Assembly Standing Committee on Economic Development, Growth, and Household Impact

We can testify in person here in Room 27. Our witness testimony will be in person. There will be no phone testimony option for the hearing. If any member of the public in the room would like to testify in the bill, I would ask to approach the microphone at the appropriate time To preserve the safety of everyone here and to ensure the public's access to the discussion, please follow directions of our sergeants.

I would like to welcome the newest member of the committee, Assemblymember Caloza, which she'll be on her way.

She's presenting another committee. We are happy to have her here part of our committee. The following bill file item number five, SB 1123, Wiener has been removed from the agenda. We're going to begin today's hearing at the subcommittee until we have a quorum. Today, we have six bills on the agenda and one SJR.

The following bill is consent, file item number two, SB 700 Grayson, and file item number six, SB 1340, Richardson. We will allow primary witnesses here in the room today to speak for two minutes, each with two primary witness per side. Any additional witnesses will be limited to name, organization they represent, and position on the bill.

Primary witnesses and support must be those in the author or who are otherwise have registered in support position with the subcommittee, and the primary witnesses and opposition must have their opposition registered with the committee. All other support and opposition can be stated and standing mic when upon simply call state and name, affiliation and position.

At this time, we're gonna wait for the first author to come. I know that we have different committees today. Our first author, I know, is presenting in a different committee, so we're gonna put a little pause to to today and then continue in a couple of minutes. Thank you for your patience.

Okay. Good morning again, everyone. We are convening today's committee. Welcome to this morning's Assembly economic development growth and household impact committee hearing to ensure members of the public and the media have access to our proceedings today. The hearing will be streamed on the assembly's website, and the members of the public can provide testimony in person here in Room 127.

All witness testimony will be in person. There will be no phone testimony option for this hearing. If any member of the public in the room would like to testify on a bill, I ask that you approach the microphone at the appropriate time To preserve the safety of everyone here and to ensure the public's access to the discussion, please follow directions of our sergeants. I would like to welcome our newest member, which will she'll be here in a minute. So I'll do that again in a second.

And with that, I we do also have a new caucus, the Republican caucus, Mister Alex Wynne. So thank you for joining us, and, you know, and we wish our last con you know, consultant wish her luck as well. K. So with that, again, the bill will, today, following bill item s number five, SB 1123 Wiener has been removed from the agenda. We are going to begin today's hearing as a subcommittee, and we actually have committee now.

So we will do that in a second. We do have quorum. Today, we have six bills on the agenda. One SJR. The following bill is consent.

File item number two, SB 700, Grayson, and file number six, SB 1340, Richardson. We will allow primary witnesses here in the room today to speak for two minutes, each with two primary witnesses per side. Any additional witnesses will be limited to name, organization they represent, and the position on the bill.

Primary witnesses in support must be those in the author who otherwise have registered a support position with the committee, and the primary witnesses in opposition must have their opposition registered with the committee. Other support and opposition can be stated at the standing mic when called upon and simply state name, affiliation, and position. With that, it looks like we do have quorum. So Secretary, please call the roll.

[Roll Call]

Okay. We had do have quorum, so we're gonna take the consent calendar at this point. Secretary, please take the consent calendar. It's been moved and second.

Okay. We have file item number two, SB 700, Grayson. Do pass and re-refer to Committee on Appropriations with recommendation to consent calendar. And file item number six, SB 1340, Richardson. Do pass and re-refer to Committee on Appropriations with recommendations to consent calendar. [Roll Call]

So we have... Yeah. We'll hold it for additional Members to come. Perfect. With that, we do have one of our awesome authors here today. Let's see. Yeah. We have Senator Reyes. We are we're a very nice committee, so we always give great credit to our Senators. Senator Reyes, good morning. Okay. Again, good morning, Senator. You may start. SB 1044.

Thank you, Mr. Chair and Members, for the opportunity to present SB 1044. I would like to start by accepting the committee's...

Thousand and ties future adjustments to inflation to the Consumer Price Index for service and IT contracts. Under current law, certified small businesses, micro businesses, and disabled veteran business enterprises may be awarded contracts with state agencies and the California State University system valued between 5,000 and 250,000. However, the $250,000 cap has remained unchanged since 2009, even as the cost of doing business has risen significantly.

This outdated limit restricts the state's ability to contract with small businesses on larger projects and effectively shuts many of them out of opportunities they are fully capable of delivering on. Adjusted for inflation, that $250,000 equivalent to about $350,000 today, making this update both practical and necessary.

In response to stakeholders' concerns about how this increase would impact goods contracts, the amendments make sure that the cap is only increased for service and IT industries and ensures it keeps pace with inflation by tying it to the CPI. Importantly, this bill does not establish $350,000 as a floor. It remains a ceiling.

Contracts under $350,000 will continue to be offered while expanding while expanding access and opportunity for small businesses who are ready and able to scale up across the state. I've been engaging thoughtfully with the opposition on this bill and will continue to do so. The goal of this bill is to expand opportunities for small businesses and veterans, not to limit them.

It is critical that the state continue to leverage as its procurement power to invest in California small businesses who are the backbone of our economy and our communities. Here to testify in support are Julian Cañete, President and CEO of the Hispanic Chamber of Commerce, and Andrew Chang, who is the owner and director of a certified small business consulting firm, as well as the former Chief Deputy Director of the Department of General Services and economist for both government Governor Wilson and Schwarzenegger.

Thank you, Senator. So we'll go on to support now. You have two minutes.

Thank you, Mr. Chairman. Chairman Solache and Members of the Committee, good morning. Julian Cañete, California Hispanic Chambers of Commerce, and here today in support of Senate Bill 1044 by Senator Reyes. And I just have to thank her and her staff for their hard work on this. And I know they're still working out, but we're still working out a few issues with some of our partners.

SB 1044 is a crucial piece of economic modernization. It expands state contracting opportunities for certified small businesses and disabled veteran business enterprises, ensuring that our state's vital job creators are not pushed out of public procurement by eroding effects of inflation.

The Small Business Procurement and Contracts Act has enabled state agencies to streamline awards to small and disabled veteran owned businesses, reducing administrative overhead and shortening procurement processing times. However, the current streamline contract cap of 250 has not been updated since 2009. Over the past 17 years, the cost of materials, equipment, and labor has risen dramatically.

Because this cap has remained stagnant, our small businesses, including those providing services and information technology services are forced to operate at unsustainable thin margins or are barred entirely from bidding on projects they clearly have the capacity to handle. The issue is not whether these businesses can handle larger contracts. The data shows they can.

The issue is that the current 250 threshold acts as an artificial barrier limiting access to opportunities that better reflect today's market cost and project needs for small businesses ready to scale up. SB 1044 modernizes the small business, small business DVB option by adjusting that threshold ceiling to 350, 350,000.

It is important to emphasize that 350,000 is the ceiling, not the floor, and small businesses will still have full access to contracts valued at less than 350. And state agencies can still and should realize and practice this. They can still issue contracts for amounts below the ceiling. Again, it's important for them to understand the ceiling is 350, not the floor.

The cap will also be reviewed and adjusted every other year by DGS to align with the CPI, ensuring that small business opportunities scale with shifting market conditions. SB 1044 is a common sense measure that restores the purchasing power California originally intended to give its small business community. For these reasons, we urge an aye vote on SB 1044, and thank you for your time and, of course, your continued support for California's small business community.

Thank you. Do you have a second witness? We have two minutes.

My name is Andrew Chang, and I'm the owner of Andrew Chang Company. We're a management consulting firm here in Sacramento. We provide a lot of business, or we do a lot of support for both private sector companies as well as nonprofits and including a lot of state government agencies. Some of the specializations that we focus on are actually procurement. So and we've actually supported a number of major departments in refining their procurement operations.

In addition to that, we've actually served as expert witness testimony for particular litigation basis on the government side of things. I come to you for with two different perspectives. One is a small business owner. And quite frankly, you know, the 250,000 cap has been it's become more problematic, especially with the recent growth of inflation. For a number of years, it's been relatively flat.

And, you know, even then, we've actually bumped into particular situations where people would come to us for bids, and we'd say we can't do that because of the fact that we've actually hit the cap thresholds. Right? But the second part that I talk about is the fact from my role as in helping government agencies, both from a consulting perspective, but also as former Chief Deputy of Department General Services.

And over the years and especially under the past few administrations, there's been a growth in trying to help state departments do the day to day business more and more. Right? So they're so they've actually been increasing their particular delegations. So this actually comes into alignment with the way the department and actually the past former administrations have done what they've done in their approach, which is to expand authority, not reduce it.

So that way they can do their things. There are a number of reasons why a small business purchasing option is critical. But if you go to any state department, they're gonna tell you that two the two vehicles that they rely most upon are CMAS and a small business option. Without these particular tools, their hands are tied. And one of the big factors...

Please wrap up your comments. If you could wrap up your comments.

Yes. One of the big factors that you should, should mention is that when you do a formal procurement, an IFB or any of that sort, it typically takes about nine months. Small businesses purchase can take about two months to three months. So consequently, having that...

Okay. Your time is up. Thank you. Thank you for your comments. Are there any other members in the public in support of this bill? We'll take any me toos at this point.

Good morning, Members. Jazmine Advincula with the Cal Asian Chamber in support. Thank you.

Dr. Tara Lynn Gray, Director of Advocacy and Public Policy for National Association of Women Business Owners, State of California, and NAWBO was in support as amended by the committee.

Seeing no other in support, we will call on any opposition. Are there any main witnesses? Okay. We have one person. Please come. You have two minutes to present.

Thank you. I'll be very brief.

Yeah. Two minutes.

Lori Kammerer on behalf of the California Coalition on Small Disabled Veteran Businesses. We represent the interests of the 21,000 small businesses and DVBEs and especially over 5,000 of our disabled veteran businesses. We have worked very closely with the Senator, and thank you so much for working with us. We are, as Julian had said, we are trying to work out our differences. Specifically, we're representing those small businesses who are in the goods, not services, not IT.

These are folks that are working mostly in the Central Valley, in the TACPA areas where you are by prisons and where you're able to provide jobs in that area in those areas. And so the goods that they're providing are perishable. And so their sweet spot is not the 250,000 maximum. It's the 100,000 maximum. And we had requested that the Senator consider for goods only that they go into that 100,000.

And I can mention DGS numbers very quickly that 92% of those contracts that go out are between $60-70,000, well below a 100,000, even more below the 250,000. And then that's with the small business option. The DVBEs, 97% of those contracts are below that 100% or the 100,000.

Excuse me. So in order to be able to help these small businesses, the disabled veteran businesses in these targeted area preference, TACPA areas, it would be very helpful to have their contracts be limited to the or their maximum be limited to a 100,000 because that's really where they are.

They're competing with the larger companies especially in the food, eggs and bread and all of the condiments that are served, you know, in our state prisons are all part of these orders or all part of the contracting. So we respectfully are opposed, and we will continue to work with the author. Thank you.

Thank you. Are there any other members of the public opposed to this bill? Please come to the mic.

Okay. It's okay. Tim Taylor with the National Federation of Independent Business, working with the author through the coalition. We're confident we can get there, but as for right now, we're soft opposed. Thank you.

Seeing no one else in the opposition, we're gonna bring it back to the committee. Are there any comments or questions from the Committee Members? Assembly Member Patel.

Thank you, Senator Reyes, for bringing this bill forward. It's very interesting to see how the caps can really impact our small businesses, and I'm always very supportive of our small businesses. Can you please clarify? Seems to be there's some differences in understanding. This raises the cap, but it doesn't prohibit folks who are looking at smaller contracts from still being competitive, especially in areas where there aren't larger or folks with other interests.

That is correct. And in fact, through the committee, the amendment was to, it initially, it was to increase it to 350,000 across the board. But for goods, we did agree to keep it at the 250,000. The contracts, as was mentioned by opposition, we wanted to find a way to provide for the small businesses regarding goods, and that's why we kept it at 250,000. But it is a cap, as was mentioned by our witness, rather than the floor. So the contracts still come in for less than that, but that is the cap.

Thank you. And to clarify also, even for goods as well as services. But even for goods, inflation is significantly impacting the cost of goods. So by not increasing that cap in today's economy, we're actually kind of keeping it at a lower threshold relative to interest rates and the cost of goods increasing.

And we are. And that was in direct response to the opposition and their concern for those smaller contracts. We wanted to find a way to assist them with what they were doing under under the current cap. So they were able to get those contracts. But still for IT and for business for services, we did want to increase.

Thank you for those clarifications. Appreciate it.

Yeah. Just real quick. And I think it's important for us to say the policy is the ceiling of 350, and it's gonna be important as we execute this with DGS and with state buyers that they understand that that's a ceiling. It's not the floor. They can still issue out an RFP for the under the $100,000 or whatever amount they want up to 350.

So I think that's been an important an important follow-up on on especially parts of our small business advocates in educating those buyers saying, hey. You can still issue out these contracts, and you need to issue out these contracts, especially in in those areas as Lori, Ms. Kammerer, described. That's important.

Thank you, Assemblywoman. Assemblywoman Soria.

Thank you. And I wanna thank the Senator for bringing this bill forward. I just wanna piggyback on the question that was made by Assemblywoman Patel and then also just on the comments. Obviously, the comments made by the disabled veteran folks, I think I'm very sympathetic, especially because I represent an area where there's a lot of prisons.

And so I understand, you know, the concerns. I want to better understand why you guys feel that by increasing the cap and not having it at 100,000 it disadvantages folks. I wanna understand that when you're saying that these contracts, you know, being lower is better. And so wanna understand that point.

Thank you. Thank you for that question. So as I had mentioned that the sweet spot or the majority of these contracts are between $60-70,000. So well beyond or well below, excuse me, 100,000. What we're doing is this is it's not a bidding process. There's not an RFP. The agencies, and we'll say CDCR because that's the majority of these contracts that are going to the small businesses that are the DVBEs. They are, they will get a phone call to say, I need, and and we were talking about the floor versus the ceiling. In goods, it's the it's the floor. Right?

They'll call and say, we need $250,000 worth of bread. And so rather than, you know, split the contract up like a 100,000 for bread, a 100,000 for bread, or a 100,000 for bread, they'll say we need 250,000 or something that is so high that they know that that small business does not have that product in their warehouse. We're talking about also items that are perishable. So whether it could be, you know, carrots, peas, we'll think of eggs as well. We have a 114, approximately a 114,000 inmates in California whose, you know, dietary requirements.

A lot of these contracts can go to these small businesses. But when they come in at 250,000, which is what they're doing now, they're unable to have that product. And so they will call the two businesses and then say, okay. If you guys can't provide 250,000 worth of carrots and peas and vegetables, then we will go ahead and call US Foods or Sysco. And it's same with when we're talking about goods, we're also talking about paper supplies.

Right? We're talking about paper and pens and office supplies. It's the same thing. They'll call and they'll say we need, the small business supply store, they'll call and say we need $250,000 worth of binder paper. Well, they use that as the floor, and the small business doesn't have that product in their stock. And so they lose their their ability to contract.

I think someone else wants to... Question or do you wanna answer? Yeah. Go ahead, sir.

If that's okay. Yeah. There's one of the things that we should consider is the fact that there's a two pronged purpose to the small business option. One, it is actually to support small businesses. But the other part of it, which is actually very, very important, is to meet the needs of the state.

And generally speaking, I find the fact that when departments say that they need $250,000 worth of bread, they actually need $250,000 worth of bread. So consequently, you know, it's not like that we're asking them to adjust it. It's the fact that they actually need it.

Now the second part about this is the fact that is the fact that if you actually start splitting orders, you're not achieving the value for the state because there is this consolidated value in having large contracts and as well as administrative values. In addition to that, if you start doing it in a way that's not entirely kosher, it's actually illegal.

It's called splitting contracts. Right? So it is something that we have to be worried about in this particular situation. Is this splitting orders when you do need it? The you know, I can't really talk directly to the way the business operations works for these particular contracts. Okay. So I would defer to Lori on these things.

But my experience is the fact that when you order $250,000 worth of bread, you don't need it all at once. And what you do is you manage your supply chain. You talk to your order and you sit there and say, hey, I need $250,000 for the next year or whatever the term happens to be, and it flows in and you manage it.

That's part of the business that the businesses will actually do. That is part of their job. And quite frankly, if they can't do that, I don't know if I'd want them as a supplier. So, you know, because they they cannot achieve a reliable supply chain for me. So that is one of the things I think that you should consider as you're going through things.

And thank you for that. Though, I would say that we would want to these types of contracts should help people scale up and build capacity over time. But if they're never given the opportunity, then they can't ever achieve the 250,000. So I would argue a little bit back on that Which I understand that we want the best value in that at the end of the day.

But I think when we're creating more businesses, that is also a value to the state of California. Especially the businesses that folks are advocating here for. So I'd push back a little bit on that, but I appreciate your perspective. I do, you know, I am sympathetic towards the issues that you guys are raising.

I think that it is important that we may have, you know, further discussions on this, and maybe there's gonna need a need further legislation and maybe doing some additional carve out for, you know, the very small small. Because I'm even looking at the definition and the small, the definition of small businesses is up to a 100 employers or employees.

And so that also, when I look at the businesses in my community, when I'm thinking about the small small business, I'm not thinking about the business that has a 100 employees. I'm thinking about the business that has five, ten, 15 employees. And I think that those businesses should also be able to compete so that they can scale up and help these small businesses achieve, you know, you know, the same level of success as other businesses have.

And so I do see value in continuing to have this conversation. I look forward to seeing what the bill ends up being on the floor. I will be supportive today because I know that you've been working with the committee, taking amendments to address, you know, some of the concerns, but I do believe that there's extreme value in having additional conversation on how we help those micro, the smaller businesses. Because I didn't even see the, I'm interested in also having the data.

So maybe, Chair, this is something also to follow-up, you know, after this session in thinking about, okay, where are these contracts really going and really digging deep into the data. Because I think the data will really tell us the story. And so I do appreciate the concerns that were raised today.

I look forward to seeing what comes out of these productive discussions that I know already the Senator has been having with all of you guys. But thank you for raising those concerns. I really look forward to seeing what you guys come up with at the end and then reserve my right on the Senate floor, I mean on the Assembly floor to figure out. But I trust that you guys will figure out something. And then maybe in the future also address this these issues. So thank you so much.

Through the Chair. My staff just reminded me. I asked how many of our small businesses have benefited through this procurement process. Per the Department of General Services, DGS, between the fiscal year 2021-2022, and then 23-24, there were 572 contract purchase orders between 250,000-350,000, that were awarded to small businesses, including micro businesses. This total this totaled nearly $170 million in awarded contracts to small businesses under the existing contract caps.

46 of those contracts totaling 13 million were awarded to DVBEs. So this is just some of the information that I think goes to the comments from Assembly Member Soria that it's really important that we do help our small businesses and help them level up to the next stage. And that was part of the reason that we worked with the committee to accept the amendment to keep it at 250,000 for goods because those were the so that there wouldn't be competition taking it to a higher level yet, but soon. Right?

Thank you, Assemblywoman Soria. Anything else? Okay. I think you're gonna be so ready to go to the Senate soon, so thank you. With that, Senator Reyes, would you like to close?

I respectfully ask for your aye vote at the appropriate time.

Thank you. With that, is there a motion? Moved by Assembly Member Soria and second by Ms. Rodriguez. Roll call, please.

File item number 4, SB 1044, Reyes, do pass as amended to Appropriations. [Roll Call] We'll leave it open for additional votes.

Thank you, Senator. Good seeing you.

Great to see you.

With that, we're gonna go out of file order. And our next file order, I know Mr. was here, but I know Senator Lola Cuevas. Smallwood Cuevas.

Thank you, Mr. Chair, and thank you for your patience.

This is SB 247.

247. Got it right. Members, I am proud to present SB 247, which strengthens California's commitment to equity and public infrastructure by providing up to a 10% bid preference for projects that hire workers from disadvantaged communities. SB 247 bills on SB 150, which was established as a key metric for ensuring that equity standards include historically excluded communities and do not leave them behind when public investment dollars flow into our state and sometimes into their own neighborhoods.

These investments include the Inflation Reduction Act, Infrastructure Investment and Jobs Act, and the CHIPS Act.

These are were, at the time, once in a generation opportunities to create long term quality jobs that lift families out of poverty, but these investments alone do not guarantee equitable outcomes. In communities like mine in South Central, too many workers remain concentrated in low wage occupation is, in fact, the the highest grossing percentage of jobs created in my county are low wage jobs. And we know when we have low wage jobs, it perpetuates housing crisis, food crises, educational gaps, health disparities.

We wanna make sure that when the state is investing in infrastructure projects that we turn that into an anti poverty campaign, that we look at infrastructure where whether it's cleaning, our environment through clean energy projects, whether it's expanding our public, service and infrastructure. We wanna make sure that these jobs are accessible to our communities, and we wanna make sure that contractors are bidding with our most vulnerable populations in mind.

SB 247 helps ensure that public dollars create a pathway into family sustaining, resistant recession resistant careers and that we reward contractors that hire workers from disadvantaged communities. We can better connect California's workforce to opportunities by making sure that the taxpayer investment is the bridge. At a time when federal rollbacks are threatening DEI, and certainly we know the Federal Government has rolled back a number of those massive investments to our state.

At one time, we were looking to gain about a $100,000,000,000 for investment infrastructure investment here in the state of California. We do expect those dollars to flow back.

Right? And we also know that some of those projects are underway. And so this is a opportunity for us to ensure that the workforce reflects the diversity of our state, that we are beginning with the most impacted communities in mind, and that our contractors are ensuring opportunity for the most vulnerable in our community. With me here today is Danica Rodamel from, Local one forty eight Public Defender's Union, to testify in support of this bill.

Welcome. You have two minutes.

Thank you. Good morning, Chair and members. Yes. Danica Rodarmo of Whole Consulting here on behalf of my client, the LA Public Defender's Union. Really pleased to support SB 247.

I'm often across the hall in public safety, and so very happy to be here with you because public defenders really see firsthand the consequences of poverty, economic instability, and barriers to employment. While much of the public conversation around safety focuses on what happens after a crime occurs, we believe California must invest in conditions that prevent harm from occurring in the first place. One of the most effective public safety strategies available to us is expanding access to stable family sustaining employment.

When people have access to good jobs, they're better able to support themselves and their families, maintain housing stability, and build connections to their communities. Those are the same factors that research consistently associates with lower involvement in the criminal legal system and and stronger public safety outcomes.

Too often, California spends significant resources responding to the consequences of poverty while underinvesting in the opportunities that help people avoid system involvement in the first place. For many people, including those with Prior Justice Involvement, access to a quality job can be the difference between long term stability and continued hardship. SB 247 is an upstream investment in community safety. It strengthens local economies, expands opportunity, and helps create the conditions that allow individuals and families to thrive.

By prioritizing good jobs and workforce development, we can reduce reliance on costly downstream interventions while building safer and healthy communities.

For these reasons, on behalf of the LA Public Defenders Union, I urge your aye vote on SB 247. Thank you.

Thank you so much for that, and happy you're here in our committee. I know the Chair of public safety is a difficult Chair, so I'm happy you're in our committee. With that, anyone in support of this bill? K. Seeing 9 one.

Anyone in main opposition to this bill? K. Welcome. You have two minutes. Thank you.

Mister Chair, members, I'm Brett Barrow with the National Electrical Contractors Association, the California Legislative Conference of the plumbing heating and piping industry, United Contractors, Western Line Constructors, and Northern California Allied Trades. We're here in opposition today, but I wanna make one thing clear. We're not opposed to bid preferences when structured correctly. Where we are opposed to this bill is because it is aimed at the worker and the way those workers are dispatched to job sites.

As union construction employers, we are our labor agreements are collectively bargained, and we don't have any control of who is sent to our job sites because the union hiring halls send those those workers. And if they dispatch a worker from the local hall, we have no grounds to reject that worker based on any criteria other than the fact that they may be lacking in the skills or training that's necessary for that job.

And in order for a contractor to establish equity metrics relating to our workforce, we would also have to go through our collective bargaining process, which restricts our abilities to apply, be able to access any kind of bid preference under the structure of this bill. So with that, we are opposed to this.

Thank you, sir.

Mister Chair and members, Scott Govenar on behalf of the Construction Employers Association. We are many of the largest union signatory building contractors in the state. As Mister Barrow said, workers are dispatched to our job sites. We cannot send them back based on the ZIP codes where they reside. The only ones who can do that are nonunion employers.

They have the latitude to pick and choose workers at their discretion. So they're the only ones who could actually benefit from this measure. And then mechanically, you have another problem, which is if contractor applies for a 5% bid preference, what happens if down the road the union dispatches workers who don't comply? As building contractors, we have 60 subcontractors on a job site. What if their workers don't comply?

What happens? It's really the mechanics of this measure that don't work. And we have seen this in other areas where there's a disconnect between things like local hire and skilled and trained, and we welcome the opportunity to try and harmonize those so we can actually comply with law and ensure that union employers benefit. So for these reasons, we are opposed. Thank you.

Thank you. Is there anyone in the room opposed to this bill?

Mister Chair, members of committee, Chris Walker, on behalf of the California Sheet Metal Air Conditioning contractors, 300 con union contractors statewide. Mister Barrow, Mister governor have articulated our concern. We cannot control who's dispatched from our union hall, and we are put at a disadvantage because of this bill. For those reasons, we're opposed. Thank you.

Melanie Perrin on behalf of the Associated General Contractors, California Chapters, and opposition. Thank you.

Thank you. K. Seeing no one else, bring it back to committee. Are there any questions or comments from committee members? Assemblymember Soria.

Yeah. No. I wanna thank the folks that raised the concerns with the dispatch issue, which that to me creates a a big concern. I understand the intended goal of the bill. I think one of the things, at least in my community, and I represent one of the districts that is disproportionately disadvantaged and we have, you know, the probably some of the highest levels of unemployment and poverty.

One of the things that I know the local folks have been doing in my area, especially the building trades is through their pre apprenticeship programs trying to eliminate barriers to entry, which I think that's where the greater focus needs to happen so that they can be actually then employable and part of the trades so that then they can get and I think we have a major gap in that.

I don't think we've spent enough resources trying to do that in creating the pipeline, but I am concerned that this bill would have an issue with the fact that, you know, the the dispatch, the dispatching concerns. So I'm looking forward to kinda what what other questions and maybe if you can speak to to that issue because

I would, you know, be concerned about supporting something today that would lead to other, you know, issues.

Any other questions or concerns? K. Oh, and I just wanna answer now or do you're closing, Senator? Your your choice. Okay.

I can do it in my close.

Okay. Thank you, Senator. Doctor Patel?

Yeah. I do have concerns about the ability for our our labor partners to be able to dispatch and not be able to control that. One of the things I look for is when is whether a bill is operational. I can we have aspirational goals, but then when we actually implement them on the ground, how does that look and how does it, implement, basically?

And if it puts one class of worker at a disadvantage, we are trying to help uplift in our societies, giving people good, stable jobs that that come both benefits, which is something that labor does very well.

I don't wanna see that process get interrupted in an unintended kind of way. So, would like to know what your thoughts are and plans are for considering a way to get, to resolve this this unintended conflict.

K. I see no one else. Senator Smallwood Palace. Let me close.

Thank you. Thank you, Mister Chair, for this opportunity. Really appreciate the discussion and and the questions from, from committee members. So this idea of targeted, community benefits and hiring and equitable metrics is about twenty years old. From Sacramento, to Bay Area to Central Valley where we're now building high speed rail to Los Angeles.

This metrics is utilized, and it's a proven a proven way to what I call achieve a triple bottom line, where we have more diverse folks coming into the building and construction trades. We have contractors who then have these new members of their workforce who then are dispatched not just from the job that they're initially bidding on, but they stay and can work from place to place to place.

That is the the benefit of a skilled and trained workforce, of having a unionized contractor that it's not one project. Folks are now in the pool for multiple projects. So when we say career and why this process is important, is because it is a long term proposition.

Contractors and in all of these instances often exceed the goals. We had a targeted local hire goal in LA County, for example, that started at 30%. They were marking 40% local hire. I think the misunderstanding is that the unions are very good at dispatch. They're very good at understanding their members.

They're very good at understanding where their members live. They have worked with these contractors over the last, I think, I was a part of the very first LA Metro targeted local hire program, where we went from black workers participating in the union construction trades at 2%. Even though they were 10% of the trained apprentices, they were participating at 2%.

But once we instituted this metrics and system and worked with the building trades and with contractors, that percentage jumped to 25%, which is unheard of in the building and construction straight sector. So this is a model that has been proven.

There is I will I'm happy to share research on this model that not only helps with ensuring that we are investing in contractors that want to invest in our most vulnerable communities, that we hold accountable to building trades, to making sure that we have targeted local hires that look like us so that we don't have folks coming from Nevada and Utah and building on contracts that don't reflect California and don't look like California. This is a a way that we are all accountable.

And also that our community, that we are identifying and investing in young that may not get a four year college education, but they damn sure can have a middle class career by building and investing in their own communities through our public tax dollars. So I'm I believe that this is the California Good Jobs Act. I believe that the folks at this table know exactly how to do this and do it well.

And I'm convinced that as we are looking to recoup the dollars that have been stolen from us by this hostile administration, and we are able to get those billions of dollars reinvested in California that will be ready to provide the workforce that this state needs and deserves. And I and I know from Fresno and in the Central Valley how important that is for us to get it right.

We want your community to benefit just as I want South Central to benefit, and I think this is a way for us to do that. And with that, I respectfully ask for your aye vote.

Thank you, Senator Small Buevas. I appreciate your engagement with our committee. You know, we have an IRAC on this on this on this bill. So with that, is there a motion and a second?

Thank you, Senator Small Buevas. I appreciate your engagement with our committee. You know, we have an IRAC on this on this on this bill. So with that, is there a motion and a second?

Moved. Is there a second? Okay. Second. Okay. Roll call, please.

File item number 1: SB247. [Roll Call]

We'll leave it open for the additional vote.

K. Thank you. K. Thank you. With that, we do have, Senator Cortese, next.

K. We're moving on to agenda item number seven, SJR from six, Senator Cortese.

Well, thank you, Chair and Members. I appreciate the opportunity to present SJR 6. California is now the fourth largest economy in the world. Maintaining that position requires continued investment as we know, but particularly in infrastructure innovation and workforce that drive economic growth. Over the last several years, Congress enacted the bipartisan infrastructure law, the CHIPS and Science Act, and the Inflation Reduction Act.

California's communities, businesses, universities, and local governments have planned around those investments and are already seeing the benefits. The bipartisan infrastructure law is helping California modernize roads, bridges, ports, transit systems, broadband networks, and wildfire resilience projects. These investments improve public safety, strengthen supply chains, reduce congestion, and support economic activity throughout the state. The Chips in Science Act is helping strengthen domestic semiconductor manufacturing science research.

For California, that means supporting our innovation economy or world class universities, workforce development programs, and the high skilled jobs that keep us globally competitive.

The Inflation Reduction Act is helping fund clean energy projects, advanced manufacturing, hydrogen development, battery technology, and energy infrastructure. So these investments are creating jobs, attracting private investment, and helping build the industries that will power California's economy for decades to come. Together, these federal investments are helping California build the transportation systems, research capacity, energy infrastructure, and advanced manufacturing economy necessary to remain globally competitive.

As a Senator as a Senator representing Silicon Valley, I see firsthand how investments in research, innovation, semiconductor technology, and workforce development translate into jobs, economic art opportunity, and long term economic growth. SJR six recognizes a simple principle.

When communities have planned around funding commitments already approved by Congress, those commitments need to be honored. Abrupt changes create uncertainty, delay projects, increase costs, and make it harder for local governments, businesses, and workers to plan for the future. SJR 6 urges the Federal Government to maintain these communities and provide the certainty necessary for California's communities and economy to continue moving forward. I should say we're asking the Federal Government to maintain its commitments, especially under the current administration.

At the appropriate time, I respectfully ask for Aye vote, but I do have a witness here, Keith Dunn, if there's an opportunity for him to present.

Absolutely, Mister Dunn. You have 2 minutes.

Thank you, Mister Chair and committee Members. Keith Dunn here on behalf of the State Building Construction Trades Council. I wanna thank the Senator for bringing this resolution forward. You know, California sends a lot of our resources to the Federal Government. In exchange for that, we partner with them to provide infrastructure for our citizens.

This effort has always been bipartisan historically. In fact, we named one of the big bills bipartisan infrastructure investment bill. It seems like a no brainer that this would be something that everyone would support. I'd ask for all of your support, but I would say it's critically important because the dollars that we invest, not only as local communities, but also as the state, are leveraged against those federal dollars.

And when those dollars get in question or get delayed or sometimes, in some instances, get removed for what seems like reasons that are hard to understand.

It creates financial hardships not only for our communities, but also as a state and those dollars that are being invested. It puts more pressure on us to put resources towards them because they're critically important projects, whether it's water, rail, the CHIPS program, hydrogen, additional, alternative energy, or other programs that we partner with the feds on. So I would just like to ask for your support.

I wanna thank the Senator again for moving this forward, and I hope that we can all get behind this message to our friends in Washington, DC. Thank you.

Thank you, Mister Dunn. Is there any oh, no one else on in support in this bill from the public? Seeing none, we're gonna go out to any opposition on this. Any opposition? Anyone in the public? K. So now we'll bring it back to committee. Any committee comments or questions?

Moved by our newest member to committee and wanna acknowledge her again publicly. Miss, Felosa, thank you for joining us. And we have a second by miss Soria. With that, roll call, please.

File item number seven.

Oh, miss sorry. Did you wanna close anything, Senator? I apologize.

And I respectfully ask for your Aye vote.

Thank you. Apologies for that. Thank you. And with that, we obviously have a recommendation of an Aye vote. File

item number seven, SJR 6, Cortese, be adopted and re referred to committee on appropriations. [Roll Call] We'll leave it open for the additional vote.

Thank you. Thank you for your time. K. With that, we have our next alpha item. She looks a little different today, miss Hurtado, but we have Assemblywoman Rodriguez.

Michelle Rodriguez will be presenting today on behalf of Senator Hurtado. Miss Rodriguez, when you're ready.

Good morning, Chair and Members. Today, I present SB 1025 on behalf of Senator Hurtado, who establishes which establishes the office of food security and affordability. Every day in California, there are parents working full time jobs that still have to worry about how they're will put food on the table for their children. There are seniors choosing between groceries and medication and college students skipping meals while trying to earn a degree. The reality is that many of these Californians qualify for assistance, but the system can be difficult.

Families are often sent from one agency to another, filling out multiple applications while trying to figure out where to turn for help.

Imagine being a single mother working two jobs already stretched thin and having to spend hours navigating different programs just to just to access food assistance that already exist. For many Californians, there's this is a reality. California invest billions of dollars in food assistance programs. SB 1025 helps make sure those investments are working as efficiently as possible by connecting programs and putting families at the center of the process. SB 1025 is about making government work better for the people it serves.

The bill will strengthen outreach efforts, identify communities that are being left behind, and support local food banks and community partners, and help ensure that resources reach the people who need them most. Over time, improving our food security will contribute to a better health outcomes, stronger education attainment, and increased workforce participation, helping reduce long term economic burdens on families and communities. Today, I have with me Kelly Lowry, Executive Director of Community Action Partnership of Kern to testify in support.

Sorry. You have two minutes.

Good morning, Chairman and Mmbers. My name is Kelly Lowry, and I serve with the CAPK Food Bank in Kern County, one of California's hunger relief organizations. We distribute every month between one and a half and 2,000,000 pounds of food supporting more than 50,000 Kern County families that are experiencing some of the highest levels of food security in our state. I'm here as a sponsor of SB 1025, and I'll tell you why.

The charitable food system in California is not the responsibility of any single department, program, or organization.

It's influenced by housing costs, wages, transportation, health care, agriculture, emergency food systems, and public benefit programs. Yet our response remains fragmented. At the local level, we often find ourselves trying to coordinate across multiple state agencies, private affiliations, and local partnerships that each play a critical role, but without a unified strategy connecting those efforts together.

SB 1025 addresses that challenge by establishing an office of food security and affordability and directing the development, and this is the most critical part, the development of a statewide food security strategy. It it creates a place where data, policy, program, administration, and community expertise can come together to identify gaps, coordinate solutions, and measure outcomes.

This need has become even more urgent as significant federal policy changes shift additional responsibility to states and local communities. Food banks like the one that we operate, counties, schools, nonprofits, health care systems, farmers, and community organizations are all adapting to this rapidly changing environment. California needs a coordinated approach that helps us plan ahead rather than simply react to crisis. SB 1025 does not create another food program.

It creates the structure necessary to make existing investments work better together and helps to ensure that decisions are informed by data, guided by stakeholders, and aligned around measurable goals.

And you could wrap up, please.

Lastly, for those of us working on the front lines every day, the question is not whether California has organizations committed to addressing hunger. We do. The question is whether we have a coordinated system capable of meeting the scale and complexity of the challenge before us. SB 1025 helps build that system. I respectfully ask for your aye vote.

Thank you.

Thank you so much. Is there anyone else in the the public for in support of this bill?

Jessica Dong with the University of California in support. Thank you. K.

See no one else. We're going to opposition. Anyone in opposition of this bill? See anyone else in the public? K.

We'll bring it back to committee. Are there any questions or comments from committee Members? Doctor Patel.

Thank you for presenting this bill on behalf of the Senator, and thank you for being here for your testimony. Is there can you please walk me through or or highlight what the specific reportables are for this new agency and and when would we be able to have those reportables?

Yeah. So the the goal of the bill is to bring stakeholders together to actually formulate what those are. Because I think that's one of the gaps that we're identifying is that we have really incredible people working both in the public and private sectors that are each doing work in silos with our own metrics, but not in a coordinated strategy to be able to even determine what success even looks like for Californians facing food insecurity.

So I wish I could say that the measurable would be, you know, to increase the pounds that of food we deliver or to, you know, use different metrics than others deploy on a regular basis. But again, the truth of the matter is that one of the first elements of this strategic plan is going to be to develop what those metrics are by bringing the both the public and private sectors together.

Do we have a target as to when we think that'll happen once the the group is formed?

Yeah. Is it

like a are we giving them a year? Are we giving them a year and a half?

So I'm really thankful for the work that's been done in other states, most notably in New Jersey. In New Jersey, they've, were the first state in the country to do this work just a few years ago. And within a year, they had brought the entities together to develop a three year strategic plan that was just released this year.

Excellent. Thank you.

Thank you, miss Patel. Assemblywoman Coloza.

Hi, Chair. Thank you so much for having me on your committee. I'm excited to be part of this work, and I thank you to Assemblymember Rodriguez for her presentation on behalf of the Senator. I just wanted to, echo my support for this bill. I think it's great.

I think, you know, creating this independent office, to really tackle food insecurity in the state is gonna be really important. We know that the state has backfilled a lot of the federal dollars that has been cut for a lot of our food banks, and everyone's trying to tackle, you know, what's happening at the federal level. So establishing an office, is important and agree to with the the the questions that Assemblymember Patel raised about what the deliverables are and how we can, really get ahead of those.

But, just wanted to express my support and would love to be added as a coauthor. Thank you.

K. Anyone else? Miss Rodriguez, would you like to close?

Thank you. And then on behalf of, Senator Hurtado, I respectfully ask for an Aye vote.

Thank you. And that no one, thank, Senator Hurtado for, this bill today, and, on that, we are I'm gonna I recall on this bill. So with that, we're gonna take a roll call, please.

File item number three, SB 1025 Hurtado, due passed to appropriation.

Danny, a motion in a second just to make sure. Move. Second. Second. Okay. Thank you.

File item number three, SB 1025, Hurtado due passed to appropriations. [Roll Call] We'll leave it open for the additional

Thank you again. And with that, we're gonna wait on one more committee member. We'll wait five more minutes and see if she comes. Then we're done.

And before we go on, just a personal privilege, I wanna acknowledge our my three interns in my office. I have Lexi, I have River, and Evie. So thank you all for being here. They're amazing, and we have all the interns that do good work in our office. Thank you.

[Roll Call]

Miss Rodriguez also has her intern here. I wanna acknowledge the intern.

[Roll Call]

We will continue. Madam secretary?

[Roll Call]

Great. With that, members, see no more business. This hearing is adjourned. 10:45.