Senate Standing Committee on Local Government

The Senate committee and local government will please come to order. Good morning, and thank you everyone for joining us for this meeting. The Senate welcomes the public in person, and we are holding our committee hearings here in the Capitol Building. I ask all members of the committee to be present Room 112 so we can establish our quorum and begin our hearing. This is our first hearing on assembly bills.

We expect to have three more after this. June 17, June 23, which is a Tuesday, not our usual day, and July 1. We have nine bills on today's agenda, two of which are on consent. File item number two, AB 1658, Kalra, and file item three, AB 1834, Patel. We do not have quorum, so we will begin as committee. Sub subcommittee. Okay. Let's hear from our first author. I see assembly member Wilson. Please come forward.

Good morning. Welcome. Grab that other chair.

Good morning, madam chair and members. I'm pleased to present—ooh, it's hot. I'm pleased to present AB 1621 which aims to strengthen the integrity and efficiency of California's housing approval process. Currently, delays and post entitlement permits both slow down housing production and drive up cost, making homes less affordable for Californians. Despite prior reforms, permitting delays remain a major driver of California's housing crisis. As highlighted by the assembly select committee on permitting reform, these delays continue to slow production, increase costs, and making housing less affordable.

This is why I've chosen to reintroduce this legislation as AB 1621, building on AB 660, which I'm thankful had strong bipartisan support in this committee last year. AB 1621 builds on existing law by establishing clear timelines and real accountability for local agencies to process post-entitlement permits, ensuring that approved housing projects can actually move forward. It also provides applicants with a clear path when agencies fail to meet their obligations.

This legislation aims to strengthen—to streamline—the housing approval process, targeting areas where housing developers have experienced significant issues. It will also prohibit local agency inspectors from requiring a project to make changes in the field that would deviate from plans a local agency has already approved.

And it stops local agencies from delaying the process by sending applications to outside reviewers and limiting how many times they can ask applicants to revise and resubmit their plans. While we've heard concerns about AB 1621, it is important to note that local agencies can go beyond the two-plan check limit if there is strong evidence that more review is needed to address serious health or safety issues.

AB 1621 simply closes the gap and improves existing law regarding the timelines for local agencies to act on post-entitlement permits. With me to testify today on the importance of this legislation are Steve Cruz, on behalf of California Building Industry Association, and Debra Carlton, on behalf of the California Apartment Association. Nick Camarata is here as a technical witness.

He's the General Counsel for CBIA, in case there are any questions.

Thank you, Assembly member. Correct. Two and two. That's right. Thank you.

Thank you, Madam Chair and members of the committee. Steve Cruz on behalf of the California Building Industry Association. As was stated by the assemblywoman, AB 1621 is critical legislation needed to approve the efficiency and fairness and accountability of the post entitlement permitting process for housing development.

Despite legislative progress in recent years particularly with the enactment of AB 2234 by Speaker Rivas, which established important procedural timelines for local agencies when processing post entitlement permits, serious barriers remain that continue to delay much needed housing across the state. The measure addresses these barriers and strengthens the existing framework with a narrowly tailored approach by doing three things, prohibiting last minute field changes that contradict previously approved plans, limiting excessive plan checks resubmittals and closing loopholes that currently allow indefinite extensions of the shot clock.

The delays, of course, not only contribute to increased cost and uncertainty for developers but also affects the viability of projects.

AB 1621 offers a balanced and common-sense solution that does not override local control or compromise safety. Instead, it creates clear, concise, and accountability framework that ensures timely permit processing, fair treatment of applicants, and ultimately, the ability to deliver the housing our state so desperately needs. For these reasons, the California Building Industry Association respectfully urges an aye vote on 1621. Thank you.

Good morning, madam chair and members. Debra Carlton with the California Apartment Association. I cannot overstate the importance of this legislation. In California, for apartment owners, it can take up to eight years from beginning to at least getting the occupancy permits, and that is so challenging. You've got to have your everything in line when it comes to your financing.

And of course, in other states, two years or less. So, every single legislation that helps us expedite the process is so incredibly important and we respectfully ask for your aye vote today. Thank you.

Okay. Is there anyone who wants to speak in support? If you would give your name and organization and your position.

Morning. Nolan Gray, California YIMBY, in strong support.

Holly Fraumeni de Jesus with Lighthouse Public Affairs, on behalf of the San Diego Housing Commission, SPUR, Habitat for Humanity California, Circulate Planning and Policy, Abundant Housing Los Angeles, and the Chamber of Commerce, all in support.

Thank you.

Audrey Retajczyk, on behalf of the California Business Properties Association, in support.

Purva Bhattacharjee, with Housing California, in support.

Bob Naylor for Fields Southern Company. That's Howard Amundson Jr. in support.

Oracio Gonzales, on behalf of California's Business Roundtable, in support.

Thank you. Is there anyone here to speak against? If you want to come up. Good morning.

Good morning, chair and members. Brady Guertin on behalf of the League of California Cities in a respectful oppose unless amended position. We have had ongoing conversations and do appreciate some of the changes coming out, but we do remain concerned about the two-plan check limit. And here, here's the challenge that local governments face. We have requirements from the state that we need to enforce that are also non-health and safety re—requirements—right?

Solar energy, you look at EV parking, a lot of stuff that's required, that's not necessarily a health and safety issue, so, our options locally now, within this proposal, would be that we can't allow extra plan checks if applications are not complying with the, with the standards that the state has laid out for us. Now, the challenge is that we could deny it, but then with litigation risk, that could be a high litigation risk with the Housing Accountability Act, so we do remain concerned about that.

I will also note that multiple rounds of plan checks usually happen from a lack of understanding of the complexity of the building codes, not necessarily cities dragging their feet or, or holding the line on that. And, you know, our amendments that we offered were trying to address the concerns in terms of, okay, here's why you're missing the mark.

These are the standards you're not meeting. And then, you know, we're open to if the challenge is that they're moving the goalposts, then we can say that on those feedbacks, after the additional plan checks, you can only be held to that.

Now, I think that might already be current practice, but I will say that's the challenges that a lot of local governments are facing, and, and that's where our concern lies as risk of litigation and this opportunity to only deny, as opposed to looking at health and safety.

I'll say the other amendments reduced the clarity in the law that said you could look at health and safety, although there is one section that might allow it, but I think we remain concerned that that clarity might not be there. So, with that, we respectfully ask for a "No" vote and happy to answer any questions.

Thank you.

Thank you. Thank you very much. Is there anyone else in opposition? Please come forward.

Good morning, Madam Chair, members of the committee. Sharon Gonsalves, on behalf of the cities of Rancho Cucamonga, Corona, and Thousand Oaks, in opposition. Thank you.

Thank you.

Chair, members, Max Perry on behalf of the City of Camarillo, also in respectful opposition. Thank you.

Thank you.

Good morning. Mark Neuberger with the California State Association of Counties. We already have an opposed unless amended position with Cal Cities and also providing—registering—opposed unless amended for Rural County Representatives of California.

Thank you very much. And seeing no more support or opposition, come to the dais. Any comments or questions? Senator Choi?

Yes. I, I would like to support this measure, which essentially to expedite the various permitting process, including housing construction and then, also, including limiting the plan checks and the process, which are all important for the safety reasons primarily. However, I had an experience last year with a historical building that was authorized by the LA County and the Korean Youth Academy that has been there for many, many years, almost one hundred years.

And then, that building was in the zone that was important enough for the Korean government and the Korean people, and they recognized, and they, they designated that as a historical building. And then, the Korean government wanted to remodel because the building was almost a 100 years old, dilapidated condition.

And then, since the time that I got involved last year, about July, and to get the help from the assembly members and the senators, I got the encouraging endorsing letters and encouraged city government to process the permit, the remodeling construction permit, to expedite quickly. And then, I couldn't believe two dozens of agencies that they had to go through. And then, finally, they would not make a decision, and that they kicked the ball to the state level, state housing department, you know, housing, and let them decide.

And they okay-ed, and they went back. That process took another three, four months, and then it went back.

Rather than, okay, state has approved it, instead of final stamp, but they went through another agency, just we couldn't—I couldn't believe how they can come up with the different departments. And I felt like they are nobody's willing to take the responsibility to put the final stamp on that, kicking the ball down to another department, another department. Good news is that finally, it got the approval, and they will be starting the construction, the, the remodeling process pretty soon.

I know construction process is all—it's a matter of timing, and the time is money. And the construction, the existing building from saving from, from collapsing and not even new construction took us that long time of time, at least from my involvement for at least a year.

And you said that apartment building construction takes eight years to get the permit. This is unrealistic. So, this is a small step, and we need to streamline the permitting process so that we can encourage builders to tackle on the shortage of housing, building constructions or even tenant improvement process also takes a long time. I had to myself had to wait at least one month delayed because of tenant improvement.

The permit was delayed when my Senate office was supposed to occupy, and the, the other tenant would not extend our staying there because of the expiration.

So, you can see the, the, the time is the essence. The time is so important. So, you know, the efficient process of the perm—permit—checks and the construction permit, that's essential. So, I, I would strongly support this bill. Thank you.

Thank you, Senator. Senator Arreguin?

I strongly support the bill and move it at the appropriate time.

Thank you.

Thank you. I just wanna make a, a, a few comments. The housing crisis demands us to take action, take comprehensive action. There's no, no doubt about it from all levels of government.

Local government has a very important role to play in all of that. We rely on them to enforce things like health and, and safety and many, many more. We hear week after week how local governments need to move faster to approve housing, and yet, year after year, the legislature passes bills to tighten timelines or tell local governments the steps they must take to approve housing.

I think we need to take a step back and ask, have all of the procedures that we have added to local government processes help speed up, or are local governments struggling to keep up with the new rules and the, the new prescriptive procedures, and devoting time to making sure they don't violate the new laws, rather than moving quickly on housing?

So, although today I support this bill, I think it's a really important issue that we have to face that piling up new rules does not mean that local government is going to be able to do it faster. There's an argument to be said that it will be slower. So, I urge us all to think of local governments as partners, rather than opponents, in getting our goals on housing and housing production built.

So, with that, again, I think these are more—these are issues that we more seriously have to take into account rather than to use, you know, the sort of same, same things that we say over and over, which is government's not doing it fast enough. Let me tell them how, how to do it.

So, with that, those are your thoughts. Assemblymember Wilson, if you wanna close or add anything else.

Thank you, madam chair, and I appreciate your comments—actually, the comments from, your colleagues as well, or our, our colleagues. And, you know, I look at local government as a partner, and I know how strong of a collaborative partner they can be. I held the position in local government for twelve years prior to coming to that.

And, and we were a partner, and a lot of times we were frustrated by what was coming down the pipeline, and how we felt like it made our job more difficult, and that's why I'm a strong supporter of this bill. It doesn't bypass local control, but it actually injects predictability. And predictability helps both sides. When you have variance or, variability, that can lead to higher costs.

But when, when a developer comes in and they know that they have two-plan checks and if something else is going on related to self—safety and health—they, there might be something additional. It allows them predict timeline, which we know if we can have a consistent timeline, we can better manage cost. And then, on the government, local government, side, predictability helps them. It allows them to manage their workload with all of the development projects coming in.

It also forces them to, to think thoroughly on that first plan check about what they think the issues are and then make up on any second that may arise versus saying, okay, we'll get it the next time.

We'll get it the next time, and not really taking that deep comprehensive analysis the first time. And so, we don't add timelines, more specific timelines. We just are very clear about the two-plan checks. And so, hopefully, that predictability will help both local governments be comprehensive in their analysis, as well as our developers to get through the process.

And so, AB 1620—1621—is about streamlining the housing approval process by closing loopholes in those local permitting timelines, holding our agencies accountable when they're causing delays, and helping ensure that California can build housing faster and more efficiently.

Truly by cutting the red tape, this bill will support timely housing development to meet our state's growing needs and ensure that our local agencies continue to be collaborative partners with us. With that, I respectfully ask for an aye vote at the appropriate time.

Thank you. Thank you very much. Oh, we're gonna move over. Oh, I see. Yeah.

Yes. Thank you very much, assembly member and, and witnesses. Assemblymember Ward, you're next. Which number is it? This is item seven.

Item seven, AB 2180. Assembly member Ward, you may proceed. And your witnesses have two minutes each.

Thank you, madam chair and members. I'm here to present AB 2180, a measure which will provide clarity, consistency, and a practical framework consistent with long standing industry best practices for water agencies in a setting proportional rates that are in compliance with the constitutional requirements of Prop two eighteen. To meet the strict proportionality requirements of Prop two eighteen, public water suppliers routinely hire experts to develop proportional rates supported by rigorous cost of service analysis and data.

Despite this diligence, high water users have regularly challenged these rates in courts, and now recent appellate court decisions have reached conflicting decisions regarding the methodologies used by water providers when setting these water rates. This is called widespread uncertainty for agencies attempting to comply with prop two eighteen's proportionality requirements.

AB 2180 would address this issue by establishing clear legal standards that protect both water agencies and rate payers by reducing costly litigation, and ensuring that low use customers are not subsidizing infrastructure costs driven by high use customers while preserving the core constitutional requirements that rates do not exceed the proportional cost of service.

With me in support of the bill here today, I have Soren Nelson, senior policy advocate at the Association of California Water Agencies, and Nicholas Whipps, the deputy city attorney for the city and, and county of San Francisco.

Thank you, Senator Byrd. Welcome.

Good morning, madam chair and members. Sorry Nelson with the Association of California Water Agencies. Proposition two eighteen is the foundation upon which most of the spending in water in California is built. The Public Policy Institute of California estimates that 85% of all investments in water infrastructure in the state happen at the local level, funded primarily by water rates. As financial support from the state and Federal Government becomes less reliable, that number is only expected to climb.

Public water agencies are held to a higher transparency and public engagement standard than any other utility when setting their rates. Public water agencies are accountable to their communities for the money they spend and are constantly striving to balance the cost of providing safe and reliable water with the need to keep water affordable for Californians.

Unfortunately, despite the high standard to which water agencies are already held, opportunistic lawsuits have become more frequent and created what is quickly becoming an impossible legal landscape for our local governments to navigate. As climate change accelerates and our infrastructure continues to age, the ability to set rates that accurately reflect the impact of high volume water users on our systems is critical.

Because the courts are reaching conflicting conclusions about how water providers should apply prop two eighteen, it is now both appropriate and necessary for the legislature to weigh in.

AB 2180 will give public water agencies the clarity they need to set rates without diluting the consumer protections built into prop two eighteen. I respectfully urge your support.

Excuse me. Just one second. We're gonna take a moment to establish quorum. It just gives us a minute.

Senators Durazo? Here. Durazo, here. Choi?

Here.

Choi, here. Aravind? Here. Aravind here. Ashby?

Cervantes? Laird? Sayardo?

Here.

Sayardo, here. You have a quorum.

Thank you very much. You may proceed.

Thank you. Thank you, Assemblymember Ward and Soren. Good morning, madam chair and senators. My name is Nick Whipps. I'm a deputy city attorney at the San Francisco City Attorney's Office.

There, I advise regarding proposition twenty eighteen compliance, and I also assist in defending water and sewer rates of the city of San Francisco. California's public water agencies ensure continued water affordability while operating and maintaining critical drinking water systems, providing Californians with high quality drinking water. Public water agencies set rates only to recover the cost of service to their customers, nothing more. Setting water rates requires highly technical calculation of costs, while also accounting for the affordability of rates, often in the face of uncertainty.

AB 2180 responds to many of the major legal uncertainties, namely what costs proposition two eighteen allows water agencies to recover, how these agencies may allocate costs, and what evidence and rationale is sufficient to support these costs and allocation decisions.

AB 2180 also responds to uncertainties spurred by recent court decisions. Left without clear guidance from the legislature, courts have reached different conclusions about what proposition two eighteen allows. Of these recent decisions, Dreyer versus LADWP provides the clearest and most workable statement of the law. AB 2180 would confirm that Dreher got it right. If passed, the California Supreme Court will look to AB 2180 to interpret the provisions it addresses.

Absent the clarity from the legislature that AB 2180 would provide, continued legal uncertainty will invite even more lawsuits. The standards proposed in AB 2180 would fully protect the constitutional rights of ratepayers while also better protecting them from the added burden of litigation costs. Today, we ask that the legislature invoke its judicially recognized authority to clarify the requirements of what proposition two eighteen requires and to provide much needed direction to public water agencies, their rate payers, and courts.

I respectfully ask for your support on AB 2180. Thank you.

Thank you very much. All those in support of AB 2180, give your name and organization, please.

Good morning, madam chair and members. Niko Molina on behalf of the Rancho California Water District in support. Thank you.

Thank you.

Good morning. Kyle Jones on behalf of the San Joaquin Valley Water Collaborative Action Program and Community Alliance with Family Farmers in support. Thank you.

Good morning. Jamie Minor on behalf of Eastern Municipal Water District and Santa Margarita Water District, please to support. Thank you.

Thank you. Thank you.

Thank you.

Good morning. Leila Romero on behalf of the League of California Cities in strong support. Thank you.

Good morning. Caitlin Leventhal on behalf of the California State Association of Counties in support. Thank you.

Good morning. Ashley Walker with Nausman on behalf of Santa Clara Valley Water District, Padre Dam Municipal Water District, Olibanai Municipal Water District, and the city of Ventura in support. Thanks.

Good morning. Keely Morris on behalf of the Los Angeles County Sanitation Districts in support.

Good morning. Andrea Avergell with the California Municipal Utilities Association in support.

Chair members, Alicia Priego on behalf of Otay Water District in support.

Good morning. Eric Will on behalf of Rural County representatives of California in support. Thank you.

Dana Nicholl, REEVE government relations, Deseret Water Agency in support. Thank you.

Good morning. Sharon Gonzales on behalf of the cities of Burbank, Santa Rosa, Thousand Oaks, the city Of Roseville's environmental utility department, and the town of Hillsborough in support. Thank you.

Madam chair and members, Kendra DiDogo with the Guoco Group on behalf of the California Council for Environmental and Economic Balance, Kern County Water Agency, Kings River Conservation District, Queens River Water Association, and Stockton Nease Water District, all in support.

Sorry. Good morning. Laura Bennett on behalf of Coachella Valley Water District in support.

Madam chair, members, Debbie Michael on behalf of East Bay Municipal Utility District in support.

Thank you. We will now have anyone in opposition. Please come forward. We have two two seats up here. If you're if you're gonna take the time, you can do it from there or you can sit down.

Hello. My name is Frederick Cardano, and I live in American River Canyon in Folsom. And

I just wanted to remind you of two minutes two minutes.

Yeah. I got it. Anyway, I'm here. There's no surprise that all of these people supporting this are utilities and cities. I live in American River Canyon and we have San Juan Water District And my neighbors, I have the letters, the opposition letters that were sent to many of you and through the California legislative portal opposing AB 2180.

Our I moved to Folsom from the South side of the river, city of Folsom to the North side of the river, which is San Juan Water District in 2017, and my rate doubled. And it has nothing to do with my water use. My base is a $180 every two every two months, whether I use any water or not. So unlike contrary to what they're saying, I have no incentive to save.

I've already cleared out my backyard and all hardscape, but there's no incentive for me to save because I'm pay a $100 $180 every two months, and it's gonna go up and it's gonna go up more as water conservation starts to increase because utilities are going to have to make up for that difference.

And so I have the letters, from my neighbors, Kevin Furry, Charlie Beagle, and Meera Deshmani, who's been our crusader with San Juan Water District for years now. Trying to get San Juan Water District to do a meaningful rate study that basically reflects reflects the usage, you know, outlined in prop two eighteen. So, 2180 basically guts proposition two eighteen. Again, there's no surprise that the utilities are all lined up here supporting it because it gives them more authority.

So what we're looking at is again, we were trying to get a meaningful rate study from San Juan Water District and pretty much they just named two eighteen.

It it was in name only. It had nothing to do. It didn't reference the actual use by parcel or any of those kinds of things. So basically under prop two eighteen, utility fees and consumption based rates must be evaluated together to ensure that changes remain proportional to the cost of service attributable to each customer.

When agencies increase fees and reduce the portion of charges based on actual compensation, they shift cost away from usage and toward mandatory charges that every customer must pay regardless of how much service they use. The trend is becoming increasingly common

Sir, I'm sorry. You have to wrap it up because we've said two minutes.

Okay.

If you could wrap it up.

Constitutional safeguard basically established two eighteen intended to prevent exactly this type of cost shifting. AB 2180 is weakening that safeguard by giving agencies greater discretion to justify allocations that may no longer reflect true proportional cost of service. I respectfully urge you to reject twenty one eighty and preserve the constitutional protections that ensure utility charges remain tied to actual service costs rather than evolving into de facto taxation.

Thank you very much.

Thank you.

Yes. Scott Kaufman, Howard Jarvis Taxpayers Association. This seems like it's off, but I'll just speak loudly. Oh, there we go. Okay.

AB 2180 is not simply clarifying proposition two eighteen. It's not defining mundane terms within proposition two eighteen. It is seeking to interpret proposition two eighteen for the California Supreme Court. It's seeking to codify the the the lower court's decision in Dreher, which directly conflicts with another lower court's decision in Pat's.

And, you know, among the questions are whether tier break points can be arbitrarily set, whether peaking factors used to determine water rates must be based on actual consumption data, whether Prop two eighteen demands not only reasonable effort, but also requires the agency to demonstrate that its rates are in fact proportional to the cost of service, and it and it also asks whether proposition two eighteen requires water agencies to determine rates based on the cost of water service that is actually delivered to the parcel.

These are fundamental, parts of proposition two eighteen. Proposition two eighteen is a constitutional amendment. It is in the constitution. It is not for the legislature to interpret. It is for the courts to interpret.

They will interpret it. They are taking up the Dreher decision, and we will have a decision. And depending on what they decide, if the Supreme Court decides to uphold Dreher, then this bill is completely unnecessary. If the Supreme Court decides to split the loaf and take some aspects of Dreher and not others, we'll be back here next year clarifying the clarification. And if they ultimately find Dreher unconstitutional, this bill and the clarity it gives water agencies will be unconstitutional.

We ask for your no vote at this time and wait for the Supreme Court to make its decision because that's where this should be. Thank you.

Thank you very much. Others who are in opposition to twenty one eighty, please come forward.

Good morning. Amy Garrett with California Association of Realtors in respectful opposition to AB 2180. Thank you.

Thank you. K. See no more any more any other opposition? You could come up if you want.

The support the support witnesses. I'm sorry? The support witnesses, ma'am.

Oh, support. I'm sorry. How did I jump to yes. Those I skipped over. All in support of 21 Oh, now you're really confusing me.

Sorry.

Okay. So we already went through support and opposition, and you're for questions. Okay. The dais, any questions, comments?

I'm sorry.

I have nobody wants to discuss.

I have a concern with this as well.

Along the lines of what was outlined by the taxpayer association, what's your response to that? Because I have concerns about us intervening in a judicial branch process right now. This very issue is before the Supreme Court. They've decided to take this up.

What we're basically doing is making a law to try to influence the judicial system on a just like what was just outlined and it seems that we're putting the cart before the horse on that because if they do not, if they vote to uphold the laws that are the constitution as it is written, in order for us to change it at that point we will have to do a constitutional amendment, which means we'd have to take this to voters to change that.

So what is your response to their their concern?

No. I appreciate the question. Thank you. And I also would acknowledge that and I appreciate Howard Jarvis Sacksbury Association referencing that this does not actually change proposition two eighteen, and that, you know, we are, seeking through this bill to help the court be able to interpret what the legislative intent was through the implementation ordinance. Right?

As you know well, this doesn't actually change the, provisions in the constitution. Rather, this changes our implementation ordinance that has been on the books for decades. That is the source of an of, unclearness and clarity. With the between these two digital interpretations right now, It can take some time for the Supreme Court to be able to actually reconcile these, and we're not even sure what the outcome would be, but I wanna talk about what's happening on the ground right now.

But in the meantime, right now, we have that opportunity because they do follow legislative guidance as you know well when we are basically through other, you know, findings and declarations or actual language in the statute.

We are able to better define for the curt the courts to be able to take into account as they're making their interpretations and they're reconciling all this information. And that's important for the outcome right now because in this moment that we're at right now with these, you know, very difficult decisions that are reckon that are that are competing with each other, water districts are not able to understand what whether they should be following long standing best practices and how they're setting these rates.

So it's a little bit of a uncertain area that we're in right now. And if they get this wrong, what we're seeing right now is some water districts right now that are having to reset their rates so that low water users are actually now having to subsidize the high water users right now that are pushing more demands on the systems. I'd like to ask my witness to be able to clarify a little bit more on the legality of this.

Yes. So a couple of things. The, courts will look to the legislature and will defer to the legislature's, interpretation of unclear constitutional provisions that is really a core function of the legislature. And it is not something that the California Supreme Court, I think I can't speak on their behalf, but I don't I think that they they have actually have cases where they have cited to their deference to the legislature's interpretation even where courts might have come to a different conclusion, and that's hypothetical.

Another issue that you could come up with if we just say, let's just wait for the California Supreme Court to answer these questions, they will answer them narrowly according to the facts before them, and they will answer them piecemeal, where the legislature really has an opportunity to direct courts here.

And I would just encourage this committee to take the court up on its tip to the legislature to do so.

I think we need to tread very carefully when we're wandering into the waters of constitutional amendments that were voted on by people. And changing them at any point requires their approval, not our approval, their approval. And the interpretation of what they approved is right now before the Supreme Court. And the Supreme Court decides that that's how it is, then that's how it is.

If you want to change it, you have to take it to the people and say, hey, we got a great constitutional amendment for you.

You're going to be voting on this in whatever year it's going to be voted on. But for now, it's not supportable because we're going into an area that we're not supposed to be. And that's the whole idea of three branches of government is that they function in their space, we function in our space.

If they want the legislature to come up with some kind of different interpretation of of that, then that's probably gonna they're gonna have to weigh out whether that goes to a vote of the people or not. And, right now, it seems we're trying to circumvent that.

And, you know, as far as water rates, I get it. Nobody's the water the water agencies have a lot of, regulatory requirements and mandates that are being piled upon them, to be able to to to supply water. And those are being directly, passed along to to customers.

And at some point, the state is gonna have to realize that some of the tax dollars that they already take in from all of us need to be spent on that infrastructure instead of just turning it into you know, more, you know, higher bills for for constituents. We need to invest in our water infrastructure, and that's what this is about.

You know, that's why prop 218 is there. It's to protect people from from an unchecked raise in in their rates. And, and I and I fear that this is just wandering into an area that we are being really premature in trying to address it and trying to influence the judicial, branch, in something that they're all that's that's in their court right now, and we shouldn't be doing that.

If I may Did

you want yes. Go ahead.

Clarify again. This does not affect proposition two eighteen itself. Right? We can't do that. Only the voters can do that, so we agree on that.

This affects the the implementation ordinance, which, of course, we put into place in the first place and is the source of the confusion about how we're defining proportionality. And let me give you an on the ground example of why that's important. The whole point of this is that if you're having new uses come into a given jurisdiction right now that are imposing these infrastructure upgrades, which we know we're gonna need. Right?

Let's say, for example, you saw that Eastern Municipal Water District is here in support of this bill.

And if Lake Elsinore decides that it wants to take on a data center, well, that's gonna be highly consumptive of new water uses. But right now, because of this uncertainty in the court interpretation, we are having that's new demands. Right? That's new pumps. That's new pipes.

That's new infrastructure upstream. And who's going to pay for that? Well, it's not the fault of the existing community clinics and fire stations and other commercial users right now that have that fixed rate right now. But what this is saying that if we don't actually provide this clarity, they are gonna have to pay a higher rate because this new water hog came into your community and is actually imposing all this new infrastructure upgrades, and the data center is not gonna have to pay its proportional share.

All your existing users are gonna have to pay for that to be able to come in right now.

So if you wanna support that, I mean, you're welcome to vote no. But I think the voters are gonna wanna see and make sure that, you know, water hogs are paying their fair proportional share, and we respectfully request your aye vote. Okay.

Thank you very much.

I'm not done with my he was he was making a point on my point.

And so

He was responding to what you said.

Right. And and I can respond to that as well by reemphasizing that this this matter is before the Supreme Court. Let them make their decision. If we if they decide we need to make some adjustments, then we can do it at the time. Me voting no is in no way indicating that I think, our users need higher rates to pay for data centers.

I think that characterization is is uncalled for. Okay.

Okay. Seeing no other questions or comments, we have a motion by Senator Araeen, and we're ready to vote. I'm sorry. Did you did I give you an opportunity to wrap up? I didn't give you an opportunity to wrap up.

The colleagues are sitting behind us in a very busy agenda for, committee members here. I appreciate your deep thought on this issue. I think that we're trying to make sure that we are leveling the playing field and getting back to a scenario that is inconsistent with the constitution, but also fair to rate payers, especially as we are all thinking about being water conscious and how we use, water at our homes and what rates should be applied, and I respectfully request your aye vote.

Thank you very much. Call vote.

The motion is do passed to the Senate floor. Senators at Durazo? Aye. Aye. Aye.

Choi? No. Choi, no. Aye. Aye.

Aye. Ashby Cervantes? Aye. Cervantes, Aye. Laird.

Sayardo? Cervantes, no. Three two.

The bill remain on call.

Okay. And and we can call it cons. Okay.

it cons. Okay.

We're gonna move on to item five of assembly member Aarons. Welcome.

Good morning, madam chair and members. AB 2,005 allows current owner occupants to participate in the process of building more housing and protects the current guardrails and existing law that deter corporate participation in this process. Specifically, AB 2,005 will allow the trustee of a living trust who is currently the primary resident of a single family home or the owner or member of a LLC to apply for the urban lot split. Under existing law, these common estate planning tools cannot be used for a lot split applications.

This restricts the process to individuals with substantial financial resources and expertise.

ThiS Bill does not increase the number of units that can be constructed on an SB 9 lot split or reduce the number of owner occupied units. In fact, lot splits constructed under AB 2000 five's new pathway will create additional owner occupied units. AB 2,005 creates an alternative option where an existing homeowner may partner with a small home builder to manage the lot split and construction on the second lot. This option will create not just one, but two new owner occupied units for sale.

The current version of SB 9 only creates rentals after the lot split.

I wanna thank all the stakeholders who have engaged with my office regarding this bill. I care about everyone's viewpoints and the viewpoints of the opposition, and I appreciate them for coming with me, with their suggested amendments. Because we received amendments, late last week officially, we were unable to consider any of them for this committee. However, I am committed to taking amendments to add a five year sunset provision and tighten the definition around living trusts and LLCs able to apply for lot splits.

I would also like to thank the committee consultants for their hard work on this bill and thoughtful policy comments.

I'm committed to making amendments, additional amendments to prohibit LLCs from using this bill to conduct lot splits on properties destroyed by the Palisades and Eaton fires. I look forward to ongoing conversations with stakeholders, and I remain open to suggestions on how to improve the use of existing housing laws to produce more homeownership opportunities for our communities. With me today is Nolan Gray, the senior director of legislation and research at California Yembi, and Stephanie Yee from Alpha X Recapital.

morning. Welcome. You each have two minutes.

Good

Good morning. Thank you, madam chair. My name is Dylan Gray. I'm senior director of legislation and research at California YMB. Thanks for the privilege to be able to speak today.

California MB is focused on making California an affordable place to live, work, and raise a family. Unfortunately, the median home price in our state is still nine times the median household income. The typical family has no path to homeownership, and we have the second lowest homeownership rate in the country after only New York. AB, 2005 addresses a practical problem with one of California's most important housing reforms.

While SB 9 was intended to empower homeowners to create additional density and expand homeownership opportunities, the reality is that the law has not performed.

The main reason is that the process remains too difficult for the average homeowner or small developer to navigate. And working with folks across the state, we found that many are interested in creating additional homeownership opportunities, but lack the experience, time, and resources necessary to manage a lot split and build on their own properties. AB 2,005 recognizes this reality.

The bill creates a new pathway for homeowners to partner with experienced small local builders, who can help them navigate the entitlement financing and construction process, and by making these partnerships possible, it will translate into more actual housing production, and in particular, leveling the playing field to make it just as easy to build homeownership opportunities as it currently is to build rental.

The bill also, fixes, another common barrier, which is that many homeowners hold their property and living trusts or other legal entities for perfectly valid family estate planning purposes.

These ownership structures should not prevent otherwise eligible homeowners from participating in the program as they currently do, and this bill would fix that. Ultimately, AB 2,005 is about making existing law work. It doesn't expand the feasible housing on any particular lot. It just makes it easier to build a home ownership version of that home. It will reduce unnecessary barriers and power homeowners to use their property as they see fit, and create more homeownership opportunities and for that we respectfully request your aye vote thank you

Thank you very very much. Any support

group you can line up and identify who you are and your positions. Awesome. Thank you, mister chair. Michael Gunning, Lighthouse Public Affairs here today on behalf of Abundant Housing Los Angeles, spur circulate planning and policy, and the 2 hundred all in support of AB 2 thousand five.

Mister chair, Bob Miller for a field set in company. That's Howard Amundsen junior in support.

Chair members, Alicia Priego on behalf of the Bay Area Council and Housing Action Coalition in strong support.

Okay. Are there any opposition lead witnesses you can come forward? Each person will have two minutes. Go ahead.

Your time is up.

Yeah. Yeah.

You will have two minutes too.

Thank you. Good morning. Amy Garrett, also with California Association of Realtors. And picking up where my colleague left off, I wanna touch on the limited time frame that SB 9's actually been in meaningful effect, which is the legislation that AB 2005 is attempting to expand. It was enacted 01/01/2022, but it's been tied up in litigation and has had subsequent legislative cleanup as a result all the way up till 2024.

So meaningful implementation of SB 9 didn't actually begin until January 2025. And since that time, 1,600 lots have been split statewide. So further, we're concerned that increased density affects water, sewer, utilities, transportation networks, traffic circulation, ingress and egress, particularly during emergencies like wildfire and public safety in general. Yet the bill contains no requirement to study or evaluate these impacts to current communities before expanding the program.

We're additionally concerned that AB2005 creates the risk of corporate entry into the development space without regard to or planning for the impact to existing communities.

And as

as

the committee analysis notes, community members in fire affected areas like Altadena have already raised concerns about investors purchasing lots to develop in ways that are inconsistent with the needs of recovering neighborhoods. We would assert that this concern's not actually limited to disaster affected areas at all. Under 2005, areas of the state which have long offered homeownership options for working Californians, like Richmond, California or South Los Angeles could now become very desirable for corporate development without any consideration to the unique needs of the existing community.

So for these reasons, the substantive amendments that we offered to remove our opposition were based on the concept of limiting this to become a district bill, giving additional time to see the full impact of SB 9 while also limiting the expansion of s b nines just to the author's district. This allows policymakers to determine whether the proposals under 2005, are actually compelling the development in the direction that's intended before moving statewide.

Thank you. And in the audience, anyone would like to express your position? We're in opposition. I see none. Okay.

I will ask my colleagues on the tires to ask any questions.

Well, isn't that okay? So I was in the assembly when SB 9 was heard and passed, and it was a struggle for them to get it over the line. There was a reason it was a struggle. And the reason was all of these with the main the points that all of these folks were making, and I was making those points too. This is local government.

Most of the people that were in here have served on on city council. So I also served on a city council, but we also had the distinction of being the fastest growing city in California during the early 2000s. And all of our infrastructure was very, very carefully thought out in trying to be frugal and minded as far as, making our dollars stretch, we design infrastructure for what the design of the city was going to be.

We've already overimpacted that in our communities, with the, you know, some of our, the the regulations that allow the local government local agencies to have less input on on things, especially when it comes to apartments and and affordable housing. And many apart many cities are being affected, especially the cities I represent, and there is no change in in the, there's no money going to infrastructure to keep up with all of that, and we're suffering from that now.

We have increased traffic. The water companies, as you can see, they're in here screaming because they need more, because they have to upgrade their their their improvements. In this particular issue, this lot split, the lot splits are not easy. Every once in a while, you would get a lot split application into the city, and the technical requirements of just doing the lot split itself is is a difficult process. The legal requirements for that are a difficult process.

When I moved into my neighborhood, it was a brand new neighborhood, and so we got to watch and listen to construction constantly for a year while they finished the rest of the neighborhood. We were relieved when our neighborhood was done.

I can't imagine all of my neighbors selling their homes to developers to come in and do lot splits and start building again because there is nothing that would prevent them from taking down the original house and and doing two two smaller houses to make them look better on their lot split. That's not what the neighborhoods are designed for. We do need to address housing.

Infill development to me is when you have something that has become outdated, a shopping center, some kind of off building, that, or a a very dilapidated house that is no longer being used by anybody. You remove that and then you infill with other housing for that. This is actually trying to double the amount of housing that you can build into an area not designed for it.

And the reason that was outlined here that this got passed because it didn't pass by a lot, passed by little, was some of these these provisions. And now and and that was my fear, and I I probably said this on the floor at the time.

This is what's gonna happen. You're gonna pass it saying, okay. We got all these. We've taken care of everybody's thing. But then over the years, we're gonna nibble away at that, and we're gonna get rid of that one, and we're gonna get rid of that one.

My my admonition on this bill or my my prediction on this bill when it passed was it's not going to work because of all of the technicalities involved, and that's what's happening. That's that's exactly what's happening.

And now we're trying to nibble away at the provisions that made it tolerable because I I if you look at the vote vote card for the the Senate, vote card on this, there are a lot of people that didn't vote on it that you would think would have voted on it. Well, there's a reason they didn't because they didn't wanna tick off their constituents. So so, anyway, it's hard for me to support these lot split bills.

I I'm I'm all for housing and and reducing some of the regulatory environment that it takes to to actually go out and build more neighborhoods, but this is not going to make that impact happen. The even the the rental housing to, you know, the granny flat ordinance, been being used a lot in my my area, but it's not for rental purposes. It's just making a an $800,000 property worth 1.1. We didn't really do a whole lot for for for helping on the housing part.

So so anyway, I'm not a big believer in these these type of these type of and I call them gimmicks, other people don't, to try to increase housing because it's it's doing too much damage to existing neighborhoods.

And we're not we're not offering cities or communities the money that they need to keep up with the infrastructure. Instead, we're offering them higher rates for their water, and that just doesn't work for me.

Okay. Are you done? Yes. Yeah. Okay.

Okay. I think this bill has been nine also came up when I was in the assembly, and my recollection is that I paused. But the the beauty of that bill was that the owner was required to owner occupy at least three years. But my understanding of this AB 205 does not require three year ownership occupancy, and it may the owner may sell if they want to. And the ownership has changed to LLCs and then also the what is it?

The owner limited the part not not not the partnership, but but what is it? The person on ownership entity?

LLCs.

So this will concern the intended original intent of the SB 9 to expand the housing availability in the spaces of waste available. I come from the city of Irvine, which is very well known as the best planned community in America. So that means there are specific zones such as single family zone, multifamily zone, commercial zone, open field zone, and they adhere to that original city planning from the beginning. But time has changed.

A lot of homeless people have caused lots of social problems, and they all attributed to the fact of lack of affordable housing.

So, therefore, many times that the term was developed in no units in the space available in the backyard that can be built, and that that will help homeless people. I don't know whether this additional ADUs actually reduce the people on the street or prevented. I hope it has because of more rooms, more spaces available for people to occupy. Somebody will occupy that place.

So but this one is removing that three year at least even even though SB9 was not permanent ownership, indefinite ownership was required, but it was three years.

So that was a little compromise so that the developed commercial developers would not try to look for extra spaces and encourage owners to to allow for them to build the ADUs. But this one is I feel like bait and the switch initially less help homeless situation by providing affordable housing. And then now that is being practiced, Now let's allow that to sell to others. In other words, it becomes multifamily zone rather than single family zones. So that is deviating from the original city plan.

And as far as I know of one area in the city of Orange where Chapman University is located in the lots of homes in the single family homes. So being a old residential units, they have a relatively large backyard. That will be really tempting for the developers to negotiate the last split and sell it to me, and then I will develop. And that neighborhood character and the traffic congestion will be a nightmare for the city.

So how will this bill or prevent that kind of undesirable results?

So as a homeowner myself, we I added my my own home. Extended unit was not the separate separately was another last split I expanded. So I don't know whether that's considered to be as a ADU or expansion of the house. So I think I benefited from that law being able to extend to the in the existing space. But when you lot split it and treat that as an independent single family home, that can be transacted buying and selling.

So that changes the characteristics of that the community and the expand originally expensive homes when multiunit probably next bill will be from the single family two story limit that may be demanded to expand the five story, four story, whatever. How do we so this is a typical bait in switch switch kind of impression I get.

Right.

So on the other hand, I have some understanding and the good benefits. If my ADU happened to be split in a separate ADU, my freedom to sell that unit as a separate unit might be beneficial, but for the community benefit, for the neighbor's benefit, it's not a benefit for them.

So that's why it's very difficult for me. And so one aspect is laudable. It's good. At at the same time, for the benefit of the community, for the city, character for that village, it is damaging and concerning.

Well

Thank you, Senator. I I appreciate those comments, Senator, and I appreciate the comments from Senator Scioto. These are hard issues as you explained during both of your times in the assembly. However, these are issues that our constituents are demanding that we focus on, and you're not gonna get a bill that is gonna be consequential in high housing. That's gonna fly out of the Senate or the assembly.

It's just not gonna happen. However, it is something that our constituents are begging. They are begging us to make more any meaningful impact on reducing the cost of living and to actually deliver meaningful results on housing. This bill is not going to be the unicorn bill that solves our housing crisis. I don't even think my time in the assembly, there's going to be any one bill that's going to solve all of our housing woes.

This is a, in my opinion, one tool in the tool belt that can have meaningful, measurable growth in helping alleviate a very large, a very difficult problem that is that we are called to address and work on. I respect the opposition and their concerns. There are concerns that I'm wrestling with, when I'm grappling on this issue.

However, I feel very strongly that my constituents sent me to Sacramento, just a year and a half ago to wrestle with you all on these issues, to work with, supporters and opposition on trying to get this right. We certainly don't want entire communities to be upended.

At the same time, we need to solve the housing crisis, and we need to show, you know, that we're actually making progress. It how the housing affordability crisis is getting worse. The homelessness crisis is getting worse, and I'm here to say, let's look at everything that we've been doing in Sacramento and seeing if we can actually make a measurable difference. That is what this bill is attempting to do. That is what I wanna continue to work with you all on.

Respect the concerns that have been raised by this committee. I sincerely believe that we need to keep chipping away because the status quo, I think we can all agree, is not working. The laws on the books for our housing laws are not working. They're not working for our constituents. They're not working for our local governments.

And I just respectfully request that we continue this conversation and continue working on it together.

Now another committee member walked in, so do we have any comments?

I think a motion.

Okay. Motion has been made. And if no other further questions, please call or you're gonna have another closing statement? I disrespectful

I think I kinda made it, but I just kinda

Yeah. I see.

I feel very passionate about this issue, but I also wanna respect the the the issues that have been raised. Those issues that you mentioned happened before I got here. They're important agreements that were that were worked on, but every housing law is gonna be chipped away out and worked on until we get it right, until we actually can deliver and show results. We're gonna keep working on these things. We're not always gonna agree, but we need to keep working on them to deliver real results.

And I respectfully ask for their I vote to continue this conversation.

Thank you. With the motion in place, please call the roll.

The motion is do passed to the committee on housing centers de Razzo. Choi.

Epsom.

Regin. Aye. Regin, aye. Ashby, Cervantes, Laird, Sayardo. Sayardo, no.

One one?

Okay. We'll keep it open for absent members. Okay. That's a good idea. Consent calendar, please call the roll.

We have another member walking in.

The motion is to adopt the consent calendar, which consists of file item number two AB 1658, and file item number three AB 1388. [Roll Call]

Aye.

Choi, aye. Adrienne? Aye. Adrienne, aye. Ashby, Cervantes, Laird?

Aye.

Laird, aye. Seagarto? Aye. Seagarto, aye. Four zero.

Okay. Now I see Assemblymember Berman here to present your bill, bill number four, AB 1838. When you're ready, you can proceed.

Thank you, Vice chair Choi. Good to see you again. Thank you to the committee staff for their work on this bill. I'm happy to accept the technical amendments outlined in the analysis. AB 1838 would ensure that local agencies can better assess if contractors should be awarded a public works project bid.

Existing law requires most public works construction contracts to be awarded to the lowest responsible bidder. Any history of wage and hour violations directly reflects contractor responsibility, and is critical information for local agencies to determine who should be trusted with taxpayer dollars. This bill would require a contractor submitting a bid for public works construction projects to disclose any history of wage and hour violations within the previous five years.

The bill was recently amended to ensure that contractors don't have to submit duplicative documents and that there is a notice in the appeals process. AB 1838 would help ensure taxpayer dollars are well spent, promote fair labor practices, and increase transparency for local agencies awarding public contracts.

I respectfully ask for your aye vote. And with me today is just one witness, Matt Cremins, director of the California Nevada Conference of Operating Engineers.

Okay. You have two minutes here.

Thank you, mister chair, members. Matt Cremins here on behalf of the California Nevada Conference of Operating Engineers. We are proud sponsors of AB 1838, which would provide an additional tool for awarding agencies to utilize when making a determination if a contractor who has won their public works bid meets the definition of responsible. I think the assembly member did a great job outlining the bill. I know you folks have a very busy schedule today, so I'm gonna abbreviate my testimony.

I did wanna drive home the point though that we did take amendments last week that bring the vast majority of contractors who had concerns with the bill to neutral. So thank you very much. Would respectfully request your aye vote.

Okay. Any other support audience in the audience come to the microphone and your name, agency, and your position?

Good morning, mister vice chair and members. Mike West on behalf of the state building and construction trades council of California in support.

Good morning. Jessica Hay with AFSCME California in support.

Mister chair and members, Ivan Fernandez on behalf of the California Labor Federation in support.

Good morning, mister chair and members. Connor Gusman on behalf of Teamsters California in support. Thanks.

Thank you. Is there any opposition with main witness?

Good morning, mister chair, members of the committee. Felipe Fuentes here on behalf of the Associated General Contractors of California, and let me begin by thanking the author for the amendments that they took. It is helpful for those contractors that are signatory, or have project labor agreements. And for that, you know, we are appreciative. AGC has the, blessing, to both represent union contractors and nonunion contractors, and that's where there still remains a rub for our nonunion contractors in this measure.

Let me also begin by saying that AGC supports labor compliance and accountability and public contracting. Responsible contractors want and need a level playing field, and we support strong enforcement against those who intentionally violate labor laws. Our concern is that the bill goes well beyond enforcement and instead creates a new layer of administrative hurdles that will discourage qualified contractors from competing for public projects. The bill requires extensive disclosures regarding prior labor violations, including technical and administrative violations that may have been corrected years ago.

By treating minor infractions and paperwork errors the same as serious labor violations, the bill creates a system that does not distinguish between responsible contractors acting in good faith and bad actors intentionally breaking the law.

This is especially problematic for small and mid sized contractors and nonunion contractors that do not have large compliance departments or in house legal teams to navigate increasingly complex disclosure requirements. The bill creates uncertainty in bidding process by allowing local agencies to establish their own review and dispute procedures rather than one consistent statewide standard. Contractors could face hundreds of different processes and interpretations depending on where they bid. The practical result is fewer bidders, less competition, higher costs, and delayed project delivery.

But again, we are grateful for the movement on the bill and unfortunately remain in opposition at this moment.

Okay. Thank you. Are there any audience who would like to express your stand on this opposition stance? No, I don't see anyone. We'll ask our committee members for comments and questions.

Okay. Motion has been made. No questions. I only have a question regarding this bill. That is clarifying what kind of labor violations have been committed by the contractor that is for the building ownership will happen for them to understand what kind of, you know, problem problems that the contractor had. But troubling aspect was including wage history. I don't know whether this is a sound policy. I thought that that was a more of a more private companies' wage may be much higher, much lower, or average, whatever, among the competitions.

the

clarifying what kind of labor violations have been committed by the contractor that is for the build the building ownership will will will happen for them to understand what kind of, you know, problem problems that the contractor had. But troubling aspect was including wage history. I don't know whether this is a sound policy. I thought that that was a more of a more private companies' wage may be much higher, much lower, or average, whatever, among the competitions.

But requiring what kind of a benefit requiring to reveal the wage history? How will it help for the construction ownership is concerned?

How will it help for the construction ownership is concerned?

Thank you for the the question. I might defer to my my witness, to provide a little context around around that component.

Thank you for the question. So the importance of providing this information as it relates to an awarding agency is gonna be that they're gonna get some certainty that the contractor that's bidding on their project doesn't have a history of abusing and wasting taxpayer dollars, and also from our perspective, from the union side, it's going to ensure that workers are under these contractors are ones that are gonna be fairly treated, they will not be misclassified, and they will not be underpaid.

So we truly see this as a taxpayer transparency measure that will also protect workers.

Okay. And thank you for your reply. I now we have a motion made by Senator Arreguin and no other question. Senator Laird, do you have any question? Do do you have any question?

No. No? Okay. Nothing. Okay. Look. Go ahead. Closing statement. Okay. Now you are allowed to have closing remarks.

Look. Go ahead. Closing statement. Okay. Now you are allowed to have closing remarks.

I will let Senator Laird's close speak for myself.

Okay.

Thank you.

Call the roll, please.

The motion is do passed as amended to the Committee on Labor, Public Employment, and Retirement. Senators Durazo? Choi?

No.

Choi, no. Arreguin? Aye. Arreguin, aye. Ashby? Cervantes? Laird? Aye. Laird, Aye. Seyarto? No. Two to two.

Cervantes? Laird? Aye. Laird, Aye. Seoarto?

No. Two to two.

Okay. I will leave it open for absent members.

Okay. Thank you. Next one is, who's the person here? Which bill is that?

you. Okay. Thank you. Next one is, who's the person here? Which bill is that?

Which number is that? No. Oh, Addis. File number 6, AB 2134. Assemblywoman Addis, when you are ready, you can begin.

Thank you so... Thank you so much, Chair and Members. I'm here to present AB 2134. And serendipitously, my witness is home with family obligations, so she's not here today. But this comes from a situation that I originally read about in the Santa Cruz Sentinel.

Where certain city council members and certain city councils were needing to disclose in public that they were pregnant and then ask their city councils for leave so that they were not removed from their city councils if they missed too many meetings.

And this is a situation that has happened multiple times across California. So the bill is very simple. It would just say that city council members are allowed parental leave so that they don't have to disclose their personal medical and family information in public in order to get that leave. And I'm happy to answer any questions.

It would just say that, City Council members are allowed parental leave, so that they don't have to disclose their personal medical and family information in public in order to get that leave. And I'm happy to answer any questions.

Thank you. Any, I don't see any main witness. But in the public, any supporters?

Thank you. Good morning. Sharon Gonsalves on behalf of the City of San Mateo in support.

Okay. Any opponents? Seeing none. I'm gonna ask my Committee Members, any questions? Yes, Senator Laird.

Well, since Santa Cruz is referenced, I guess I have to speak. And I find it ironic because 40 years ago when I was on the Santa Cruz City Council, somebody breastfed it to council dais, and so there were no issues about disclosure. Believe me. This is appropriate. I move the bill.

I move the bill.

Okay. Motion has been made. And Senator Seyarto?

Yeah. Thank you for your bill. And I am surprised that we even have to have a bill to to clarify this for people. Other people's medical issues, whether you're a council member or, are nobody's issues but their own. HIPAA requirements that should should help alleviate that. But if they don't, I'm completely supportive of your bill. So thank you.

Yeah. My comment is that I was so surprised when I saw your bill. California has a Family and Medical Leave Act, which allows employees are allowed to take 12 weeks of family leave. I mean, council members are citizens of California. Why are they excluded to begin with?

Well, I think this is a situation where we have conflicting, you know, things in statute where if you're a council member and you miss a certain amount of meetings, you can be removed from your council.

I know before that local policy, but that they should be all under the protection of the same law rather than being excluded. Now your bill is asking each city council so that their own family leave policies not to complete not to to be subject to this same law, Family and Medical Leave Act?

We are not asking that councils don't allow city council members to be covered by existing law. We're just saying that you cannot remove, you cannot force somebody to divulge that information in public out of fear of being removed from their city council.

Because if your act is signed into law, then each city council family leave law will be different. It can be four weeks, it can be six weeks, whereas this state law is 12 weeks. So it can be less than the basic protection under this Family and Medical Leave Act, which allows them to take up to 12 weeks of nonpaid leave.

There is a there is a minimum in the bill. Cities certainly could exceed that minimum, whatever.

Minimum, you can make it twelve weeks.

I'd be happy to.

Okay. That's amendment. That's suggestion. Okay. That's my comment, and then I will support that. The motion has been made by Senator Laird. Clerk? Closing statement again. Okay. Alright. Clerk, please call the roll.

That's my comment, and then I will support that. The motion has been made by Senator Laird. The clerk closing statement again. I received the last

year. I've

Okay. Alright. Look, please call the roll.

The motion is do pass to the Committee on Judiciary. [Roll Call]

Choi, aye. Aye. Aye. Aye. Aye.

Aye.

Aye. Aye. Aye. Aye. Aye.

Aye. Aye. Aye. Aye. Aye.

Aye. Aye. Aye. Aye. Aye.

Aye. Aye. Aye. Aye. Aye.

Aye. Aye. Aye. Aye. Aye.

Aye. Aye. Aye. Aye. A Aye.

Seguarto, Aye. 4 0.

Okay. Congratulations. Okay. I saw Assembly Member Tri Ta. You have a bill? Bill number 7, AB 2180. You can begin anytime when you're ready. Oh oh oh, I'm sorry.

Yes, sir.

You have a bill? I do. Bill number 7802180. You can begin anytime when you're ready. Oh oh oh, I'm sorry.

Bill number 8. Bill number 9, AB 2397. I'm sorry about that.

Good morning, Chair and Members of the Committee. I first want to thank the committee staff for their help. We appreciate that, and we'll be accepting the committee amendments. AB 2397 addresses a radical but often overlooked barrier to building affordable housing. In California, we make progress streamlining approval, but too many housing projects, especially those with affordable affordable unit.

So you stall because it cannot secure the financing needed for basic infrastructure like road, water, and sewer system. AB 2397 applies narrowly to housing infrastructure district. These districts are initiated and approved by land owners. They are a proven tool for financing essential infrastructure. And without them, many projects simply don't get built.

AB 2397, allied financing decision with the same pro housing principle already established under the Mello-Roos. At a time when California faces a severe housing shortage, we need to remove every unnecessary obstacle to production. AB 2397 is targeted, practical step to ensure that financing doesn't become the hidden veto on needed housing. I respectfully ask for an aye vote on my bill, and I have my witness.

Okay. Witness, you have two, four minutes.

Thank you, Assembly Member Ta. Thank you, Vice Chairman Choi and Members of the Committee. It's my pleasure to be here today. My name is Stephen R. Sheldon. My company is SRS Land and Capital Holdings, and I've been a practitioner in land use and housing development for decades.

And I come up here to Sacramento to support this bill. It's a very wise move by the legislature to extend the Housing Accountability Act protections to this critical and underlooked element, which is the financial aspect of the construction of homes that include the lower income and moderate level income along with market rate homes.

Our company specializes and specializes focuses on the missing middle, so to speak. We focus on small lot, single family detached homes, and that are for sale, and townhomes that are the two and three story townhomes attached that are for sale. That is our core, when we look for land, that's what we look for.

And this is a critical component based because of the needs of local cities to have that infrastructure constructed, and they require us to finance that, the builder to finance it, along with sometimes an enormous impact fees. It's just this is a necessary critical component to be able to have the actual homes constructed.

This legislation streamlines the process, I believe, and it makes it a more objective process because you're taking out some of the potential politics or cronyism that could maybe bias a municipality for one entity versus another.

And that could be a huge problem to someone that's invested millions of dollars in a project to take it to that last level and then and then get denied. It would and in fact, if that happened more and more, that could have a huge effect upon the type of housing that you definitely want to create. Thank you for your time, and I'm here for any questions.

Thank you for your time, and I'm here for any questions.

Thank you very much. In the audience, anyone in support of this measure? I see none. Any opponents, lead witness? Any audience to express your opposition? No? Okay. Back to dais. Any Members, any questions? Go ahead.

No? Okay. Back to Dyer's. Any members, any questions? John, go ahead.

You know, a lot of people Mello-Roos is a bad word because they see it as that additional tax that they see, not realizing that that's actually their share of what it costs to do the infrastructure that would have been in the price of their house if it's not done that way. And and so, yeah, it makes sense to extend this.

lot of people Belarus is a a bad word, because they see it as that additional tax that they see, not realizing that that's actually their share of what it costs to do the infrastructure that would have been in the price of their house if it's not done that way. And and so, yeah, it makes sense to extend this. It does add an additional smaller burden as opposed to having the price of the house be that much more.

It does add an additional smaller burden as opposed to having the price of the house be that much more. You know, you're talking about a $10,000 per house improvement in a, you know, medium sized development, and a lot of people don't want that type of thing added on to the cost of the house upfront.

So it makes sense to try and do this. People do know upfront when they're buying their house that there is a Mello-Roos to it, and that's the due diligence that people have to do. So, you know, I'm not advocating for people to accept Mello-Roos taxes if they don't want to.

I'm just saying, you know, you got to pay attention what you're buying and how the structure of the financing is put together and what their share of that's going to be. And so with that, I'll go ahead and... Yep. I'll go ahead and move the bill.

I'll go ahead and move

the bill.

Okay. Okay. I have a question. For my benefit, your bill is suggesting to create a new type of community facilities district for critical housing infrastructure district. And what's the difference between this facilities district, the new district, which will impose I feel like that's extra fee is necessary versus Mello-Roos.

district.

And what's the difference between this facilities at district, the new district, which will impose I feel like that's extra fee is necessary versus metal roofs.

Yeah. I really appreciate that you that you asked a question, but I believe that this that the CFD community facility district is a is a tool, you know, to finance infrastructure for new housing. However, at the end of the day, the city or the local agency, they still have the control over the CFD. I hope that helps.

Where will the funding for the CFD will come from?

I believe that because, you know, when the local agency or the city establish that, I think that they have to work with the the available. They need to come up probably MOU or a solution. There must be some of the agreement. Yes.

Yeah. I hope.

Yes. Is

Is there any way that my, is there any way that Mr. Sheldon can respond, please?

Mr. Vice Chair, may I address your question as well? Yes. Thank you. Thank you. Members of the Committee, it doesn't, I don't believe it establishes a new tax or fee. It just modifies the process to how that is approved. It's approved by the owners of the property initially. And typically, this is going to be one entity or a few people who own the property that will be constructing the homes.

Members of the committee, new tax or fee. It just modifies the process to how that is approved. It's approved by the owners of the property initially. And typically, this is going to be one entity or a few few people who own the property that will be constructing the homes.

So it's not. And then it's paid for by the people that live there because they're the one that are receiving the benefit or creating the impact because of their coming to the city to pay for their proportion of the parks and their proportion of the schools and all those other benefits and needs that the city provides, as was stated earlier. So it doesn't create a new tax. It simply modifies the process on how the CFD is created.

So it doesn't create a new tax. It simply modifies the process on how the CFD is created.

Okay. Usually, my understanding of community development, new communities, like in my city of Irvine has a village concept. Each village, one area, new area, 5,000, 9,000, whatever homes planned and developed by the developer. And then, usually, they need to meet all the environmental impact demands, and the study has to be publicly done. And they need to expose the water, any electricity.

And then when I was in the council, I demanded the Internet, Wi Fi, Internet access or Wi Fi should be one of the infrastructure requirements, just like utilities. And water will be sufficient and electricity will be sufficient for that additional housing units. At the same time, now in this technology era we are living, Internet access is because many people complain, so that should be part of the community development plan.

So I hope this CFD will take that Internet issue into contracting with who's gonna provide an Internet for that new village. Should be critical question to ask, but I don't think any bill so far has proposed that kind of demand. But this CFD may be a good tool to demand that. What do you think?

What do you think?

Yes. Thank you. I agree with you, and it's the obligation of the builder to provide what they believe that the buyer wants, and I think you've come up come up with your own idea for a good bill for you to introduce.

Yeah. If Stephen's development company, for example, my old friend, If you are the developer, you know, in that city or area, either AT&T or Verizon or T Mobile, which is a prevalent and who can be responsible making a contract. You make sure that that new homes would have a strong Internet access.

So will you put, will you be responsible placing proper antennas to benefit for those new homes? I think this is, this this should be new infrastructure requirement. Okay. With that, motion has been a... Closing statement.

Okay. With that

Motion has been a closing statement.

I respectfully ask for your aye vote.

Okay. A motion has been made by Senator Seyarto. Please call the roll.

The motion is do pass to the Committee on Housing. [Roll Call]

Adrienne? Aye. Adrienne, aye, Ashby, Cervantes, Laird? Aye. Laird, aye.

Seyato? Aye. Seyato, aye. Four zero.

Okay. Okay. We'll leave the bill open for absent members. So who is ready for next bill? So which one is it? Mister vice chair, why don't you we don't have the one author. Why don't we lift all the calls before the author gets here?

Mister vice chair, why don't you we don't have the one author. Why don't we lift all the calls before the author gets here?

I'm sorry. What is it? Okay. This may be a good time to lift the calls, you know, for add ons for the missing votes. Thank you. Okay. Motion has been made. And now bill number one, AB 1621.

Okay. Motion has been made. And now bill number one, AB 1621.

[Roll Call]

Choi, aye. Araeen? Aye. Araeen, aye. Ashby?

Aye.

Cervantes? Laird? Aye. Laird, aye. Sayarto?

Aye. Searto, aye.

Okay. Remaining, any late members? You you can call the roles of all add ons.

One zero.

You you can call the roles of all add ons.

[Roll Call]

Laird, aye. Two one. On call. File item number seven, AB 2180. The motion is do passed to the Senate floor with the chair voting aye.

Aye.

The current vote is three to two. Senators Ashby, Laird? Aye.

Four two. On call.

Okay. I'll leave the rest of them still open. Yes. Okay. Assemblymember Henry is here for file number eight, AB 2308.

When you're ready, begin.

Thank you, mister chair. AB 2308 is the San Francisco Transit Neighborhood Act, which will help keep a major downtown transit and housing project moving forward by extending an existing financing tool connected to the Transbay program. Specifically, this bill will allow already approved tax increment financing from former state owned parcels to continue for an additional twenty five years from 2050 to 2075. This is not a new tax and has not changed how the program works.

It simply gives the project enough time to finish what was already planned.

Transbay program is one of California's most important transit and redevelopment efforts centered around the Salesforce Transit Center, a regional hub designed to connect bus service today and rail service in the future. Its next phase, the portal will bring Caltrain directly into Downtown San Francisco, closing a long standing gap in our transit system and preparing for future statewide rails.

Without extending the timeline, we risk losing a key funding source and delaying or jeopardizing completion of this critical rail connection, and this will be a practical fiscally responsible solution to match the financing timeline to today's economic realities. With me in support today is Adam Vanderwater, executive director of the Transbay Joint Powers Authority.

I'll I'll be quick. Members, vice chair, senators, thank you for your time and consideration. We stand obviously in support. My name is Adam Vanderwater. I'm the executive director of the Transbay Joint Powers Authority.

As the assembly member mentioned, we own and operate the Salesforce Transit Center and are responsible for delivering the portal, the downtown rail extension for Caltrain and, high speed rail into high into Downtown San Francisco, and we're here to help, seek your support and thank the assembly member for his leadership and authorship of twenty three zero eight, to help finish the job of that existing approved and responsible funding measure. Thank you for your time.

Okay. Any supporters in the audience? I don't see any opposition lead witness. Any opposition in the audience? I don't see any questions from the members.

Okay. Motion has been made by Senator Laird. Any questions? Okay. Motion has been made, and the no comments, then okay.

You can close the

Thank you. Respectfully ask for your vote.

Okay. Go ahead. Call the rules.

The motion is do passed to the committee on appropriations. Senators deRazzo? Choi? No. Choi, no.

Avegin? Aye. Avegin, aye. Ashby, Cervantes, Laird?

Aye.

Laird, aye. Sejarto? Sejarto, aye. 31. Okay.

On

call. We'll leave the bin open for absent members. We'll be in short recess until a chairperson returns.

Oh, she's right. Okay. We're resuming local Gov Committee. Okay. We're gonna hold on just a little bit.