Senate Standing Committee on Emergency Management

Senate emergency management committee will come to order. Good morning, all. If all Members could come down to Room 112, we can begin to establish a quorum. But for now, I think we're gonna start as a as a subcommittee and just take presentation at the moment. And once we get some Members, we'll we'll start.

So Mister Archuleta, you're first up. SB804. File item number 1. Welcome. At your leisure, please bring it to us.

Is the mic on? There we go. Well, thank you, Mister Chair and members to follow. I'm pleased to present Senate Bill 804, the hydrogen pipeline safety act, which is back on concurrence. This bill tasks the office of the state fire marshal to establish hydrogen pipeline safety standards and require the California Public Utilities Commission to recommend to the legislature a regulatory framework for pipelines carrying blends of hydrogen.

Over the last year, my office has worked extensively with the governor's office, office of the state farm marshal, and the appropriate committees to make this bill workable for all stakeholders involved. Senate bill 804 ensures that the office of the state farm marshal has clear authority, appropriate enforcement tools, and fee structure sufficient to administer the new hydrogen pipeline safety program.

Hydrogen is a key part of California's climate strategy, and we know there are certain sectors of our economy where hydrogen will be essential to achieving our climate goals. These include heavy duty transportation, ports, maritime shipping, aviation fuels, and other industrial manufacturing applications where electrification alone may not be sufficient. To support these uses, hydrogen must be transported safely and efficiently from where it is produced to where it is needed.

For large scale deployment, pipelines are widely recognized as the most efficient, lowest emission and most cost effective methods of transporting hydrogen. However, hydrogen presents unique safety challenges. Hydrogen is the smallest molecule in existence. It can permeate materials differently than natural gas, behaves differently under pressure, and requires specialized engineering and safety standards to minimize leakage and ensure safe operations. Hence, the necessity to establish the hydrogen specific pipeline safety program.

The federal Pipeline and Hazardous Materials Safety Administration recognized these unique characteristics and began work on hydrogen specific regulations. However, the effort has stalled and today's hydrogen pipelines remain subject largely to regulations originally developed for other gases. At the same time, California is effectively investing in hydrogen production, fueling infrastructure, and industrial applications. In short, the deployment of hydrogen infrastructure is moving forward, but the development of hydrogen specific safety regulations is not. That creates uncertainty for communities, regulators and project developers.

Current California law does not clearly identify which state agency is responsible for regulating the safety of hydrogen pipeline. In fact, the California Public Utilities Commission has acknowledged that its authority over hydrogen pipelines has not been clearly established. Senate bill 804 closes that gap. This bill designates the office of the state fire marshal as the safety regulator and enforcement authority for ultra state hydrogen pipelines and directs the fire marshal to adopt hydrogen specific safety standards that reflect the unique characteristic of hydrogen.

Importantly, this bill does not mandate the construction of any hydrogen pipelines.

It does not approve any projects. It does not create a hydrogen deployment program, and it does not circumvent environmental review or local permitting requirements. What it does is ensures that if hydrogen pipelines are built in California, they will be built and operated under a clear, consistent, and accountable safety framework administered by the state's recognized pipeline safety experts. This is exactly the approach California has taken in other emerging industries, establish the safety rules first, then allow the deployment to proceed within the predictable regulatory framework.

This is a good public safety build, good for environmental protection, and good for responsible economic developments.

Most importantly, it is much easier and less expensive to establish strong safety standards before infrastructure is built than to retrofit an entire system after deployment. In California, if California intends to be the leader in hydrogen, then California should also be the leader in hydrogen safety. Senate bill 804 ensures that California is that safety leader. For these reasons, I respectfully ask for your aye vote. And with me today is Mike Monaghan on behalf of the State Building and Construction Trades Council of California.

Thank you, Senator. Mister Monaghan, two minutes.

Two minutes? Okay. I'll try. Mike Monaghan of half of the state building trades. I don't have much to add to the senator's remarks.

I would like to say that we really appreciate and acknowledge his leadership in this space. It's critical that hydrogen be part of the solution, and this legislation will go a long ways to making sure it is. Okay. Ask for Aye vote.

We have another minute and forty five seconds, but we can just if you wanna just tell us a poem or kind of no. It's okay. We'll we'll leave it at that. The Members are here now.

Clearly, I recognize the need to be brief.

You do. You've you've been here. Do it well. We appreciate you. Members, we're we're hearing SB 804 at the moment as a subcommittee from Mister Archuleta on hydrogen pipeline safety.

Just heard his opening testimony and the lead witness, and we're gonna turn to opposition, and then we'll establish a quorum once we get one more? Two more members? Okay. Do we have any others in support of this measure? Just general witnesses in support.

Welcome to come forward at this time. Seeing none, we'll turn to opposition. Come on forward. We'll give you you could take two as well. Welcome.

Thank you, Chair and members. Ryan McCarthy here on behalf of Air Products, in respectful opposition to the bill. Air Products has safely operated the only hydrogen pipeline in California for more than thirty years under an effective federal regulatory regime. Although hydrogen pipelines are already regulated for safety, we have supported the author's effort to establish jurisdiction under the state fire marshal. However, we have two major concerns with amendments that were taken in the Assembly.

First, the bill authorizes the collection of fees from hydrogen pipeline operators to cover the costs. According to the appropriations analysis, this could range from 2 to $3,000,000 annually. We think it would be wholly inappropriate if those costs were imposed on the only hydrogen pipeline operator in the state. Our understanding is that the intent of those amendments were to spread the costs, and have hydrogen operators pay the same as others under the elder act, but that's not clear in the bill.

So we're hoping to get clarification on that. Elder Act has historically defined the term rupture separate from leak. And a rupture is supposed to be

a big leak that poses hazards, and therefore requires a set of remedies to repair including shutting down the pipeline, a deep investigation, and repairs. This bill, or the amendments in this bill now define rupture as leak. So for any leak whatsoever, no matter how small and no matter how clear the fix is and how simple the fix is, you would shut down the pipeline. You would have to do a deep root cause investigation before you repair it.

Even if it's very clear what the repair is and there's no risk to public safety.

So that would risk shutting down the pipeline, that would risk shutting down customers, the pipeline like refiners for no for not necessarily any good reason. We certainly agree if there's a hazardous leak, we should shut down the pipeline and do a deep investigation, but not every leak is gonna represent that. Connect with the state fire marshal. We think there are straightforward fixes to the bill that in no way limit the safety provisions or the authority of the state fire marshal under the bill.

But unfortunately, we have been able to connect with and have these deep dive technical conversations, and remain concerned with the provisions in the bill.

Thanks for that. Do we have any others in opposition? Just general witnesses in opposition willing to come forward? Seeing none. We're one away from quorum still?

So we're operating as a subcommittee, but Members are welcome to ask questions. Comments will bring it back to the dice. We don't have any at the moment. I I do maybe give the author a chance just to respond to the the opposition's concerns about or the or the sponsor on this this elder act distinction issue around ruptures versus leaks. Been looking here through my notes.

It seems like there's some de minimis thresholds under the Elder Act in the oil context. But we recognize that, you know, a hydrogen molecule is a lot smaller, so leaks are sort of a different different animal. If if you have thoughts on it? Yeah, please.

I may, Mister Chair. Yeah. And and committee members, this is the Hydrogen Safety Act. This is our way here in California as we develop hydrogen that we should have, I guess we'll call it a playbook, a rule book, a book of safety and standards in production and transportation of hydrogen. Regardless of the size of the leak, whether you'd classify it as a rupture, you'd classify it as a leak, it is still possibly dangerous.

So the state, the governor, our office have been working extensively over the last year to establish who will be the right authority to oversee the Hydrogen Safety Act, and that is the fire marshal, state California fire marshal. That is the purpose and the foundation of the bill, to establish that authority. It has also make sure that when it's transported, produced transported, and on the market, whether it be for high heavy duty application, whatever, there are safety standards.

And as California develops with a green environment, we wanna make sure that hydrogen is leading the way when it comes to safety.

Thank you for that. We do have a quorum at the moment, then we'll bring it back for question. Can we call the roll?

[Roll Call]

Okay. We've got a quorum. We'll bring it back to Senator Blakespear.

Thank you. Thank you to the author and to the opposition. I wanted to see if your witness wanted to answer any of the specific things that were raised by the opposition.

No. I don't think so. I think the Senator covered the the questions adequately. The building trades have been very active in hydrogen space for long as I've been with them. This is a key to making sure that hydrogen is upfront and a part of the solution going forward.

Okay. Thank you.

Sorry. I I wanna be charitable, but I also I'm I'm gonna I'm gonna put you through your pace, Mister Monaghan, just real quickly here. Is the intent of the bill to assess all the fees to stand up the agency on this one pipeline or or spread it more broadly? Do you guys have a sense of that? That question.

The overall safety act is a blanket across California, whether the hydrogen is produced in Northern California, Southern California, Long Beach. It doesn't matter. It's the same standards that we're looking for. And the fire marshal is the one that we're trying to establish, that he has the authority. And that's why the governor's office, our office has jumped in together to establish that and recommend that to the committee.

Okay. Yeah. I would just my caution would be because there's only one in operation right now, we know we wanna build more. And that's why I'm I'm standing with you on this bill and some of your other efforts.

Given that there is just one major hydrogen pipeline going on right now, I wanna make sure that the the as we stand up this I think the analysis says a few engineers, some analysts, some safety experts in the in the, safety supervisor and executive and office manager supervisor, equipment and training, just that we don't sort of, burden any of the work going on down in Southern California, especially as it's feeding the refining system and throw off other things on the fee front.

And then the other caution I would just say going forward, I hope you'll work with the opposition just to ensure that that there's a we we that we can make a proper distinction between leaks and ruptures and that the office state fire marshal is recognizing, I guess, what what some kind of de minimis threshold. I'm I'm curious from the opposition though. Do you have a proposal for what would count as de minimis in your mind?

Is there because the the elder act really isn't that clear on the hydrogen front. So do you did you have a proposal?

You're just concerned about them over interpreting their authority and and and that the is the bill vague on this front or is it specific in other words?

Well, we we are concerned it is we're concerned it is specific. We we had proposed various approaches that we tried to run through the fire marshal via the governor's office. We have not been able to connect directly with the fire marshal frustratingly. But, you know, one was the original or earlier in the bill and as is in the, elder act elsewhere, it defines the rupture as something that poses a safety hazard and causes an explosion, fire, bodily injury. We were fine with that.

We were also fine with, if if that was not, some an approach they wanted to mimic for hydrogen, going through the regulatory process to define this because it's it's new for the fire marshal, and we have the experience. But it's not really if if if the, you know, if the intent or the desire is to define rupture as any leak for hydrogen, that's not even a concern with us. We're happy to go through the reporting and other obligations that would go through that.

The concern is the obligation earlier in the bill, and I'm sorry I don't have the section number. But it says you must shut down a pipeline for a rupture.

And that made sense when rupture means, you know, a big risk to the environment or to safety. It doesn't necessarily make sense if it means any leak whatsoever. Investigation, which our understanding is often, at least in in industry, a term of art to mean a, root cause analysis, which is not just, you know, a car crashed into a pipeline or something that well leaked or something. It's why did that happen and go in steps, upstream from that, which can take a long time no matter how.

And fix fix our.

So that's our big concern. We think you could actually just delete that provision it's B and some section. Again, I apologize. I don't have that in front of me.

Because the provision right in front of it says the state fire marshal may shut down a pipe line for safety or environmental concerns. And the one right after it says they can choose when to start it back up. So we think that's entirely unnecessary actually and they would still have all the authority they need if they want to shut down the pipeline if they want to order an investigation to do so. But it's really that legacy from the Elder act Coupled with the definition of rupture being the same as leak that poses the concern.

Okay.

Mister Chair, if I may.

Yes, please.

You know, the Assembly, Utilities, and Energy Committee, this was submitted and approved. And again, it just clarifies that all the pipelines will be under the authority of the fire marshal. And Air Products and the Opposition, they're probably concerned, no doubt, of the financial requirement they would take. But let me bring it down to a basic fundamental because hydrogen is is a very complicated fuel. But imagine in your cars, everyone, you had a leak in your radiator and you're driving to Vegas.

It's a 110 degrees. Should you pull over, and get that leak fixed? Or are you waiting for that leak to be classified as a rupture? A leak is a leak. A rupture is a rupture.

Danger awaits you, and that's what this safety act is all about. We're working with transportation. I know one of our committee members is is very involved in transportation up and down the corridor in San Diego. Safety standards. I'm on the transportation committee.

Safety standards. Everywhere we go, California is setting the standards for safety. But who should oversee it? This bill, all it states is a state fire marshal should oversee it. Fees pertaining to violations, that's another structure.

That's not what we're talking about. We're just talking about who has the authority. And if my opposition's again concerned about the dollars and cents, where is the safety when it comes to dollars and cents? Whether you you seal it immediately or you bring in a big crew, that's not for us to decide. It's the state fire marshal to decide.

That's my point. Safety first. And with that, I again urge the Aye vote, and I will continue, upon closing.

Okay. Thanks. Okay. So we have motion from Senator Perez, and we'll just first, we'll hear from the Vice Chair.

Yeah. I just wanna bring some comfort to this this part of the discussion. Just because it is the office of the state fire marshal, and he ultimately gives the order to shut or not open or shut down. That does not mean he's the person making the decision from his ivory tower. They have experts out there. They have the hazmat folks out there.

They're going to determine what size of leak, what kind of what what needs to be done to mitigate that and and some of the precautionary things that need to be done and when it's safe to open it back up. And at the end of the day, they won't open it until it's safe. And, and they won't close it if it's unnecessary because they those are things that as an incident commander or some you have to take into consideration, the cost implications.

You don't wanna shut things down unnecessarily just because you can, but there's a lot of decision making that goes in by people that are really experts at this stuff that advise whoever it is that says, Hey, we're going to shut down the pipeline for now.

So, you know, Aye, I'm an advocate of the OES handling that just because of that, because we have that, we, we get everybody gets to be involved, in a, in a decision making from the IC that arrives on, on scene first to, everyone else, the Department of Transportation, all their experts also weigh in.

And I think I think it covers it that well. And that's why I was an advocate of having a state fire marshal on this.

Thank you. Alright. Well, thank you. I will just say, we read this debt the bill to to to give some discretion to the fire marshal, to make those sort of judgment calls, when something is so serious that it requires ceasing operations versus sort of automatically shutting down operations over things that are de minimis, that aren't gonna have serious safety risks.

We'll be keeping an eye on that going forward and looking for feedback, obviously, from the administration as this gets stood up, but we think this bill is quite necessary at the moment.

We appreciate your leadership on this. I'll be recommending an aye vote, but certainly encourage you to keep working with the opposition as our sort of lead hydrogen per carrier in the state right now. Just to make sure that we don't unintentionally disrupt operations and what what's going well. We hope this lays the groundwork for for expansion of the system in a safe manner. But for existing operations, we do want it to keep operating smoothly.

So I I'm recommending Aye vote will allow you the opportunity to close.

Thank you, Mister Chair and committee Members. And you're absolutely right. There are experts within the agency, the state fire marshal, and there's no one standing up in some office somewhere. It's gonna be hands on, gonna verify the problem, verify the necessity of of repair, but also that will open up other doors for further safety regulations that are out there. It's new, and it should be established that the ground rule is safety first across the state of California.

And we will lead the way when it comes to safety across the nation, and that's what this bill is all about. I urge you an Aye vote.

Thank you thank you very much. I think we have a motion from Senator Perez. So the motion is that the Assembly amendments be concurred in. We'll call the roll.

Senators Stern? Aye. Stern, aye. Sarato? Aye.

Sarato, aye. Allen Ashby, Blake Spear? Aye. Blake Spear, aye. Dally Dally, aye.

Grayson Perez Rubio? Aye. Rubio, aye.

Okay. We will leave that on call for the absent members, and we'll Move the consent Hope is there no? If only there was. No. We're just waiting for Mister Cabaldon who is not busy at all at the moment.

He's just lollygagging somewhere. Senator, thank you. We'll leave that on call if you ask him. Okay. Appreciate you.

All right. Senator Seyarto, Cabaldon, Welcome.

Welcome to this committee. We have before us here SB 828, Fire Chief. Oh, wait.

That's not you. Who are you? Oh, that's him. Okay.

He doesn't have its folder.

Let's see. Let's see what he can do. Alright. On behalf of Senator Cabaldon, Mister Vice Chair.

Yes.

This is razzing.

I thought I was cutting in line. Sorry.

Nope.

Alright. Yeah. No. It's a free for all here in Senate emergency management committee. Good morning.

If you're ready to present go ahead.

Thank you, Mister chairman and members of the committee. SB 828 is the bill that I introduced last at the beginning of the year in response to the massive explosion in Esparto in my own community from a site that was unlicensed, unpermitted, unregulated, and largely unknown that killed seven people, but also exposed a massive challenge with fireworks and explosives in the state and their connection to organized crime.

When the bill left the Senate, it was it included recommendations based on the experience specifically in Esparto. In the Assembly the Assembly amendments incorporate the final recommendations of the State Fire Marshals Task Force on fireworks for this issue and so covers a wide array of issues with respect to licensure verification, to land use, and permit verification and validation between the state and local governments in order to to assure that this does not happen again.

There are many more issues to deal with in this space as we as we've learned over this over the time in the Assembly, but this bill implements the consensus recommendations of that task force, and look forward then to working with many of you on follow ups next year.

I will note, also for the record that there have been we one of the issues we need to continue to work on next year is the relationship to production studios and those that work with fireworks and explosives as part of film and other productions, and so who are covered under the state fireworks and explosive laws for for important reasons, but they also are in a different situation.

So we we look forward next year to continuing to refine the statute to assure that we're both protecting public safety, protecting against the organized crime rings that are in this space, while also continuing to support our entertainment and film industry in California. So with that, I'd be happy to answer any questions. Thank you so much.

Okay. Thank you, Senator. We'll look to witnesses in support?

Seeing none, we'll look to anyone in opposition?

Seeing and hearing none, we'll turn back to the dias.

It's a motion, but we'll turn first to Senator Blakespear and then over to Senator Rubio.

Yes. Thank you. I remember this because of course, we all come to Sacramento every week, and I was watching the local news one evening and saw this exploding firework facility on the local news, and they were it was happening live in real time, and they were playing it continuously. And I the fact that it was this massive facility with such danger had been built and was operating without locals and county understanding what was there is somewhat boggles my mind.

So can you give a little bit more insight about how something like that can be set up and not actually have the permits to be there at all?

Yeah. This is a failure on many, many, many levels. So the site itself was not zoned or permitted and the county at least officially was unaware that this was being used for this, for this purpose. The facility could be an Ag processing facility or if just driving by you couldn't know. And so the county was not aware.

The owner told the state for the licensure process and the state oversight process that yes, we have all the necessary local permits.

They did not but current law does not, does not provide for any data sharing, any validation between the state and the local agencies and of course keep in mind as you know as part of as an example this is you know this is a tiny jurisdiction with its own fire district and Yolo County is does as best that it can, but I mean, their ability to keep their finger on the pulse of every single organized crime ring on explosives is pretty limited.

So that state local partnership is essential. So the bill addresses that by requiring that you have to show your receipts, show your homework that, yes, we have the necessary back and forward permits. At the same time, the licensure itself for the owner, that owner should never have been licensed at all.

But under current law, the State Fire Marshal's Authority to not grant a license when there is a prior conviction is at least ambiguous. And so this legislation clarifies that as well that the that when there is a prior conviction in the space, that the Fire Marshal has the authority to not issue a a license. So those are a couple of those examples. Now the law is not the only problem here.

There was also violations of the existing law, which is why the District Attorney has filed indictments, I mean, the case as well.

So I don't wanna suggest it's just because we the legislation hasn't been enacted. It's also that there have been nefarious actors who have been actively or at least allegedly flaunting and breaking the laws that we already have.

Thank you. Senator Rubio.

I think Catherine sort of asked the questions that I had concerns with, you know, about the license verification and the appropriate land use. But I wanted to just kinda clarify. There were some criminal charges, and people were held accountable. Because I think that them, like Catherine, that baffles me how something's so massive and it's happening in a lot of our communities. But the issue here is the strong message that if this happens, you will be criminally charged.

So I hope that happened, that those people receive justice.

Yes. I completely agree. And I think the other dimension of this, and this was the focus of more of the Assembly amendments, was around you know, weeks before the explosion in the Esparto, you know, there there was a raid in the City of Commerce of a fireworks facility with, you know, with connections to organized rings

Lots and lots of explosive and dangerous material. And the some or many of those boxes and what have you were had addresses what they were addressed to the Esparto facility. Right. So it's it isn't purely a local issue. It really is also that there the California has become a way station for massive we're not talking about sparklers, massive explosive devices and materials.

Yeah.

California's become a weigh station internationally, and so we also need to you know, teeth up the Fire Marshal and other state and local and law enforcement in order to respond to that because those we should have caught those materials before they even got to Esparto in the first place.

Thank you.

Mister Vice Chair.

Thank you. So shedding a little bit of light on the warehouse issue. Anybody can build a warehouse. They can get permits. They can tell them what they're gonna put in it.

But when a cartel or a foreign person from the places where these are made most, and they're very illegal, entice a owner of a building with massive amounts of dollars, to move their product in the middle of the night. Unless that is inspected every so often, it's not going to get caught. And there's a reason they don't wanna get caught. So they're gonna make sure it's masked so they can't. And it's really important, and this is one of the you know, federal state things.

Those are federal, federal ATF people that come in and are dealing with some of these and the explosion, explosives and and things like that.

And so it's really important to have that relationship so that you can, find these zoo when, and then when they, you get them, you can trace where they're there, where it's coming in from and try to nip it at that point because really, nobody knows what's in half these warehouses unless your fire guys are going out there and looking at them. And we do. And I would work in the City of Industry.

We had a gazillion of these, not these, but a lot of warehouses.

And that's how you discovered these things as you have people. But you know, some warehouses were never open.

So and those would get referred because we could never gain access and you knew something bad was going on in there. So that's how that happens. You know, it's and not I don't know that people mean for it or it's necessarily negligence on the local's part. It's just bad people do bad things, and they hide them. And until we find them, that's how it works.

Thanks for that, Mister Vice Chair. We appreciate your work on this. Committee is recommending an aye vote. I as their as our technology guru for the Senate, I have every confidence that you know, as you implement the task force, task force's recommendation with the provisions in this statute that you also look for those kind of technology opportunities for how to do better monitoring on-site.

So it doesn't just rely on thinly staffed, state and local operations, but we can also do remote sensing and other detection.

I think there's a lot of opportunities there. I do appreciate the state fire marshal's work on getting on top of this, and I'm sorry that it takes so long. Hopefully, this is of some comfort to the families that have lost so tragically.

And I the last thing I'll just say, is I do encourage you though to keep working with the entertainment industry because as we know, pyrotechnics are also an important part of making big movies here in California. And so we wanna preserve the legitimate industry and make sure we don't have sort of unintended any unintended consequences. But I appreciate your commitment to working through that next year.

We'll be here to help you along in that task, and I would entertain a motion at the appropriate time and then allow you to close. So move from Senator Rubio, opportunity to close.

Simply to ask for an aye vote. Thank you, Mister Chairman.

Thank you. Alright. So the motion is that the Assembly amendments be concurred in. We will call the roll.

[roll call]

We're gonna open the roll on the first item, File item number 1, SB 804. Please call the absent members.

Current vote is 5-0.

[roll call]

8-0, bills out. Close the roll on that one. Next up, file item number 2, SB 828 Cabaldon.

Motion is Assembly amendments be concurred in.

Current vote is 6-0

[roll call]

Okay. 8-0. Bill's out. We'll close the roll on that one. And before we wrap, I do wanna say thank you very much to the if we can all thank the committee staff for their very hard work this year.

I know it's been a long year. Hopefully, this is the last hearing we have to do. So I'm gonna hopefully not jinx us by just saying thank you all so much. It's been a very important year, and I think we've made California a lot safer. So to the minority staff, to my staff, we do appreciate you all, and thank you.

We'll wrap. This meeting is hereby adjourned.