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Senate Education Committee California State Senate
Follow its sittingsSpeaker 1
Okay, great. Now let's hear from any other support witnesses here in Room 2100. Please use the microphone outside of the railing, and please only state your name, organization, and position on the bill.
Speaker 5
Sarah Petrosky on behalf of the California Association of School Business Officials in support.
Speaker 4
Morning. LeAngela Reid on behalf of the California School Nutrition Association in support. We
Speaker 1
will now move on to lead witnesses in opposition. If there are any, the two lead witnesses may come forward and use the microphones at the table in front of us. Seeing nobody getting up, we will now bring the discussion back to the members. Do any of our members have questions or comments? Senator Kibaldin?
Speaker 6
Yeah, thank you, Madam Chair, and thanks to the author. I'm definitely supportive of the bill. It follows on a series of work that's happened in the legislature as well as at the local level and certainly is an important follow-up to the legislation we passed last year on ultra processed foods but also many others. This is not a cause for concern in the bill, and I know the Senators, the Chair of the Revenue and Taxation Committee has a lot of experience monitoring changes in federal laws and regulations and definitions. And just given, you know, given the administration's view about health and safety.
Luckily, this is in the agriculture area, not in the health department, but we just we're essentially deferring permanently to whatever the federal government includes in that regulatory language which is not inappropriate but it just it puts the onus on us both in the legislature and the executive branch to continuously monitor changes to that federal regulation so if anything goes off the rails that we're able to reclaim our time and reclaim our own ability to write the definition that makes sense for California. But the language as it is in the federal reg today makes sense. This is an important conformity and alignment that will allow school districts to do exactly what the witness said. So appreciate it and at the appropriate time I'd to move the bill.
Speaker 7
Thank you. Let me ask also our nutrition director. RFPs are usually used to ensure the lowest cost based upon the requirements specified request for proposal criteria whether they are meeting or not. So I wonder how you determine how you select such vendors. Do you include certain items, certain percentage of vegetables, meat, If you specify those categories based upon that requirement, different potential vendors will bid to that.
Among them, obviously, some will charge more or less. And then you may have to consider, obviously, lowest price for the highest quality of the service or food that they will be providing. How do you go by specifically if you just send a service 1,000 students for lunch and bid on your own without any item criteria, lowest bidder, maybe junk food, so I can understand this intent of the bill. If you can elaborate how you choose when you send out the proposal.
Speaker 3
Thank you, Senator. So at Lodi Unified, we are very typical in how we go about our RFP process in many other school districts.
Speaker 3
And you had mentioned farmers, I heard produce, I heard junk food. And so, when we do the RFP process, it's a specific process. So, looking at produce, we just finished our RFP for our produce. And so with the addition of $10.58 what this allows us is greater flexibility so that price is not the main driver on this. So if our main driver in, for example, in Lodi is locally sourced, you know, we're in the middle of all of this agriculture and so we have, definitely a local economic interest to, awarding to our local farmers.
And also it heavily supports and leverages all of the health outcomes that we are all interested in. And it also leverages our and recognizes our local economic interest for our farming community when it comes to produce. And to your point on junk food, so an RFP on produce would not include junk food. Junk food would, you know, I don't know what the definition of junk food is legally. I'm pretty sure there is none that I'm aware of on the public health spectrum.
Speaker 3
Highly processed food. Yeah, so thank you so much. So that profile of food would not fit inside of that RFP. Did that answer your question?
Speaker 7
The reason I'm raising this question is that even though the intent of the bill I can see to select the best quality of food for the students And your emphasis right now, what I'm hearing is that supporting local farmers. Yes. That's good too. Sometimes relationship trustworthy, etcetera, that's an important part of the criteria, but they can deliver what they promise. But sometimes it can be abused without the real check and balance of the quality and the price is in the reasonable range, but go by abuse of the system like of giving the contract to friends or relatives, things like that.
You know, how we prevent that aspect, that's my concern.
Speaker 1
Did you want to respond or was that just your final comment, Senator Choi? Or I know Senator Cabaldon, I think, wanted to just make a comment briefly.
Speaker 6
Just on this point because I think Senator Choi is when I first read it, that was my question as well. So I wonder if you can describe obviously, that if you only want to feed children locally sourced quinoa from Lodi and there's only one provider and it costs, you know, $11,000,000 per pound or whatever, obviously we don't want that nobody has that interest. But maybe you can describe briefly just what are the other things that are like you have to provide a meal to every you know, the meals to every child. Like you so you can't spend it all on one thing. What are the other things that will help make sure that balancing localness, supporting ag, and of course health primarily that you can still afford to assure that every child is fed with the limited federal dollars that you have?
Speaker 3
Thank you, Senator. And so inside of the RFP process and inside of Fund thirteen, which is our nutrition services fund, we are financially responsible for that check and balance of the actual cost of everything. The RFP is simply the rail that allows us to drive that. As the author of the RFP for Lodi Unified, looking at the produce bid, we specifically put on there what we're looking for and we award according to what the RFP allows us to reward by statute. This increases the flexibility for this.
And did you say quinoa in Lodi? I would love to find the quinoa farmer in Lodi. But to your point, we would not purchase the $10,000,000 because financially it just would not make sense. And the responsive and responsible vendor is enforced throughout the RFP cycle of the awarded providers.
Speaker 6
So there's no point in the lunch line where you say, hey, Carlos, Bethany, sorry we've run out of food because No. You missed out on the really great quinoa, but now we can't feed you, right? That's that you have other checks and balances and controls both your own but also federal and state that require that each child gets the meals to which they're entitled.
Speaker 1
Great. Are there any other questions? Alrighty, Senator McNerney, would you like to close?
Speaker 2
Well, I thank the chair and the committee. I thank the witness. I thank Senator Choi and Senator Kibaldin for their inputs on this. I mean there's always going to be some concern about fraud or but giving schools flexibility based on quality I think is real game changer and a winner for our communities. As the witness indicated.
We are a farm community. There's a lot of local farm competition, and I'm sure that we'll be watching those, and it'll be up to the local school districts to make sure that everything is done fairly and properly. But actually, the point is to make sure that the students have access to the highest quality food that can be provided by the school district. With that, I'll ask for an I vote.
Speaker 1
Great. We have a motion by Senator Cabaldon. We also now have a quorum, so Secretary, if you wouldn't mind establishing and please calling the role for quorum.
Speaker 1
Great and we have a motion on SB ten fifty eight. If you could please call the roll. And the motion is do pass.
Speaker 4
Senators Perez. I press I Ochoa book Ochoa book I cabalden cabalden I Choi Choi I Cortezi Gonzalez Reyes.
Speaker 1
Great and we will put that bill on call. Thank you so much, Senator McNerney. I see that we have Senator Ashby, next here in the room. Senator Ashby's presenting SB eleven forty and you can begin when you are ready.
Speaker 8
All right. I'm here to present SB eleven forty, which is a Safe School Campus Act sponsored by the California Federation of Teachers. California schools are required to maintain a comprehensive school safety plan that addresses campus risks. However, these safety plans do not always include construction site access protocols. Construction and repair projects require workers to repeatedly open doors, driveway gates, and other points of access to complete their work efficiently, often over the course of several days, weeks, or even months.
While our schools undoubtedly work hard to keep their faculty and students safe, unauthorized individuals have gained access to school campuses through unsecured entry points such as open gates and propped open doors. Some you know of are national tragedies. However, the data points show that there is no known active shooter who's ever successfully breached a locked door in The United States. SB eleven forty works off of this data point by closing an important gap in school safety plans. The bill requires schools to enhance their safety plans with measures that limit entry points to better prevent unauthorized school site access during construction maintenance and repair times.
SB eleven forty ensures California can continue to better protect our students from unauthorized individuals and potentially very dangerous events by requiring schools to incorporate measures into their school safety plans that limit unattended entry during construction maintenance and repair projects. That being said, I do have one witness with me. I have Mitch Steiger from the California Federation of Teachers.
Speaker 9
Thank you, Madam Chair, members and staff. Mitch Steiger with CFT, a union of educators and classified professionals, proud to sponsor this bill for all the reasons stated so well by the author. Also, because we think this bill offers an opportunity to prevent tragedies rather than just respond to them, that this is a hazard we've heard about from our members that, oh, the driveway gate's been open all week, the door's been propped open all day. And fortunately we don't have a tragedy to point to in California where there was a shooter or there was someone trying to commit violence that accessed the school in California because some point of entry was propped open. But we'd much rather be here trying to stop that from happening than scrambling to try to fix it after the unthinkable has already happened.
So the bill is structured, we believe, in a very straightforward way that should be easy to comply with where it doesn't tell every school you shall do this with your doors or you shall do this with your driveway gates. It just builds this concept into their existing process of developing the school safety plan. So this is something that's already done. There's already a safety committee that puts these together. And this just means that, excuse me, when you're having the discussion about the safety plan that this topic is added to the list.
We need to figure out a plan because each school is going to be Some have a lot of doors, some don't have that many, some have a very secure fence around the campus, some don't. And so this allows each school to kind of tailor a solution to their specific needs while not reinventing the wheel and creating some new process that they all have to comply And just wanted to finally mention that with respect to the Uvalde shooting where it was originally thought that a teacher had propped the door open, the video surveillance confirmed that the teacher had kicked the door out and pulled the door shut, but the door was supposed to automatically lock, but it didn't. So another reason we like the way this bill is structured is that it in no way discourages maintenance workers from being on campus. We want those maintenance workers on there fixing the locks, fixing the gates, doing whatever they have to do to keep the campus safe, but we don't want to create any sort of an unintended consequence that means it's more expensive to have them on there and we think this bill does that, striking a balance between all these different needs, but still we think doing a lot to prevent any sort of tragedy from occurring in the future.
We urge your support. Thank you.
Speaker 1
Thank you for your presentation. Now let's hear from any other support witnesses here in Room 2000 100. Please use the mic outside the railing and only state your name, organization and position on the bill.
Speaker 10
Good morning, chair and members. Rebecca Marcus representing Brady Campaign and Brady California in support. Thank you.
Speaker 6
Good morning. Carlos Lopez with the California School Employees Association in support. Morning, Chair members. Elmer Lizardi here on behalf of the California Federation of Labor Unions in support.
Speaker 9
Morning, Madam Chair and members. Dylan Hoffman on behalf of Prism in support.
Speaker 1
Great. Seeing as we have no more support witnesses, we'll now move on to lead witnesses in opposition, if there are any. The two lead witnesses may come forward and use the mics at the table in front of us. Saying nobody getting up, we will now turn it back to discussion with the members. Do we have any questions or comments?
Senator Choi?
Speaker 7
Thank you, chair. I just want understand clearly what the intent of the bill is. The summary says that to limit the access points during the construction facilities maintenance and repair projects. So are you concerned of existing building maintenance and repairs and then doors propped open but it has to be more monitored and school access whether that's during the construction time or non construction time already you do limit unauthorized people, so access to the school. So if you are referring to new project, separate building construction, then that is obviously they need to have a perimeter of the construction area.
No unauthorized people should be able to access it to that point. So which project are you concerned or both situations that this bill is addressing?
Speaker 8
So both, anywhere where there are students present. Right now, all school sites have to do a school site safety plan. If this bill does what it's supposed to do, it's sort of boringly and unopposed, makes its way through the legislature, gets implemented, and schools across California make plans for when they have construction on-site, and therefore nobody ever gets hurt. We don't do this bill. We run the risk of not learning from other states who haven't been as safe and haven't been as careful, and then folks gain entry onto a campus unintentionally.
This is not an indictment of anyone. We know that people are careful around schools. But as you have heard, there have been instances across this country where unintentionally a door isn't closed, or it isn't secured, or it isn't locked. And in every case in The United States Of America where there has been a school shooting, it has been through an unlocked entry. So the goal here is just to ask schools to make sure that when they're doing their overall school site safety plan, that if they have construction or maintenance happening that they also include that in their plan.
Speaker 7
Yeah, I'm all for obviously school safety, student safety, and any measures that we need to strengthen. I'm all for it. So obviously even extra outside the new construction area whether that's a school or non school issue always for the local government it has been a problem because some thieves may come in with the truck and steal their equipments or whatever because people trust that they look like part of the workers and that they have that kind of unethical in stealing activities took place many times. So project, new construction site, the security and then also always to lock it up when they leave. That has been the practice at the city that I served in the city of Irvine.
So I think this is, you know, obviously construction management has to secure that construction site. At the same time, if there's existing building maintenance and repair work, obviously for the convenience, the door can be easily left open. So who's going to monitor that door? I think that has to be worked out between the school administration and the construction company.
Speaker 8
This bill may inadvertently help with construction loss, but the focus is student safety.
Speaker 1
Any other comments or questions? Great. Okay. And we have a motion. Senator Ashby, if you'd like to close.
Speaker 1
Excellent. So, we have a motion by Senator Ochoa Bogg, and SB eleven forty is due passed to the Senate Appropriations Committee. Secretary, can you call the roll?
Speaker 4
Senators Perez? Aye. Perez, aye. Ochobog? Aye.
Ochobog, aye. Cabaldon? Aye. Cabaldon, aye. Choi?
Aye. Choi, aye. Cortez, Gonzalez, Reyes.
Speaker 1
So, we're going to go ahead and do consent right now for SB nine fifty nine. Secretary, if you could call the roll. Oh, and do we have a motion on the consent calendar? Apologies. We have a motion by Senator Cabaldon.
Speaker 4
Senators Perez? Aye. Perez, aye. Ochobog? Aye.
Ochobog, aye. Cabaldon? Aye. Cabaldon, aye. Choi?
Aye. Choi, aye. Cortez, Gonzalez, Reyes.
Speaker 1
Great and we will put that bill back on call So we're going go into a short recess while we wait for the other two authors to arrive, and then we'll return once either one of them get here. Thank you. All right, we will bring Senate Education Committee back to order now that we have Senator Padilla here. Senator Padilla, you're presenting SB ten-six. Please feel free to begin when you're ready.
Good morning.
Speaker 12
All right. Good morning, Madam Chair and members. Thank you for your indulgence. I am pleased to present SB ten oh six, which sets the Cal Grant B access award amount at the new minimum and requires the award to automatically increase each year based on inflation using the California Consumer Price Index. Cal Grant program, as you know, has helped California students cover the cost of college for more than fifty years, Yet its support for non tuition expenses has failed to keep pace with rising costs.
Cal Grant awards for tuition at UC and CSU campuses have increased. The maximum Cal Grant B access award that helps students pay for non tuition college essentials such as housing, food, transportation and books, however, has remained at just sixteen forty eight dollars per year. In 1969, a little bit ago, the amount was set at $900 has not kept up with inflation. In fact, it is currently worth less than one fifth of its original value. Nontuition costs make up a majority of college expenses often exceeding over $30,000 annually for students living independently off campus.
Even when combined with the maximum Pell grant, less than one third of average non tuition costs are covered contributing to widespread basic need insecurity among college students. This bill addresses the rising cost of college through incremental investments that will increase access award amounts for Cal Grant B recipients. It indexes to Cal the award amount to the California Consumer Price Index and replaces the current fixed cap to ensure the award maintains its value over time. Beginning in the twenty seventwenty eight academic year, this bill will set the Cal Grant B access award to at least the current amount for the twenty five-twenty six academic year, rather than the amount set in the statute. SB ten-six strengthens the program and complements our broader efforts to address the basic needs of college affordability through investments in non tuition based costs.
With me today, I have Laura Zabel Kubitz with the Institute for College Access and Success, and Jallmarie Crawford, a current student activist at Sacramento State University.
Speaker 10
Good morning, Chair Perez and members. My name is Laura Zabo Cubitz, and I'm Senior Policy Advisor at the Institute for College Access and Success. Thank you for the opportunity to testify in strong support of SB1006 by Senator Padilla, which we are proud to sponsor along with our partners at Children Now, Ed Trust West, and Public Advocates. SB1006 is crucial to the success of both individual Californians and the state because it would ensure that the Cal Grant B access awards that the lowest income students receive to help cover non tuition costs, including food and housing, are indexed to inflation and do not continue to lose value and provide much needed support on Californians' paths to higher education credentials. Importantly, this bill would benefit over 300,000 students annually at all types of public and private higher education institutions.
We are grateful for the legislature's ongoing support of the Cal Grant program. However, unlike Cal Grant awards for tuition at CSU and UC that automatically grow with statewide increases, its awards for non tuition expenses, which as the Senator mentioned often exceed $30,000 annually and have increased by 80% in the last decade alone, have failed to keep pace. At just $16.48 dollars today, the maximum Cal Grampi Access Award is worth less than one fifth of its original value. Research finds that many California college students face basic needs insecurity, which impacts their ability to thrive in higher education. Data from CSAC finds that sixty six percent of California college students are food insecure and fifty three percent are housing insecure.
These figures rise to 7973% respectively for student parents. Importantly, SB1006 would also ensure that Cal Grant B supplemental awards available to student parents and recent foster youth who face additional affordability barriers are indexed to inflation. We are proud to sponsor SB1006, which would complement the state's efforts to address basic needs in college affordability and respectfully urge your I vote. Thank you for your time.
Speaker 13
Hello, Chair Perez and members of the Senate Education Committee. My name is Jomari. I am a second year political science major at Sac State. I am a student activist and a young Latino activist here in Sacramento. I am here in support of SB1006 by Senator Padilla because as a formerly homeless student and as someone who continues to struggle with us and as someone who continues to struggle financially, it is extremely difficult for me to prosper academically, to advocate for others, and to organize in a community while still figuring out ways to pay for college, which unfortunately includes me borrowing loans that had to take out to pay for my college dorm because the aid that I got was not enough to cover it.
I only receive $700 monthly from paid volunteer work, which supplements my financial aid, but that money is not enough to get me through the month even with careful budgeting. Unfortunately, I have to miss out on networking opportunities that could further my career and my academics because I may not have enough money to pay for an Uber to get back from the event to my dorm or vice versa. I also miss out on parts of my college experience because I may not have enough funds to experience those parts of my college experience. Many other students that I know also face similar challenges. Cal Grant B being indexed to inflation would significantly benefit hundreds of thousands of students statewide by ensuring that the aid that they get does not continue to lose purchasing power.
As someone who works with former foster youth and formerly homeless youth such as myself at The Guardian's College Park in Massac States, I see the effects of students struggling to pay for rent, emergency costs that may come up, and books for classes. And so, non tuition need based aid is absolutely important to make sure that these students are able to thrive, excel in their classes, have an enjoyable college experience, and not have to worry about whether or not they can pay for books for classes, money for gas, and money for a parking pass, and so much other things. And so SB1006 will significantly improve the conditions of these students, including myself, by ensuring that the award does not continue to lose value each year. We're great we are grateful for your consideration of this bill and I hope to get your eye vote today. Thank you.
Speaker 1
Thank you so much. We will now see if there are any other support witnesses here in Room 2100. If so, please use the microphone outside the railing, and state your name, organization, and position on the bill.
Speaker 7
Thank you. Mark McDonald on behalf of National University and the San Diego Community College District in support.
Speaker 5
Morning, Chair and members. Oscar Sandoval, the Center for Healthy Communities in strong support. Good morning. I'm Maggie White with the California State University Chancellor's Office here in strong support. Thank you very much.
Speaker 15
Good morning, Jessie Hernandez on behalf of the Campaign for College Opportunity and California Competes in support.
Speaker 11
Good morning, senators. On behalf of public advocates, Carina Paredes in strong support and a co sponsor of the bill. Thank you.
Speaker 13
Good morning committee, Valentina Rodriguez, student at Sacramento State, support.
Speaker 5
Hi, good morning chair and members. Carol Gonzalez on behalf of the Cal State Student Association, proud to support the bill. Sorry we couldn't get the letter in on time. Thank you. I thought my colleague was going walk through the door.
Carol Gonzales on behalf of Ed Trust West. They were running through my kit. Thank you.
Speaker 1
Thank you. Now we'll turn it over to, opposition. Do we have any opposition lead witnesses here in Room 2100? Seeing nobody getting up, I'll turn it back now, to discussion with the members. And I just want to say before we get started, Senator Padilla, I really appreciate this bill.
This has been, I think, something that I know I've worked on even before I got to this building. And it's great seeing friends here, Laura. It's nice to see you. And, you know, I remember working on the Cal Grant Equity Framework, which was signed into law but was never funded. And we've continued to have conversations about putting more money into the Cal Grant.
We know that we need to lift the amount of aid that we've provided our students, and yet we fail to do so. And it's a constant struggle because we know for our students they've seen the cost of transportation, of housing, of food continue to dramatically rise, and yet that award amount hasn't changed. And what that does is it causes our students to rely more and more on student loans and on other forms of student aid, when we should be raising the Cal Grant. We know that we should, and so I think that this is a very intentional and measurable way for us to start moving that number. Tying it to CPI, I think, makes a ton of sense.
It always should have been tied to CPI, and really, really happy to be supporting this and to see you introduce this. So just wanted to acknowledge that, acknowledge all of the tremendous efforts that have been put into this over the years, and I'm hoping that we can make the investment in this one because we need to really start making movement on that. I'm going to turn it over now to Senator Ochoa Bogue.
Speaker 16
I just want to echo not the part that I've worked on it like you have, but I actually am very grateful that you are kind of tying it to the CBI. I think it's a great I think as mentioned by our chairwoman, I think it should have been done from the get go. So I'm really glad that we're finally doing it. I can't believe it's we've waited this long to do it. Quite frankly cannot just add on that but I'm grateful that you're, taking the lead on this Senator Padilla and I will be happy to make the motion when the appropriate time is here.
Speaker 7
Thank you, Chair. Excuse me, Madam Chair. Senator Padilla, thank you for the bill idea. I just want to have some clarification. Before your bill, existing legislation does not allow CPI automatically included and your bill is trying to catch up a small portion that is behind the CPI.
My calculations are only catching up was $97 per month. And then also, although faster parents, the amount they are getting $6,000 will include that the CPI rate. Are you specifying certain percentage to be built in if existing law does not have a specified such as a 3% or California CPI rate, whichever that is publicly announced. So if you can clarify, and that is my first part question. Second part question is that when your bill passes, what amount of money will be impacted?
I'm worried about the California budget situation and the deficit, whether this will be implemented or not.
Speaker 12
Madam Chair, Senator, thank you for the question. Just to clarify, this bill specifically goes to the access award amount under the Cal Grant B portion, which right now is limited in statute to a discrete number. This bill instead would align that with the maximum per student amount provided in the twenty five-twenty six award year, which is distinct and was allowed to be more flexible under a different statutory proceeding. So we're providing that more flexibility to bring that forward, and we're also requiring that it be automatically tied to CPI and increased on an annual basis. The second part of your question in terms of I think I understood the second question to be asking if I had a scoring or a calculus on budget impacts or costs.
And I don't have it in front of me, but I would probably can get you that information to your office if you need it. I don't think it's substantial or adverse. And I think when considered against the value of increasing access and student success for people who rely on Cal Grant to be able to even get into a learning environment, I would argue it's probably a good investment.
Speaker 10
is not obviously an official scoring, but what we've done in our with our research team is that for year one, it would be about $21,000,000 $14,000,000 would be for increasing the $16.48 dollars to inflation, and then the other $7,000,000 would be for increasing the $6,000 for the student parents and foster youth. So, we've estimated that in the first year, it would increase by about $54 for that first award and then about $198 for the second award. Goodness, Oh what was I going to say? Lost my train of thought with that. Oh, I know what I was going say.
Advocates are also going to be doing budget advocacy on this as well. Yeah.
Speaker 1
We know that's critical in order to make sure that this actually happens. Like I said, unfortunately, I haven't had experience working on this before, so but I think this is, you know, really a measured way to approach this. I hope the governor agrees as well, so. Senator Padilla, would you like to close?
Speaker 12
Thank you very much, Madam Chair, briefly. I'm always reticent in a policy committee to try to score a bill ahead of when it's keyed fiscal. I just don't believe in creating your own bad karma. But aside from that, I appreciate the assist from one of my lead witnesses. And I would just reiterate, this is about access.
This is about everything from creating a healthy learning environment by reducing the burdens certainly on students with less means. And we have to catch this up. And Madam Chair, I want to thank you for your leadership in this space, even before you joined the legislature. And I think I would agree it's a measured approach to adjust this in the right way, and I would respectfully ask for an I vote.
Speaker 1
Okay. A motion by Senator Choi. And the motion for SB ten-six is due passed to the Senate Appropriations Committee. Secretary, can you call the roll?
Speaker 1
will go ahead and lift the calls because I know Senator Gonzalez has joined us. Secretary, if you can go through the bills.
Speaker 4
On the consent calendar SB nine fifty nine, file item one. The motion is oh, it's consent item current vote is four ayes and no nos with the chair and vice chair voting aye Senators Cortez Gonzalez Gonzalez. I Reyes Okay, it's back on call
Speaker 4
Item three SB ten fifty eight by Senator McNerney. The motion is due pass. Current vote is four ayes and no nos with the chair and vice chair voting aye. Cortez Gonzalez aye Reyes.
Speaker 4
File item four SB eleven forty by Senator Ashby motion is due passed to the Senate Appropriations Committee current vote is four ayes and no nos with the chair and vice chair voting aye Cortese Gonzales aye Reyes is back on
Speaker 1
call Great and we will put that bill back on call All right. Good morning, Senator Rahab. You're here to present SB eleven forty one, and you may begin when you're ready.
Speaker 18
Thank you. SB eleven forty one will prohibit a business from contracting with the University of California if a UC executive is paid or has been paid by that business within the previous year. UC manages vast budgets, complex procurement systems, and long term vendor relationships, and the university exercises significant discretion in selecting contractors, consultants and partners. Outside of competitive bidding, this discretion has been exercised without oversight or transparency and has created opportunities for conflicts of interest, self dealing, and steering contracts to companies that compensate officials directly or indirectly. The consequences of these conflict laden contracts extend beyond financial loss.
They erode public trust in the university, deprive competing businesses of opportunities, and risk diverting resources away from students, faculty, and research. To ensure that contracts are made based on merit and public benefit, SB eleven forty one will specifically prohibit a business from bidding on, entering, renewing, extending, or expanding a contract with the UC if a UC executive has served that business as a paid director, paid consultant, or paid advisor within the last year. The bill will also prohibit a business from contracting with the UC for one year after providing or promising compensation to any UC executive or immediate family member. As a publicly funded institution, UC has a legal obligation to ensure that contracting decisions are made solely in the best interest of the university and the public it serves. With me to testify in support of this measure is Kathryn Liebarger, Executive Vice President of AFSCME three thousand two and ninety nine.
To answer any technical questions, Kate Hallward, Counsel for AFSCME three thousand two and ninety nine.
Speaker 19
Good morning. Katherine Liebarger, Executive Vice President for AFSCME three thousand two hundred and ninety nine, along with the frontline workers at the University of California in support. SP eleven forty one is a long overdue step toward dismantling a dangerous conflict of interest practice. For years we have witnessed troubling side deal relationships between companies who receive UC contracts and UC's executive management. We know of senior UC executives with 7 figure public salaries who have concurrent, lucrative, private roles with companies also doing business with UC.
For example, reports acquired through Public Records Act requests show CareDx, a medical data company, pays the CEO of UCSF Health to sit on their CareDx corporate board of directors. Walltower, a real estate company that leased buildings to UCLA Health, has paid the CEO of UCLA Health a total of $1,800,000 so far to sit on its corporate board of directors. SB eleven forty one does not prevent any company from doing business at UC. SB eleven forty one does establish and enforce clear prohibitions against conflicts of interest. SB eleven forty one protects the integrity in the UC's contracting processes, levels the playing field for competition, maintains public trust, and shields state government from the damaging, scandal baiting accusations emanating from Washington DC.
Thank you for your consideration.
Speaker 17
Good morning Chair and members. My name is Kate Hallward. I am counsel to ASME three thousand two hundred ninety nine and here to answer any technical questions that may come up.
Speaker 1
Thank you for your presentation. We'll now hear from other support witnesses here in Room 2100. If you're here, please use the microphone outside the railing and state your name, organization, and position on the bill.
Speaker 5
Aliyah Griffin, American Federation of State County Municipal Employees, in support.
Speaker 1
Hi, my name is Diana. I'm a food service worker here at the Medical Center, and I'm in strong support of SB eleven forty one. Thank you.
Speaker 19
Naomi Nakamura, pharmacy technician at UCSF Medical Center in strong support of SB eleven forty one. Thank you
Speaker 1
Great. Any others? Thank you. We will now turn it over to any lead witnesses in opposition. Please use the mics, at the table in front of us.
Speaker 20
Good morning, Madam Chair and members. Tyler Aguilar, on behalf of the University of California. I want to lead by stating that the university is fundamentally aligned with the author's goal of ensuring the highest ethical standards in public contracting. We maintain a zero tolerance stance towards self dealing and agree that no official should personally benefit from university contracts. We've also had a chance to speak with the senator and her staff on multiple occasions.
I appreciate her listening to our concerns. However, currently we are in respectful opposition to this bill because it would unintentionally trigger an immediate operational instructional crisis across our 10 campuses and five medical centers, and overlooks an existing comprehensive framework of transparency and oversight that already operates under public scrutiny. It would also apply more stringent prohibitions on UC than those applicable to any other state agency in California. Conflict of interests at UC is already strictly regulated by public contract code section 10,516 in the political reform act, which utilizes recusal as the proper remedy to ensure integrity without halting essential services. Furthermore, current law provides severe consequences for wrongdoers, including felony charges and other financial remedies.
UC also maintains robust internal safeguards such as Regents Policy 7,707, which requires executives to obtain prior approval before joining any outside board. This is a request that is denied even if there is a perceived conflict. This is done annually. SB eleven forty one replaced this comprehensive framework with a more rigid mandate that ignores whether an employee actually had any decision making authority at all over a contract by blocking contracts where any entity with a UC, where a UC leader provides unpaid board service. This bill effectively bars our experts from offering technical guidance needed to develop tools that meet the specific needs of our students and of our patients.
Furthermore, the bill's broad definition of compensation would count standard passive investments like $500 in dividends from a publicly traded company as a disqualifying conflict for a UC contract. Because this bill applies to all executives and their direct reports, regardless of their involvement in any contract decision, we could be prohibited from renewing essential software licenses or medical supply contracts under this bill for a few examples. With the added ten year risk of a system wide ban, many vital UC vendors may simply choose to avoid doing business with university at all. For these reasons, the University of California is opposed to SB eleven forty one. I'm happy to answer any questions that you may have as well.
Speaker 1
Thank you for your presentation. We'll now see if there's any other opposition witness here in Room 2100. If so, please use the microphone outside the railing and state your name, organization, position on the bill.
Speaker 21
Ezra Spawn, on behalf of Vizient, a UC contractor. We just got brought on board on Monday, so no letter on file, but we do share the concerns that UC has. Thank you.
Speaker 5
Ben Golumbic with the California Chamber of Commerce in respect for opposition.
Speaker 1
Alrighty. Thank you to all our support and opposition witnesses. We'll now bring the conversation back to members. Do members have any comments or questions? Senator Chua Bogg?
Speaker 16
Thank you Madam Chair. I I'm curious and this is either for the for the author or for the witnesses in support, but I'm curious as to right now, we already have in writing conflict of interest at the university, which is regulated by the public contract code as stated by the opposition 15 is it ten five one six prohibits any officer or employee from having a financial interest in an activity funded by a university contract. These protections are also bolstered by the Political Reform Act with the gov code 87100, 87103, and a robust suite of university policies including the UC conflict of interest code, Regent Policy 7,707, UC Policy PPSM 82 on conflict of interest, and UC Policy BUS-forty three, which specifically governs conflicts within business contracts. So is this more of so there's all of these conflict of interest codes already in statute. My question is, are we just not enforcing it?
We I'm sorry, not we, but I'm just saying, are these conflict of interest not being enforced already? Because it seems like you already have lots of code in or a lot of such as in code already. So, I'm trying to understand why the need for additional clarifications or another bill on this issue because there's quite a bit of them on record.
Speaker 17
So, SP eleven forty one fills a gap in existing law. This bill will affect businesses that contract with UC, to the extent that they might have an executive on their board, and prevents a company from paying a UC official, a UC executive, to serve the company's interests as a board member, while also bidding on or renewing contracts with the university. That's the conflict that the bill seeks to address.
Speaker 16
So, these are individuals that are currently serving the university and are asked by businesses to serve on their boards, right? Within these statutes, if these companies are bidding on contracts for the university, are they supposed to be recusing themselves from actually making these decisions for the contracts?
Speaker 17
So, recusal, while a traditional mechanism to address conflicts of interest, doesn't really apply at the University of California where contracting decisions take place behind closed doors. There aren't public votes to enter into contracts or renew contracts, even of very significant value, hundreds of millions of dollars. Those happen with layers of approval of the executives within the university system, but they do not happen with a public vote from which someone could recuse themselves.
Speaker 16
But within the vote in behind closed doors, I'm going to assume that the attorneys present or the counsel the legal counsel that is present in those contract negotiations would let them know to recuse themselves, I'm assuming.
Speaker 17
There is not a public vote at all. There isn't a vote from which they could recuse themselves. So, like, I would draw the two examples that Ms. Leiburger referenced. Welltower is a real is a realtor company.
It's a real estate commercial real estate company that has on its board, the CEO of UCLA Medical Center. And, sorry.
Speaker 17
can't refrain. And they lease a suite of buildings to UCLA. That lease gets renewed without a public process from which the CEO could recuse herself. It's not subject to a process like that. It is a lease that gets renewed with internal approvals by people signing off, and that's it.
Speaker 16
And why is the process designed that way? Why was it originally designed that way?
Speaker 17
I mean, the University of California is a complex system with procurement professionals who administer contracts under the direction of the executives.
Speaker 16
Madam Chair, if I may, the opposition. Just following up, how do you explain the contracts that are being awarded behind closed doors or privately that have board members on their on those companies and those businesses.
Speaker 20
Yeah, I mean so I mean, the term behind closed doors is a little bit vague in my opinion, right? I mean, again, the proper remedy for recusal and this goes across the board in all of state government, right? So I mean you could make this argument I guess for
Speaker 20
Any agency who's renewing a variety of contracts on a renewing or ongoing basis. The point being that if there is an executive on the board, and I want to emphasize too, like when we talk about paid board versus unpaid board, I think the example that's being used is a board member who actually serves as the CEO, but actually forgoes her amount or salary and donates it to charity. So she only gets travel covered for her. But to the point of your question, recusal is the remedy that works the best. Know, if somebody is involved in on the board of a company and they're somehow involved in the contract decision, the policy is you recuse yourself.
If not, you will be penalized, full stop.
Speaker 16
So because of the current process that's in place in which it's not publicly done, what assurances does the public have that these individuals that serve in capacities would be recusing themselves?
Speaker 20
I mean, that's a great question. I think we feel very strongly about our existing policies. We have a very strong, I think, environment where we make sure that this is not something that's going on. And so I think when, you know, when executives are filling out, for example, their form under Regent's Policy 7,707, that's a public list and that information goes out to folks internally and they approve or deny, yes or no, you can be on this board. So, I mean, I think it's the culture of, you know, ethics around the university that we try to do the right thing every time.
But, you know, ultimately, I think there also are existing remedies and statute for people to bring complaints or violations that may have occurred to the appropriate body to make sure that they could be addressed.
Speaker 16
Is it, are we to understand that individuals, when these conversations are happening, there's obviously a statute in place that says, you know, you're not supposed to have personal financial benefit. When these contracts are being negotiated, and I know you don't like the back doors, but, you know, privately or in the system that is not publicly viewed, is the assumption that a fellow board member would, you know, if somebody was not recusing themselves, they would themselves, you know, report them as not recusing themselves? Is that something that would be happening behind closed doors? If somebody wasn't doing and recusing themselves if they had a conflict of interest or if they're getting paid, would they would someone else in that board or in that decision making cabinet report this individual as someone who's not recusing themselves and financially benefiting?
Speaker 20
I think that could be a very real example of something that can happen. I mean, I think what we hope and what we probably experience mostly is that somebody who has a conflict recuses himself from the decision and that's kind of where it stops, you know. In terms of what happens if somebody doesn't do that, I think there may be a variety of different examples that could come up. The attorney could say, Hey, you shouldn't be voting on this or you shouldn't be approving this. You have a conflict.
Here's the form you filled out. We approved it. You need to follow policy or else we take action against that employee. So it's hard to speculate exactly what would happen in that situation. Of course, we would hope that somebody who has a conflict would recuse themselves and that would be kind of the end of it.
There could be other opportunities as well where people could raise the concern outside of the individual who has a conflict.
Speaker 16
So it's my experience just, you know, my city my husband sat on city council for twelve years. I sat on the school board. He now sits on the water board and there's a lot of conversations that happen, you know, when they have closed session, what they call closed session, right? Every governmental entity has closed session in some form, shape. And that's where certain conversations happen where legal counsel is always present.
And in those situations, legal counsel usually will say and questions are asked, you know, who can and cannot make decisions based on whatever it is, but counsel is always giving counsel as to where they can and cannot participate. I'm going to assume that because we already have so much in statute already in place, even though it's not publicly made, I think there is a you can't make me laugh. I'm going sorry we have a personal relationship and we're personal friends and it just she just when I oppose her bills or when I support her bills there's always like a look that she gives me and so I try not to look at her when I'm trying to have a dialogue of the issues. I'm going to assume that people would be following the law because I think the penalties would be very, very harsh. And I don't have the penalties if someone actually moves forward in breaking, you know, the protocol or breaking code.
But I'm going to assume they're pretty severe. They're pretty severe. I think the question at hand is and that would actually fall into every single other government entity is whether or not closed sessions are even allowable. If we're going to start questioning whether or not people are doing what they're supposed to be doing if legal counsel is present if they're following all the rules we have statute, I'm assuming that people are following what they're supposed to be following at. My ethical way of thinking is that we all are adults.
We're hoping that people are following the rules when they're in closed session and making contracts, especially when we already have them in written law. I think the concern that we have here is that it's not public. But then again, every government entity, including the state legislature, does things behind closed doors and makes negotiations behind closed doors. Whether it's right or wrong, I struggle with it as well. But what did the governor say?
That's how the sausage is made. And one of his comments on contracts don't necessarily agree, but the rules are there. I'm conflicted with this one. I really am because I understand what you're trying to do, which begs the question as to the system itself, but the rules are already in place, and it's whether or not we have the ability to see whether or not they're being followed, which goes again, every entity has the ability to have closed sessions and make decisions on that end. So, I would love to hear Senator with Chairman Chairwoman, Senator Cabalden's thoughts on this.
Speaker 18
Yeah. And I'm curious as well on a number of things. I'm sure Senator Cabaldon will have a couple of items to add to this. I just want to be very frank. We have met with the UC.
This is a simple bill that literally prohibits corruption. The honest truth is the Form 700s that, you know, we spoke about and was referenced here, and there's a lot of little sections and a lot of words and this and that, but the reality is this. Form 700 submitted once a year. It's highlighted as the individual is saying, you know, what their shares are, what may happen. A lot of business entities don't necessarily have shares, and there's private, silent partners.
This is getting to that, number one. Number two, there's plenty of government entities that have been in the news that their executives, their leadership, their elected officials, their whatever you want to call them have participated in some type of, you know, quid pro quo. You know, this gets to the heart of that as well. I do want to say that the UC system has millions upon millions upon millions of dollars of California taxpayer dollars that deserve a little bit more transparency. I want to highlight that this bill is no different than some of the work that we're trying to do that keeps getting killed in this building when we're talking about transparency, when we're talking about accountability, when we're talking about this.
The honest truth is we don't actually have data from the UCs to say how many people have recused themselves on bills potential contracts when they deal with billion dollar contracts in totality, right? We don't have a list of individuals that have been charged with, you know, these fees and fines and the, let's say, the stick piece of enforcement. This bill specifically highlights that executives, or University of California executives, basically, an employee that serves as a chancellor, a vice chancellor, a chief executive officer, chief operating officer, chief transformation officer, human resources officer, general counsel of the university, or anyone who holds a senior management group position, if you will. To be able to, again, not enter into some type of agreement within a period of twelve months, right? It's very simple, very similar to the senators who are not allowed to be a lobbyist for roughly twelve months, right?
I do want to highlight, I actually worked in contracts with governments for a short stint in my life, just roughly a couple years. And this is how it works. There is something called the delegation of authority, right? So a lot of contracts are deferred to even lower level staff that are delegated the authority to decide on contracts without it coming to the full body, hence the votes don't happen publicly, does not even necessarily happen in closed session. The contracts are renewed even 30 to $50,000,000 contracts, okay?
And I want to highlight that because literally in every form of government including city managers, CAOs of counties and much more, have their own delegation of authority, right, that it does not come to the board. The board approves a delegation amount. So, for example, a Microsoft contract, and I worked in technology and this is what I'm familiar with, can have a delegation of authority of $30,000,000, of $50,000,000. And each year what the body presents and votes on is to extend that amount because as we all know with cost of goods, labor, and much more it always goes up. So it keeps going up and all contracts are renewed and have, let's say it's a three year contract, it's renewed for one year with an extension of one year or two years, but individual years.
That has a delegation of authority attached to it where the individual who has that delegation of authority granted by the executives can just say, yeah, we're going to continue to go with Microsoft, like who really competes with Microsoft, right? When that is extended and extended, then a full renewal of that contract maybe five years later, seven years later, ten years later, then it's talked about again as to let's dive in deep as to how many licenses do we have, do we really want to do this, do we really want to do that. This also highlights the fact that there are plenty of businesses that are not publicly traded, that are not, you know, out there. In city council, in my four years of sitting in closed session, not once did an attorney ask, is there a conflict of interest? There were several city council members, even in small businesses, that had businesses around downtown, and sometimes they would recruit themselves, sometimes they wouldn't, right?
And that is, you know, self determined largely, right? And we had better policies in place that said if you were, if you had a business or even a family member that had a business 500 feet within whatever is being decided upon, then it's a conflict of interest. But 500 feet is not that big, right? So, I give different levels of example because we can do better. We can truly, truly do better.
I believe that the UC system tries to do their best, but the reality is these are executives, highly paid executives, nearly half of them get half $1,000,000. They get all these extra stipends and much more. We are specifically just asking that when we are protecting students, we are protecting staff, when we are protecting these vulnerable folks that let's say some corruption happens or conflict of interest, what are their means? How do they prove it? How do they explain it?
How do they go and advocate for themselves for the righteous cause? Right? They don't have lawyers. They don't have attorneys. They don't have this and that.
So I say all this because I understand the concern, but I also think this is a very practical bill that deserves the merit of, hey, this is what we're expecting. We are more than happy to work with the UCs, and we've had conversations, multiple conversations. We will continue to have conversations to improve this bill, but oversight and accountability is very much a must for me, and it should be for all our institutions.
Speaker 1
Okay. I know, so we have a couple of questions here. So, from Senator Gonzalez.
Speaker 15
Yeah. Thank you so much. And I want to thank the author for bringing this forward because this is just and AFSCME three thousand two and ninety nine for leading this effort. I couldn't agree more with what the author said. I'm curious though as to the UC's position because you'd mentioned that this was an operational crisis, and I'm just wondering why it would be such an operational crisis because I would say, I mean, any even though you do have, as has been stated, you know, a policy that seems to be sort of just the bare minimum in some cases without a recusal process, which is hard because it is not public.
I don't see how this could be an operational crisis, but please explain and indulge me on that so we can find out why exactly.
Speaker 20
Absolutely. Thanks, Senator. Yeah, so just specifically the definition of a compensation is one of the triggers. Somebody were dividends included in the definition of compensation, so presumably if somebody were to receive $500 or more in dividends like we might all do from our investment portfolios, that would trigger the 10 basically the potential ten year ban from them, that entity contracting. So Microsoft as an example, probably a lot of people at UC get in their direct reports from senior executives have dividends from Microsoft.
Dollars 500 or more in one year would mean that Microsoft wouldn't be able to contract with UC. On the board service example that's outlined in our letter, we have many folks at UC and the S and G group and direct reports who serve on advisory boards or technical boards of different vendors, mostly to make sure that the products and services that we're purchasing from them are consistent with the needs of the students and the patients that we serve. So in those situations, even if there's an unpaid relationship, the way the bill is written, if that person were to be serving on that advisory board, I think it says committee, board, a few other things. So it's very broad in terms of what it would apply to, paid or unpaid. That would trigger the ban potentially for that contractor to work with UC.
So we talk about operational and fiscal. These contracts are huge. Microsoft's a great example where if we can't renew our contract with Microsoft, our students can't do their work, our faculty can't do their work, you know, it affects everything in the university. And so that's kind of where we're coming at it from.
Speaker 15
And, you know, I certainly think that the bill is really focused more so on the larger sort of grandiose and issues like related to the CEO of UCSF. And then receiving a very large compensation on the UC side and then serving on the board, how is that not viewed as a conflict of interest in that on that level? And it's not just the compensation part of it. If CareDx has a CEO that has values that are just so dissimilar from the UC system, why would that even be allowed? I would think that that would be just an appearance of impropriety on top of any, you know, issue that this company had.
You know, if they were stealing thousands of dollars from you know, that's scary to think about.
Speaker 15
You know, so that's, yeah, in addition to I just think that that adds an extra layer of just appearances all around that just don't seem to, you know, be in alignment with anyone at the UC system. In some cases, it could. And I think what I would like to see is the UCs come together, come, you know, based on this, come up with a more comprehensive policy, independent review. It needs to be able to address these appearances of impropriety. And even at $500 in dividends, compensation nonetheless.
But, you know, that's something that I think needs to be addressed. But I would just I'm appreciative of this bill because this was news to me that this was actually happening. I mean, hear it kind of happening but then it's really highlighted and you think if we can't do this as elected officials and I actually used to work for a company called Microsoft. Let me tell you how stringent those policies were. I couldn't even give a water bottle to an elected official.
That's how stringent the policies were. And I'm just so dumbfounded that the UCs would not have that similar policy. If you want to act like a corporation, then let me tell you corporations also have that very stringent policies, but if you're a public university system, even more so. So, all that to say, supportive of the bill, and thank you for bringing it forward.
Speaker 6
Thank you, Madam Chair, and thanks to Arthur who is a steadfast champion and won't be silenced on ethics or conflicts of interest or the importance of integrity in government. I appreciate the efforts going on. I do have some concerns, and they're pretty significant, but I would just want to put that on the table, I think mostly for the author's close, although if there are other if I'm getting some of the technical issues wrong, happy to understand those as well. I think first of all, I think it's important to you know, having been both a professor and a mayor, the University of California is not a city. It's not a school district.
It's not a city government. It's not an agency with its own locally elected board. It's much more like the Department of Health Services or any other state agency. It's not like that either, but it's much more like that. And so when we talk open meetings and closed session and behind closed doors, like virtually all decisions that are made around contracts in state government are in that frame behind closed doors because there is no there isn't a board or an agency to prove every single thing.
And, you know, if the regents don't and can't manage every single contract for every single thing at the campus, we might put them on their agenda for them to review, but they can't possibly process everything just as there's no board even we don't process everything for the entire city Of California. So just the notion of recusal in an administrative environment is a well established one, right? Even actually in city hall, the city manager can be required to recuse themselves. The director of economic development can be required to recuse themselves regardless of whether it's in a meeting per se or a vote is being taken. So I think we had some discussion about recusal isn't a thing.
It's absolutely a thing. And it is required by all of state laws as well as the university's own policy when it comes to this. I the bill, at least in its current form, applies to essentially all non public agency entities regardless of their corporate form which would therefore which includes then private sector entities organized as non profits. And here's where the, you know, where the university as a representative for UC Davis, like the importance of the university in the community is not to be minimized. So if a if the Vice Chancellor of Community Relations at UC Davis serves on the advisory board for the Yolo County Food Bank, which is a nonprofit organization, and the university applies for and wins a grant from us for a basic needs center on campus that they want to operate in conjunction with the Yolo County Food Bank, they absolutely should be contracting with the Yolo County Food Bank, notwithstanding that advisory board relationship, both because that's going to be the most capable provider locally, but also because the university should be supporting and contributing to that to the local economy, the local civic culture as well.
So I think, you know, there are good reasons in the bill, I think, is too broadly too broad in its application to all nonpublic agencies and then to advisory bodies and other sorts of things. That vice chancellor has no financial interest in the food bank. They're just they, on behalf of the university, are simply supporting an important community institution, and that should not require that community institution to not be eligible to contract from the university around the provision of those services. And I think similarly, I absolutely don't want an environment where medium and smaller sized businesses and nonprofits, even big corporations, but they'll figure it out on their own, they're worried that now they are the ones responsible for monitoring this. They're not really sure.
They how would they know that the Assistant Vice Chancellor at UC Davis owns stock through their four zero one ks or their four zero one program? How would they even know? So they then have to find that out, you know, any interaction with the university. And I think this gets to one of the fundamental policy issues is I think contracting out ethics to the private sector, ethics enforcement is not a good public policy. That if I share a lot of the concerns, all of the concerns that the author raised around the ethical issues and Senator Gonzalez also emphasized.
But that's on us. That is on the public sector, the courts, the FPPC, and other agencies, and the administration of the university itself to implement. And I'm very weary of saying that it's the private sector's responsibility to enforce these ethical obligations that university executives already have under existing state law and university policies. That to me is a fundamental policy question, which is hard for me to get my head around, that Microsoft is going to be responsible for enforcing our own ethics laws in that respect. But I don't want a environment either where local companies and others are like, it's just too much trouble to contract with the University of California, you know, for Sal's Tacos in West Sacramento to do a contract for, you know, for events.
It's just like, I know how to go through that. I know that somebody from UC Davis is always over here getting tacos, and I ask them to be part of our thing or whatever, and they help me with my taxes. They're not going to be covered by this bill, but the notion that doing business with the University of California is harder than for any other thing in the state. I just think it's when you talk about operational failure, that seems a bit exaggerated to me, but there I do see a problem that regard. And one other example, we've you know, in our regional in this region, we created a region wide nonprofit on workforce and education workforce development and education coordination.
And our higher ed partners were kind enough to loan us one of their vice chancellors to be the CEO. We with, you know, some extra compensation paid by the nonprofit regional collaborative, that's that would have been precluded under this kind of arrangement. And the university has an important role to play in our communities and our regions. And so I appreciate the intent of the bill. I am worried about the structure of outsourcing ethics and about some of the implications.
So I know I can't I think I can't support it today, but do understand and I agree with Senator Gonzalez in particular that the university has to do a better job itself in terms of enforcement and transparency and sunshine in these issues too. That the university has been entrusted by the people through the constitution with extraordinary independence, which it's our constitutional obligation to respect. But the flip side of that is the university has a special public trust obligation to lead the way on ethics and conflict of interest and look forward to them doing that. So thanks to the author. I support it today, but appreciate efforts that are going on here and hope that the university responds in kind.
Speaker 18
Yeah, and I appreciate that, and I want to be very clear. I think that what the conversation is, is that there's a little doom and gloom and overreaching in the argument in opposition to this bill. Here's the reality. Student internships and job opportunities do not require a contract between the university and the private company, nor does a business require a UC executive to serve on an official advisory board to the company to do some of the activities that they are trying to do. And I want to be very clear about that.
And we could have our technical witness provide a little bit more into that after I'm done. But I do want to highlight that, again ethics is incredibly important. We do see, I agree with you also that the UC largely mostly operates very similarly to a massive department under the state versus a city council. However, there is also a lot of transparency built into that because it is a government agency. The conversation about businesses and the onerous being on businesses, the reality is we actually need more oversight in these types of relationships and contracts.
We have all been trained on FPPC violations and certain things that have hit the news. I will say in the Bay Area, there have been plenty of elected officials, name a city that have been caught up in some type of pay to play scheme. Not only have they been caught up in a pay to play scheme, their spouse or their partner or somebody affiliated with them have been caught up into that type of scheme. And we rely so heavily on these enforcement bodies to go track it down, get the FBI involved and much more when we have the ability to write legislation that provides the best governance opportunities for these government agencies and these individuals. You know, I will be very honest with you, my father taught me a long time ago that if a human being can get away with something, they will.
They will do absolutely their best to get away with it. We see conflicts of interest all the way up to the White House, all the way down to local city councils and school boards. And I think that we need to provide more oversight, more very clear guardrails when we're talking about executives who are literally paid half $1,000,000. I personally have a number of community colleges that I am trying to help them build a workforce pipeline, an apprenticeship. I even point to some of my other community colleges and colleges in general that have great organizations.
There is no need or effort to work for the private sector to set up a contract to get money or paid out. When we're talking about investments, and I'm happy to clarify in our language, and I've asked the UCs also for any type of amendment language that they feel is too broad when it comes to stocks, right? When it comes to a little bit more clarity there. We are not interested in somebody's retirement savings and what they're planning to do there. We are solely interested in executives that clearly have been described in some of the examples we've talked about today where I think it raises significant red flags especially when an agency is governing the entire housing market for students.
And that contract would be renewed over and over and over again for at least three to five years and then eventually reviewed again, right? And there's like college kids can't advocate for themselves, they can't. And so I say that because I understand your concerns. I fully agree with you that you know, again, we don't wanna be too prescriptive, and that's not my intention. I, as a former board member of several nonprofits in the Bay Area, also had to resign the moment I got elected to city council.
And that was my intention to make it a very clear cut that as much as I'm interested in supporting the community on domestic violence and new arrivals and refugees and much more, I also don't want to be seen in a position where I'm abusing power in any way in favor of one thing or another. So, like I said, I think that this bill is very simple and straightforward, and we're happy to work with the UCs to, you know, ensure that there are guardrails and also, you know, handle some of the concerns raised here. But I still think it's a very simple bill.
Speaker 14
Senator Cortese: Thank you, Madam Chair. I will be supporting the bill today. I would though appreciate going forward much more clarity on the distinctions between what government code section ten ninety does currently versus what this bill would do. I don't understand in the analysis the side by side distinctions. The analysis seems to say that ten ninety only requires recusal, which is not true.
Ten ninety requires the contracting entity on the government side to not enter into a contract where there's a financial interest by one of its voting members. And the only solution for that is resignation by the member from either of the two entities. And there's a lot of examples of that that have occurred. One of them was in the Bay Area, Ladors Cordella, a well known and very ethical judge who retired, went to work for Stanford as a provost, got elected to the Palo Alto City Council, which was a huge problem because Palo Alto City Council then could not enter in any contracts with Stanford University, which is obviously its biggest employer, etcetera. Either of those she would have had to resign from either of those entities for any contract to proceed.
That's current state law. So I'm not understanding what's being added here, value added over current government code ten ninety? I'm guessing something is. Otherwise probably Legg Council would have flagged that during the preparation of the RN for Senator Wahhab, for the author or the committee. The only other concern I would have once seeing that information, if it becomes available between now and when I would have to vote on this again, is the UC's, you know, concern about voluntary activity.
I think the arguments in opposition on page five zero five of the analysis says unlike other laws, this applies even to unpaid voluntary service. If that's true in the way the bill is crafted I can't say it is or not, and I've read the bill read through it two or three times. If that's true, that would be problematic for me. I mean, to me, that would basically say that if the university is contracting with the domestic violence organization, like the example that the senator was giving a few minutes ago, And that individual volunteered for the domestic violence hotline for that same organization that suddenly there would be an inability to enter into contracts or to continue pursuing that contract. I don't see the bill going that far, but that's the argument in opposition.
I think we should be damn clear on that language. I think it would be really problematic to, you know, people who are ministering in jails and doing other good work suddenly causing a contracting problem because they're also regulated by this bill in their UC position. That said, I'll support it today, just assuming those issues will be worked out, or I'll get better educated between now and a four vote. Thank you.
Speaker 1
I know we've had lots of conversation around this bill. Senator Bahab, would you like to close?
Speaker 1
Thank you. Do we have a motion? It's a motion Gonzalez. Okay. Motioned by Senator Gonzalez for SB eleven forty one by Wahab.
The motion is due passed to the Senate Judiciary Committee. Secretary, can you call the roll?
Speaker 4
Senators Perez? Aye. Perez, aye. Ochoa Bug? No.
Ochoa Bug, no. Cabaldin? Choi? No. Choi, no.
Cortese? Aye. Cortese, aye. Gonzalez? Aye.
Gonzalez, aye. Reyes? Aye. Reyes, aye.
Speaker 1
And that bill is four ayes, two noes and that bill is out. We're going to go ahead and lift calls since we have all members here.
Speaker 4
File item two SB-ten-six, Cabaldin? Cabaldin I. Cortese? Aye. Cortese I.
Reyes? Aye. Reyes I.
Speaker 1
Bill is out 70. And everything's done. There's nothing else? Okay. Great.
And that is it and concludes our agenda for today. The Senate Education Committee is adjourned.
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