

Regardless for workers entry level and ask to pay back for a training course or as a highly paid professional that has asked to pay back for incentives to relocate, the policy we pass is one that tried to prohibit punishing workers for choosing to exercise their freedom of employment. Last year, AB692 was carefully crafted to include limited exceptions and allowances for an employer would be allowed to claw back benefits received.

In response to the staff comments in the analysis, it is our intent to apply the bill retroactively so that future or pending claims that worker wants to enforce for the entire year 2026 would not be enforced under a court order.

By moving the date back a year, this bill fulfills the ask and the governor signing message by giving all employers with the collective bargaining agreement including the NFL, the ability to amend contracts and negotiate through collective bargaining and more time to comply with California's labor law, other ongoing conversations with the professional sports leagues and this will buy some time to to continue those conversations and respectfully ask for an aye vote.

Thank you. Can you support me too's name and affiliation?

Yeah. Good morning madam chair, member Silvio Ferrari, we have the National Football League in support.

Thank you. Any opposition witnesses? Do we have another support? Me too. Thank you.

Madam chair, we have a support if amended position. May I have a few minutes? Please. Thank you. Madam chair and members, Joanne Bettencourt representing CFMA, the Securities Industry and Financial Markets Association, we have a support if amended position on the bill.

We respectfully request that AB 1697 be amended to delay AB 16, AB 692's implementation until January 2028. The intent of the bill, as Assemblymember Kalra stated, was to protect low wage workers to prevent them from exploitative stay or pay contracts that limits workers mobility and career advancement. The language, however, could unintentionally impact the long standing loan structure that the financial services industry has used to attract and retain financial professionals here in California.

These contracts and situations are vastly different from the type of debt arrangements that AB 692 is trying to protect against. Financial advisers are sophisticated, well educated, and highly compensated professionals here in California.

They effectively can negotiate on their own, and they do hire counsel sometimes to, excuse me, negotiate on their behalf. January 2027 effective date does not provide sufficient enough time for policymakers to clarify the laws applicability and intent. So we would support the bill if it was amended to extend it to 01/02/2028. Thank you.

Thank you. Okay. So opposition witnesses, opposition support, me too's. Okay. Who come to the dice?

Oh, Senator, Strickland, please.

You heard from, are you amenable to move it from one more year for '28?

The current date that's been selected has been part of negotiations with the professional sports leagues, the sponsors, and the administration. So any any movement on that would require conversations with all the parties that have been part of the process so far. So at at this

I I don't Let's be clear. Let's be clear. I'm gonna I'm gonna vote for this today no matter what. But would you be willing to at least have those conversations as you move the bill along?

at at this

I'm we've been having conversations with everyone including folks with with folks from the financial services

I just if there's a way to mean be amenable, I know you have to go back to your sponsors and everything else. So I'll support it today, but hopefully, you can talk to them and see if we can resolve it if possible. Thank you.

Thank you.

Senator Laird.

Senator Strickland more or less asked what I was gonna ask, but I know I'm gonna see this in judiciary next. And if you continue the conversations, we'll see if if there's any, progress then. I would move the bill.

Wonderful. We have a motion for Senator Laird. Would you like to close?

I'd like to ask for an aye vote.

Thank you. Please call the roll.

[Roll Call]

Aye.

Smallwood Cuevas, aye. Senator Strickland? Aye. Strickland, aye. Senator Cortezi?

Senator Durazo? Senator Laird? Aye. Laird, aye.

We have a vote of three zero. We'll wait for members when they return to vote. Thank you. Okay. K.

So we don't have another author. We'll wait a few more minutes, and hopefully someone will come on down. That's Assemblymember Lowenthal, Assemblymember Solache, Assemblymember Ward. See? Speak manifest and then they here they come.

Well, welcome, Assemblymember. We just spoke your name and here you are.

No rest for the weary

If you have witnesses, please have them have a seat at the table. We will proceed to file item number eight. Begin when you're ready.

Well, thank you, madam chair and members. I am pleased to present AB 1803, which is developed in partnership with the select committee on racism, hate, and xenophobia, chaired by assembly member Corey Jackson. And this bill is a Jewish caucus priority bill. The reason why this is a Jewish caucus priority is simple. Our community is under threat.

California now ranks second in the nation for anti Semitic incidents. Anti Jewish hate crimes account for 80% of all reported religious hate crimes. 19% of all crimes committed in schools despite being only 3% of the population of California. Action is demanded now. We must prevent hate from persisting and give workers the tools and knowledge to recognize hate speech.

AB 1803 tackles this issue by requiring all California businesses with five or more employees to include anti hate speech training as a component of their existing workplace harassment prevention training. This bill does not add additional training hours. It just ensures that hate speech is addressed so workers understand how to identify and report hate speech when they encounter it. Hate speech is not just offensive language. It can be a precursor to violence.

When hate speech goes unchallenged, it normalizes hostility and emboldens escalation. Reported hate crimes in California rose by nearly a 160% over the last decade. This crisis extends far beyond any one community. Between 2019 and 2022, hate crimes against black California's nearly tripled. Hate crimes against Latinos nearly doubled.

Hate crimes against Asians more than tripled. California's civil rights department estimates that 2,600,000 Californians experienced at least one act of hate between '22 and '23, and that is intolerable. These are not abstract numbers. They reflect real people who deserve better. And employers already undergo harassment prevention training.

We're simply asking them to ensure that it covers the full scope of what their workers are actually experiencing. When employees can recognize hate speech, understand their rights and feel empowered to report it, hate loses the silent tolerance it depends on to persist. Lastly, I want to address concerns that have been raised about the First Amendment. This bill does not target speech itself. It addresses conduct that creates a hostile work environment.

The courts have long recognized that speech delivered in the workplace can rise to the level of harassment or intimidation when it is severe or pervasive enough to interfere with employees ability to do their job. Training employers to recognize that distinction is not a restriction on free expression. It is acknowledgment that workplace conduct must be appropriate and that workers deserve protection from a hostile environment. Every worker deserves to come to work without fear of being targeted for who they are.

The workplace should be a space where people can contribute and thrive, not one where they have to absorb hatred and silence.

This bill gives workers and employees the tools and knowledge to make that a reality. Very pleased to be joined here today by Connie Tan from Stop AAPI Hate who's here to testify in support.

Thank you. And you have two minutes.

Thank you. Good morning, chair Smallwood Cuevas and members of the committee. My name is doctor Connie Tan, and I'm a research manager at Stop API Hate. Stop API Hate operates the largest community reporting center for anti Asian and anti Pacific Islander hate acts. This bill is a critical step in reducing harassment in the workplace.

Bias motivated hate acts are a major problem in California. Based on the latest UCLA California health interview survey, researchers estimate that over 3,000,000 Californians ages 12 and older experience a hate act in 2024. Among them, eighty three percent encounter verbal abuse or insults, fifty five percent were targeted because of their race, and twenty percent experienced the hate act in their workplace. This data still just represents the tip of the iceberg as it requires Californians to be able to identify what they experience as a hate act.

In our stop AAPI hate annual survey, which asked about experience of hate in more detail, we found that forty six percent of AAPI adults in California or about 2,800,000 AAPI adults experienced a race based hate act in 2025.

Among them, thirty seven percent experienced hateful or derogatory words spoken directly to them, and sixty two percent experienced hateful or derogatory messages in their environment. Here's just one example that was shared with us. We have an AAPI comedy event coming up to support the community. One of my coworkers went up to our only Asian coworker in the department and said the event was of his people and used her fingers to pull her eyes back to make slanted eyes.

The targeted coworker brought this up in our team meeting and the rest of the team just laughed and our head boss decided to ignore the comment with no action taken, and this happened in Los Angeles.

Hate acts like these have adverse impacts. We found that forty percent of California API adults who experienced hate reported negative effects on their health. So training on harassment could prevent hate acts in the workplace and more broadly in our communities. Thank you.

Thank you. Is there a me too's in support of the bill? Please come to the mic and state your name and affiliation.

Good morning, madam chair and members of the committee. I'm Santosh Seram representing a community based civil rights organization, Chinese for affirmative action in support. Thank you.

Good morning, chair and members. Connor Guzman and on behalf of the engineers and scientists of California in support. Thank you.

There any is there another support? Okay. Any opposition to the bill? Please have a seat. You have two minutes.

Good morning.

I'm sorry. We don't allow filming inside of this. This is a there's the filming is done for the public. We don't allow individual filming. You have two minutes.

Good morning chair and members. My name is Sophia Lohrey with California Family Council in opposition to AB 1803 which adds an anti hate speech training to California's already mandated workplace harassment training. The bill requires employers to train their supervisors and employees to confront speech that vilifies, humiliates, or incites hatred based on protected characteristics. What is speech that is considered humiliate humiliating or speech that vilifies or incites hatred? There is no settled legal meaning to these words.

And not only do employers have to give the training to employees, but they need to get training on how to report on each other, a k a to please each other's speech for signs of hate. This is sounding more like communism every day. The state will now encourage people to report on each other when they say something the government considers humiliating. But do those rules apply to legislative officials themselves who regularly use humiliation to attack those they disagree with?

If you can believe this, we had a legislator come to one of our Save Girl sports press conferences and humiliated the girls by flipping off the press conference.

You can imagine how the girls felt. So I ask, who decides? The newest co author, assembly member, Rick Travers Zipper, sat in the capital last year and heard from me and others testify to protect girls' sports. His answer was to compare what he heard from us to Nazi Germany and the Holocaust. If that is how he hears a common sense concern, ask yourself, how would he define hate in a mandatory state training?

Under this bill, would common sense beliefs and religious beliefs be labeled hate? Because that is the direction this is going. And the Supreme Court has spoken clearly. There is no hate speech exception to the First Amendment. The government cannot push speech for being offensive.

And it cannot compel you to endorse its preferred message. This bill does both. Two minutes is up.

Oh. Please close. Thank you.

Okay. California should not be in the business of labeling this agreement as hate. We respectfully urge a novo on AB 1803. Thank you.

Good morning. My name is Kara Dansky. I am a Jewish lawyer, feminist, author, lifelong Democrat, former senior counsel at the ACLU, and a board member of Democrats for an Informed Approach to Gender. I urge you to vote no. If this bill becomes law, California will be setting itself on a dangerous path.

We in The United States do not generally recognize a category of speech called hate speech in the law at all. Our forefathers fought for our right to be unburdened by legal restrictions on our speech, including speech that some find hurtful. California law already does what this bill claims to do. Workplace harassment is illegal under state and federal law. Employers are already required to train workers on harassment and abusive conduct, standards that have settled legal meaning.

A worker targeted by slurs severe enough to create a hostile work environment already has a remedy today. AB 1803 adds no protection workers do not already have. I understand this bill does not purport to criminalize so called hate speech because doing so would be unconstitutional. But even recognizing so called hate speech in a statute sets a terrible precedent. I'm a feminist.

I do not want any man calling me or any woman a misogynist slur, but there's a difference between workplace conduct that rises to the level of harassment and speech someone finds offensive. No worker needs the state deciding which views are acceptable and writing that into mandatory training. Once hate speech is recognized in law, government decides what counts as hate, and that definition shifts with whoever holds power. These laws are easily turned in turned against dissenting voices, including women who speak plainly about sex.

AB 1803 sets a dangerous authoritarian and un American precedent.

Please vote no.

Thank you. Next, any me too's in opposition, state your name and affiliation.

Meg Madden on behalf of Californians United for Sex Based Evidence in Policy and Law in opposition.

Jean Chadbourne from Oakland, California, high school teacher, lifelong Democrat, member of FIRE, the Foundation for Individual Rights and Expression, a nonpartisan civil liberties group, and here on behalf of Women Are Real, and I oppose this bill. Free speech makes a free people.

Beverly Talbot from San Francisco, registered Democrat, speaking as a member of Lesbian, Gay, and Bisexual Courage Coalition, Democrats for an Informed Approach to Gender, and as a supporter of the Foundation for Individual Rights and Expression fire, I strongly oppose this threat to free expression in the First Amendment, which will surely be found unconstitutional.

My name is Ariane Adam Chacova, resident of San Francisco, lifelong progressive, Democrat, LGB activist, a twenty four year veteran CTA high school, multilingual language teacher, member of Lesbian, gay, and bisexual courage coalition, and Democrats for an Informed Approach to Gender in opposition of this bill. Thank you.

Laura Perez from San Francisco, California. I'm a California licensed midwife, and I oppose this bill.

Romy Mancini, San Francisco resident, Lesbian, former attorney at the ACLU Lesbian and Gay Rights Project in opposition. Jenny Poyer Ackerman, resident of Alamo. I serve on the board with Karadansky of Democrats for an Informed Approach to Gender. I'm also a lifelong Democrat, and I oppose this bill.

Hi. Lisa Disbrow. I'm the chair of Moms for Liberty of Contra Costa County. I'm a retired teacher. I've been called a bigot, a racist, all the four letter words, my entire career. Free speech is important to preserve and protect.

Free speech is important to preserve and protect.

Okay. We'll move to the dais. Senator Laird.

Thank you very much. I appreciate the author bringing the bill. And as somebody that that ran an aid service agency at the height of the epidemic, I don't see anything in this bill that that prohibits discussion of sex or sexual transmission of disease or other things that that are articles of our policy and we should do.

And we had a situation in my hometown where I was once mayor, where the Jewish mayor was presiding over a meeting and had people stand up and do the Nazi salute in Sieg Heil to him. And while there was a debate that was appropriate about free speech, this is about training people in a way that they understand that they should not put themselves in those situations rather than actually regulate the free speech.

This is going on to the Judiciary Committee, and I know that is where there will be maybe a more refined discussion of free speech. But I think this is appropriate, and at the appropriate time, I would move the bill.

Thank you. We have a motion from Senator Laird. I wanna thank the author for bringing this bill. Whenever we can stand up against hate and hate speech, it's so important. We know education is power.

That's the way that we can ensure that people's rights are protected and respected. And I'm happy and wanna be a co author on this bill. And we have a motion from Senator Laird. Please close.

Yeah. I I just want to say thank you for the thoughtful comments. I appreciate them so much. I think for all the people that came testifying this bill including the opposition. You know, hate is already voluntarily included in in a vast amount of the trainings that are sexual harassment trainings are take place right now.

I believe including the modules that we do here in the capital includes those components too. So on a voluntary basis, it's already happening and we're not hearing about any of the concerns that are happening that the opposition is speaking about in those that are going through those modules. And I just want to say one last thing before I respectfully ask for your aye vote.

You know when I ran for assembly in a losing campaign in mister Strickland's area actually in 2018, there was mail that was sent out that enlarged my nose that showed me clutching money and saying that I was, you know, making money at the expense of the sickness of residents in the district which is playing on the most horrific Jewish tropes that are out there. This is pervasive throughout the state of California including in in in politics itself.

And I think it's a wonderful idea for us to be reminded as the Senator pointed out in the training capacity what is appropriate in workplace and what is not. Respectfully ask for your aye vote.

We have a motion from Senator Laird. Please call the roll.

The motion is do passed to the Senate Committee on Judiciary. Senator Small Cuevas? Aye. Small Cuevas, aye. Senator Strickland?

Senator Cortezi? Senator Durazo? Senator Laird?

Aye.

Laird, aye.

We have a vote of two zero. The bill's on call. Thank you. Thank you. Okay.

We are gonna move down to file item number 10. I see Assemblymember Solace is with us. If you have witnesses, they're welcome to sit at the table.

Okay. Making sure. Good morning, madam chair and members. As a former school board member and personnel commissioner, I proudly present AB 2120. I'm grateful to the chair and the committee, a staff for their thoughtful work on the engagement with my office.

I will gladly accept the committee's amendments. This bill addresses the selected certification, a specialized hiring tool that Los Angeles Unified School District successfully and responsibly utilized since 2003. With these amendments, AB 2120 ends the sunset of after five years. This twenty three year old practice has been supported seven times by the legislature and ensures taxpayer dollars are used efficiently by hiring candidates ready to perform on day one in a highly specialized role without intensive perimeter training.

To testify in support, I would like to introduce Anna Ioakimedes, at Los Angeles Unified School District.

Good morning, Chair Small...

You have two minutes.

Thank you. Good morning, Chair and members. Anna Ioakimedes, legislative advocate on behalf of Los Angeles Unified. Los Angeles Unified is sponsoring AB 2120 to extend the authorization for the district to use selective certification for certain positions and to additionally allow the district to retain employees hired under selective certification in the event of a layoff. Los Angeles Unified adheres to the merit system, a set of laws that for over a century has promoted excellence in hiring in government positions.

Under the merit system, an employer is typically required to hire one of the top three applicants for the job as determined by an examination process. However, due to the very large workforce and very diverse school sites and student body that we serve, sometimes the position requires specific skills, competencies, or certifications that cannot be learned on the job. For example, we may use selective certification to hire a senior administrative assistant with knowledge and experience in highly specialized in technical reporting and compliance processes for facilities bond compliance.

Without selective certification, if candidates in the first three ranks do not possess the necessary knowledge or certification, the district is compelled to onboard on individuals who require immediate intensive remedial training. This results in a prolonged skills and productivity gap of up to two years, increased turnover, and the additional cost of restarting the recruitment cycle should the candidate fail the necessary competencies.

In addition, Los Angeles Unified seeks to logically extend the policy to also apply to reductions in force. If a layoff pattern would deprive the district of the specialized skill for which a staff member was hired, the district wishes to be able to skip that individual in a layoff. This will avoid depriving the district and the students and families we serve of critical skills that cannot be easily replaced.

Selective certification allows the district to most efficiently utilize taxpayer dollars and serve students and families by hiring candidates who are able to effectively perform the job on day one. In closing, we would like to note that as originally drafted AB 2120 sought to permanently authorize selective certification which we have had authority to do since 2003.

We understand the committee is recommending a new sunset date and we look forward to working with staff on these amendments. However, we do wish to state our position that after over twenty years of successful implementation Thank you. And no no votes in either house. Thank you. We respectfully ask for your aye vote.

Thank you very much. Are there any me too's in support of this bill? Please come to the mic. K. We will move to opposition.

Is there opposition witnesses? Seeing none. Any MeToo opposition? Seeing move to the diocese and Laird is chomping to to give some points here.

I don't know if I'm chomping on a Solache bill, but the the the interesting thing to me was is that there were no concerns expressed by the the unions in the in the district that he he I was actually a little surprised by that, but I think that's significant and that sort of tells us.

And I know that having worked with certification before, locally, we amended it because it really turned out to be a problem for, gender parity and people showing up on a list in a way that they could do it. And I see you're just trying to get it skills here. So I would move the bill.

Thank you. Senator Laird, you may close.

Thank you, madam chair. And to mister Laird's point, I think we will always protect our employees and and the right thing to do by our labor partners. So this is definitely to specifically address those specific positions, and we are happy to support this and work with our our committee and partners and ask for an eye vote. Thank you.

Thank you. We have a motion from Senator Laird. Please call the roll.

The motion is do pass as amended to the Senate Committee on Education. [Roll Call]

Aye.

Small Cuevas, aye. Senator Strickland?

Strickland, aye. Senator Cortezi? Senator Perezo? Senator Laird? Aye.

Aye.

Laird, aye.

Three to zero. That bill is on call. The rest of our members return. Thank you. Thank you.

Okay. Alright. We see file item number 12, Assembly Member Ward is here. Please come to the mic. If you have witnesses, they're welcome to sit at the table.

Well, good morning, Madam Chair and Members. Here to briefly present AB 2292, which would ensure that workers can access state disability insurance and paid family leave benefits without being charged administrative fees for required medical certification forms.

Now existing law requires a physician or a practitioner to certify a worker's medical eligibility in order to access their benefits. These certifications are essential to establishing or maintaining eligibility for wage replacement during periods of serious illness, injury, pregnancy, or family caregiving.

However, current law does not clearly prohibit providers from charging separate administrative fees specifically for completing these required forms. As a result, some workers report that they're being charged hundreds of dollars simply to have paperwork completed on top of medical visit costs and despite already paying into the system through payroll deductions.

AB 2292 closes this gap. The bill prohibits physicians and practitioners from charging administrative fees for completing initial SDI or PDL certificate, PFL certification forms, as well as any required recertifications or documentation needed to maintain eligibility.

This ensures that access to benefits is not conditioned on a worker's ability to pay additional out of pocket administrative costs. Importantly, this bill is narrowly tailored. It does not prohibit providers from billing for actual medical services, including examinations, evaluations, or clinical care associated with determining disability.

It also allows providers to collect standard co-payments, coinsurance, or deductibles consistent with other medical services. The intent is not to interfere with medical practice, but to ensure that administrative paperwork tied directly to public benefit eligibility is not treated as a billable service.

AB 2292 importantly aligns SDI and PFL with existing protections for other public benefit programs where providers are already prohibited from charging for completing eligibility related forms. The bill is about ensuring timely access to these earned benefits during most, during the time that they're most financially and medically vulnerable in in their life.

So at its core, AB 2292 strengthens the integrity of California's SDI and PFL programs by ensuring workers can access these benefits that they have already paid into without any additional financial barriers. When the time is appropriate, I look forward to your questions and respectfully request your aye vote.

Thank you so much, Assembly Member. Are there any support me too's out there? Okay. We'll move to opposition. Any opposition witnesses? You have two minutes.

You have two minutes.

Thank you, Madam Chair. I'll be very brief. I first like to thank the author for the conversations that we had prior to this committee. I also wanted to make it clear that we fully appreciate the intent behind this bill. My name is Ryan Spencer. I'm speaking on behalf of the California Podiatric Medical Association and the California Orthopedic Association.

They have an oppose unless amended position. And their position is largely fundamental. I think over the past decades, physicians have been asked to do more, including asking their staff to do more with less. The cost of Medi-Cal, HR 1, they're constantly under fire trying to make it work to be able to provide the care to the patients that they need.

We truly appreciate what the author is trying to address here, but the concern is is they're being asked again to be able to perform a service for free. And so we came up with the amendment saying we understand there should not charge hundreds of dollars for these fees.

But maybe the actual cost 25, maybe $50, even $25, something to be able to ensure that they aren't doing things without actually getting compensated for it, so they can pay for their staff work. So that's the position they have on the bill. I look forward to our continued discussions with the author. Thank you.

Thank you. Are there any opposition me too's? Seeing none. Dais, anyone? Members, comments? Would you like to close?

Thank you. I respectfully, you know, appreciate the opposition's points. You know, this was a newer conversation that we had. Did not come out as in the Assembly, and we'll continue to engage with them as well, of course.

You know, I think that we would be, I think, in place of disagreement because when you think about it, those that are on SDI or PFL are already, like, you know, really struggling to make ends meet. So even $25 or $50 goes a long way.

Think about what that could be for food for the family for the day that you're otherwise having to be able to fork over here for administrative cost that probably are actually already associated with the cost that are already subsumed by a medical visit or other things that are not touched by this bill.

We're just asking don't overcharge and don't be able to have this additional administrative charge on here that is not gonna get picked up by the insurance company or some other program. This is gonna come off of the back of that actual worker right now simply because they're trying to access the public benefit for which they are due.

Right? We need to have this form filled out. We're requiring them to have this form filled out. Let's not charge them to have this form filled out and be consistent with federal and other state practices. I respectfully ask for your aye vote.

Thank you. Do we have a motion? Thank you, Senator Laird. Please call the roll.

The motion is do pass. [Roll Call]

Aye. Strickland, aye. Senator Cortezi? Senator Durazo? Senator Laird?

Aye.

Laird, aye. You have

a vote of three to zero to build on call. Thank you. I see Senate assembly member Haney is with us. So we're gonna move on to file item backup, to file item number two, AB1198. Please begin when you're ready.

If you have witnesses in support. Yes.

They're, they're here. Thank you, Madam Chair and Members. AB1198 is the Fair Pay for Construction Workers Act. It's crucial legislation that will ensure equitable pay for construction workers across California. To me, this strikes me as pretty common sense.

Workers should get paid the prevailing wage for when the project is actually happening, not for when, it's first advertised to bid. Sometimes the advertisement to bid is many years before the actual project, takes place, and the prevailing wage is meant for folks for the time that they're actually performing the the work.

The result of not having that in law currently is that there's a loophole where some bad actors are exploiting to underpay workers to lower bid costs unfairly and undercut contractors who are doing the right thing. Many contractors do, of course, pay folks the prevailing wage for when the work is being done, but if some contractors are not doing that, then they underbid and they underpay and we all lose as a result. And so this bill would fix that.

It won't show that workers receive the current prevailing wage, common sense on projects regardless of when a project was announced for bid. We've had some good conversations with the remaining groups in opposition. We're looking forward to receiving our proposed amendments. And with me here to testify in support of the bill is Keith Dunn on behalf of the Building Trades and Eddie Bernanke on behalf of the National Electrical Contractors Association.

Great. You each have two minutes.

Thank you, ma'am. Chair, Members of the Committee, Keith Dunn here on behalf of the State Building Construction Trades Council. We'd like to thank the author for bringing forward AB1198.1198 is about a very simple principle. When California invests taxpayer dollars into public infrastructure, workers should be paid the wage that California has determined is appropriate for that work.

1198 does not create a new prevailing wage requirement. It does not change who is covered by prevailing wage. It simply modernizes the process to prevent locking workers into outdated wages. It's not rocket science. It's about a straightforward policy as we can talk about in this building.

In fact, the opposition you'll hear from today, some local governments and some contractors already account for fuel escalation costs. They account for material escalation costs. A contractor can submit change orders when steel, concrete, insurance equipment, design professionals, services, or supply chains change during the life of a project. Somehow, and you're gonna hear from my colleague here, union signatory contractors account for wage adjustments in this process.

In fact, the only cost that the opponents of 1198 believe should remain frozen is the paycheck of the men and women who wear the hard hats to build the projects that we actually all depend upon.

1198 is here to address that injustice. 1198 is sound and reasonable. It provides a fair process for the contractors and awarding bodies and workers who, if there isn't a disagreement about the adjusted wage, there's a process for them to be adjudicated. That is transparency, and that is due process. If escalation protections are good policy for materials, fuels, insurance, contractors, and design professionals, accounting for potential escalation of labor wages is a no brainer.

We would ask for your support of AB1198. Thank you.

Thank you. Thank you, Madam Chair, Members. Eddie Bernacchi on behalf of the National Electrical Contractors Association, in addition to the California Legislative Conference for the Plumbing, Heating, and Piping Industry, the Finishing Contractors Association of Southern California, Northern California Allied Trades, United Contractors, the Wall and Ceiling Alliance, Western Wall and Stealing Contractors Association, and the Western Painting and Coating Contractors Association, representing thousands of union signatory contractors across California. Assemblyman Mehaney and my colleague, Mr. Dunn, have done an excellent job in explaining what the bill does.

So I'll just kind of focus in on a few points from a union contractor perspective. First, as stated, anticipating wage increases when bidding public works is standard practice. Our contractors are bound by collective bargaining agreements, that are renegotiated on a one to three year cycle typically, meaning they must account for likely wage increases in their bids regardless of what the prevailing wage is at the time of advertisement for a public works project.

Second, under current law as I just mentioned, the applicable prevailing wage is locked at the time a project is advertised, which can be months and in some cases years before the actual work is performed on a public works project. Third, the issue that AB1198 addresses is even more problematic when it comes to change order and extra work that is outside of the original contract.

Contractors are required to perform that work at an outdated wage rate even though higher rates have been posted by DIR, which results in them having to perform that extra work that was requested by

perform that extra work that was requested by

the public agency at a loss. At a loss. So they're they're having to pay what the wages are in their collective bargaining agreement that may be even reflected in current prevailing rate, but they can only charge back to the agency what was posted at the time of the advertising, forcing them to perform that work at a loss, which this bill corrects, which is a substantial point and why we are so strongly in support.

And then finally, any concerns that compliance with updating prevailing wage rates would be difficult, is really a red hailing hearing. All applicable rates are readily available on the DIR website.

Your time is up. Please come to me.

And for those reasons, now to say we're accustomed to meeting those rates. So for those reasons, we urge your aye vote. Thank you.

to me.

Thank you. Any me too's in support of this bill, please step forward and state your name and affiliation.

Thank you, Chair Members. Elmer Lizardi with the California Federation of Labor Unions in support.

Good morning, Chair Members. Martin Vindiola on behalf of the California State Association of Electrical Workers, the California State Pipe Trades Council, and the Western States Council of Sheet Metal Workers in support. Thank you.

Vince Seguru on behalf of Sheet Metal Workers Local 104 in support.

Thank you, Madam Chair. Todd Bloomstine for the Southern California Contractors Association as as well as the Southern California Association of Scaffolding Contractors in support. Thank you.

Good morning, Madam Chair. Connor Gusman on behalf of Teamsters California in support. Thank you.

K. Great. Do we have opposition witnesses? If there is an opposition witness, please come and have a seat at the table. You each have two minutes.

Good morning, Madam Chair. Damon Conklin with the League of California Cities and also representing the California State Association of Counties. We always hate being on the other side of a bill with our good friends in the built environment, and we appreciate the author's efforts to narrow the bill from previous versions and recognize the intent to address limited sets of large, long, multiyear projects.

AB1198 continues to raise the same concerns identified in Governor Brown's veto of AB1140 and Governor Newsom's veto of AB2182, which ultimately were highlighted to increase uncertainty in public contracting, greater taxpayer exposure, and escalating project costs. Under current law, the public agencies and contractors can identify applicable prevailing wage rates at the time of project bid, allowing labor costs to be incorporated into the project, budgets and project contract and pricing with certainty.

Unfortunately, 1198 would instead require agencies and contractors to absorb future wage determinations after a project's already been awarded, creating unpredictable costs, increasing what could force scope reductions, project delays, project cancellations, particularly for infrastructures funded through fixed grants, bond proceeds, or voter approved revenues. If the legislature wishes to address concerns on a limited subset of projects, we respectfully urge amendments that would restrict the bill's application to multi year, large infrastructural projects. Design bill, progressive design bill, or similar procurement delivery methods.

We, until those concerns are addressed, 1198 continues to expose taxpayers and public agencies to significant financial uncertainties. For those reasons, we respectfully oppose 1198.

Sarah Dukette, on behalf of the Rural County Representatives of California and the Urban Counties of California. I'll just quickly go over a few highlights. My colleague covered a lot of it. We do have a lot of fixed projects, grants, bond proceeds, and then these changes could jeopardize potentially moving forward with these projects. So our understanding that it's really meant to go after these really long, multi year, very large, expensive projects.

So we think that there is a path forward to right size the bill and narrow it to really go after these projects. Why not potentially jeopardizing your average public work projects? As we've shared a number of ideas and amendments with the sponsors in the author's office, and we think that there is a path forward. We're happy to work with them. But if less some of these issues are addressed, we're still gonna have concerns with that uncertainty and really jeopardizing some of our projects with that.

We respectfully ask, we respectfully oppose unless amended. Thank you.

Thank you. Any other opposition me too's, please come to the mic and state your name and affiliation.

Good morning. Kiara Ross on the behalf of the City of Thousand Oaks, respectfully in opposition to the bill.

Nicole Wortleman on behalf of San Bernardino County in respectful opposition.

Melanie Perrin with the Associated General Contractors with an oppose unless amended position.

Michelle Gill on behalf of California Association of School Business Officials, also oppose unless amended. Thank you.

Seeing it come to the dice members, any comments, questions? No. Okay. We have motion from Senator Strickland. Would you like to close, Assemblymember?

Thank you. Yeah. I appreciate you, Madam Chair, and, and look forward to continuing the conversation with the opposition on some of their concerns and, and and some of the amendments they'd like to see, and you have my commitment to continue that conversation and try to work out some of those issues.

I think this is an important bill and you've got inequity and uncertainty right now where some folks are bidding and including those costs that can be appropriately predicted and others are not, and that creates inequities and, of course, the inequities and how much folks are getting paid. So with that, respectfully ask for your eye vote.

Thank you. We have a motion from Senator Strickland. Please call the roll.

The motion is do passed to the Senate Committee on Appropriations. Senator Small Cuevas. Aye. Small Cuevas, aye. Senator Strickland.

[Roll call]

Laird, aye.

Aye.

That bill is a vote of three zero. It's on call. So Senate committee on labor, public employment, and retirement will recess for about ten minutes.

That bill is a vote of three zero. It's on call. So Senate committee on labor, public employment, and retirement will recess for about ten minutes.

Okay. Senate Labor Committee on I'm sorry. Senate Committee on Labor, Public Employment, and Retirement is resumed. We are gonna start with the consent calendar once we're all situated. I think all members are here. Assistant, please call the roll.

Senate Committee on Labor, Public Employment, and Retirement is resumed. We are gonna start with the consent calendar once we're all situated. I think all members are here. Assistant, please call the roll.

[Roll Call]

Durazo, aye.

With a vote of five to zero, the consent calendar is out. We will start at the top of our file items.

File item one, AB 1048. The motion is do pass as amended to the Senate Committee on Appropriations. The current vote is three to zero with the chair and vice chair voting aye. [Roll Call]

Cortese, aye. Senator Durazo?

Durazo, aye.

Aye.

And we have a vote of five to zero. That bill is out.

File item number two, AB 1198. Current the motion is do passed to the Senate Committee on Appropriations. The current vote is three to zero with the chair and vice chair voting aye.[Roll Call]

Cortese, aye. Senator Durazo? Aye. Durazo, aye.

We have a vote of five to zero. That bill is out.

File item three, AB 1439. The motion is do pass as amended to the Senate Committee on Appropriations. The current vote is two to one with the chair voting aye and the vice chair voting no. [Roll Call]

Aye.

Cortezi, aye. Senator Durazo?

Aye.

Durazo, aye.

We have a vote of four to one. That bill is out.

File item four, AB 1601. The motion is do pass. Current vote is three to zero with the chair and vice chair voting aye. [Roll Call]

Cortese, aye. Senator Durazo?

Durazo, aye.

Aye.

We have a vote of five to zero. That bill is out.

File item seven, AB 1697. The motion is do passed to the Senate Committee on the judiciary. Current vote is three to zero with the chair voting chair and vice chair voting aye. [Roll Call]

Cortese, aye. Senator Durazo?

Aye.

Durazo, aye.

We have a vote of five to zero. That bill is out.

File item eight, AB 1080100 sorry, AB 1803. The motion is do passed to the Senate Committee on Judiciary. The current vote is one, two to zero. The chair voting, aye. [Roll Call]

Senator Cortese? Aye. Cortese, aye. Senator Durazo? Aye.

Durazo, aye.

We have a vote of four to zero. That bill is out.

File item 10, AB 2120. The motion is do pass as amended to the Senate Committee on Education. The current vote is three to zero with the chair and vice chair voting aye. [Roll Call]

Aye.

Cortese, aye. Senator Durazo? Aye. Durazo, aye.

We have a vote of five to zero. That bill is out.

File item 12, AB 2292. The motion is do passed. The current vote is three to zero with The chair and vice chair voting aye. [Roll Call]

Cortezi, aye. Senator Durazo?

Aye.

Durazo, aye.

We have a vote of five to zero. That bill is out. That concludes our agenda for today. If you were not able to testify, please submit your comments in writing to the committee. Thank you, everyone. The Senate Committee on Labor, Public Employment and Retirement is adjourned.

The Senate Committee on Labor, Public Employment and Retirement is adjourned.