Senate Budget and Fiscal Review Subcommittee No. 2 on Resources, Environmental Protection and Energy

Senate budget budget subcommittee two on resources environmental protection energy will come to order. We're holding our hearing in the O Street Building and I thank my numbers for being here. So we have two informational issues for discussion on today's agenda prop proposition four and the Greenhouse Gas Reduction Fund. Both of these issues are still open after the June budget and were were agreed by the Senate Assembly and administration to address the August to be to address them in August.

Today gives us an opportunity to refresh our memories about what was accomplished in June, what still needs to be addressed this end of session, and what may be looked at in the future.

After members discussion, we will open it up to public comment on both items. Even though we don't need a court. Let's let's take roll please.

Senators Reyes. Here. Reyes here. Choi? Here.

Troy here. Lake Spear? Here. Lake Spear here. Nerney?

Here. Is Nerney here? Alright.

Let's start with issue number 1, proposition four. We'll hear from the LAO first. Welcome miss Ehlers.

Would you like to begin? Yes. Good morning senators. Rachel Ehlers with the Legislative Analyst's Office. So for proposition four as a as an update, you've got a nice chart on the second page of your agenda that summarizes where things are.

The proposal before you from the administration is 2,250,000,000 for the budget year. Well, now current year, 2627. Most of that was proposed in January. There was a small addition in May, a 150,000,000 additional proposed in May. The bulk of which, you'll recall we had lengthy discussion here was for the Golden Gate Fields purchase, a 100 and Golden Gate Fields purchase.

A 125,000,000 for that. And then a small smattering of funds across a few other programs. So really the decision before you as a legislature regarding proposition four is kind of two fold. The first is timing. The voters approved the $10,000,000,000 bond.

So one of the key decisions before you is the timing for when to allocate those funds. There are clearly tradeoffs. If you do it really quickly, you get the dollars out the door and and get it ready to spend. But, I guess that maybe the downside of that is that the sooner you do it, the less funding is available, in future years as emerging needs may come up and you are looking for for dollars to address those.

Another consideration around timing is just the capacity of both administering departments to put out dollars, as well as for the field and for projects when they're ready to use.

The second big consideration is the specific uses of the dollars. There are a lot of different categories within proposition four. Some are more prescriptive in the bond language of exactly how the dollars have to be used. And some give a lot more discretion to the appropriation, either putting language in the appropriating language or deferring to the administration. So that's really a key consideration is how specific do you want to be of how the dollars can be used within the parameters of what the bond allows.

How much do you want to leave for competitive grants so that, there are the process of applications and review, which sometimes can mean that some of the strongest projects percolate up to the top and get selected. But also can mean that only those, applicants with the highest capacity to put together a strong application get get funded. And then how much do you want to defer to

the administration in some of

those cases to make those decisions. So with that that that's kind of the broad parameters and here to answer any specific questions members may have.

Thank you. Questions? Any questions? Well before that, Mr. Benson do you have any comments you'd like to make?

I think the only thing I would add in terms of what was accomplished in June is we did that the June budget does include $65,800,000 of, admin funding for projects funding that was included in the '25 budget. That makes sense. So that that's all that's in the budget so far for prop four is the ongoing project administration funding for things that were approved last year.

Okay. I have one question. Okay.

Senator Blake Spear.

Talk about that. But, I think one thing that I would point out is, so early on, there was a process for emergency regulations that was required. However, we have since then, the legislature's adopted and the and the governor, signed some amendments that have, provided an APA exemption so that the emergency regulation process for prop four isn't necessary anymore.

Okay.

Note that.

Well, that's probably helpful. Yeah. Okay. Go ahead.

On the emergency rule making. So, yeah. Last year, we did start the emergency rule making process for prop four. We submitted to office of administrative law. We were told they were gonna reject the prop four procedures we had put together.

So we withdrew them. But at this point, with AB 35 being signed, we no longer need to go through the rule making. So our prop four has not been delayed and we're moving forward.

Okay. So we expected those delays are now behind us?

Yes. The saga is behind us.

Okay. Well that's good to hear. Thank

you. Thank you.

Well, thank you Chair and thank the witnesses. Good morning. The way it looks to me that our water problem, has our our water distribution system has two major challenges. One is the subsidence, of the canals in the valley, and the other, and that would be, if left untreated, that would be an 87% reduction in water, of, delivery capacity by 2040. Significant challenges, especially considering that, the Colorado River is no longer a, a reliable water source for the state of California.

The other problem, of course, is the Delta Levees. A lot of that's in my district. These levees were constructed, many of them in the eighteen hundreds. They no longer meet the Corps of Engineers standards and so we have significant risk. This year, I introduced S B SB 872 to set up a fund to provide funding for those two challenges.

In the one case, we asked for $60,000,000 or the Delta caucus anyway asked for $60,000,000, for prop four funding for lamp subsidence repair, and also $60,000,000 for a Delta lever repair. So what what does the LAO think about in the governor's office about those requests, the urgency, and what's it gonna look like in the next few years? Because in my opinion, $60,000,000 isn't gonna be enough to get where we need to go.

And it's gonna look more like $6,000,000,000 to do what needs to be done in today's dollars. So if you could address that, I'd appreciate it.

I think our our response without speaking kind of to the merits of specific bills which as you know we don't we don't do. I I guess what I would con contribute is that we are lucky that the voters approved proposition four and gives us a resource that's available. So and there are some, pots of funding both for levies as well as for, water conveyance infrastructure that are available.

So again as I outlined the questions before you and the considerations are how quickly to spend that that funding. If you spend it all this year on those projects it it can help make some progress.

It does mean that then that those resources aren't available in the future as issues arise. Regarding conveyance, I think the other thing I would add is just it is tricky to figure out who and what entities are should be responsible for paying for some of this issue.

Whether it's state water project users who use the canals, whether it's those who caused the damage from over pumping for the subsidence, whether it's the state because there is clearly a state role and consideration to make sure that drinking water gets to those who need to drink it. So those are tricky issues to untangle and but yet I think also very key to deciding how much of this general taxpayer dollars should go for those types of projects.

Alright. Any other

I'll I'll defer my colleagues in terms of what may have been proposed, for prompt prop four in the January budget for those issues. But I would just note that we stand ready to, you know, talk with ledge staff and and when work through the the process of of, finalizing a expenditure plan and some of these can be part of that conversation.

Madam Chair, senators, Senator McNerney. My name is Casey Shimpke. I'm the deputy director for legislative affairs with the Department of Water Resources. To to give a a little context, I I think your numbers are are are largely accurate. We've identified the subsidence issue on the aqueduct systems.

It's probably being about close to $4,000,000,000 in in overall costs to address that. That's for the state water project

Correct.

Not for the Central Valley project.

Correct. I would also, say that, you know, with the enactment of the Sustainable Groundwater Management Act and the efforts have been going on for the last twelve years associated with that, there is, moving forward, you know, a plan to kind of prevent further subsidence or address further subsidence, but we do have that existing issue. So that's that is something that is that is being dealt with and you know, prop four does include some funding.

There was some initial funding provided by the legislature in past budget acts to start moving that process forward. With regard to the levies, We have operated a a Delta levy maintenance subventions program since the the early nineteen seventies.

Working with the levy protection districts and the the Delta Island land owners, and their annual maintenance needs. If you don't maintain it, you're gonna have a a problem in the future. So we do run that program. And additionally, we have a, Delta special projects program for other issues. I believe, the Stewardship Council has identified $3,200,000,000 in overall need over the next twenty five years.

And so, like any infrastructure throughout the state, like a lot of our state water project infrastructure, repairs need to be made, updates need to be made. A lot of our Delta levy Delta levies initially were constructed in the nineteenth century, have been upgraded, have been modified but we

are still talking about an aging system that does need to be updated. So the proposal we have in the budget using the prop four funding is another investment period of time and, you know, we hope to keep moving forward and and as I mentioned, we've been operating these programs since it was 1973 and 1988 respectively and continue plan on continuing to operate those, you know, through annual budget appropriations and other actions.

Well, Lyn, I wanna point out that that's a good start but it's just a start. If we wanna make a water reliable for Californians for for the remainder of the century, then we need to think ahead. In terms of levees, just putting more dirt on top of the levees isn't gonna do it. They're they're suffering seepage, saltwater seepage and, that needs to be dealt with. I think one of the one of the levies had a real plan for that and implemented.

It was a little expensive but I think as that moves forward that that will become more affordable and and absolutely necessary.

It is definitely a little expensive. Yes.

And Senator, just for context, the bond includes a $150,000,000 for delta levies. The governor's proposal would be 60,000,000 for 2627. That's 44 for the special flood projects and 16 for maintenance inventions. That would leave 89 for future years.

Aye, you know, I defer to the department but it does seem that in this category this could be one where you may not want to spend all of the money in one year because it does take time and there is sort of limited capacity and new new leaks can spring.

So having some funding to be able to use over several years probably makes sense.

Yes. I agree. Okay. And Thank you. Well, I'll yield back.

Thank you. Thank you. Okay. Thank you. I have some concern on the total cost of Prop four spending plan this year, 02/2627 is about $2,250,000,000, among which there were some major key reductions in the spending compared to last year.

One of them is $103,000,000 less for wildfire and the forest forest resilience. And as you may know, the wildfire so far this year has been four thousand five hundred thirty six cases. And total emergency response incidents have occurred 377,615 times. So that's annual occurrence. As you know, that's property damage and the lifetime losses, etcetera, very ongoing issue with the hot weather continuing annually, especially this year.

But what is the justification that $103,000,000 has been cut in the budget?

So I think what you're seeing is obviously prop four is a defined amount of authority to spend And it's consistent with what sailors was just talking about. We think that it's financially fiscally responsible for us to sort of meet that out over a couple of years. Otherwise, we're gonna find ourselves in a year where we have none of it to appropriate, and that is obviously gonna be a bigger problem than, some scaled reductions.

So for example, we're gonna talk about g g r f here in a minute, but the amount of g g r f that's projected to be available for forest health type projects is projected to be reduced significantly. So prop four on the general fund is in not in great shape at the moment.

We've been obviously putting a lot of talk, discussion and focus on balancing that and trying to reduce our out year structural deficits and whatnot. So we think it's really important that we sort of take a look at metering out some of this prop for over a couple of years so that we have ourselves covered for a couple of years. So for one example, you know, the forest health pot, I think we proposed 30 a little over $35,000,000 for 2627.

That leaves about $35,000,000 left in that pot that we would intend on proposing for 2728. That's it for that pot in prop four.

Similar situation for local fire prevention grants and and for a number of the other pots. We also in 2425, there was an early action package that appropriated all of the wild fire funding for a number of the conservancies and stuff. So all of that's already appropriated.

So there's a large amount of the funding that's already been appropriated and is out there for use and we're trying to sort of balance what we need to do this year with what we're probably gonna need to do next year and hopefully, you know, another year or two after that for some of these pots. But it's we're going through it relatively quickly and it's really the only game in town at the moment.

Very interesting to see issue number 1 in the governor's proposed spending plan in for the from the from from the proposition for spending plan includes helping $125,000,000 for the purchase of Golden Gate Field. That's more than what percentage is out of a $175,000,000, and they raised only $50,000,000. And the remainder, the governance proposal is to give 125,000,000,000.

And the old Hose track purchase, is it more important than the wildfire prevention and the fighting and the continuous issue that we are dealing with the wildfires and the reduction, $103,000,000 of reduction is proposed while giving away $125,000,000. Is that more important?

Well, so I think what you're seeing there is it's no. It's not more important. So I'll be I'll be frank about that. But what you're seeing is the the Prop four bond sections specify what the funding can be used for. The funding that would go towards prop four can't be used for wildfire resilience.

So it's not a matter of we chose to spend that money on Golden Gate Fields instead of wildfire resilience. We're not we we can't. Statutorily, we're you can't use those bond sections to go towards wildfire resilience.

So we we have identified projects that align with what the bond section allocations allow for them to be spent for, and all of the we're the 125,000,000 for Golden Gate Fields is spread across three different bond sections, and each of those bond sections aligns with the purposes of what the Golden Gate Field acquisition would would be for.

So so prop four money cannot be used for wildfire mitigation at all?

So Chapter three of Prop four is about wildfire and force resilience. All of the funding in that chapter is focused at wildfire and force resilience, but there are, eight or nine chapters in there, and there's, a coastal section, there's, water, there's, you know, parks and access. Each of those chapters has sort of focus, and the sections within those chapters delineate what the specific, apPropriated or authorized amounts can be used for.

Many of them outside of the wildfire chapter, obviously can't be focused on wildfire because they were, authorized for other purposes. Now there are, of course, multi benefit types of things.

There's a nature based solutions chapter. Some of the multi benefits you get from a nature based solutions project can improve forest health and things like that. So there there are some some cross benefits, But in terms of focus specifically in wildfire resilience, it's really what's in Chapter three.

Regarding the donation, $125,000,000 to the Golden Gate Field purchase money. I wonder whether that's gonna be just a giveaway or state will have any control over the property once that's purchased. If there's any agreement how who's gonna control it or just a donation pure donation to give away?

Or or second question would be, have you thought about loaning $125,000,000 and on over a certain period of time and that they they can have their revenue and that they can pay back to the state rather than giving away and causing our depleting our resources that we may someday need to use some way somewhere else? Yeah.

So we we haven't considered loans. Prop four is not set up with authorizations to do a loan program. Most of our departments really aren't set up to do loan programs. So that would probably take a lot of additional administrative stuff to get the expertise to handle something like that. But I think the the bigger thing to note is that, by design, the state will never be a part of the chain of title, if you will, for the Golden Gate Fields property.

And and part of the reason for that is by providing a grant so that it can be acquired by others. Ultimately, it would be resting with East Bay Regional Parks District, and they would be operating and maintaining it. But by the state not ever having titled the property, it means we also don't have any of the liability that comes with the property or any of the maintenance and operations responsibilities that come with the property.

They can have a land a surplus land. I thought

quite a few state fairgrounds are owned by state. There are ag districts that that a lot of the state fairs grounds are associated with. This particular property is not in state ownership now, so it wouldn't be like state surplus property. It's owned by a private entity as I understand it. And

So it's about to be purchased, so you can negotiate at least rather than being generous giving away that money.

If this if the state wanted to acquire title to the property, we could do that. I think from the administration's perspective is the state doesn't want title to that property. But we do want the property to be brought into conservation. And so the idea is you do a grant to another entity that will take ownership of it.

In this case, it's a park district, so we know that it'll be it'll be conserved and used for increasing outdoor recreation and and park access for, you know, anybody through the state, but I will obviously folks in the general area probably get most use of it.

That is a huge land of 161 acres. Right? Yes. Total of land. I I I know your concept is preserving open space and for environmental protection purposes.

But on the other hand, have you done any comparative study if that the land has been auctioned off or or or or developed for them to the the the owner current owner if our state doesn't help purchase not help a nonprofit organization purchase the land. Probably the entity could develop into some nice resort or whatever that made would would create a lot more revenue to the state. Has there been any comparative study? So

I'm not aware of a comparative study about those things. I'll defer to my colleague Brian Cash if he's aware of anything along those lines, but I think part of the purpose of this is that the administration views this as a, unique, opportunity to bring a large piece of land along the coast into conservation and use it for public access and public recreation, And probably part of that is to avoid large development. But And that's part of the appraisal process too is to figure out what the highest and best use is of the property. So that has been used and is going to be used as part of the review of the appraisal of the property by the Department of General Services.

Yeah. My final thought was that since the purchase idea was initiated by the nonprofit organization and they should have any means of raising enough funds to to acquire rather than relying upon the state and eventual control will be by them and other than the ideal situation for the environment and environmental protection is good idea. On on the other hand, just on with the state budget, the resources that we need to conserve and use it effectively.

But why the the value of giving away $125,000,000 is better than giving the nonprofit organization themselves that they control. And if they they have that kind of idea, they should have the ability to raise enough money and eventually acquire.

And the non profits will will just manage it themselves. But why state has to get involved and to spend our money? That was my real concern.

Liz Eiry, Department of Finance. The administration agrees that there can certainly be some significant philanthropic, support for this program. So the May revision proposal actually includes provisional budget bill language allowing, if philanthropic funds are raised to help support the project that the state's contribution could actually be reduced to lessen the impact on proposition for resources. So that was something that was considered.

Okay. Thank you.

Okay. Thank you. First I wanted to ask if the LAO has any response to the prop four expenditure plan.

Thanks Senator. I think consistent with our feedback in January when most of this was put forth. Really, we think it's reasonable. You could adopt it. There there nothing jumped out as as overly concerning.

But there are certainly some areas that would under this proposal are deferring decisions to the administration around how to spend money. There are a number of categories that are very broad within the bond language. And, under the administration's proposal, it would be those departments deciding within that category how to spend it.

So for example, within wildfire there's a number of there's some pots of funding that could be used for fuel reduction or defensible space or home hardening or you know, a number of different categories within the bond language. And the administration simply asking for, the allocation with some ideas how it would like to spend and and would make those decisions.

Similarly within parks, there's a category called expanding outdoor recreation, reducing climate impacts. Very on disadvantaged communities. Very broad. So you know, do you as a legislature, are you comfortable with what the administration's proposing within those parameters or not? Nature, climate, education, research facilities.

That's like a category within the parks area. So when we reviewed the specific proposals from the administration, again, they all seemed reasonable to us but also involved a lot of discretion of what they identified as priorities. And so I think part of our message to you at that point and we would continue is are you comfortable with this or do you have other priorities? So again nothing nothing jumped out as as as very concerning. The pacing and timing seemed reasonable.

It seemed you know in all of our conversations with administration that the departments had been very thoughtful in thinking about their administrative capacity to allocate funds and what the demand they were seeing in applications. So not front loading too much and not holding off too much. So, all that seemed reasonable. But again, as a legislative bond that you all put this on the ballot.

You know if you had priorities, if you had ideas around how specifically to spend this funding this is the opportunity to do that.

Okay. Thank you. And I'll just make a few comments. So in my district, which is in Southern California, I have 60 miles of coastline. And coastal erosion is already disrupting rail service, reducing beach access, and threatening public infrastructure throughout my district and also throughout the state.

I would like to urge the state to move ready projects from planning into implementation. We have projects such as ReBeach Oceanside and erosion control works work at Trestles and San Onofre, which could protect beaches, habitat, infrastructure, and public access. And this is including access to the twenty twenty eight Olympic surfing venue. I appreciate that the '20 that the twenty twenty five, twenty six budget funded the prop four set asides for the California Mexico cross border water quality projects.

The state water board should award those grants promptly after the August 31 deadline.

I also continue to support $10,000,000 for Scripps Institute of Oceanographies proposed coastal research vessel. And I'd like to understand whether it can be funded through the state coastal conservancy or not because that wasn't clear. Given delays in implementing prior coastal appropriations, I'd like to know how much of the proposed 183,000,000 will reach local projects and when awards will be made. So specifically, I think that's for the State Coastal Conservancy. How much will be available of the 183,000,000 through competitive or rolling grants?

And when will those funds reach the projects?

Thank you. And I realized I did not introduce myself. Earlier, I'm Amy Hutsell, executive officer of the State Coastal Conservancy. So the 183,000,000, I am assuming you are referring to the FY 2526 appropriations for. Oh, it's Okay.

So not Okay. So the State Coastal Conservancy, was appropriated 88,000,000 for coastal resilience out of that 183,000,000. And then Sorry. 63,000,000 in 2520 I'm sorry. I'm doing this wrong.

2627 is a proposed 88,000,000 in coastal resilience. A portion of that is going to Golden Gate Fields. 30,000,000 is general coastal resilience funding. So as soon as the 2627 budget is signed, the Coastal Conservancy will be able to grant the 30,000,000 to projects. So with AB 35, the rule making issue has been resolved.

From FY 2526, there was 63,000,000 of coastal resilience and an additional 33,000,000 of coastal and combined flood management for the Coastal Conservancy. We are expeditiously, moving that funding into on the ground projects. I believe we provided a grant to ReBeach in Oceanside. I think for the planning portion of that project. So since last, I would say, October, November, we have been expeditiously moving the FY 2526 funding into projects.

And we'll do the same with the 2627.

I just had one thought. I think that that that comment is is an important point is that last year's 2526 appropriations were made in September. So there was already some some delay in terms of the fiscal year period of time in getting some of that funding out. So I think part of our our 2627 proposal takes into account that we have a significant amount 2526 funding that still needs to get out on the street,

as well. So thinking of capacity and balance, that's part of the equation. Right. Yeah. I mean, urgency and timeliness are important.

So just reemphasizing that. Okay. And then is the administration prioritizing funding to address the coastal erosion hazards on the low sand rail corridor? Because that that is a critical rail corridor and there are multiple projects particularly in San Clemente and also in Del Mar. And so having the state be involved in that, the administration through its many different branches, You know, that that needs to be a priority and I'm wondering if it is.

I would need to go back and talk with our South Coast manager, Megan Cooper. And I am sure it's on her radar. I am I do not know if we have received a grant application that we are considering. So I'll I'll follow-up with her. I can follow-up with her about the Scripps vessel as well.

Okay. And then when does the state water board expect to announce awards from the 46,000,000 Tijuana New River solicitation? Is there somebody here who can answer that?

Oh, thanks.

Good morning. Andrew Hall with the Department of Finance. We weren't able to get, the lead from the water board for this issue, but we'd be happy to follow-up. I do know that, that they have finalized their guidelines. And so presumably, they're starting to receive awards, but I can get some detail and follow-up with you after the hearing.

Okay. Okay. Thank you. Yeah. It's the same issue of there's urgency around this.

So okay. And then, I'll sh switch gears a little bit. I wanna talk about, the six contract counties which include OCFA and Orange County provide fire prevention and suppression services on state responsibility area lands under contract with CAL FIRE. So, I the legislature should provide a prop for appropriation under the wildfire and forest resilience category for contract counties.

Specifically, Orange County Fire Authority, is requesting 8,000,000 to ensure that it has the equipment it needs to mitigate fire risk and respond to fires across the nearly 200,000 acres of wild land it is responsible for.

So I'm wondering if you is Cal Fire planning to allocate any prop four funds appropriated in 2526 or proposed for 2627 to the six contract counties for their infrastructure and equipment needs?

So we have CalFire here that can help answer that. I would say that sorry, the prop four authorizations have the funding directly appropriated to CalFire. And unlike so there's public resources code that talks about proportional funding for fire protection services or activities. And and so whenever we do, you know, say, six six hour work week or any of the other types of things we do, there's proportional funding built in for the contract trainings and that's provided out.

I don't think, and we'll get the experts to clarify, but I don't think that's the same requirement exists for like wildfire resilience type of activities that's specific to welfare protection.

And so in the Prop four space, while the funding will be appropriated to CAL FIRE, I think the contract counties or entities within them are all eligible to submit grant applications and whatnot just like everybody else but I I'll defer to.

Good morning. Matt Sully, deputy director CAL FIRE cooperative fire. So with our contract counties, couple items. In 2019, we added in, additional line items to our agreement and gray book for infrastructure. So there's a proportional share of not just personnel equipment but also infrastructure to our capital outlay.

And it's based off the annual approval for Cal Fire. So the infrastructure component is is addressed in that. In 2022 with the surge capacity budget change proposal that CAL FIRE received, there was a contract county proportional share which included purchasing of new surge engines to the contract counties and that was the first time that we had ever reimbursed the counties for purchasing of new equipment. So we've had some of those components built in. When it comes to the grant applications and wildfire resilience.

Some of the positions that we've added into the agreement over the years have been more in that pre fire resource management. And so we have now better now than ever but connected our units, CAL FIRE units that neighbor or and have administrative oversight with their prevention staff.

And so you've seen the benefits of that relationship because a lot of the cal fire resources hand crews, dozers and that administrative support have shifted to the contract counties where more fuel reduction wildfire resiliency projects have been had because of that partnership. So I'm not saying they have a leg up but they because of that our our agreement and partnership that we have, we have bolstered a lot of those efforts in those six contract counties.

Okay. Okay. Thank you for the explanation. Okay. Okay.

And then the last thing, I just like to, raise is, I wanted to raise the issue of the Lake Hodges Dam. I think my my colleague Senator McNerney does a great job of focusing on the the water infrastructure that serves the entire state from the Delta. And I as the question and answer was happening, I was reflecting on the the the aging systems that need to be upgraded. And the Lake Hodges Dam in San Diego County, it's what you would consider a medium sized local reservoir.

And it is over a 100 years old.

And it's been recently, a couple years back, deemed by state safety officials to be unsatisfactory. So that's meant that the water level has now been lowered to a level that's below what the pump storage system is able to now utilize. So essentially, we no longer have local water that's being provided for local needs in Southern California. And the hydroelectric power that was created from the pump storage system is also no longer working.

And when it's not working then it be pump storage system, it was built in 2012 and it cost $200,000,000 to build.

And that was an investment, from that was made, you know, essentially from taxpayer dollars because everything event comes back to taxpayer dollars. And so that $200,000,000 investment is now sitting there. And to build a new dam in front of Lake Hodges Dam because it's unsatisfactory, it would cost between 500,000,000, 700,000,000 to build. So I I wanna raise this because I think it's a a really a serious problem that is that is not being talked about at the state.

This is right outside of my district in San Diego County.

And when we're thinking about a water future that has less water and we have obviously a lot happening on the electricity side where it would be better to have hydroelectric clean power produced locally. You know, letting this become mothballed through a series of delays and inactions, it really is a mistake. So, I don't think there's a proposal in front of you at the moment. I could be wrong about it.

But but I do see it as something that, it it it has had investment, deserves to have future investment, and also deserves to have a a resolution.

So for this medium sized local reservoir that's in San Diego County. So just wanna put it on your your radar.

And Senator, I would note there is 480,000,000 in the bond for dam safety. About half roughly half of it was allocated in the 2526. That leaves $24,543,000,000 available in future years. I'm not familiar enough with this project to know whether it would qualify for that for that funding but but there is some funding kind of on the topic of dam safety in the bond. So there there is some potential there.

I mean, one of the issues is when local agencies decide to walk away, what is the state's response to that? If it's the city of San Diego or it's the local water agencies or the regional water agencies that are saying this isn't worth our the money any to to anymore. Is that something we just agree to as a state or is it do we get invested involved in saying this is an investment that's important for regional and statewide reasons?

And also to take pressure off of the Delta and the other out of area water and electricity generators.

Yeah. And and certainly in those con considerations, if it's a locally owned and managed operation than the state even if the state feels it's in the interest of contribute some funding, kind of what's the ongoing gonna be.

If I may through the Chair, to answer to add on to your previous question of the LAO's assessment, I think I would feel remiss if I didn't also emphasize as your legislative staff, we are here to advocate for you as legislators ensuring that your priorities are met in the bond but I think it really is important to highlight the trade offs of to the degree in the categories of the bond that are available for competitive grants to the degree that they are pieces of them are specified for specific projects through the budget act because they are priorities either for individual members or for the legislature as a whole, or the legislature as a whole deciding that individual members' concerns are important enough to include, that does mean less money available for competitive grants for other projects.

So I that that is a key trade off making sure your, priorities are reflected in the budget, in those categories where it is a competitive program that means less available for that.

So I think that's that's an important consideration to highlight.

Thank you. I I do have a few questions related to the Golden Gate fields to follow-up with my colleague. I understand the buyer will be trust for public land and it's going to then be turned over to East Bay Regional Park District. Is that correct?

Brian Cash from the Natural Resources Agency. Yes. That is correct.

And East Bay Regional Park District will then own and operate, the fields, the park. What happens if East Bay Regional Park District does not take title of the property? And the the follow ups is what will happen with the title and responsibilities for maintaining the property and what will happen with the state funds provided for this purchase?

East East Bay will take title to the property. They've they've agreed to that. They're here today. They're very supportive of it. So that's kind of a hypothetical situation.

It it is a hypothetical because there's a lot of money that is being used. And so as a hypothetical, what happens if they do not take title?

Then if the acquisition does not go through, then the money would go back to the pots within proposition four.

Okay. Yeah. And that will be that is something that will be noted in the contract then, I assume.

That's something that happens on the natural. If if money goes into escrow and then the transaction does not happen, then that money goes back to the parties that put it in.

The transaction will happen because the buyer will be trust for public land. They are the buyer. The title will then transfer to East Bay Regional Park District. Is that correct? So title will have already transferred to trust to to trust for public land, but I'm talking about the title then transferring to East Bay.

If that title change does not happen, that is the hypothetical.

That's part of the agreements as I understand it that the transaction that the transfer will happen if trust for public land does make the purchase. It will then transfer on to East Bay Regional Park.

And we do have somebody from trust for public land here. If you could step forward and identify yourself, please.

There. Erica Williams, Trust for Public Land, Menjivar project manager working on this project. Yes. So that is so if we exercise the option and move forward with the transaction, by by virtue of a a an agreement disposition agreement with East Bay Regional Park District, we would almost simultaneously convey the property. Once we close escrow, it will be conveyed to the park district.

So those are agreements, that will be in place by are in place, but and will be by the time of exercise. Very good. If and go back

to the hypothetical. If they do not take title for whatever reason, what happens to the money that is being used the state money that is being used for

the purchase? Well, if we are not prepared to exercise and move forward with the transaction, the money won't even go into escrow. There's a period between exercise and close where we would pull funding into escrow. And by that point, we'd already have exercised and and and have an approved, disposition agreement with East Bay Park District. So, so that that will all be in place trend, you know, by by virtue of the agreements.

And there is that period of time between exercise and close of escrow to get money into escrow and and and sort of close on the deal.

I understand that the the buyer Yes. You Yes. Or, trust for public land, will purchase pollution legal liability insurance with respect to the environmental, conditions of the property. Is that correct?

Yes. Yes. We we call it PLL insurance, and that will actually be for the benefit of the East Bay Park District to be funded by this the landowner, the seller. And so that will be we'll be facilitating, that, insurance policy, but it will actually be for the park district's benefit. So they will have that in the event anything is discovered, that hasn't shown up in the environmental site assessment.

There has been an ESA. And so to the extent anything hasn't been identified as part of due diligence and later comes up, that PLL coverage will kick in to cover, you know, remediation, potential, you know, claims arising from anything that is is discovered. So that's that's part of our what we call the environmental framework or the environmental protections for the park district.

Thank you. Now the seller purchased it in 2017. Does the insurance cover any conditions that were present before 2017?

The well, the seller the the the landowner the current landowner purchased it 2011. Well, before yeah. 2017. 2011. So so there is so there there's a the when I talk about the framework, it's not just the PLL coverage.

There's also some funding set aside. It's funded by the seller to cover any sort of existing conditions, not not rising to the level of, you know, environmental concern, but any existing conditions. For example, there was a a a maintenance yard, you know, and you have the typical, you know, over over the years, there were some vehicles and and, parked there, and there may be issues related to that that that bucket of money set aside also for the park district's benefit.

Also agreed to and to be funded by the seller, is a is a second part of that package. So that's to deal with kind of that the robust set set of protections on the environmental side.

And, again, we have an ESA, and I think it's important to point out that this was this has been a a racetrack predominantly for eighty years. So it's not you know, it has a different character, a different history, from what you might think, you know, when you think of these East Shore Park or or properties that had had a a a different past.

We know that even before that, during World War two, the US Navy temporarily took over the property. So there is concern about what would have happened during that time with the naval landing force equipment, the gears, vehicles, anything that would have happened. So that was prior to the purchase.

Yes. Yes. Yeah. For, I believe, about a year or two during the war, it was a depot. So it was really a transfer point for vehicles.

And so that was above ground, vehicles. So, again, that those protections, that that bucket of money plus the PLL, that would be designed to cover anything that might be related to that. There's the the ESA, the site assessment that we've done hasn't indicated any significant issues that would arise from that, but that's exactly why we're working with with the landowner, with the park district to to make sure that the the the environmental framework or package in place is is is robust to cover that.

And is there a cap on the PLL?

Well, there is we're penning down the details. I mean, we're there right now. We have a $3,000,000 retention of funding plus that that doesn't include the PLL. But, you know, with the parties there, I mean, we're this is a transaction, and we're we're talking.

Question for the administration. Thank you.

You're welcome.

What is the administration's expectation of the state's role, if any, should environmental mediation or clean up of the property be necessary?

Brian Cash again from the Natural Resources Agency. The state will not be part of any environmental clean up or anything that happens. That'll be the responsibility of of East Bay Regional Park District since they will be taking title of it. And And nowhere just to reiterate, the state will not be taking title of the property anywhere along the way.

Good and bad as was mentioned by my colleague. Yes. Is there a hold harmless clauses indemnification is indemnification also noted in the the in any of the documents?

We do have in general language in our grant agreements that does indemnify the state generally when we when we put those together. We have representatives from the Wildlife Conservation Board and Coastal Conservancy here that can provide more detail. But generally, we do put in indemnification language in our grant agreements.

Okay. Alright. Thank you and thank you also. Any follow-up question, doctor Choi? Senator?

Yeah. I would like to touch upon a different topic on the high speed rail issue.

We're on prop four. We're still on prop four. High speed rail is gonna be g g r f. That's our next issue. Okay.

So hold that thought. Any other questions on prop four? Alright. I thank you all. Now we're going to open it up for public comment.

Never mind. We're not doing public comment. My apologies. This is why we have a boss, to tell us when we do public comment. We're gonna move right into issue number 2, and after we do both issues, then we will do public comment. Alright. Issue number 2 is Greenhouse Gas Reduction Fund. We're first gonna hear from the LAO. Welcome, Ms. Kerstein.

Would you like to begin?

Thank you so much. Good morning, Chair and, senators. It's a pleasure to be here this morning. Helen Kertstein from the Legislative Analyst Office. We've prepared a short handout.

The sergeants have some copies. It's available on our website, and also, I think on the committee's website as well. So, I wanted to start on page one just briefly summarizing an update on the Greenhouse Gas Reduction Fund revenue estimates. The Department of Finance very helpfully updated their revenue estimates in July, to take into account CARB's—or recent rulemaking—which will be implemented soon. And so, as, as expected, I know we talked about this pretty extensively during the committee process, as expected, the Department of Finance's revenue estimates reflect lower GGRF revenues than was the case back in May.

So, now, DUF projects GGRF auction proceeds 2.7 billion in '26-'27, which is down from 3.4 billion at May Revision. I would note that our office has not produced our own independent revenue estimates at this time of GGRF. So, just wanted to highlight that there are a couple key reasons why revenues are lower. I want to focus on a couple of them.

Basically, there are fewer allowances for GGRF than was envisioned under the previous set of rules. There are two main reasons for that. One of them is that the pie is just getting smaller for GGRF, or for allowances in general, I should say. So, there are just fewer to go around. And the second is that there's a smaller share of those allowances that are going to support GGRF.

If you turn to page two, just wanted to highlight some of the actions just to remind folks of what was agreed to in the June budget. So, there were some actions related to GGRF in the June budget. Specifically, there was the approval of 1.25 billion of GGRF to support Cal Fire operations. That replaced General Fund, so it's basically just to support, basically, a General Fund solution, and that was consistent with a previous budget year agreement.

And then, there was 115 million for a new zero-emission vehicle purchase incentive program, which is recently launched, actually, so it partially funds that.

But, also, we would note that there was action on a number of decisions was deferred, as part of the June budget, and so, there's still be for you, potentially, as part of your August actions. I'll go through them very quickly. One of the—the first one was budget trailer legislation. So, the Administration had proposed some cleanup legislation for SB 840, so that was not part of the June budget agreement. There also weren't any other changes that were made to SB 840.

Secondly, $250,000,000 of discretionary Tier II funding hasn't yet been appropriated, so that's still available for appropriation. Three, there was about $5,000,000 of state operations budget change proposals and those were not part of the June budget agreement. And then fourth, SB 840 and, and AB 1207 envisioned the creation of a new Legislative Council Climate Bureau, and no action has been taken yet on establishing that.

So, if you turn to page three, we have a figure that sort of shows hopefully, and I know there's also a sort of similar one in your agenda as well that, that summarizes a lot of what I said. If you focus on the, the items that have the footnotes, those are the ones that still need action.

So, the, there's a placeholder here in the table for state operations budget change proposals. There's a placeholder for the unallocated discretionary spending. Those are, those are ones that you haven't—the legislature—hasn't yet acted on. Also, you can see the Legislative Council Bureau there. And one other one I wanted to just point out, I know this is of particular interest to the Chair, is the Community Air Protection Program, received some general funds.

So, that was some additional support that that program received as part of the June budget. If you turn to page four, we, we're gonna conclude with some key issues for legislative consideration. One is we think there's just a lot of uncertainty on GGRF revenues. This—I know we've probably said that a number of times. I think given all the changes to the program, perhaps that uncertainty is even heightened.

To the extent that revenues come in higher or lower than the administration currently projects, those Tier III amounts that you see on page three, those could go up or down. So, I think, you know, you want to sort of use that as an idea of what those programs might receive, but recognize that there's some uncertainty about those numbers. Secondly, just wanted to highlight that we think GGRF revenues could go down in future years.

This—unless we see a spike in allowance prices, we think this could be kind of a little bit of a peak of GGRF revenues for the next few years. There are a few reasons for that.

One is the new regulations, only taken, taken—to go into effect, excuse me—halfway through the fiscal year, halfway through '26-'27. So, we're only seeing, like, part of the impact, only half of the year of the impact. Secondly, some of the key provisions don't take effect in '26-'27. They take effect, for example, in 2028. One of the big ones is offsets under the cap.

When those offsets are used, now we're gonna be taking allowances away, and those are gonna come out of GGRF. So, that's gonna start in 2028. That's not reflected in the forecast because it hasn't, it's not going into effect yet, but in future forecast, that will probably have to be taken into account, and it could reduce revenues. And, and then, just broadly, an understanding that the cap is now declining pretty quickly and more quickly relative—more quickly than the allowance allocations to the other categories are.

So, over time, GGRF could get, could get squeezed, we think, a little bit more. So, just to highlight that, you know, it's important to, to see what happens in '26-'27, but that might not be that indicative of what we're gonna experience with GGRF in the future. There's a lot of uncertainty, but revenues could be, could be lower.

And then the last point, I know we've mentioned this before, but given the changes, I, I think a lot has changed since SB 840, even though that was not very long ago, and so, we do think the legislature could consider those changes as it makes both its '26-'27 expenditure plan and also thinks about that SB 840 framework and whether any changes are merited going forward.

Happy to take questions at the appropriate time.

Thank you very much. Finance, any comments?

Good morning. Andrew March with the Department of Finance. Nothing to add that my colleague, from the LAO didn't already mention, but happy to take any questions.

Thank you. Alright. Member questions. Dr. Choi, you had a question on tier two.

My question is at the May Revision, you estimated that $3.4 billion in the revenue would be received in the GGRF auction proceeds, but they came in only at $2.7 billion. The LAO notes that the GGRF revenue and that Tier III items are highly unlikely to be funded, especially in the future years. I see that we are also saying that maybe we would revisit the spending plans. As you know, High-Speed Rail is a Tier II item in the GGRF spending plan.

Given that High-Speed Rail estimate, estimate—estimates—have skyrocketed to the minimum of $123 billion, is this something that we should reconsider that this project was—since this project was originally sold to the voters as a 20 mill—$20 billion project.

Now, the recent report given to us by the Inspector General notes that high-speed rail faces a $9.5 billion budget gap, and then can it, can the—the fund can run out of money by December 2027, which is the next, next year. It has been eighteen years since this project was presented to the voters. Don't you think this may be about the time for the voters to decide if they still want this high-speed rail so that we can reevaluate our priorities and fund other environmental priorities?

And one more question I would like to add is that who decided such a high-priority Tier II for the high-speed rail over the numerous other environmental issues including fire, wildfires, which are all classified in the Tier III because Tier I to III are all funding priorities based upon available fund.

Thank you for the question, Senator Choi. First, just about the, the projections. So, back in May, the Department of Finance put out a revenue estimate for the upcoming '26-'27 fiscal year of $3.4 billion. That was before the Air Resources Board had adopted updated regulations, as my colleague from the LAO noted. In June, Finance—we incorporated those updated regulations and provided a new estimate for '26-'27 of $2.7 billion because we are always forward looking with GGRF.

So, that wasn't, that wasn't reflective of the funding that we had actually received in '25-'26. We won't know the funding that we received for '26-'27 until May of 2027. So, we'll be back before this committee in in May, and then in in June, we'll have an updated revenue estimate. With regard to high-speed dial, I really appreciate your questions on that. SB 840 was the result of a lot of negotiations, as you can imagine, between the Legislature and the administration.

And ultimately, those, the, the funding tiers that you see in SB 840 are a result of that. So, I can't speak to sort of any one person's priority there. It was a priority for the administration to ensure that high-speed rail received a billion dollars, as we noted last year in May Revision, and then again at the June budget. So, it was a priority for the administration to do that.

I don't know if we have any comments on the Inspector General report, but I'll turn to my colleague, Matthew Macedo.

Good morning. Good morning. Matthew Macedo, Department of Finance. The, at the time, SB 840 was going through—$1 billion was the projection that High-Speed Rail needed to complete its construction segments that it had forthcoming. And that is still, the projection, in the 2026 business plan is that, Merced to Bakersfield, will be completed by 2033 timeline.

The Inspector General I think reported yesterday that perhaps there were some cash issues that may happen, but if you look at the total revenue that High-Speed Rail is projected to receive, we still think that there's some room there for them to complete what they have in front of them. The number you cited was for the whole Phase I San Francisco to Anaheim, those are—that's a project that we still have to find more sources for. So, right now, High-Speed Rail is focused on building the Merced to Bakersfield segment.

Can I—if I may add a few points on this because very good questions on High-Speed Rail, and the OIG's recent report? I think, so, the, I—OIG pointed out a couple of things in their recent review of the final version of the business plan. One is that cash flow issue, and that really is a significant issue, and I think a significant issue for this subcommittee specifically, and part of that is they need to borrow money.

They're, they—they're projected to have cash flow issues starting at the end of 2027, and then I think it's close to $10 billion, as you mentioned, over the next few years.

So, they're gonna need to have—basically be able to borrow their GGRF to be able to use that in the near term over the next couple of years. They can't wait till 2045 to get those billion dollars a year. And one of the big challenges is that GGRF is not very suitable for borrowing against. As we've talked about, it's hard to predict. Right?

We don't, we don't know if we're gonna have, you know, a billion dollars a year for High-Speed Rail by 2045. So, I think that's, that's really a, a sticky issue. And one to think about in terms of this appropriation is, what would you have to do to make this a good appropriation to borrow against, and are you comfortable with that? How does that fit in with your funding priorities?

Another key issue that the OIG brought up, though, is actually that the, the amounts that are listed in the business plan, one, it's for a scope that's smaller—that's not consistent with state law.

It's from the outskirts, outside of the city limits of Merced, the outskirts of Bakersfield, which is not consistent with SB 198. But also, even that scope, there were costs that were not included in the business plan that really, in the report, the OIG indicates should have been in there. And if you add those in, there's likely not enough money for even that reduced scope.

So, I think that there are some real key questions about what we can fund and whether additional funding would be needed to do Merced to Bakersfield, and some real questions about, if not, is the legislature comfortable providing additional funding to make up that difference? And so, that's a key question.

And we've—I think we've, one, we've brought before the Legislature a number of times is what scope do you want to accomplish with that project? And given what money you wanna allocate. And it might be less than Merced to Bakersfield. But there are some reasons why you'd need to probably at least do the 119 initial operating segment. So, that's a larger conversation.

I know it goes beyond just the scope of this subcommittee, but it does tie in in that thinking about really the suitability of GGRF and the adequacy of GGRF I think is part of this conversation about how you want to prioritize. And if you want to, you know, ultimately find another funding source, you might have to go back to voters, potentially, or if you want to sort of revisit SB 840. So, anyway, just a few thoughts.

Yeah. My feeling is that if voters are fed up for over eighteen years and the promised rail, you know, where is it? The shores and even billion dollars per year projection, still we are uncertain about the funding and the funding gaps that will happen. And my impression is that there's no promise that this will be ever, ever completed. Sounds like it's a bottomless path that we keep on pouring money into it, and there's no set deadline after eighteen years.

So, what can be accelerated? What can be—what direction has been changed since the past eighteen years? What has been evaluated? Why we did not—what was the hurdle for it to proceed and produce outcome of the promised High-Speed Rail?

I mean, that is a big question to all the voters. You know the nickname to that? High speed to nowhere.

Did you have a question?

Just a building comment. Anybody can answer.

Thank you. Any other comments?

Yes.

This is mostly a comment. My district is a large section of is AG and it's our responsibility to prioritize DGF funding, to have the most impact on greenhouse gas reductions. And so, I'm very interested in the Climate Smart Agricultural Programs, specifically the Farmer Program. This replaces dirty diesel equipment with low emission equipment. It's very popular.

It's oversubscribed every year and it makes a big difference. Not only to the owners of the equipment, but the people that live there and have to breathe the air that comes out of the diesels that are now in operation. Another is FPIP, the Food Production Incentive Program, again, helps farmers replace dirty diesel equipment with clean equipment. Again, the benefits are clear, and it does reduce greenhouse gas emissions. And the last is the Healthy Soils Program.

Again, this helps farmers and ranchers incorporate a new sustainable agricultural practice into their lands, which could be a carbon sequestration, methods and so on in farms and agriculture. So, I just wanted to raise the awareness of those programs because they're very effective in the actual mission of the GGRF program in the first place. So, thank you.

Thank you. Senator Blakespear.

Yes. Thank you. I have a few comments, but I just wanna start with the focus on high-speed rail. So, I remain a supporter of high-speed rail and also of rail in general and of California having high speed rail in our state, which we see as successful throughout the world. I do think it's important that we do responsible disclosure and responsible budgeting.

And I remain very concerned when I hear and read the information from the inspector general that we have a critical cash flow problem with high-speed rail. And in order for it to continue on pace, it's going to need to borrow. And borrowing will unquestionably have a borrowing cost. And the borrowing cost is not accounted for in the business plan.

You know, that is just a basic accounting principle that seems like we have to be able to disclose and be responsible in in understanding ourselves how much is this gonna cost from where we stand right now.

And when we look forward to getting something actually running on high-speed rail. So, I recognize that the scope has changed, the locations may have changed, and we still wanna have a critical path to completing this. But there is a right way to do it. And I wanna urge us to be disciplined and to ask the hard questions and demand the hard answers so that we can really be responsible in managing this project.

Because we know it will go on for a long time and costs only go up.

But we have to look in the mirror and and really recognize maybe where we are falling short. So, with that being said, I'll just share a few points. So, when we extended our cap and invest program, we did commit to affordable housing, public transit, clean air, wildfire resilience, and safe drinking water. And I believe that the state should find a solution that meaningfully funds these tier three programs. So, the tier three programs are doing really important things in the state.

And, we are currently not doing anything about that. I know that we don't think there's a general fund backfill. That's what appears to be clear. But I think that there are a lot of things we figure out how to fund, and we should figure out how to fund these things. The legislature should also honor the SB 125 transit commitments that were made in 2023.

So that was, three years ago. And agencies throughout the state relied on those commitments when they were planning service and capital investments and when they are pursuing federal and local matching funds. And so for us to renege on those or defer or delay or just basically not address it, I think that's the wrong direction. We should honor those transit commitments from the past. GGRF auction revenues could continue to be lower than anticipated.

And our communities and our transit agencies, we need a long-term solution to ensure that the programs are sufficiently funded. And maybe they're similar to high-speed rail. There have to be hard questions about what we're funding particularly around the transition to clean vehicles. But at the expense of service reductions, you know, it's hard choices. Budgeting is always hard choices.

So I really wanna urge us, the administration and the legislature, to dig in to figure out how to fund our transit agencies. And then I want to highlight also that SB 840, it included intent language to allocate 125 million, in tier two discretionary spending, and it was for transit passes. And, you know, we need to continue to commit to those things that the legislature advocated for.

So, that was one of the priorities, and Californians need to receive the benefits of that funding. So, I want to just ask the administration if there are any solutions or a focus on how to meaningfully fund those tier three commitments.

If a general fund backfill is not on the table, are there other things that you're thinking of here that, can you share any thoughts about those programs?

Thanks for the question, Senator Blakespear. The administration does not have a proposal to backfill in a sense, the tier three programs. I think as the governor noted last week, the cap and invest program is not designed to be a revenue source. We've historically relied on it since it has provided flexible revenue to be able to be use, but at the end of the day, as GGRF declines to some extent, that also means that pollution declines, which is the goal of a market-based carbon-like trading system.

So to that extent, maybe difficult choices will have to be made about trying to find other funding sources for some of these programs. I know that there's a housing bond that's supposed to be on the ballot in November for affordable housing and maybe there are other decisions that are being discussed. But right now, we have no proposal to share.

Okay. Yeah. I didn't expect it was an actual proposal but, and I recognize that we are choosing to fund, for example, Cal Fire but not choosing to fund transit or to fund rebates for clean vehicles which, you know, that allocation alone, it would be 80% of one of the transit funds that is being almost defunded, not completely. But, you know, recognizing that transit isn't important.

It's important for every reason, for our community health, for reductions in emissions, for quality of life, for congestion reduction on our roads.

And so, you know, it's not gonna happen if we don't support it because Fairbox revenue doesn't cover the cost of transit, and it's never going to. So we we really have to think about, more than just local self help. You know, the state is the fourth largest economy. We should be prioritizing transit more than we are, and there are many different ways to do it.

And so I just would continue to urge the administration to take this seriously and to think about what we can do so that we can actually provide more resources to our transit agencies and not have that death spiral into less service and less reliability and, equipment that doesn't work and less service and less reliability because then people don't take it.

So, it's something that we should focus more attention on than we are. So, with that, I will yield back to the Chair.

Thank you, Senator. I a few questions. How firm are the revenue estimates for 26-27? I know there have been some comments on that. I'd like to hear from the administration.

Like the least firm that you could probably imagine. So I think there are a few levels of uncertainty. One, we haven't seen, an auction take place under the new regulations. That won't happen until February. So we don't know how the market will respond.

We have an auction next week. So that'll also give us an indication of how the market may be responding, thinking ahead to the future. So as I've described before, you know, we'll be back before you in January with an updated estimate that will incorporate the August and November auctions. But again, those will be under the current regulations, not the updated regulations. So even to that extent, I don't know if it'll be a good indication of how the markets will perform.

And then in May, we'll consider the February auction, which will be one auction. So we are working with sort of limited data right now during a transition period. So I would say these are, you know, it is very much sort of a very squishy estimate.

As to the the interest, the GGRF interest revenues, we're using that to backfill Cal Fire. But the legislature believes the interest income is part of GGRF and shouldn't be included the SB 840 methodology. So given the current and impending decreases in GGRF revenues, does the administration still propose to exclude interest revenue from SB 840 methodology?

So that was our proposal in January. To be honest, we haven't had any feedback from the legislature on that proposal that we've put forward. Historically, interest was considered outside of the funding percentages that we had previously. So, our language would simply continue that historical practice that we had been doing and that was sort of allocated in the language of the interest being sort of outside and being additional discretionary funding.

Because it is really difficult to project the interest earnings because it's based on how much cash is in the fund.

So as programs start spending down their cash balances, that can really change the quarterly interest earnings that we earn and also, obviously, the federal interest rates that's depending on that as well.

How does the LAO feel about that? I'm sorry. Yeah. How does the LAO feel about that?

We think it's an issue, a question before the legislature. So, there was some sort of past, past practice. There's also just some ambiguity in the way that the current language is written, perhaps, and, you know, our understanding is that the administration's indicated that they believe that the intent of SBA 40 was to exclude interest earnings, but, were not part of those, discussions, so we don't know what the legislature's intent was.

So I think, really thinking about what do you want, how do you want this to work as a legislature will be really critical. It does make a significant difference because in the last few years, it's been maybe 500, 600 million.

Maybe it won't be that much in the future because hopefully we'll, we won't be running these big, have these big GGRF cash balances forever because we'll get the money out the door faster, right? And actually going, you know, finishing those projects. But it's still a significant amount of money and it makes a big difference about how much you have for discretionary purposes versus tier three.

I guess one other point I would bring up is that if you do keep it as discretionary, you always have the option of backfilling Tier three with those revenues.

So that's, you know, you don't have to, but you certainly could. You could do it proportionally or you could say, hey, we think transit is a bigger priority or wildfire or, you know, we've heard a number of priorities from members, and you could then have the discretion to kind of make a different allocation. So, it does give you a little bit more flexibility in that sense.

On the other hand, it gives the programs maybe a little bit less confidence they're going to get the money. So, there are real trade offs in that.

And so it really comes down to what is your intent? What's your goal? And then and then you can clarify the language. I think it is probably good to clarify the language because I think right now maybe the language is, you know, there are different interpretations that we've heard. And so I think making sure everyone's clear about what should be done is probably good practice.

One thing I would note is if the administration's proposal that was released earlier this year is not adopted, it would likely mean that there would have to be a 500 million dollar hit to the general fund because GGRF wouldn't be able to support it if the interest earnings were being sort of allocated towards tier three. So that's something to consider in the overall budget architecture that hinges on this decision.

And I understand that. We also understand that when SB 840 was negotiated, it was negotiated based upon an estimated number of 3.4 as opposed to 2.7. It was negotiated without the decision having been made by CARB. There were lots of factors that were different then than they are now. And as my colleague mentioned, we have to find a way to fund the tier three.

And those are programs that are extremely important to all of us. But most importantly, they're so important to Californians to make sure that those programs are funded. That was the intent. We may have some disagreement on the details of the intent, but I think clearly, that was the intent to fund those. One of the comments that you made was GGRF was not to be a funding source, you're saying for tier three.

No. Overall, I think, you know, we expect GGRF to be a declining revenue source as we get closer to our emissions caps. So with that, additional decisions will have to be made in the future. You know, revenues as Elio noted for 27-28 could be additionally lower because we're bringing in offsets under the cap which we don't have a projection for 27-28.

But I can tell you I think it'll have a very big impact over the coming years that changed to put offsets under the cap for GGRF.

And that's a change in AB 1207. That's not a change that CARB sort of implemented themselves. So that's something in the negotiations from last year that will significantly reduce GGRF revenues. So, these various factors, it is a declining revenue source. It's not something that we should rely on for the future.

For any of the tiers? I'd like to talk about Cal Fire state operations, GGRF funding. Would you please remind us how much GGRF is participate is anticipated to pay for the Cal Fire state operations in the current and future years?

For regarding the shift, the general fund shift, yes. So as part of the June agreement, dollars 1.25 billion dollars was agreed to and then as part of the June agreement as well, 500 million in 27-28 and then 500 million in 28-29.

So for the two years, for the two fiscal years, it's 1.7?

Yes. 1.75 billion between, yeah, budget year and budget year one.

What is the backstop for this GGRF funding if there ends up being a decreased amount of GGRF available?

Yeah. So, if there's decreased GGRF, so, you know, if let's say interest drops or there's reduced revenue for GGRF, you know, if it drops below 2.4 billion dollars, there's provisional language in the budget where Cal Fire is made whole with general fund.

And remind me please, during the negotiations was GGRF, was to be used as a backfill only if there wasn't sufficient money in the general fund?

So, so originally in 25-26, the agreement was that there would be a billion dollars in 25-26 and 1.25 billion dollars in 26-27 if the general fund was in that deficit. The legislature took that language out in the two-party agreement and agreed to 1.25 billion dollars in 26-27 and then the 500 million dollars in the subsequent years regardless of there being a general fund deficit.

Thank you for correcting that then. And how does the backfill differ from the SB 901 commitment of GGRF?

So I'll turn to my colleagues with the general fund shift is just for broad Cal Fire state operations for their fire prevention program, whereas SB 901 and the SRA backfill are separate.

Yeah. So the backfill is covering Base Fire Protection Program, activities. So we think of just like the regular, you know, aviation, the engines, all of that base fire protection stuff is being supported by the backfill. Whereas as my colleague, Mister March, mentioned, the SBNO 1 funding goes towards wildfire resilience type of things. So it's specifically directed towards, like, healthy forests and prescribed fire fuel crews and things like that.

So that's your distinction.

Very good. Well, thank you for that. I'd like to now open it up for public comment. We have Senator Lonnie Hancock and Assembly member, former Assembly member Tom Banks, if we could have their comments initially. Former Senator Lois Hancock.

Lonnie. Lonnie. I'm sorry. Lonnie Hancock and former Assembly member, Tom Bates.

Oh, that's a surprise. We were gonna get in line.

Well, I appreciate that. We wanted to be sure to get your comments in first.

Yeah. I've served with some of you, not all of you. I've been out of the legislature for ten years, but did, Chair Natural Resources at one point. I'm here today because I've been working for almost fifty years on the East Shore State Park, also part of the regional parks, also with local governments chipping in money every time we get a chance, and wanna speak strongly in favor of Golden Gate Fields and that purchase.

It's a critical link between the southern stretch of park and a northern stretch of park.

And, you know, as it only comes up once, and I've been thinking that as the world gets hotter and more crowded People in our area and all over California are gonna be so grateful to have this wonderful place reserved for parkland. So thank you for considering it.

Thank you.

So thank you for the privilege of jumping the line. I appreciate. I'm Tom Bates. I served in the legislature for twenty years but that was twenty years ago. So, it's been a while.

Go back.

But I'm very enthusiastic about the opportunity before us to acquire the Golden Gate Fields and to turn it into a park. It's gonna be remarkable. It's gonna be a wonderful park. I personally and Loni have been working on this park for fifty years, and now we're at the place where we can really get the crown jewel and bring that racetrack into the park.

And it'll be a wonderful thing and a great legacy for all of us to make sure that we have this wonderful park.

So whatever you can, we sure appreciate keeping it in the budget and hopefully we can make it happen. Thank you very much.

Thank you. And now for the rest of you, sorry. We're gonna put a time limit for thirty seconds. You all have done a great job in the past and we'd like to implement that again. Thank you.

Alright. Madam Chair and members, Michael Pimentel here on behalf of the California Transit Association, as well as our coalition of more than 80 coalition partners, voicing our concerns with the status of GGRF for tier three programs. A lot I can say about the importance of these programs to communities across the state, but I wanna essentially focus on our ask today. Relative to this fiscal year, we are asking for general fund to maintain our SB 840 commitments.

We wanna see the honoring of the state's ongoing GGRF funding commitments to public transmit in SB 125, and we are looking forward to working with you all on establishing some permanent solutions for tier three programs.

There's some discourse here about declining GGRF revenue. Of course, we've understood that that is the future. But also, we are expecting a decline of over 80% in a single year. That is not because of declines in pollution. That is because of elective decisions of the California Resources Board.

And so we have to have this focused conversation about recovery, of these resources in the short term as we build toward long term solutions. Thank you.

Well, thank you for the opportunity to speak. My name is Dave Groves representing Diablo Water District. I'm here to support the transferring of 5 million dollars of Proposition 4 funding to the Delta Conservancy in order to fund the acquisition remediation of Jersey Island. Jersey Island's in the Western Delta, and it sits 18 feet below sea level. It's placing enormous strain on the island's levees.

If the island's levees were to fail, saltwater would be drawn into the delta and make its way down to the intake pumps of the state water project and impact the water delivery to all of Southern California. Josie Island's also emitting enormous amount of carbon. Diablo Water District wants to convert the island to wetlands and rice to reverse the subsidence and reduce carbon emissions. So in other words, this project is of statewide significance, and it's perfectly aligned with the intent and objectives of Proposition 4.

Jersey Island's a top priority of the Delta Conservancy, but the Conservancy wasn't given enough funding from Proposition 4.

So, the ask is for the legislature to transfer 5 million dollars in Proposition 4 funding from, for example, the Wildlife Conservation Board or the State Coastal Conservancy, which combined got 2 billion dollars, to just transfer 5 million dollars to the Delta Conservancy to acquire and remediate Jersey Island for the state of California. Thank you.

Thank you very much.

Hi. I'm Arthur Feinstein. I am on the board of the Citizens Committee to Complete the Refuge. We helped work with congressman Don Edwards to establish the San Francisco Bay National Wildlife Refuge. And as such, we recognize how important our shoreline is in San Francisco Bay, not just locally, but internationally as well as regionally and for the state.

Therefore, Golden Gate Fields becomes a crucial component for helping

Alright. I'm sorry. We're going to have to get back to the thirty second timeline. We're currently at thirty five seconds. So I'll give you ten seconds to wrap it up.

Thanks. So yay yay for Golden Gate Fields. We urge you to go with the governor's request and make it happen.

Thank you so much.

Good morning. Mark Watts here today representing the San Diego Metropolitan Transit System as well as Riverside County Transportation Commission. We just wanted to urge you to take strong interest in the position that CTA has offered. Thank you.

Thank you.

Madam Chair, Brendan or Repicky on behalf of the Monterey Salinas Transit District, San Joaquin RTD, Solano County Transit, and the Santa Cruz Metro Transit District, aligning our comments with the California Transit Association. And also, on behalf of Via Transportation, respectfully request that you invest 40 million dollars of GGRF revenue and CARB Sustainable Community Strategies Programs. These programs fund zero and low emission transit options in underserved priority communities. Obviously, with the GGRF situation, many of the programs and projects will be cut in the next year.

Thank you.

Thank you.

Good morning. Steve Wallauch on behalf of the Alameda Contra Costa Transit District, the Golden Gate Bridge Highway Transportation District, Foothill Transit, Napa Valley Transportation Authority, and the California Association for Coordinated Transportation. You know, the advances made in in zero emission transit bus technology and fleets has been done in partnership with the state. We appreciate your support to maintain that partnership, and we look forward to working with you on the agreements. Thanks.

Brendan Twohig on behalf of the California Air Pollution Control Officers Association. We appreciate the additional funding for the AB 617 Community Air Protection Program that was in the June budget. We're also deeply concerned about the impact the recently adopted cap and invest regulation will have on already diminished GGRF revenues and what that means, for the AB 617 Community Air Protection Program and the Farmer Program, which have, gotten, immense, public health benefits. And so, we hope you'll, prioritize those programs as you go forward. Thank you.

Thank you very much.

Hi there. McKinley Thompson-Morley. I've got two things, but I'll try to be quick.

Here today on behalf of the Santa Clara Valley Transportation Authority to urge the legislature to fulfill the remaining SB 125 transit funding allocations, which are critical for BSP two and BART Core Capacity Capital Projects and to maintain the ongoing commitment to the cap and invest tier three programs, which local jurisdictions need that certainty so that the programs will be there to fund projects every year.

Also here today, on behalf of Ventura County Transportation Commission, to urge the legislature to support the full allocation of Prop 4 funding for Cal Vans, which provides vanpool services for workers across the state. We want that funding to be there so

we can make sure those services continue. Thank you.

Thank you so much.

Thank you.

Good morning. Soren Nelson with Association of California Water Agencies. With respect to Prop 4, I think we're very much aligned with your perspective on dam safety and some other critical water infrastructure categories. The longer we wait to spend that money, the less purchasing power it has. So there's an advantage to spending it quickly.

On GGRF, in Tier 3, we've got the Safe and Affordable Drinking Water Fund and wildfire funding that we strongly support fully funding. SAFER had a General Fund backstop that was removed and then they got the double whammy of being put in Tier 3, so would strongly support refunding those. Thank you.

Thank you.

Hi. Good morning. Michael Chen, on behalf of Audubon California. We support the inclusion of funding for 25 million under Section 91032 Subsection F for Central Valley water projects, which would provide critical resources for migratory birds. And lastly, we would like to voice our support for funding Golden Gate Fields under Agenda Item One. Thank you.

Thank you.

Good morning. Sylvia Solis Shaw, here on behalf of the City of Santa Monica and its Big Blue Bus, the San Mateo County Transit District, Caltrain, and CaCTI, the California City Transportation Initiative. We align our comments with the California Transit Association in regards to the funding levels being maintained for the Tier 3 programs, as well as honoring the funding commitments in SB 125.

On behalf of the San Joaquin Valley Air Pollution Control District, we strongly urge funding for the FARMER and Alternative to Ag Burn programs. As Senator McNerney mentioned, extremely valuable for the San Joaquin Valley. Thank you.

Thank you.

Good morning. Charles Watson, on behalf of BART, the Bay Area Rapid Transit District, echoing the comments of CTA and our other transit partners. I wanna express our strong support for maintaining the commitments in SB 125 and our Tier 3 GGRF programs. Thank you so much.

Thank you.

Good morning. Brooke Rose, on behalf of the Wildfire Solutions Coalition, a statewide alliance of over 90 organizations. We are concerned that with the downgrade in GGRF revenues, there will be a significant reduction from the funding provided last year for Wildfire Resilience, being the lowest level since 2019. This will undermine our risk reduction efforts and result in significant extra costs from the damages caused by high-severity wildfires. On average, wildfires cost California 117 billion every year. In 2025, that cost exceeded 250 billion.

Brooke, you have to wrap it up. Just a few more seconds.

Okay. We urge you to fund Wildfire Resilience through a combination of General Fund, GGRF, and Prop 4 up to last year's levels. Thank you.

Thank you.

Michael Jarred with the Nature Conservancy. We would like to support the May Revise proposal for $23.2 million of Prop 4 to CNRA for wildlife refuges and wetland habitats. We also urge a $5 million increase for the governor's proposal for WCB San Andreas Corridor, and we also urge support for island resilience and restoration, climate marine fisheries, and salmon parental-based tagging. And finally, we'd like to strongly align our comments with the Wildfire Solutions Coalition for Wildfire Resilience Funding. Thank you.

Thank you.

Crystal Dachavez, on behalf of CalVans, respectfully requesting that the Legislature appropriate its line item allocation of $50 million from Proposition 4. CalVans has yet to receive any of its allocated funding approved by voters in 2024, funding that is critical to its operations, which support more than 7,250 farmworkers by providing them with safe, cost-effective, and reliable transportation. CalVans has removed over 1 billion vehicle miles traveled since 2011 and will reduce more than 45,000 metric tons of greenhouse gas emissions in 2025. We respectfully request that the state appropriate CalVans total $50 million. Thank you.

Thank you.

Morning, Chair and members. Martin Radosevich, first on behalf of the City of Fresno, just aligning our comments with the California Transit Association on maintaining those funding levels. Second, on behalf of Megafire Action, we wanted to speak in support of a request by Senator Ben Allen for $20 million to implement SB 894, the California Wildfire Resilience Loan Program. It's a state-backed low-interest program for homeowners to retrofit their homes. We really believe that Prop 4 funds are ideal for this. We have more than 2.1 million California homes in severe high fire areas, and we really believe that this bill will address that situation. Thank you.

Thank you.

Good morning. Jake Schultz, on behalf of the East Bay Regional Park District. We respectfully request that the Legislature establish a five-year $2 million block grant to restore livestock ponds, which are essential to wildfire mitigation, climate resilience, and stewardship of California's working landscapes. We appreciate the conversations around GGRF and Senator McNerney's support for this pond restoration program. Thank you.

Thank you.

Good morning. Allison Hilliard with the Climate Center, and we strongly support using the General Fund to backfill Tier 3 programs. The Legislature should also consider eliminating the MDI because it's outside the cap and erodes program integrity and it is not aligned with the intent of 1207 and 840 from last year, and it greatly reduces greenhouse gas reduction funds. At minimum, the Legislature should limit the damage that the MDI will do to GGRF programs. And I have-- I have some specific recommendations that I'll follow up with the committee. Thank you.

Mariela Rocha with Leadership Council for Justice and Accountability. On Issue Two, we are-- the continued funding for Tier 3 programs and find sustainable funding for these critical programs, including SAFER, the-- for-- that has brought safe and affordable drinking water to more than 1 million Californians since 2019. The board designed this as a multi-year program. It develops and executes infrastructure projects throughout California. It is-- if the funding is significantly reduced, hundreds of projects currently moving through the funding pipeline will be--

Okay. Thank you, ma'am. Thank you.

Good morning. Kirk Blackburn, here on behalf of the San Diego Association of Governments, or SANDAG. SANDAG aligns its comments with those of CTA and encourages the Legislature to protect the state's ongoing funding commitments to the Tier 3 GGRF programs established by SB 840 for this fiscal year and beyond. Funding for these programs has been successfully utilized by SANDAG on affordable housing projects, major transit and rail corridor improvements, climate resilience projects, and expanded transit service, amongst others. Further, SANDAG urges the Legislature to fulfill its GGRF funding commitment to public transportation made in SB 125. Thank you.

Thank you, Kirk.

Good morning. Charles Delgado. First on Prop 4, on behalf of CSAC, we urge-- on behalf of Counties, urge an investment in groundwater implementation projects for SGMA and flood infrastructure, stormwater, as well as wildfire. Secondly, on GGRF, on behalf of CSAC and League of California Cities, we urge preservation with the Tier 3 programs, especially Wildfire Resilience and SAFER programs. And thank you.

Thank you.

Good morning. Staci Heaton with the Rural County Representatives of California, representing 40 rural counties statewide. We would like to align our comments with the Wildfire Solutions Coalition, particularly regarding the SB 901 commitments. This Forest Resilience funding is not only among the most cost-effective for GHG emissions reductions, but will literally save lives, and we encourage you to find funding for that program. Thank you.

Wendy Mitchell, on behalf of LA Metro. First, I'd like to thank you, Senator, for sitting and listening to all the public comments. That is very kind of you. But we would like to align ourselves with the CTA comments, obviously LCTOP, and the-- we encourage the Legislature to use General Fund to backfill those Tier 3 programs. LA Metro is particularly getting hit hard because we have the Olympics coming--nothing's come so far--and the GGRF hits are intense. So we encourage the Legislature to continue to honor the commitments in SB 125 from the GGRF funding. So thank you so much.

Thank you.

Good morning. Andrew Dawson with the California Housing Partnership, on behalf of ClimatePlan, echoing all the same sentiment for this year fund Tier 3 programs with access General Fund money, and on our previous transportation commitments beyond this year, achieve a permanent GGRF solution. One thing I wanna mention is that the Housing Bond has not been voted on yet, and even if passed, the money would not come until 2028. So having a continuous investment like AHSC in affordable housing is needed to help low-income Californians across the state access housing. Thank you.

Thank you.

Good morning. Allison Brooks, assistant general manager for the East Bay Regional Park District. We are an over 90-year-old organization that manages 127,000 acres, 55 miles of shoreline on behalf of East Bay residents and beyond. We have a $350 million annual budget and over 1,000 employees, and we are very prepared to manage Golden Gate Fields and the future park that will be there on behalf of California residents, and just wanna assert that we have-- we're very capable of managing this long into the future. Thank you.

Thank you.

Hi. Good morning. Evan Polisar, on behalf of General Atomics with a quick plug for fusion energy research. Last year, California enacted SB 80, which established a dedicated initiative to help maintain California's leadership as the Federal Department of Energy weighs new research facilities across the country. This will be in collaboration with the regional consortia. SB 80 was ceded at $5 billion last year. We hope there'll be an opportunity to make another investment this year, both for SB 80 and the Pacific CREST Fusion Consortia. Thank you.

Thank you, Evan.

Good morning, Senator. Louie Costa with SMART Transportation Division. We align our comments with the California Transit Association, urging the Legislature to backfill their Tier 3 funding from the General Fund. We also agree with you 100%. The state should honor its commitment to SB 125 public transportation funding and to find a permanent solution to funding the Tier 3 programs. They're so important to our transit agencies and our members across the state. Thank you.

Thank you, Louie.

Good morning. Graciela Castillo-Krings, here on behalf of Enterprise Community Partners. Just wanna echo many of the comments that have already been made about backfilling, using the General Fund to fund-- to backfill a lot of the Tier 3 programs. Those programs are critical to a lot of people here in California. When we talk about affordability crisis, these dollars are helping do that.

Continuing to fund public transit and housing is critical, and again, just to urge the Legislature to help, especially because the bond has not passed yet. We hope it does, but we cannot count that the voters will approve it this year. Even if they do, we are not gonna see any of those proceeds for another year or so, and so stability is really important. Thank you.

Thank you.

Good morning. Monique Webster with the San Francisco Municipal Transportation Agency. This June, Muni delivered over 14 million transit trips, and we are seeing year-over-year growth in our passenger rates. Our customer satisfaction rating is the highest it's ever been. State support for the Tier 3 GGRF programs and the commitments made under SB 125 play a large part in providing the transportation options needed to support the state's climate goals, a strong economy, and affordable options for people to access jobs--

Thank you, Miss.

That's 30 seconds. Thank you.

--school services.

Thank you.

Good morning. Norman La Force, on behalf of the Regional Parks Association in the East Bay and the League of Conservation Voters of the East Bay. I've only had 45 years of working with Tom and Lonnie on creating the McLaughlin Eastshore State Park and trying to save Golden Gate Fields. This is literally, for me, a once-in-a-lifetime opportunity to get this property finally bought and saved as a park for all people of California. This park, the McLaughlin Regional-- East Bay Regional Park is one of the most visited state parks in the State of California and serves underserved communities.

Thank you.

Thank you, Norman.

Thank you.

Eddie Ocampo with Self-Help Enterprises out of our San Joaquin Valley. I'm here-- we're an affordable housing developer and community development organization, and we strongly support fully funding the SAFER Program along with the AHSC Program. Thank you very much.

Thank you.

Good morning. Marge Atkinson, former mayor of Albany, and I'm on the Citizens for East Shore Parks founded by Sylvia McLaughlin, famous for Save the Bay. We have millions of people who visit the East Bay and the Bay Area every year. This is an opportunity, once in a lifetime, to save this piece of land that will be part of a jewel of parks from San Jose actually to Carquinez. So we urge you to support the governor and the acquisition of Golden Gate Parks for the future. Thank you.

Pamela Lopez, on behalf of the Resources Legacy Fund. We urge the Legislature to support Assembly Member Connolly's proposal to use Prop 4 funds to support the Tribal Nature-Based Solutions Programs. In 2025, we got two new national monuments in California. Tribes did that. Let's fund that work.

Good morning. Anya Lawler, here today on behalf of the California Coalition for Rural Housing and the Sacramento Housing Alliance, echoing the comments of many of my colleagues to urging the Legislature to find a solution this year and a long-term solution to ensure that Tier 3 programs remain funded. Thank you.

Good morning. Good morning, Chair and members. Brian Augusta, on behalf of the Rural Community Assistance Corporation. We're one of the state's partners in helping to deliver on the state's commitment to safe and affordable drinking water and expanding the supply of affordable housing. The Tier 3 programs are critical to that. We urge that those are fully funded and that the SAFER backfill is restored. Thanks.

Thank you.

Hello. Mary Solecki, on behalf of Clean Air Task Force, echoing the plug for fusion energy from Evan from General Atomics. Wanted to see that SB 80 receives the funding that was allocated and that an additional 5 million is sent towards the Pacific CREST Consortium, and appreciate your time this morning. Thank you for hearing all the stakeholders' comments.

Thank you.

Good morning. Jennifer Pierre. I'm with the State Water Contractors, representing 27 public water agencies who are all responsible for delivering water to 27 million Californians. It's not a special interest project. We have 3 billion plus dollars of infrastructure damage done, not by us but by others prior to SGMA's implementation. We urge you to release the money in Prop 4, Chapter 2 for conveyance that was meant for this issue. We're ready to spend it now. Projects are ongoing. Ratepayers are already being billed. Thank you.

Thank you.

Hello. Amaya Williams-Segovia, on behalf of Citizens for East Shore Parks. I just want to express my support for the governor's recommendation for funding Golden Gate Fields. It's a once-in-a-generation opportunity to provide a community of people a huge amount of benefits. Thanks so much.

Thank you.

Good morning, Chair and members. Ross Buckley, on behalf of the City of Sacramento. We'd also like to urge the preservation and prioritization of Tier 2 and Tier 3 funding. Simply on Tier 3, we'd like to talk about affordable housing and transportation pieces specifically. Some of the city's priorities include increasing affordable housing production, addressing climate change, and providing clean and affordable drinking water. Thank you.

Thank you.

Good morning. My name is Chelsea Gazillo. I'm here on behalf of American Farmland Trust. The Sustainable Agricultural Land Conservation Program, which is funded through GGRF Tier 3, is one of the state's most cost-effective climate investments. SALC is responsible for 20% of GGRF emissions despite historically only receiving 2%. We urge the Legislature to honor the commitments of SB 840, use general funds to close the GGRF's shortfall, and maintain the ongoing appropriations of $80 million for SALC. Thank you.

Good morning. Tasha Newman, on behalf of the California Council of Land Trusts. We are also here with regard to GGRF Tier 3. We align our comments with American Farmland Trust regarding the SALC Program, and we also align our comments with the Wildfire Solutions Coalition. Thank you.

Thank you.

Chair and members, Melissa Koshlaychuk with Western Growers. We are also here in support of the FARMER Program, which, since it started in 2017, has leveraged over $616 million in private funding. It's a great incentive program. Thank you.

Thank you.

Elise Lanman with Dairy Institute of California. We are here to support continued funding for the FARMER Program, Food Production Investment Program, Sustainable Agricultural Waste Management, and Livestock Methane Reduction programs. Thank you.

Thank you.

Honorable committee members, my name is Robert Lieber. I'm a former mayor of Albany. I'm here to support the acquisition of Albany's Golden Gate Fields. I've only been working on it for 25 years, but I support everything that everybody else has said. It's a one-time opportunity. Please don't let it slip by. Thank you.

Thank you.

Good morning. Taylor Valmores with Community Water Center, here to echo the importance of the critical Tier 3 programs and to urge full funding of the SAFER Program, which has brought safe drinking water to more than 1 million Californians. Thank you.

Thank you.

Good morning. Kyle Jones, here on behalf of two clients today. First, on behalf of the Community Alliance with Family Farmers, we just wanted to urge support for Assembly Member Wilson's request for trailer bill language to implement the Land Access Program in Prop 4 and Assembly Member Rogers's request for up to $5 million to support CUSP, which is the only program out there to support small farms who have been impacted by climate disasters.

And for the San Joaquin Valley Water Collaborative Action Program, wanted to support Senator Caballero's request to move more resources out from the groundwater funding in Prop 4 earlier because projects are ready to go and groundwater sustainability is critically important for the San Joaquin Valley, and full support for the SAFER Program. Thank you.

Thank you.

Good morning. Kim Delfino, on behalf of the Golden State Salmon Association, in strong support of the administration's parental-based tagging program for Prop 4 money for salmon, and then on behalf of the California Association of Zoos and Aquariums, for the administration's proposed $10 million Nature Climate and Education Research Competitive Grant Program. That's the last $10 million that's left. We'd like to see it to go to competitive grants. And then, for Defenders of Wildlife, strongly support the Prop 4 request that Senator McNerney already talked about for delta levees. Thank you very much.

Thank you.

Thank you. Good morning. Dylan Elliot, on behalf of San Francisco Mayor Daniel Lurie in the City and County of San Francisco, echoing a lot of the comments already made with respect to the GGRF from those with California Transit Association, SFMTA, and others. Through critical funds, 2,100 affordable homes built in San Francisco, Muni ridership finally up. Really like to see that investment continue. In addition, on behalf of Tulare County, echoing the ask of CalVans for their $15 million allocation out of Prop 4. Thank you.

Thank you.

Hi. Justin Paddock, on behalf of the City of Visalia, echoing the comments of CalVans on Issue One, their testimony today, as well as the letter they submitted. Thank you.

Thank you.

Good morning, members. Daniella Legostaev with the California Farm Bureau Federation, here to echo the comments made for GGRF funds to be made for California agriculture, specifically the FARMER Program, FPIP, Sustainable Agriculture Waste Management, and the Livestock Methane Reduction Program. These investments are critical for climate-- our California climate goals and the long-term economic sustainability of agriculture. Thank you.

Thank you.

Good afternoon, Chair and members. Vincenzo Caporale, here on behalf of the California Association of Council of Governments. We represent regional agencies across the state, which plan and deliver the transportation, housing, climate investments communities across California depend on. In light of the ongoing funding problems with the GGRF, we are concerned our members will lose resources they need to do this work.

Therefore, in alignment with comments made before me, we ask you use the General Fund to backfill funding for the Tier 3 programs for this year and work with stakeholders for a long-term solution. We're also asking the Legislature honor the state's transit commitment under SB 125. Thank you.

Thank you.

Good morning, Chair and members. Chris Lee, here on behalf of a handful of clients. First, for SACOG, echoing the comments of CALCOG, AHSC funding and SB 125 funding are key to being able to meet the climate goals in our regional plans. And then for the Sonoma County Transportation and Climate Authorities and the transit operators in Eastern and Western Contra Costa County, reiterate the call for ongoing Tier 3 funding and particularly wanna call your attention to LCTOP, which has helped expand and maintain service and grow ridership. Thank you.

Thank you.

Madam Chair and members, Andrew Antwih with Shaw Yoder Antwih Schmelzer & Lange, here today on behalf of a couple of clients, the Southern California Regional Rail Authority, otherwise known as Metrolink, and the City of Los Angeles Department of Transportation, urging stability for funding from GGRF for transit. SB 840 was just passed. The ink is barely dry. We know the CARB vote has a very big impact on exactly what you're talking about about today relative to predictability of funding.

It's not your fault, but it is your responsibility, working in partnership with local transit agencies. These dollars need to come in in a predictable way over time. We are here to work with you, and we want to be part of the solution.

Thank you.

So thank you.

Good morning, Chair and members. Lizzie Guansona, here today on behalf of the San Francisco Bay Ferry, County Connection, and the San Mateo City/County Association of Governments, aligning my comments with lots of my colleagues before me, including the California Transit Association. Urge your support for GGRF Tier 3 programs. Also here for the Office of Kat Taylor, and want to highlight particularly the importance of funding the Sustainable Agricultural Lands Conservation Program, or SALC, which is responsible for 20% of GGRF emission reductions. Thank you.

Thank you.

Good morning, Chair and members. Marissa Hagerman with TrattenPrice Consulting, here for a few clients. On behalf of Aclima, we'd like to humbly request $30 million from this year's GGRF, a modest investment that punches above its weight in terms of scope, utility, and impact, both for utility--or excuse me--policy makers and the public, delivering block-by-block data that's really useful and important. On behalf of Water Foundation, we wanna echo the comments and the need to fully fund the SAFER Program and reinstate the General Fund backfill. Appreciate it. Thank you.

Thank you.

Good morning. Natalie Spievack with Housing California, echoing many of my colleagues before me. We're deeply concerned about the cuts to the Tier 3 programs. I wanna directly address a couple things mentioned today. First, the Affordable Housing Bond is not a substitute for AHSC funding.

The bond hasn't passed yet, and even if it does, the funding won't be available until 2028. And second, we always knew GGRF revenues would decline eventually, but they were never meant to decline this fast, and we can't create a gap this big without a plan to fill it. So we urge the Legislature and governor to fully fund the Tier 3 programs in this year's budget and honor SB 125 commitments and to achieve a permanent solution. Thank you.

Good morning. Spencer Street, on behalf of the North County Transit San Diego Railroad, aligned with the California Transit Association, encouraging the Legislature to uphold promises made in SB 125 for public transportation, as well as protecting Tier 3 programs, AHSC, LCTOP, and TIRCP. Thank you very much.

Thank you.

Good morning, Chair and members. Marc Vukcevich, on behalf of Streets For All, one of the organizers of Monday's Tier 3 rally, echoing California Transit Association's comments with the desperate need to fund transit out of the General Fund. Thank you.

We're out of some fund.

Juan Altamirano with the Trust Public Land. I wanna thank you for having hearing and, you know, asking the questions. We're here to answer any questions that you may continue to have. You know, been great working with the staff, committee staff, so any questions that you may have, we're happy to answer those. One of the things that I do wanna make clear if it wasn't made clear, if East Bay Regional Parks does not take title to the property, the project is dead. We will not continue forward with the project.

Thank you.

Thank you.

Kasha Hunt with Political Solutions. I waited to the end because I'd love an opportunity to talk about something that's not on the agenda. Just want to quickly say that 211 California has a $20 million budget ask that is-- 211 provides resources throughout the state, including for disasters, and there are about 20 counties right now that are really in imminent, dire need for the funds and are looking to possibly close if this funding doesn't come through. So just asking that we be included in this year's budget. Thank you for the opportunity.

Thank you.

Hi. Good morning. This is Viet-Long Nguyen, speaking for myself. On Prop 4, I wanted to comment that it's now the second year where funding for the fiscal year has not been appropriated, and the fiscal year has already started. I think we could avoid this delay by approving a multi-year expenditure plan for Prop 4. I'll also just note that back in February 2025, the LAO recommended that for existing programs and programs with well-defined plans, they recommend improving a multi-year plan. So I just wanted to resurface that. Thank you.

Thank you. And the final comment.

Hi. Diego Zamayoa, policy intern with Mesa Verde Group, also constituent of Encinitas, California, here on behalf of Inclusive Action for the City, supporting Assembly Member Berman's request for 30 million for Small Off-Road Engine, SORE, vouchers so landscapers can transition from gas-powered equipment to electric equipment. Many landscapers have spoken with-- many landscapers we have spoken with from across the state who are often low-income immigrants have stated that they are unable to transition without access to voucher programs because they will have lost their investment on their gas-powered equipment. Additionally, it would be noted that some landscapers are currently facing fines and criminal penalties--

Thank you.

--from local jurisdictions for using gas-powered equipment. Thank you very much.

Thank you. Well, thank you to all who participated in public testimony today. If you were not able to testify, please submit your comments and suggestions in writing to the Budget and Fiscal Review Committee or visit our website. Your comments and suggestions are important to us. We want to include your testimony in the official hearing records.

I also wanna thank our-- those who came to testify from the Department of Finance and LAO. Always very helpful in helping us to evaluate the issues before us. Thank you to everyone, and thank you for your patience and cooperation. We've concluded the agenda for today's hearing. Senate Budget Subcommittee Two is adjourned.