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Senate Environmental Quality Committee California State Senate
Follow its sittingsSpeaker 3
There are increasing divisions around GHG, greenhouse gas emission reductions versus vehicle miles traveled issues, many, many others. And so, what what this bill is intended to do is to try to modernize in a comprehensive way that landmark law and some of the laws that followed since in terms of s p three seventy five. The bill that's before you represents principally the priorities that have been proposed by the Metropolitan Planning Organizations, SCAG, SANDAG, SACOG, MTC, the biggest of them of the of the of those organizations. But, we are working we've been working for months and will continue to do so with a much broader stakeholder group, including the environmental community, environmental justice, business, labor, housing and transportation interests, and local governments on what we hope will be even a more comprehensive approach that isn't radical. You know, we're not trying to undo s b three seventy five or triple its its its, you know, its its its work, but instead try to get it right and resolve many of the outstanding issues that have emerged partly because it's so old and partly because many other policy interventions have happened in between.
So, what you have before you is the is the the the current state of that work, but we have been having regular stakeholder meetings. And I wanna also thank the chair and the chair of the housing committee, both of whom are also former chairs of MPOs, for their close collaboration and trying to advance this work. So this what is before you is the is a substantive proposal around some of the key issues here. But I wanna but I wanna be very clear that we're working with folks, the some of whom may today come in express support if amended or oppose positions or oppose unless amended. But we are all at a common table working these issues through, and everyone around that table has expressed hope and some degree of optimism that we will that we will get there and and try to find a comprehensive solution that will assure that s v three seventy five delivers on the promise.
So with that, I think thank thank the chair. I'd like to introduce our two witnesses, if possible, from SANDAG and from SCAG.
Speaker 4
Thank you, chair. I'm Darren Chitsi. I'm the chief operating officer and deputy executive director for the Southern California Association of Governments. Our board leadership and executive director would be here today. However, we do have an executive committee down in Los Angeles this afternoon that they needed to attend to.
But I appreciate the opportunity for allowing us to speak today in strong support of s b ten eighty seven. As a co sponsor joined by the Metropolitan Transportation Commission, the associate and association of the area governments, the Sacramento Area Council of Governments, and the San Diego Association of Governments. These are the state's four largest metropolitan planning organizations representing about 80% of the population in the state of California. The work that s p three seven five put forth in all of our agencies really changed the work that we do. For nearly fifty years, we've been doing long range regional transportation plans.
It wasn't until eighteen years ago that there was a state requirement to really combine the work that we're doing and ensure that the land use work and the community work was really tied together in a meaningful manner. So, we were very excited at that time when this bill came to fruition and it's really enabled us to reach out to stakeholders in a new way to get better community input and to really have clear visions for what each of our regions are looking to accomplish particularly around the important climate goals. However, eighteen years is a long time. And when you think about what our world looked like eighteen years ago, certainly technology has changed so much. The way that we travel, the way that we, you know, get food delivered to us, All of that has changed.
Speaker 17
And so this opportunity, and we really appreciate senator Baldwin's leadership on this, to rethink some of these frameworks to ensure that it's meeting the needs of our agencies and our communities in this very different environment. And at the same time, as was mentioned, so much has changed in state policy for good reasons. We have had extra priority put on GHT reduction, looking at housing production affordability that we had not done so intently almost two decades ago. Equity in fair housing, air quality compliance continues to be complicated at the federal and at the state level. And mobility and congestion issues have changed a lot too, certainly with impacts that we saw during the pandemic on transit.
Speaker 4
And we're still recovering in many ways and ensuring that those robust transit systems are working as well as possible. And also on economic competitiveness. So all of these goals kind of play together into what has changed over that period of time. And we certainly view our plans is the real clear opportunity to bring forward important changes on all aspects that affect our communities. However, the current practice really emphasizes modeling assumptions more than implementation of real world outcomes.
And what this does is diverts our our efforts and resources into, you know, challenges over, you know, specific assumptions rather than really thinking about how do these policies implement the goals that are set forth in the plan. With the next target setting deadline of 2035 quickly approaching, the big force MPOs thought it was very important to have a stakeholder process to really think through how we might bring forward improvements to I'm this
Speaker 4
Oh, sure. I will just finish by saying what I think has been critical to where we've gotten today is the stakeholder process that we brought forward. We have brought in the environmental community, the business community, certainly the MPOs, other stakeholders throughout the state to really rethink about how we can bring an update s p three seven five through s p ten eighty seven to modernize it. So I appreciate the opportunity and certainly urgent I vote today on this critical bill.
Speaker 3
Madam madam chair, before we go to miss Meyer, I I neglected to do the the the one thing I absolutely need to do to my open, which was to accept all of the amendments that are proposed in the committee analysis.
Speaker 5
Alright. Good morning, chair Blake Spear and members of the committee. My name is Antoinette Meyer, and I am the senior director of regional planning at SANDAG, and we're one of the proud cosponsors of senate bill ten eighty seven. So SANDAG has been developing sustainable community strategies or SCS since 2008. In fact, we were the first MPO in the state to develop an SCS.
So, we know this process intimately and we've seen the progress that it's made towards achieving California's climate goals. But, we also know where the process needs to be modernized to make it more efficient, to make it more effective, and to actually focus on delivering the transit, the housing, and the active transportation projects that our communities are demanding. Our most recent sustainable community strategy regional transportation plan took four years to complete and it cost $42,000,000. Much of that cost went towards back and forth meetings with CARB and technical methodology and modeling assumptions debating things like the cost of operating an automobile in 2035. The CEQA process also adds significant time and expense, but it has not resulted in any project level streamlining or a more robust community engagement process in our region.
So October improves this process in several ways. It shifts to an eight year cycle, freeing staff capacity and millions of dollars to focus on implementing GHD reducing projects. It updates target setting processes to reflect real world conditions. It brings clarity and accountability to the SCS review process by establishing clear timelines and outcomes and better coordination between the CTC and ARB. And last, the CEQA exemption allows us to move faster and reduce cost and really focus environmental review at the project level.
Speaker 18
So as you heard from the senator, we engaged in an extensive stakeholder outreach process and what we heard was consistent across all spectrums of groups and that's the region should spend less time on technical analysis and more time delivering the projects that reduce GHG emissions and improve the quality of life for our residents. So on behalf of the four co sponsors, I urge you to support, senate bill senate bill ten eighty seven. It strengthens our ability to achieve California's climate commitments by making the regional plans more effective delivery tools. Thank you very much.
Speaker 2
Well, thank you very much. I appreciate the testimony. If there are others in the room wishing to express support, please come forward. And just state your name, organization, and position on the bill.
Speaker 7
Good morning, chair members. Chris Lee here on behalf of the Sacramento Area Council of Governments, a proud cosponsor in support.
Speaker 8
Mitch Weiss, Corey Consulting representing, numerous MPOs, r p RDPAs in the Central Coast And Central Valley. Support and appreciative of the author's work.
Speaker 9
Bill Higgins, on behalf of the California Association of Council of Governments, which represents all 18 MPOs, taking a support position to my board on Friday.
Speaker 6
Good morning, chair and members. Jordan Grimes on behalf of Greenbelt Alliance. We have a supportive amendment position, but really appreciate, the author's diligent work on this issue and look forward to continuing the conversation in this session. Thank you.
Speaker 2
Thank you. Okay. Do we have lead opposition witnesses in the room who would like to come forward? They can sit here in the front. It's okay.
Yeah. Welcome. And you may begin when ready.
Speaker 10
Yes. Good morning, chair Blake Spear, committee members. My name is Sofia Avikola. I'm the policy advocate with the Coalition for Clean Air. Just this March, a record breaking heat wave brought triple digit temperatures to parts of the state.
And just last year, California was affected by wildfires that destroyed over 16,000 homes and buildings. Yet in the middle of this climate crisis, s b ten eighty seven would allow local agencies to face little to no consequences for failing to meet their regional climate targets. S b ten eighty seven will allow agencies to still access s b one funding even if they can no longer demonstrate how they will reach their climate targets and have to submit an APS. Despite state efforts, both the TCEP and SECP funding programs still generate a net increase in VMT through the projects they fund, and continued access to the funding sources would move regions further away from their climate targets. Though SB ten eighty seven states that only GHC reducing projects may be funded, our own analysis shows the highway expansion projects are often flagged as reducing GHC emissions because environmental analysis fails to account for induced demand.
Similarly, SB ten eighty seven would require GHC targets to include all on road transportation sectors, such as progress made on transitioning to zero emission vehicles. Our state already has many regulations and funding programs that encourage the transition to zero emission vehicles and car already tracks the the progress made. SB ten eighty seven would reward MPOs for decisions made outside of their jurisdictions. With SB three seventy five remaining as one of the few regulations focused on BMT reduction, having targets also consider progress made on ZEVS would dilute its focus and will push us further out of alignment with our climate targets. Our organization is participating in the stakeholder process to modernize SB three seventy five, and we are committed to working with the author to ensure 10 s b ten eighty seven strengthened the intent of s b three seventy five.
Speaker 14
As such, we have submitted a letter to the committee with our recommendations. We appreciate the committee amendments to remove the CTC component, but urge you not to pass this bill without additional steps to ensure the regions do the utmost to reduce climate emissions. Thank you.
Speaker 3
Good morning, madam chair and members. Cassie Gilson with Acxiom Advisors on behalf of the California Building Industry Association in an opposed unless amended position. I wanna start by thanking the author and his staff and my colleagues in the stakeholder group for their early and vigorous outreach and acknowledge the senator's comments that this is a work in progress and still work to be done. CBIA is an opposed unless amended position. It bears note that CBIA was part of the coalition of the impossible that came together to get c b to get three seventy five passed and signed.
Speaker 11
So we don't object to the premise, and we recognize that after two decades, this conversation is warranted. I just wanna flag two of the reasons that inform our position today. The one, as you are all well aware, CBA has long opposed an increasing emphasis on vehicle miles traveled. Statutorily, if the focus in these plans is supposed to be on greenhouse gas reduction, then we shouldn't move forward and further codify VMT and statute in a way that can distort the objective of g g h g reduction and create real and unintended consequences for housing production. The second thing that I'll note today is that in practice, we're seeing some of the cogs use their authority to and their transportation funding authority to pressure the local jurisdiction to adopt things like affordable housing requirements or other socioeconomic issues that stray far from the transportation and land use focus of March so that as we work forward in this, it's gonna be really important to us.
That if we're adding further monies to this process and making some other fundamental changes that expand their authority, that there's some clear statutory direction that the purpose of three seventy five needs to stay within its original bounds for transportation and land use and not involve things like affordable housing and other socioeconomic issues. We look forward to working with the author and the sponsors as the bill moves forward.
Speaker 2
Okay. Thank you very much. And if there's anybody else wishing to express opposition and I understand there might be some tweeners in the room. If you would like to just say a few words about your tween position, you're welcome to.
Speaker 30
Good morning chair and members, me, Jeannie Wardwaller representing climate plan and also the leadership council for justice and accountability. With deep respect to the author, we are in a tweener position. We sent a letter of concern. We have a few significant concerns, and we've also made some recommendations to strengthen implementation of sustainable community strategies. We really appreciate senator Cabaldon for taking on this issue.
Speaker 12
This is a super complicated issue, and we've been engaging very productively with the with the sponsors as well over the last year on this, so we really look forward to more engagement on this. We appreciate the committee amendments. Those do address a couple of our biggest concerns and also the recommendation to extend the the target year out to 2045. We haven't seen the language yet on the sort of CARB CTC authority, but we feel that will be positive. So we hope we hope this bill will continue to move in a good direction in senate transportation.
Some of our concerns are more in the transportation jurisdiction, so we'll we'll keep working there and and hope this gets us to a good place that will advance progress on our climate goals. So thank you. Good
Speaker 23
morning, chair and members. Robbie Abenor on behalf of the Natural Resource Defense Council. NRDC greatly appreciates senator Gabaldon's leadership on this really difficult and complex issue. We currently have a tweener position because we're concerned that the bill currently does not yet bring SB three seventy five to its full potential, but we really appreciate the senator's leadership on this issue, his continued stakeholder engagement. We've had a really productive conversation over the past year with the author and the co sponsors.
Speaker 13
We're very supportive of the committee amendment, and we look forward to continuing to work with the author and the sponsors and think that we can get this bill into a really great place. Thank you.
Speaker 21
Good morning, senators. Matthew Baker with Planning Conservation League. Also in the tweener position, we're signatories to the letter of concern. While the bill isn't quite where we wanna see it go yet, you know, we appreciate the committee amendments and we are deeply committed to continuing to work with the author and the stakeholders to get this right. We very much appreciate the author's willingness to do so also.
Speaker 2
Okay. Well, thank you very much. Anybody else in the room wishing to express support or opposition? Okay. So we'll bring it back to the committee, and I'll just start with a couple comments.
So first, I just wanna recognize how thorny this is and I really appreciate senator Cabaldon for diving into this topic because it clearly is it's something that needs to be addressed and we talk about the abundance agenda Sacramento here a lot, which is government getting out of its own way so that we can deliver the things that we need to continue to build prosperity and opportunity in the state of California. And when I think about the reality that the number that was just thrown out that the last SES from San Diego cost $42,000,000, you think of the things that are not a good use of money that we're not delivering anything with that planning document and the amount that it costs to hire consultants to go back and forth with CARB, to have hundreds of community outreach meetings, to go back and forth with the board, to have just the the incredible amount of involvement at a level of planning that is then not being translated to deliverables. I think it really shows the problem. So I do come from having been the chair of SANDAG, so I'm so grateful that the author brought two members of of SANDAG here to be your lead witnesses.
And and I and I and I just wanna say that there as you could hear from the testimony, you know, to to to be considering the realities of equity goals and climate goals and affordable housing and housing supply and VMT, you know, you're balancing all these things when you're trying to modernize a planning process. But I guess what I would just encourage the author to continue to do and think about and and the stakeholders is to stay focused on the North Star, which is that this has to become simpler and it has to become less expensive to deliver and it has to lead to more projects being built. And so some of the things like, for example, the bill is doubling the length of time between the SCSs, which is good, but just make sure the interim reports aren't essentially equivalent to doing it in a whole report in and of itself. So you end up kind of chasing your tail where you're saying, and the interim report has to have the following a 150,000,000 things in it. So it makes it so that the that process is going to be as onerous as our existing process.
And I recognize that these are all this is all a balance that's going to to have to be worked out. But but I do really appreciate how complex it is, how many different interests there are, and and I hope that we're able to get there. This is just the first committee, and I hope you're able to make it all the way through because this is an area that clearly needs reform. So continue to say, this cost us $42,000,000 to produce this plan, and it took eight years or a decade of time to do. I I think that those types of stats really drive the need for these changes.
So with that, I'll turn it to my colleagues, senator Menchewar.
Speaker 1
Thank you so much, chair. I agree with a lot of the points that you mentioned. And, I mean, if something hasn't really the intent of the previous bill hasn't produced the results that we wanted since I've graduated high school, I think we need to do something about that. So, I mean, that's good government, and I'm thankful that you're implementing that. Along the lines of the what the chair mentioned, though, I am a little interested in that four s c the four year SCS report that you're gonna be doing.
There's not a lot of details. Now I'm not asking, like, what the chair is asking for the same type of level of report of the eight year, but I am wondering, senator, your thoughts on what you're gonna be giving your thoughts on what you're gonna be putting into a requesting within your bill within that, especially given that the amendment removed the amendment streamlined or removed exemptions for CEQA, not contingent on increased public outreach. That part gives me a little bit of heartburn. So this is the opportunity for public engagement at that four year. What do you anticipate moving forward in this process adding there?
Speaker 3
Thank you very much, madam chair, if I may, to the chair. So thank you for the the the question. That is an issue that we're grappling with both in the stakeholder group and even among the MPOs about what the because they each have different visions about what their what they think a progress report would would would could look like. So we had a we had a draft that we were looking at, but it turned out that only made sense in a single region. So we're we are trying to figure those those elements out.
But you're you're both you and the chair are absolutely correct. We we we need a compelling, profound, understandable, comprehensible, useful progress report to which we can be held accountable for the for those outcomes without it being a whole another, you know, a whole another $42,000,000 all over again. And there's a lot of room in between those two things. So I don't know we don't know at this point, but but absolutely agree with you that the progress report is not a box to be checked. It is it is a moment to to to to stop and to hold ourselves accountable, ourselves at the local level and the regional level as well, and we we need to make sure in the statute that it accomplishes that.
I will say on the on the enhanced public outreach, I that was that was the language in our in our original bill because my view is as as the chair said, you know, and once you've done 500 hearings and polls and focus groups and charrettes and and sticky notes and everything else that maybe maybe that should be good enough and you shouldn't do that. The the you shouldn't have to do it again over again. And but what what we were reminded was despite the fact that the original intent was that that document would then become the basis, the foundation for every other CEQA related analysis. My understanding is no one has ever tiered off of one of those environmental documents at the SCS level. And so it it doesn't become a that in that using enhanced public outreach on that in order to deal with CEQA later isn't really useful if nobody's tearing off of that document.
Speaker 1
And and and, senator, could you respond to some of the concerns of the opposition regarding BMTs and including now heavy heavy duty vehicles, medium duty vehicles, and the potential to then get to a goal that doesn't really address Lauren GHC?
Speaker 3
Yeah. I think so. I think you thank you. And you you I mean, you've identified what I think is likely to be the hardest single issue in the in this whole in this whole stakeholder work is that one. Because you heard both the BIA court source say we don't wanna ever say VMT, and they heard us say we only wanna say VMT.
So that is if you if you had to pick one area, there's a lot of disagreements about lots of things, but that is that already feels like one of the core pieces. But, I think for for for my own view and I'm hopeful we'll be able to find some, you know, some some some way through that. But my own view is that the the test has to be what what what is the goal that we're trying to achieve in s b three seventy five and other laws now that have been built around s b three seventy five. And we I I and we should pick the right measure whether it's one of those or something different in the where it's appropriate. Like, it's it's not a religious issue that we should, you know, VMT shall never be spoken again or GHG is the only thing or whatever.
And we need to figure out what are the right what are the right metrics for the that are built for that purpose. But that is going to be, I think, one of the the the the the toughest issues that already is in the stakeholder conversations.
Speaker 1
The biggest concern for me was addressing the amendment, bringing back going back from CTC or not accepting in the language and stay with ARB. So I'm grateful for the amendment, the committee, and you accepted. I am gonna be seeing this bill again in transportation. Those two things that I previously mentioned are the things that I'm gonna keep an eye on just to see how it could continues to get flushed out, but recognize this is the first policy committee. And with a really big bill like this, I appreciate the work that so far.
Thank you. Thank you.
Speaker 15
Just a comment to the author. I'm gonna be laying off of this bill today. I'm hoping to see some more work with some of the stakeholders, specifically with with BIA before it gets to transportation in hopes that some of that can be worked out so I can support it.
Speaker 2
Okay. Thank you. Well, we don't quite have a quorum. So when we get to that, we will vote. And with that, I'll hand it over to you to Close.
Speaker 3
Thank you very much, madam chair and members of the the committee. And I I just appreciate the the the long leash that the that the committee is is is giving us on on this work. It is you know, I was in the I was in this building in 2008 during high school, but not for me, testifying for s b three seventy five over and over and over again and about its potential and and and and how well designed it was with NRDC and BI and everyone else. And so, I'm I'm I'm deeply committed to making sure that all the things that I promised the the senate committee back in 2008 actually come true. And so, that this we are this is these these are challenging.
We're I do wanna we're we're not likely to have any resolution on any of these issues by transportation. We're hoping to have more progress, but they're they're big and and and naughty. But we are we are headed in in in that direction. And also wanna just to to to senator Mengistrar's point and to highlight this part of the the analysis, what we what we've what we've done at the at the with the in cooperation with the chairs, removed the transfer from CARB to CTC to leave the and all the other stuff that's related sort of CARB MPO process, that's mostly removed for the purpose of continuing that conversation. So I don't wanna imply today that we've decided that absolutely no changes will happen.
That's that isn't the case. But we're we removed the the notion that CTC is the is the answer. That that was clear during the stakeholder the last stakeholder conversation that people had other ideas about potential agencies, but no one could agree on anyone. So, we we didn't wanna imply that that the CTC decision is the right one or that that's final. I think it's likely that we'll end up in a different place.
But, very, very much appreciate the the committee's work and looking forward to continuing to collaborate with each of you and the committee staff as this goes forward because this is a this is this is a big one. There are no other bills that that attempt to try to modernize s b three seventy five or to accomplish any of the things that the that most of the supporters, opponents, and tweeners would like to see happen. That's part of the reason why this is necessary. Everyone knows and everyone has the specific objectives that they'd like to achieve, but they also know that many of them are impossible because the opponents would kill everything. So our only chance to make anything substantial happen is to bring them all together and try to to find areas of common agreement and and have folks make some compromises in the s b ten eighty seven is our best our best shot.
So with that, I would respectfully ask for an I vote.
Speaker 2
Okay. Thank you very much and good luck. Okay. Next we have senator Jones. I see him.
Thank you for being here. It's s b 1239. We invite you to come forward and you may begin when ready. Good
Speaker 16
morning chair, vice chair, members. It looks like it's economic analysis day in EQ this morning. And I think s b twelve thirty nine actually is a great companion piece of legislation to the prior bill and some of the other bills that you're gonna be considering today. Morning. So, I'll be Madam Chair, I'll be presenting SB twelve thirty nine dealing with the California Air Resources Board and the standardized regulatory impact assessment.
And, basically, what that is is when a major regulation is materially changed, the we would like for the standardized regulatory impact assessment to be redone. Currently, state agencies must prepare an SRIA for major regulations with an estimated economic impact exceeding $50,000,000. The SRIA is intended to serve as the state's primary public facing economic analysis, including impacts on jobs, businesses, and individuals, and households. However, the SRIA is when it is completed at the beginning of the rule making process, while regulatory proposals can continue to change before adoption, sometimes significantly, and with significant cost changes to consumers. When that happens, the analysis of the impacts to individuals and households may no longer reflect the version of the regulation that was ultimately adopted, particularly when changes are made later in the process.
SB twelve thirty nine addresses this gap by requiring CARB to update SRIA when a major regulation is materially changed after the initial analysis is released. The supplemental SRIA must update consumer cost impacts and be made public made available for public review. This ensures that policymakers, stakeholders, and the public have access to current and accurate information when evaluating major regulations with significant economic impacts. It also improves transparency and supports more informed parts participation in the rule rulemaking process. SB twelve three nine is a targeted transparency measure that does not change CARB's regulatory authority or underlying policy decisions.
It simply ensures that economic analysis keeps pace with the regulation as it evolves. With me this morning is Don Kopecki from the California Manufacturers and Technology Association.
Speaker 17
Good morning, madam chair and members. Don Kopecki on behalf the California Manufacturers and Technology Association in support of SB twelve thirty nine. As you know CMTA represents over 45,000 manufacturers and their 1,200,000 employees in California who operate in a very highly competitive cost sensitive environment such that accurate and transparent economic analysis is essential. The shriah is intended to serve as the state's primary public facing assessment of a regulations economic effects including impacts on jobs, business creation, competitiveness, investment, and innovation, as well as costs ultimately borne by consumers. However, under current law, the Shriya is completed at the outset of the rule making process and is not often updated even when regulatory proposals change substantially.
This shortcoming is particularly significant in the context of CARB. A 02/2024 ran corporation report found that CARB submitted 28 major regulations with sharias the agency. These rulemakings often span multiple years and frequently include substantive revisions including late stage changes that can significantly alter compliance costs manufacturers and the broader economy. As a result policy makers and stakeholders are often asked to evaluate regulations based on outdated economic assumptions that no longer reflect the proposal under consideration. This undermines transparency, limits meaningful public participation, and increases the risk that major regulatory decisions are made without a clear understanding of their real world economic consequences including impacts on California's manufacturing competitiveness and the cost of living for Californians.
SB twelve thirty nine provides a practical and narrowly tailored fix by requiring CARB to publish a supplemental shriya with updated consumer cost analysis when material changes occur. The bill ensures that decision makers and stakeholders have access to accurate current information before regulation is finalized. Regulatory changes made late in the process can significantly affect compliance cost, capital investment decisions, and long term operational planning for manufacturers. Ensuring that these impacts are transparently and accurately assessed is critical to maintaining strong manufacturing base in California. For these reasons, CMTA urges your I vote on SB twelve thirty nine.
Thank you.
Speaker 2
Okay. Thanks very much. Anyone else in the room wishing to express support? Please come forward. State your name, organization, and position on the bill.
Speaker 16
Good morning, madam chair. Chris Shimoda on behalf of the California Council for Environmental and Economic Balance. We have a support and concept position on this and the other SERE transparency bills. Look forward to working with the Thank you.
Speaker 2
Okay. Thanks very much. And do we have opposition witnesses in the room wishing to come forward? No opposition witnesses? Wow.
Speaker 2
I know. Alright. Going once, going twice, opposition witnesses. Anyone else in the room wishing to express opposition? Wow.
Okay. Well, we'll bring it back to the committee. Any questions, statements? Alright. Yeah.
Yes. Vice chair.
Speaker 15
It's a great bill. You're right. This is the theme as we're facing an affordability crisis in California. It's just time that we truly understand what regulations actually cost real world people. So I wanna thank you for bringing this forward.
Happy to move the bill when appropriate as well, madam chair.
Speaker 2
Okay. Thank you. Well, I'll just make a couple comments. So first, I want to recognize that senator Jones has worked tirelessly on transparency in government. It is something that you've worked on for many years and I appreciate that.
Unfortunately, I'm not able to support this bill today. SB twelve thirty nine, I don't think is the solution because it introduces inefficiencies into the rule making process without improving the overall process. The rule making is meant to encourage public participation to improve regulations before adoption, and s p twelve thirty nine would disincentivize agencies from implementing public feedback by creating a new barrier in the form of an additional SORIA. So a SORIA can already take months of back and forth between an agency and the Department of Finance to finalize, and s b twelve thirty nine would then introduce months to an already long rule making process while penalizing agencies who make meaningful changes to the regulations in collaboration with the public. So, unfortunately, I'm not able to support this bill today.
Anybody else wanna make any comments? Okay. Well, I'll turn it back to the author to close.
Speaker 16
Thank you, madam chair. And I appreciate your comments, and I understand the concern about that. This bill is purposefully narrow and tailored to, at this point in time, only deal with California Resources Board so that it doesn't affect other agencies as mentioned. The the point of the bill, and I'll I'll let me use kind of the last bill that was discussed in committee as maybe as an example of what might enlighten the committee as to why this makes sense. Senator Kumbalden started with an idea, brought the bill to the committee.
The committee, through its analysis, and members have asked for several amendments to that bill, and that bill is gonna move forward continuing to work on those amendments. As it moves from the senate to the assembly, to to draw the comparison to what is currently happening with CARB is they never update CARB never updates their original analysis on their rule making policies and the regulations that they're trying to pass. It would be the same thing as the assembly using the same analysis that the senate started with on that previous bill without updating the analysis for any of the new amendments that have taken place over the course of discussion through the senate and through the assembly committees. So it's basically requiring the agency to do the same thing that we do here in the legislature is update our analysis as the regulation, in this case, moves to the process so that when the regulation is finalized and then put into place, the analysis that's available for the public review is actually the analysis that applies to the final regulation. So I hope that that's a fair comparison, kinda, you know, enlightening what we're trying to accomplish here.
I know you have a lot of other bills today that are doing similar items. I'm really thankful that the committee is taking that up. I think that this is a simple, narrowly tailored bill that we should put in a process for all the reasons that we've used for the other transparency bills as well. So and I don't know if Don has anything to add to that or
Speaker 17
I would just just offer that CARB currently has rule makings in process where there have been some substantial interpretations that have been changed that would have very significant material effects on various stakeholders. So we are hopeful that they'll update, but currently there's no requirement that they do so. SB twelve thirty nine would ensure going forward that those additional costs, and even conversely where there may be reduced costs, would be updated as part of the Shriya. We would argue that could have benefits, you know, on either side of the coin, if you will.
Speaker 16
That's a good point. Thank you. I didn't think about that. So with that, I would ask for an I vote when the time comes for you to potentially change your mind and support the bill.
Speaker 2
Okay. Well, thanks so much. Welcome senator Manjivar to the other side of this the dais. You're welcome to begin when you are ready.
Speaker 1
It's a good view from here madam chair. Colleagues, approximately 1,600,000 households or about one in eight Californians have household water debt partly because water rates have increased faster than inflation over the past few years. In LA County alone, water water rates rose 60% from 2015 to 2025 according to a recent UCLA Luskin Center report. Unlike in the energy space, though, there is no statewide assistance for families who are falling behind on on their water bills. IOUs provide some financial relief to their low income rate payers, but public water systems are limiting their ability to offer any rate assistance to their customers largely because of funding limitations imposed by prop two eighteen back in 1996.
Speaker 10
SB eleven twenty five, however, now is attempting for the third time to establish upon appropriation, of course, the foundation for the first ever statewide water rate assistance program for low income residents in California, avoiding any prop two eighteen barriers to assistance. This bill honors the commitment to the state has made to Californians back in 2012 in 2012 when it declared that access to clean safe and affordable drinking water is a human right. Specifically SB eleven twenty five is honoring that commitment by providing direct bill credits to eligible rate power payers through a $20 off credit every month or a up to 20% if it's more than $20 off a month and it creates a mechanism to allow existing local assistance programs to continue operating and while all of this is contingent on funding we need to establish the infrastructure first before we can get some funding allocated. To that, madam chair, I'd like to turn over to my witnesses. One of my witness is Spanish speakers, so this is I'll have a translator for them as soon as they're done.
Speaker 19
Hi. Good morning. My name is Andrea Abrigel with the California Municipal Utilities Association. CMUA represents 86 public utilities that provide water, wastewater, gas, and electric service in California. Our members both wholesale and retail water suppliers provide over 75% of water to Californians.
Water affordability is a priority for our members and we are pleased to support s p eleven twenty five. The bill is a result of years of negotiations, learning, and deeper understanding. CMUA has been working on low income water rate assistance since a b four zero one in 2015, and the framework that s b eleven twenty five proposes as as envisioned as the in the a b four one report. So CMUA's main interest in ensuring how a statewide program would be one were one, role divisions between the state water board, third party providers, and water suppliers. It was crucial that the program's implementation responsibilities were placed on the appropriate entities and that third party providers took on the responsibility of automatically enrolling customers in this program.
And number two, we wanted to retain the autonomy of existing and future local water rate assistance programs. In developing the program in SB eleven twenty five, it was necessary that the language acknowledge that these programs are separate and net nothing in the statewide program would preclude local rate water rate assistance programs. Those local programs provide benefits to our members' customers. So we are grateful that we were able to work on these concerns and many others on s b three fifty last year and that the language has been retained s b eleven twenty five this year. Funding such an endeavor will be a challenge, and our members want to see a funding source that is sustainable and aimed at solving the broader water affordability problem in California.
Speaker 26
So another measure, a b twenty seven thirty nine by assembly member Soria, proposes a state trust to fund the statewide local, statewide low income water rate assistance program and also to fund regional infrastructure improvements. We are expected to support that effort as well. So together, s b eleven twenty five and a b twenty seven thirty nine provide a solution towards water affordability in California. And for these reasons, we support s b eleven twenty five and urge your I vote today.
Speaker 7
I'll be translating, but, this is Martha Curiel. She's here from Tulare County, and she's a member of the AGA coalition, which is the association of people united for the water. She's here to ask that, the members vote yes on s b eleven twenty five because folks in rural communities like hers are paying three water bills. They're paying the regular water bill. They're paying for bottled water, and they're paying for wastewater.
Speaker 11
That's creating a really disproportionate burden on their communities. So respectfully ask for an I vote. Yeah. Folks in rural communities have to decide between their water bills, between food, and between medical bills because they're all many of them are farm workers, and it creates a really undue financial strain. And it's really imperative for them that they have access to clean water and affordable water because that's necessary for their lives.
Speaker 7
And it's urgent to support s b eleven twenty five because there are people in the community that are children, that are elderly, that are still working in the fields, they get home tired, and often don't have reliable access to water. So this is a very important bill for communities across California, and we ask for an I vote.
Speaker 2
thank you very much. Thank you for coming to Sacramento today to testify. Do we have anyone else in the room wishing to come forward and express support?
Speaker 22
Good morning. Raquel Mason with the California Environmental Justice Alliance in strong support.
Speaker 2
I'm Tatouille from Visalia, and I am in strong support. I'm senior on a fixed income, thousand $50 a month, and so this would really help me. Thank you.
Speaker 24
Good morning. It's Evan Hamilton for Physicians for Soldier Responsible Los Angeles, and we are in support.
Speaker 25
Good morning, committee and chair. Claire Sullivan on behalf of the city of Roseville in strong support. Thank you.
Speaker 26
Good morning. Michael Claiborne with Leadership Council for Justice and Accountability in strong support. Thank you.
Speaker 3
Good morning. Soren Nelson, Association of California Water Agency support if amended. Thank you.
Speaker 27
Good afternoon, chair members. Ross Buckley on behalf of state of Sacramento in support, and also on behalf of my colleague Ryan O'Jackian with the Regional Water Authority. Thank you.
Speaker 2
Good morning. Danielle Coates, Rancho California Water District in strong support and thank the author and the sponsors for this bill.
Speaker 9
Hi. Jim Lindberg on behalf of the Friends Committee on Legislation of California in strong support. Thank you.
Speaker 29
Good morning. Scott Sadler on behalf of Environmental Defense Fund in support.
Speaker 2
No. Okay. Thank you very much. Anybody in the room wishing to express opposition? Lead opposition witnesses?
You're welcome to come forward. Okay. Not seeing anybody. Anybody else in the room wishing to express opposition? Okay.
Going once going twice. Opposition witnesses. Okay. With that we'll bring it back to the committee. Any questions, comments on this bill?
Okay. Hold on. We don't quite have a quorum established, but we will in a second. So first, I just want to recognize the need for a program like this. So I very much appreciate the author for bringing this forward.
It's always a challenge as a legislator because you're supposed to propose big policy that costs nothing. So I know that the the challenge here is going to be the cost of this type of a program that it could end up being very expensive. And I know that you're working with the assembly and also the state water board to make sure we're taking the right approach to implementation and to be able to fund it. So I appreciate what was said in the testimony that you're having to pay for water bottled water and wastewater. And we should not be having bottled water at all, actually.
We shouldn't be paying for it or creating the plastic waste. We should just have clean water that's available for people as part of, as you said, a human right. So I I do really appreciate this, and I'm happy to support it today. So thank you for your testimony. And when when she comes back up here, think we can establish a quorum or maybe you can do it from there, and we can vote on this bill.
We can. Yeah. Okay. Okay. So I would like to have you close this.
So go ahead and close. Thank
Speaker 1
you. Thank you, madam chair. I appreciate it. You know, and you you're right. It's difficult when we're trying to, at the same time, run bills, and we're going through the budget process simultaneously.
And one thing that we've adjusted as the analysis points to is the original cost of doing something like this was over $600,000,000. We've adjusted this bill, taken out some things to bring the cost to a little bit over a $100,000,000. I only I think that was a big strategic move to ensure that we can be it could be more digestible. There's no other opportunity for people to get assistance on their water bills, a necessity to thrive to be successful in California. In fact, our legislature has had to even put in funding to give people $10 extra on their EBT cards for Central California to purchase water because those are areas that do not have access to clean water.
We continue to invest in in in water but are still falling short in providing assistance to low income communities. I'm grateful for the committee to allow this bill to move forward so we can have the opportunity to hopefully solidify some funding stream for a program that addresses the affordability issue a full affordability issue in California. With that respectfully asking for an I vote when appropriate.
Speaker 2
Okay. Thank you very much and thank you again for your testimony today. Alright. So now I'd like to pause for a moment and ask our committee assistant to please call the roll.
Speaker 30
Senators Blakespeare? Present. Blakespeare present. Valderas? Here.
Valderas here. Allen? Here. Allen here. Dali?
Gonzalez? Her daughter. Menjivar. Menjivar here.
Speaker 2
Okay. We've established a quorum, and I think senator Allen moved the bill. Okay. So, let's go ahead and vote on s b eleven twenty five which was moved by senator Allen. Please call the roll.
Speaker 30
Senators Blakespeare? Aye. Blakespeare? Aye. Valadares?
No. Valadares? No. Allen? Allen?
Dally? Gonzalez? Ardado? Menjivar? Aye.
Menjivar? Aye.
Speaker 2
Okay. That's three to one. We will keep it on call. So let's senator Allen, you could present your bill next, but let's go through the role first. So, the first bill that we heard was SB ten eighty seven from senator Cabaldon.
I'd entertain a motion on that bill. Okay. Senator Menshevar moves the bill. And the motion is do you pass as amended to senate transportation?
Speaker 30
Senators Blakespeare? Aye. Blakespeare? Aye. Valadares?
Sorry. Valadares? Not voting. Allen? Allen I.
Dali? Gonzalez? Ordado? Menjivar? Menjivar I.
Speaker 2
Okay. That's three to zero. We will keep that on call. The next bill we have is s b twelve thirty nine from senator Jones. Okay.
We have a motion from the vice chair, which the motion from her is due passed to appropriations.
Speaker 30
Blake Spear, no. Valadares? Aye. Valadares, aye. Allen?
Dali? Gonzalez? Hurtado? Menjivar? No.
Menjivar, no.
Speaker 2
Okay. That bill is two to two. We will keep that on call. Oh, I'm sorry. That bill is one to three.
We will keep that on call. Okay. And now we will move to senator Allen or actually we yeah. We have the consent calendar. Okay.
The vice chair moves the consent calendar, which has items one and two. So it's s b ten sixty nine and s b ten eighty one are the two items on consent.
Speaker 30
Blakespeare, aye. Valadares? Aye. Valadares, aye. Allen?
Aye. Allen, aye. Dally? Gonzalez? Hurtado?
Benjevar? Aye. Benjevar, aye.
Speaker 2
That's 4 to zero, and the consent calendar is out. So now we will move to senator Allen with s b eleven eighty. We're on item number six.
Speaker 31
Thank you. Well, thank you, madam chair. Thank you, members. Let me start by accepting the committee's amendments, which will clarify the intentions for the expansion of grant eligible entities for the fund. That's dealt with here in this bill and also provide some additional direction for those entities.
We know that plastic pollution is a massive environmental and public health challenge. It persists in our environment for decades or longer causing widespread harm to all life. We now know that microplastics are commonly detected in air and not drinking water and food. They have negative impacts on human health, including links to illnesses like heart and lung disease, as well as reproductive harms. That's one of the reasons why we all worked so intensely together a few years back with SB 54, establishing the most comprehensive plastic pollution framework in the nation requiring producers of covered material to source, reduce, meet specific recycling rate targets and ensure that their materials are recyclable or compostable by 2032 and truly recyclable or compostable.
And while we work toward a future with less plastic, the reality is that the plastics already ubiquitous in our environment. In 2024 alone, California discarded over 8,000,000 tons of covered material with 3,000,000 tons of that being plastic. And that's why SB 54 among many things established the Plastic Pollution Mitigation Fund which would consist of at least $5,000,000,000 from producers over the next ten years to address the harms that plastic pollution is already causing in our communities and environment. We even heard about a little bit of them earlier in the last bill. So this bill builds upon that framework, the foundation of SB 54, by providing the kind of detailed operational framework that is necessary to administer the fund, ensuring that dollars are being spent effectively and equitably.
It outlines requirements for the expenditures including improvements of public or environmental health and engaging communities in project planning, development, implementation, and create safeguards of reporting and transparency measures to ensure that funds are being used for their intended purposes. It also expands the eligible fund recipients beyond those originally listed in SB 54 to ensure the door to funding is open to the full range of organizations doing this work and to encourage the potential for collaborations and large scale projects. One of the things we found is that there's this persistent barrier for grant programs with regards to accessibility. And by mandating that implementing agencies provide technical assistance, use standardized simplified grant applications and initiate projects in a timely manner, the bill ensures that groups such as tribes and smaller community organizations, especially smaller communities such as those we just heard in the Central Valley and elsewhere, are provided with administrative pathways to meet them where they are to provide support for them to be able to do the important work of this pollution mitigation. We are continuing to and very committed as always to working closely with stakeholders and relevant state departments to ensure that this money goes towards meaningful and transformative projects that will protect public health, restore our natural environment, and deliver real tangible benefits to communities that have historically borne the greatest burden of plastic pollution.
Here with me today, we have Amaro Kakusian with the Environmental Justice Communities Against Plastics and also Miho Llivare from Surf Rider Foundation.
Speaker 19
Good morning, Chair Blakesphere and members of the committee. My name is Maru Cacusian, and I'm speaking today on behalf of Environmental Justice Communities Against Plastics Coalition or EJCAP. We are in strong support of SB eleven eighty, and we urge the members of the committee to vote in support of this bill as it is necessary to ensure that California's Plastic Pollution Mitigation Fund or PPMF delivers on its intended purpose to address the environmental justice and public health harms caused by the full life cycle of plastics. Plastic pollution is not just a waste issue. It is a public health crisis.
Speaker 32
Plastics release toxic chemicals such as endocrine disruptors like BPA and phthalates. Plastic materials and fragments known as microplastics enter the human body through ingestion and inhalation. Once inside, they can cause inflammation and act as Trojan horses that carry other harmful pollutants such as pathogens and heavy metals, thereby increasing overall exposure risks. Together, these pathways make plastics uniquely complex and difficult to mitigate once exposure occurs. These harms are not experienced equally.
Environmental justice communities, disproportionately low income communities, and communities of color face cumulative exposure across the life cycle of plastics due to proximity to production, refining, and waste facilities. SB eleven eighty strengthens the original purpose of the PPMF established by SB 54 by ensuring expenditures actually reduce harm, improve public health, and prioritize communities, workers, and tribes most burdened by plastics. It maintains a clear nexus to plastic pollution by requiring funded projects to directly reduce pollution, mitigate health impacts, restore environments, and deliver measurable benefits while ensuring polluters pay for a just transition to local zero waste economies. What this bill recognizes and what the science makes clear is that when harms occur across the full life cycle of plastics, true mitigation is not separate from prevention. With these guardrails, there is a risk that funding could be diverted toward ineffective or short term solutions that fail to protect public health or advance environmental justice.
For these reasons, we we respectfully urge your support for SB eleven eighty. Thank you.
Speaker 13
Good morning, chair Blake Spear and members. My name is Mihael Leguer, and I'm Surfrider Foundation senior plastic pollution initiative manager. I'm honored to be here in today in strong support of SB eleven eighty. Californians residing in your respective districts as such as Oceanside, Lancaster, Mid City, Cottonwood, Long Beach, Arvin, and Sun Valley are identified as plastic burden communities that face high to very high downstream plastic exposure risks every day according to UCL Alaskan Center's research. With effective investments using the plastic pollution mitigation funds, these same communities can become healthier and more vibrant.
Speaker 33
First, to be clear, plastic production drives plastic pollution and creates harms across the entire life cycle of plastics. The chemicals associated with plastics have been linked to health problems such as cancers, heart disease, and infertility. Unless we address production, there will always be plastic in our communities, in our bodies, and in our environment. The mitigation fund is groundbreaking, and we must get it right. SB eleven eighty ensures needed clarity, transparency, and accountability, and ensures that funding is directed to where it's needed most.
It also strengthens coordination across agencies, streamlines grant making resulting in time and resource savings, and opens the door for environmental justice organizations, tribes, and other entities that have historically been left out. We appreciate the proactive collaboration from state agencies named in statute and their commitment to public input. Finally, Surfrider strongly believes that the funds should be guided by the communities most burdened by plastic pollution, not by the producers responsible for it. I hope we can count on your support to create healthier communities and environments across California. SB eleven eighty will be a catalyst to fund meaningful and measurable solutions.
Thank you for your time.
Speaker 2
Thank you very much. Anyone else in the room? A lot in the room wishing to come forward and express support. Just state your name, the organization you represent, and your position on the bill. Thank you.
Speaker 22
Good morning. Raquel Mason with the California Environmental Justice Alliance in support.
Speaker 34
Good morning, chair members. Jennifer Fearing on behalf of Oceana and Ocean Conservancy in support.
Speaker 24
Good morning. Teva Hamilton representing Physicians for Soldier Responsibility Los Angeles and Hilda Bay, and we are in support.
Speaker 35
Good morning. Christina Scringe with the Center for Biological Diversity in support.
Speaker 4
Good morning. My name is doctor Zoe Conniff. I'm giving me too's in support on behalf of Bokoima Beautiful and Just Transition Alliance who are both also members of EJCAP, Environmental Justice communities against plastic thank you
Speaker 25
hi my name is Tiana show akman I'm giving a me too for black women for wellness thank you
Speaker 28
hello good morning I'm with value improvement projects and we are in support and also a part of California Environmental Justice Coalition. Also giving me to's for West Berkeley Alliance for Clean Air and Safe Jobs, the Ecology Center, a thousand grandmothers for future generations, green action for health and environmental justice, global alliance for incinerator alternatives, Richmond shoreline alliance, central California environmental justice network, sunflower alliance access to thrive, the Sacramento environmental justice coalition, west oakland environmental indicators project, Parents Against Santa Susana, Field Lab, and Fresnans Against Fracking. Thank you.
Speaker 33
Good morning. Kayla Robinson with Californians Against Waste in support. Thank you.
Speaker 37
Ruth McDonald, retired pediatrician on behalf of Climate Action California in support. Thank you.
Speaker 38
morning. Karen Amagon on behalf of A Voice for Choice Advocacy, and we're in support of this bill.
Speaker 5
Carla Gary Garcia with Monterey Bay Aquarium in support. Good morning. April Robinson with a Voice for Choice Advocacy and strong support. Mercedes Macias with Sierra Club California in support.
Speaker 33
Jordan Wells on behalf of the California State Association of Counties in support. Thank you.
Speaker 9
Jim Lindberg on behalf of the Friends Committee on Legislation California in support.
Speaker 8
John Kennedy with RCRC. At Twin Air, we look forward to supporting, look forward to clarifying litter reduction projects and illegal dumping will continue to be eligible. I don't think there's an intent intent to exclude, but just wanna make that clarification. Thank you.
Speaker 35
Good morning, chair and members. Nicole Quinones representing Cal Chamber and the Household and Commercial Products Association who are both opposing as amended on SB eleven eighty. Both organizations were active participants in the negotiations that led to SB 54, and we certainly remain committed to its successful implementation. We are not here to renegotiate the fund. We fully support that supplementation.
And I think hearing the senator speak and meeting with his author's office, I think we actually are very much aligned in our goals with how the mitigation fund could be implemented. And so we really appreciate those conversations and look forward to continue engaging with them. So, I'll just highlight some of our key concerns with the bill currently in print. So, first, the language that requires expenditures to help create or accelerate a transformative shift away from plastic production and use. We feel this language moves beyond the mitigating impacts and towards influencing manufacturing and consumption decisions that SB 54 already addresses through its producer responsibility requirements.
Speaker 9
SB 54 incentivizes and ultimately mandates shifts away from plastics and packaging and food service wear through the source reduction requirements, recyclability standards, and other design and system changes. Those provisions are designed to address the production and use of packaging materials, but the mitigation fund, in contrast, was broadly structured to address the environmental and public health impacts associated with plastic pollution, recognizing the need to continue driving down the impacts while advancing more sustainable material systems. We would also like to see the language reframed to support projects, delivery models, strategies, and other initiatives that result in measurable reductions in plastic waste or plastic pollution. Second, we'd like to ensure eligible projects under SB eleven eighty are clearly tied to measurable mitigation outcomes. We're just concerned that the language would include broad fund or funding for broad public education and outreach activities that aren't directly to specific mitigation efforts.
Speaker 35
And third we'd like to ensure the primary goals of eligible products are related to the covered products under SB 54 as those are the producers that are paying into this fund. We do appreciate some of the language in the recent amendments that speaks to this, but believe there are other areas where we can straighten that nexus between the products covered by SB 54. So, again, we have a long history of working with the author and look forward to resolving these concerns. However, today, are opposed unless amended. Thank you.
Speaker 20
Good morning, madam chair, members of the committee. Tim Shestick with the American Chemistry Council. First off, I too would like to thank senator Allen and his staff for, their willingness to meet with us, discuss some of the issues, that we have raised, and continue the constructive dialogue as this bill moves through the process. I just wanted to make one additional comment to those that, miss Quinones made, and this concerns ensuring that there is appropriate oversight of the monies that are expended from the fund. Given the substantial amount of funding that would be flowing to a variety of different entities, we have suggested that the bill include a requirement that midway through the process, a progress report be prepared by the state auditor, to the legislature, and to the governor on the effectiveness in implementing the various elements of the fund.
We think this level of oversight will help ensure the program is meeting its stated objectives. And again, I want to thank the committee for considering our views on this. And again, look forward to working with the senator and all stakeholders as this bill moves through the process. Thank you.
Speaker 2
Okay. Thanks very much. Anyone in the room wishing to express opposition? Please come forward.
Speaker 17
Thank you, madam chair and members. Dawn Kepke, on behalf of the California Manufacturers and Technology Association, would align our comments with HCPA and ACC. We too have had a long history working with the author. Just look forward to working through these additional details, but are currently opposed unless amended. Thank you.
Speaker 32
Sarah Palomuth, California Retailers Association, aligned with Don and Nicole and Tim as well, opposed unless amended, but looking forward to continuing to work on it. Thank you.
Speaker 17
Britton with Plastics Industry Association echoing the comments before, respectfully oppose unless amended.
Speaker 3
Hello. Edwin Borbon on behalf of the Flexible Packaging Association also oppose unless amended. Thank you.
Speaker 2
Okay. Anyone else in the room? Alright. We'll bring it back to the committee. Any comments, questions from the committee members?
Okay. Well, I want to commend the author for working on this, trying to continue to reduce the toxics and plastic waste and all of the harms it causes. So it looks like we don't have any comments. I'll turn it back to you to close.
Speaker 31
Yeah. No. This is this is we're we're gonna we're gonna do work together. Obviously, has been a long and winding road, and I'm glad that I appreciate the fact that opposition sees the how how close we are, I think, in intent on a lot of these things. I mean, this is about making sure that this money is going to really assist the the enormous impacts that that the plastics have had on so many of our communities.
And so with that, look forward to all the work we're all gonna do together, and respect for your asked for any vote.
Speaker 2
Okay. Thank you. Do we have a motion? Senator Menshevar moves the bill, and it is, the motion is do pass as amended to appropriations. So please call the roll.
Speaker 30
Senators Blakespeare? Aye. Blakespeare, aye. Valadares? No.
Allen? Aye. Allen, aye. Dali? Gonzalez?
Hurtado? Menjivar? Menjivar, aye.
Speaker 2
Okay. It's 3 to 0. We will keep that on call. And senator Valadez, if you are ready. It's s b eleven sixty one.
And then after that, we just have two more bills in this committee. So I encourage all members of the committee to come here to, EQ so that your vote can be registered.
Speaker 15
Thank you. Good morning, madam chair and members. I'm here this morning to present SB eleven sixty one. This bill actually derived out of several conversations that our California problem solvers caucus has had. And at this core, this bill really does one thing.
It is about it it's it's about honesty. It's not about whether we protect the environment. We all agree on that. It's not about taking away carbs authority. This bill doesn't touch it.
This bill is about being honest with Californians about what our policies actually cost them. Because right now, we are not. Today, CARB runs economic analysis, but they're buried in technical documents written for experts, not for the people who are actually paying the bill. And by the time a family realizes what a regulation costs them, when their gas bill spikes, when groceries go up, when their electricity bill jump, it's already taken effect. So let's be real about who feels this the most.
It's not Sacramento. It's not policy experts. It's a single mom from my district community an hour to work. It's a small business owner trying to make payroll. It's seniors living on fixed incomes who don't have room for one more increase.
We've all seen the headlines, record gas prices, rising rising energy costs, families paying thousands more a year just to live their daily lives. And yet the people most impacted are the last to be clearly informed. SB eleven sixty one fixes that. It simply requires CARB to do what we should have been doing all along. Tell people in plain English what a regulation will cost their household before it takes effect.
Not buried, not after the fact, not in a 300 page report. Upfront, clear, and understandable. Because the bottom line here is if a policy is worth doing, we should be able to explain what it costs. And if we can't, that's a problem. Here with me today in support of the bill is Paul Diero.
Speaker 8
Madam chair and members, Paul Diero representing the Western States Petroleum Association. It's not often I find myself sitting in this chair supporting a very good bill, But I'm glad to be here. We believe the bill would help ensure that policy decisions that are led by comprehensive understanding of economic outcomes of the state's most vulnerable communities. California is one of the most expensive states to live, specifically referring to transportation fuel prices and electricity. Lower income disadvantaged communities often face their the most burdensome cost as they spend a higher share of their income on transportation and and utilities and for those reasons we support.
Thank you.
Speaker 2
Okay. Thank you very much. Anyone else in the room wishing to come forward and express support?
Speaker 18
Morning again. Chair Blake Spear, Chris Schmode on behalf of the California Council for Environmental and Economic Balance. As mentioned on the previous bill, we're supporting concept on all the Syria transparency bills. Look forward to working with the senator as the bill moves forward. Thank you.
Speaker 23
Good morning. Dylan Hoffman on behalf of the Western Propane Gas Association in support.
Speaker 2
Thank you. Anyone in the room wishing to express opposition? Lead opposition witnesses? Don't see any. Anyone wishing to express opposition?
Okay. Or yes? Okay.
Speaker 15
Thank you. Michelle Canales with Union of Concerned Scientists in respectful opposition.
Speaker 29
Morning. Scott Sadler on behalf of Environmental Defense Fund. We know the bill has changed with committee amendments but haven't been able to review them yet, so qualified opposition.
Speaker 2
Okay. Thanks very much. Alright. Any we'll bring it back to the committee now. I'll just make a few comments here.
So I am pleased to be able to support this bill today authored by our honorable vice chair as amended, and I think you indicated you would accept the you're accepting committee amendments. I know we've had a couple of other bills this year that have tried to get at the same issue, and I believe this bill has the right approach. While we can acknowledge that climate mitigation has hugely progressive benefits to low and middle income families, we can also recognize that cost must be minimized on vulnerable and disadvantaged communities. SB eleven sixty one is a healthy middle ground requiring an economic analysis of the impact of regulations from the Air Resources Board across income levels. SB eleven sixty one preserves the rule making process while also putting working class Californians first.
So I'm, happy to support it when we get to that stage. Any other comments? Alright. Not seeing any. We'll turn it back to you to close.
Speaker 15
Thank you, madam chair. And, yes, I I just wanna clarify. I did accept the committee's amendments. I know that we did see receive some late opposition last night on the bill and specific around the requirement for a legislative hearing, has been amended out of the bill. Respectfully ask for a I vote.
Speaker 31
Just has madam chair, do you feel as though because when I first had news about the bill, there was no opposition. I understand it's coming late. Do you are you feeling I'm sorry to call out of order, but I I wasn't aware of this opposition till just now. Are you feeling that there's a you're you're
Speaker 31
Alright. I'll I'll support the bill in with those with that understanding.
Speaker 2
Okay. Thank you. So do we have a motion on this bill? Okay. Senator Menshevir moves on SB eleven sixty one, and the motion is due pass as amended to appropriations.
Please call call the roll.
Speaker 30
Senators Blakespeare? Aye. Blakespeare? Aye. Valadares?
Aye. Valadares? Aye. Allen? Aye.
Allen? Aye. Dally? Gonzalez? Ortado?
Menjivar? Aye. Menjivar, aye.
Speaker 2
Okay. It's four to zero. We will keep that on call. And I think I'm gonna hand it to the vice chair if you're able to take over for the last two bills. This is just a reminder for all members of the EQ committee to come here to the state capital to vote and and close out this hearing soon.
So I'll hand that over.
Speaker 15
Thank you. We're now moving to file number item number eight, s B955 by senator Blake Spear. Senator, you are recognized when you are ready.
Speaker 2
Okay. Thank you vice chair and members for the opportunity to present s b nine five five. First, I'd like to start by thanking the committee for their work on this bill and I accept the committee amendments. This bill is an update to California's beverage container recycling and litter reduction act to ensure that all major stores selling beverage containers are participating in the program. California's deposit refund recycling system established in 1986 is driven by the California Redemption Value or CRV.
This is a deposit that is paid at purchase and refunded to consumers when returning the containers. For the system to work as designed, all CRV container purchases must be able to be easily returned for their refunds. In recent years, California has experienced significant reductions in the number of certified recycling centers with more than half closing over the past decade. For many Californians, this means that redeeming CRV has become more difficult, more time consuming, and in some areas is not possible at all. As a result, the amount of unclaimed consumer deposit has skyrocketed from 219,000,000 in 2014 to August in 2024.
That data shows that the system is not working well, and more and more containers that could be returned for recycling are not being returned. SB nine fifty five helps address this problem by modernizing the definition of for supermarkets to ensure that all major sellers of recyclable containers are part of the program and by requiring sellers to provide a place within close proximity for consumers to return the containers. This is even more important now that we have expanded the program to include wine and distilled spirits containers. SB nine fifty five also does not eliminate or disadvantage reverse vending machines as a compliance pathway for dealers. It ensures that a served convenient zone is based on adequate collection capacity across all methods allowing RVM operators to continue participating while preventing a single unit from fulfilling obligations zone wide.
SB 99 makes the changes necessary to keep California's beverage container recycling program effective and successful. With me today in support, I have mister Louie Brown with Circular CRV and the California Grocers Association and Tony Gonzalez on behalf of, Tom Ra. So with that, I'll turn it to both of you.
Speaker 27
Good morning, madam vice chair, members of the committee. Louie Brown here today on behalf of Circular CRV Association and the California Grocers Association. SB ten thirteen, a few years ago, made some significant changes and improvements to the California bottle bill. One of those was the formation or the authorization for the formation of a dealer cooperative that actually allows retailers and grocers to come together to help solve some of the recycling issues that we have in unserved areas. I'm happy to say that Circular CRV is the dealer cooperative right now formed in the state of California for that purpose and has successfully has membership throughout the state and is working to find solutions for recycling in those areas that are deemed unserved.
Speaker 41
SB nine five five really addresses two technical issues, that we've now found as we've gone through the implementation of the regulations from SB ten thirteen. They're minor, but they make, major differences in the program. And so with that, we are happy to support the bill, and appreciate the leadership of the chair to take on this issue and help us see that recycling in California is successful. Thank you.
Speaker 12
You Madam Chair. Tony Gonzalez on behalf of Tomra North America, a leading reverse vending machine technology company. We're in strong support of SB55 and thank the author for introducing the bill. I just would like to add a few comments to what Mr. Brown shared with you regarding the collaboration that stakeholders have had with CalRecycle over the last couple of years in implementing SB ten thirteen and AB 179 which was a budget trailer bill or a budget junior bill that provided funding for ultimately the expansion of convenience redemption centers across the state of California.
Speaker 42
It's been somewhat slow going but the pace of the work has accelerated over the last eighteen to twenty four months and we're delighted to see that pace of work increase. This bill provides some technical guidance and clarity to CalRecycle in order to ensure that not only are we serving zones but ultimately we're serving consumers. And, what this bill is about is serving consumers having access to redemption centers throughout the state. Thank you. Now
Speaker 15
we'll now move to anyone else in the room here to express their support. Name, organization, and position, please.
Speaker 29
Good morning, members. Jason Eichert on behalf of the Glass Packaging Institute in support. Appreciate the chair and sponsor bringing this forward. Thank you.
Speaker 25
Good morning. April Robinson with A Voice for Choice Advocacy in support. Good morning. My name is Riley, and I support the bill. Okay.
Speaker 38
Good morning, chair and members. Karen Amagon on behalf of A Voice for Choice Advocacy, and we are in support of the bill.
Speaker 15
We'll now move to any key witnesses in opposition to the bill. Seeing none, would anyone else like to express opposition? No. We will now move to the committee. Questions?
Comments? I wanna just thank the author for bringing this forward. I am somebody who supports carrots over sticks, and I think this does does exactly that. And I, would love to be added as a coauthor if you'd have me. You may close.
Speaker 15
Love it. Do we have a motion? We have a motion from senator Menjivar. The motion is due pass as amended to appropriations. Please call the roll.
Speaker 30
Senators Blakespeare? Aye. Blakespeare? Aye. Valderas?
Aye. Valderas? Aye. Allen? Aye.
Allen? Aye. Gonzalez? Hurtado? Menjabar?
Benjivar aye. Hartado aye.
Speaker 15
50. That is on call. We'll now move to file item number nine, our last bill of the committee today, s b twelve fifty nine by senator Blake Spear. Senator, you're recognized when you are ready.
Speaker 2
Okay. Thank you. So my support witnesses are welcome to come up. Yes. Okay.
Thank you. So welcome. Welcome. Thank you, sir. Well, thank you colleagues for the opportunity to to present s b twelve fifty nine.
Twelve fifty nine is a transparency measure that requires refineries to proactively and collaboratively share information with the state to help us plan for the future of the land that refineries sit upon today. In California, as well as the rest of the world, the clean energy transition is underway. It is a fact that we are in the mid stage transition, which means we are transitioning away from fossil fuels to a clean energy future and we know that we are not all the way there yet. So right at this moment, we are very focused on gas prices and refinery health as we should be. But it also remains true that in the big picture, petroleum refineries have been closing and consolidating across The US for years and that includes here in California where several refineries have closed in recent years and we expect more to eventually close in the decades to come.
As policymakers, I believe that we can and we should responsibly plan for the future. Before I served in the state legislature, I worked as an estate planning attorney and I drafted wills and trusts for clients. And when I'm when I've been working on this bill, I think about this a lot because when people are drafting their will, they are not planning to die immediately. They're thinking they're still taking their vitamins and going on their runs and living their full life, but they are also thinking about the future. And so they are drafting their will recognizing that someday sooner or later they will end up passing.
And it's important to get your arms around everything that you have in your estate and to think about what are the obligations and what are the assets and what is going to happen with those things after one passes. So I don't see that refineries need to close any earlier based on a bill like this. It is just looking at how can we and communities be ready when it does happen. CEC vice chair, Sivagunda, has done tremendous work highlighting how important it is for California to concurrently pursue policies that stabilize in state supply, maintain system wide reliability, and execute a holistic transportation fuel transition strategy. So it needs to be all of the above all at the same time.
We want a smooth and thoughtful transition to clean energy and that means that we need to get our affairs in order. Understanding what refinery site cleanup will cost, how long it will take, and how it will get done if and when a refinery might close. This is not because we want them to close but because we have to face the uncomfortable truths of what may be coming or will be coming in the future. So this is what s b twelve fifty nine does. California's refineries are aging.
Many were built long before modern environmental laws existed. Some are more than a century old and they sit on sites contaminated by decades of toxic spills and buried waste. Communities live near these facilities and they deserve clarity about what it will take to safely clean up these sites when they shut down so that they can plan for their eventual future without them. Refineries are unique among major energy infrastructure because they are not required to meaningfully disclose or plan for cleanup costs until closure is imminent. Unlike other sectors, refineries do not have sector specific requirements.
They do not have to provide advanced estimates for remediation. Plain and simple, s b twelve fifty nine is a good government bill because it requires information to be provided for thoughtful planning. This is not excessive regulation. It does not increase the costs of refining oil or doing business because we know that these sophisticated companies that are running refineries either already have this information or they will be needing it eventually. So this is about holding refineries to the same level of transparency that is required of comparable industries.
For context, in response to the last Iran oil crisis in the late seventies, California passed the petroleum industry information report act which was called PIROU. And the CEC has been collecting and protecting extensive confidential market data about operations from refineries and others ever since. Going back even further in response to the Great Depression, Congress passed the Securities Exchange Act in 1934 which established the SEC. And the SEC has been requiring annual financial reports from publicly traded companies for many decades since. These balance sheets show the assets and liabilities that companies carry which often include reporting post closure liabilities for decommissioning and remediation.
But while many other sectors report their asset retirement obligations annually to the SEC, the rules let refineries avoid this until less than a year before they close. This means that the CEC understands the financial inner workings of refiners through PERA right up until the point they close. The first time anyone outside of the company itself sees a cost estimate for decommissioning is after the refinery announces its intent to close. This is less than a year before shuttering operations. As a result, communities are left in the dark and the state it's not just communities, it's also workers are left in the dark and the state lacks the information needed to plan for land reuse, environmental remediation, and economic transition.
SB twelve fifty nine addresses this gap by requiring refineries to disclose to the state how they their asset retirement obligations and other cleanup liabilities. And it asks them to provide rough estimates of both costs and timelines. These estimates will be reviewed by and informed by guidelines that are developed by the state water board. And they will all figure into the energy commission's ongoing efforts to navigate the mid stage transition. We are also asking the CEC to report to the legislature what the total costs and potential risks to the state are based on the cleanup obligations and financial assurances that the refiners report.
To go back to the estate planning example, preparing your will doesn't mean that you want to pass away any sooner. It just means that you want to help those who survive you to live well once you're gone. With s b twelve fifty nine, we are saying we don't want refineries to pass any sooner, but we want the workers, communities, and the state who rely on them to live well once they're gone. It's not about creating onerous new obligations. It's about us getting our affairs in order before we're forced to make the same big decisions in an emergency.
With me to testify in support of s p twelve fifty nine, I have Carrie Birds Eye, city council member in Benicia, and Faraz Rizvi of the Asian Pacific Environmental Network. And I'll turn it over to both of you.
Speaker 39
Thank you, chair. And just quick statement that I'll be sharing a bit of my time with Carrie. Chair and members of the committee, thank you for the opportunity to testify today. My name is Faraz Rizvi, and I'm here representing APN Action in support of SB twelve fifty nine. California is entering a new era of mid transition.
Californians are moving away from oil and gas for cleaner air, climate action, and costability. From Houston to Australia, aging refineries are closing, and the industry is consolidating globally. Whether refinery will close in two years or twenty years, the question facing this body today is not if these refineries will close, but how. California is currently coming to terms with its oil industry orphan oil well problem, and now we're facing the same lack of end of life planning in the refinery industry. Other industries within the energy sector, including coal mining, nuclear plants, and wind and solar facilities are generally required to prepare plans for decommissioning usually including a cost estimate for it.
Speaker 22
Federal law also requires that publicly traded companies report an estimate of their asset retirement obligations to the Securities and Exchange Commission. Refineries however are an outlier and that they are not subject to an industry specific decommissioning planning requirement. They have managed to evade the requirement to report their asset retirement obligations to the SEC through the use of an accounting loophole. SB twelve fifty nine is a common sense measure that provides transparency for communities facing refinery closure. Without such transparency, we risk stranding communities with decades of costly cleanup that will leave taxpayers not responsible for legacy pollution on the hook.
Speaker 39
The energy transition is happening now. The state must commit to advancing a truly holistic and robust transition strategy. I urge you to support the refinery transparency act. Let's put a plan in place before the gates close. Thank you.
Speaker 37
Good morning, madam chair and committee. My name is Carrie Birds Eye. I am a member of the Benicia City Council, an off an office I've served in since 2022. I very much appreciate the opportunity today to testify in support of S B 1259. And as an elected official of a city in which a refinery is closing now in real time, I'm acutely aware of the problem that this legislation is addressing and eager for the solution it offers.
The closure of the refinery will hit our economy hard in the near term, putting an estimated $10,000,000 hole in our tax revenue. Our community does not have the luxury of decades to let the site's future play out in slow motion while while viable opportunities slip away. But the planning and the coordination we need to be doing right now is extremely difficult in the absence of hard information about the refinery site and what it will take to clean it up. We are pleased that many prospective business interested interests have been approaching Benicia to talk about the future use of the refinery site and its supporting infrastructure. We are not in a position to provide them with the kind of hard information about the site cleanup that will impact their decisions and whether or not they wanna purse proceed further.
The city of Benicia needs that information now, and this act would have provided it. But for other local governments in the future who will be in the same position as as future refinery closes, the act will make sure that Richmond, Rodeo, Martinez, Torrance, Carson, Wilmington, and other refinery communities can start now to engage in their long term planning. We commend the regional water board for its work thus far in taking preliminary steps to assess site contamination.
Speaker 37
Well, for all these reasons, I respectfully urge your vote on SB twelve fifty nine.
Speaker 15
We'll now move to any others in the room in support. State your name, your organization, and your position.
Speaker 35
Good morning. Christina Skirinj at the Center for Biological Diversity in support.
Speaker 24
Raquel Mason with the California Environmental Justice Alliance in strong support. Also asked to register support for scope action, the Environmental Health Coalition, and CRPE. Thank you. Good morning. Catherine Chew with Apen Action, also on behalf of CBE and Poudre San Francisco.
Speaker 22
Really strongly ask to support and get your I vote on SB twelve fifty nine. Thank you.
Speaker 25
Hello. Ada Welder with Earthjustice here in support. Mercedes Mezia, Sierra Club California in support.
Speaker 32
Mauro Kukusian on behalf of Physicians for Social Responsibility Los Angeles in strong support.
Speaker 9
Jim Lindberg, Friends Committee on Legislation of California in support.
Speaker 26
Good morning. Michael Claiborne with Leadership Council for Justice and Accountability in support. Thank you.
Speaker 28
Hello. Laura Placencia with Valley Improvement Projects based in Stanislaus County in support. Thank you.
Speaker 15
Thank you. We'll now move to our key witnesses in opposition. If you please step forward. You each have two minutes and are recognized when you're ready.
Speaker 8
Thank you madam chair and chairs. Paul Diarro representing Western States Petroleum Association here in opposition to the bill. I think given the author's presentation and I think it's mentioned in the committee analysis that the the premise part of the premise of the bill is that California refineries are leaving the state because gasoline demand is significantly dropping. That's not true. Gasoline demand has dropped 1% annually over the last five years.
So to be clear, 90% of the automobiles driving on California roads need gasoline. And on the second point, we are in the mid transition. I don't know what that means because we're not in the middle of anything because, again, 90% of the cars on the road require gasoline. The only thing that has happened is refineries are leaving the state because it's too expensive to stay in the state and refine crude into gasoline to meet the demand of California drivers. That is the reason they're leaving.
At a time when we have been working with the administration and others last year and this year on trying to convince the six remaining refineries to stay in the state of California. This this I don't think this is this is helpful and is a distraction in in that effort. So my my my my point is that gasoline demand is there. So I guess the question is, if you don't get it from in state refining capacity, you have to import it from foreign countries. There are a handful of refineries they that make California specific blend of gasoline.
They are in Southeast Asia and India. They do not have any a b 32 emission reduction requirements. They do not pay into the cap and trade program. As refineries leave California, you have no GGRF fund. So that is the the path of which we're going in now.
And for that those reasons, we oppose the bill.
Speaker 43
Thank you, madam vice chair. Keith Dunn here on behalf of the state building construction trades council. As many of you've heard me say in the past, the state building construction trades council supports renewable energy. We work on those projects. We support those projects.
Every expert I speak with, and I'm sure those that you do as well, tell us we're we're decades away from getting there. SB fifteen twenty nine isn't preparing a will. SB fifteen twenty nine establishes the parameters for which the obituary for our refineries is being written. It's a blue print for working class tax, and it's a preview of the pink slips that my workers, hundreds of thousands of workers in the state of California will be receiving should we move forward without finding solutions to keep them operating effectively in the state of California. When refineries closed, as was mentioned, energy demand doesn't go down, doesn't disappear.
It goes to places with weaker if any labor standards and weaker if any environmental enforcements. If and when this happens, fence line communities lose out on a active workforce that generates hundreds of millions of tax dollars that not only support my workforce that I represent, but also first responders, teachers, and other services critical to those communities. Refineries in this state are subject to oversight from a myriad of of agencies here in the state and federal regulators. Cleanup obligations exist. They're enforceable, triggered by multiple statutes and permits when operations change or cease.
There is no enforcement vacuum here. SB fifteen twenty nine doesn't close the gap. It manufactures one. Forcing refineries to generate state directed estimates of decommissioning costs and timelines untethered to actual closures is not neutral it's not a neutral planning exercise. It's a deliberate signal to markets that California is a hostile environment.
It's not ideology. That's just math. This continue this committee continually talks about affordability. If SB fifteen twenty nine adds uncertainty and friction to a system that's already constrained that we need to be talking about how we retain. It's not a planning exercise.
It's pressure. It's provocation. The people who will pay for it can afford at least. And I'll just close quickly here by saying this is a blueprint again for working class tax that each and every one of your constituents will pay
Speaker 15
Thank you. I'll move to anyone else in the room here that would like to express opposition. Please state your name, your organization, and your position.
Speaker 17
Thank you. Don Kepke on behalf of the California Council for Environmental and Economic Balance also in opposition.
Speaker 43
Good morning. John Kendrick on behalf of the California Chamber of Commerce, also in opposition.
Speaker 15
Thank you. Seeing no others, we'll now move to the committee. Senator Menjivar.
Speaker 1
A lot of a lot of thoughts on this bill. I I recognize that since last year, this body, the legislature as a whole has paid extra attention as it should to the situation of our refineries, where you even had environmental champions voting for things that they've never voted before. This this committee itself has passed this year a couple of bills in this space. Last year, we passed bills to address the short and medium goals to address the instability of what is access to crude oil in the refineries. We've done that.
In the report that we got from last year, the vice chair talked about three goals, and we only addressed the first two goals. While we are we have been supportive in those first two goals, I think it is unfair to not allow us to work on the third goal. And that third goal is the holistic transition in which is what the senator is working on. This isn't a bill to address the instability of refineries. This is this is apples and oranges of what we're arguing arguing today.
While I agree that we need to continue working on addressing the instability, the report that we got with the chair led on the informational hearing on this recommended throughout the entire hearing that we need to do something in this space. And one of the policy fixes that were were talked about were decommissioning and remediation of refineries is extraordinary underregulated compared to other hazardous industries. In the entire energy sector, everyone else has to do planning. Everyone else. Solar, wind, everyone else.
This is the only entity in the energy sector that does not have to do any planning. Now I recognize the opposition is talking about some duplicative work, and I would love to ensure that there isn't duplicative work. We don't wanna add anything. If something already exists, I would like to make sure that this bill is not adding to it, that we are streamlining streamlining it. The analysis also talked about the cost to the state that has to incur when refineries close, and there's no adequate planning for it.
What we've paid thus far, I think, is $1,000,000,000 of revenues that outside of this year are not sustainable and ongoing. I'd like to hear a little bit more because I think one of the things, senator, you mentioned is that they already have this information or will need it soon. I'm wondering how we know that they have this information accessible that they can distribute or put together.
Speaker 2
I mean, I think the answer to that question is just basically how businesses plan their financial futures. I mean, thinking about the liabilities that that they would face if they were to close, if they were to sell, if they were to think about redevelopment. I mean, these are things that are taking place in in responsible financial planning basically at every level. So we we assume that these things are happening. And I think when you look at other refinery closures, they you know, there there is information that goes back a decade.
So, like, for example, the one in Philadelphia where they're they were beginning to think about what should we do here. And a private equity firm bought the company and, you know, a number of things start to happen. And so so the financial information is is there. And to the opposition, I'd like
Speaker 1
to hear a little bit more, like, your thoughts on two things. What I've shared regarding every other energy sector have to submit disclosures in preparation. Why should you be excluded from all the other energy sources? And the the second part is, the water board may not require investigation or cleanup and abatement prior to its closure. It's only if an incident has happened.
How do you respond to, if it's not a requirement, the need to not change that approach? Those are the two things I'd like to hear.
Speaker 8
So, senators, through the chair, happy to answer your question. Currently, we have disclosure asset retirement obligations. It's outlined in the committee analysis. They're called a ROs. And we do those asset obligations when a decision is made to close the facility.
And a decision making to close the facility doesn't happen overnight. These companies are looking at these kinds of things for a long time. Under the the like nationally, a ROs, the the requirements are are quite comprehensive. The the the the the comprehensive regulation here in California and nationally on oversight of the closure of a refinery is quite substantial. I'm just suggesting what we use today and what we use nationally addresses what senator Blake Spear is trying to add to.
So we we believe it's it's it's a bit over the top, a step too far, and we have a an existing system that we use both in California and in nationally. And and I'd like to add to that. Since the nineteen eighties, we've had over 20 refineries close or leave the state. I have not heard of a problem with any of those departures. What problem are we solving?
Speaker 1
Yeah. But before that, I'd still want my answers my questions answered. I didn't get the second part about why other energy sectors have to do this and not this one should be excluded. You're saying the system exists, but even vice the vice chair Gouda's letter talks about no system existing in its place. And I'm just wondering, WISPA, you want us to support the first and second goal of the letter from the vice chair, and we're throwing you know, we're supporting you on that.
But why is it that only those two are important? And the third point is we should ignore.
Speaker 8
No. Good good question. Through the chair again. So a a clear description of what happened last year in s b two thirty seven was the stabilization attempt on crude supply from Kern County. There was nothing in that bill that proposed stability of gasoline supply.
Nothing. So we did the crude part last year. We haven't done anything on the retention of the six remaining refineries. We are having conversations with the energy commission and mister Gunda about what we can do in that space.
Speaker 1
And I appreciate and look forward to those because, you know, I I do believe we need to do something in that space, but that can live simultaneously while we also prepare for decommissioning. Because the fact is refineries are leaving. Regardless of how we land on why they're leaving, we can disagree on that, but we have to at least agree that they're leaving, and we need a plan for that. While we can work on retaining the remaining ones, we might not be able to retain all of them. But I don't think this bill is talking about how we retain refineries, access, importing, anything of that.
That's a whole other thing. I think regardless of what we do in that space, we still need a plan for the recent refineries because it takes it could take decade decades for one closes for contamination and so forth. I think there's a whole plan for Phillips sixty six and the redevelopment of that, but we do need a plan in place both for the workers and also for the cleanup in the area. And if we don't have a plan in place, we're gonna be, I think, we're gonna be, disadvantaged in how we respond to that. That's that's the only thing I'm I'm I'm lucky I just wanted to bring up.
Speaker 15
So before are we gonna move to the senator? Allen, do you have questions?
Speaker 31
Well, I I did wanna give the senator the opportunity to answer the perhaps rhetorical question.
Speaker 2
Well, I I think also my witnesses, if you don't mind, might be able to speak to the consequences of of not having planning.
Speaker 37
Thank you, chair. To answer the question, what problem are we solving that there hasn't been a problem in the 20 communities that in California that have survived refinery closures. Well, those those communities were left in the dark. They they suffered when they were when they learned that the refineries were closing. They had to scramble to figure out how to balance their budgets and pay their police and fire.
Speaker 20
So that's where the city Of Benicia is right now, and this bill will give communities on the ground the information they need to plan ahead and and look towards a, you know, a sustainable future. Right now, you know, we're left in the dark in the city of Benicia. We we do not have any answers on how we're gonna redevelop the 900 acres in our community. We are centrally located. We have businesses coming to want to relocate, but we we do not have any of the hard cold data to enable that transition.
Speaker 15
Thank you. So before I move to senator Hurtado, senator Blake Spurge, can I just clarify that you did take the committee's amendments? Yes. Thank you. Senator Hurtado.
Speaker 21
I'm not necessarily opposed to this measure. I like a lot of what you have in the bill. I think that there's just gotta be some accountability, especially when it comes to the communities, the workers, and and there's gotta be a plan. And there's no reason why, you know, refineries should be exempted from from having something of that sort. I I do, you know, feel it's my opinion that I don't I know we say we're in mid transition, but I don't necessarily believe that we're in mid transition.
I don't know if there's gonna be a transition. I mean, if we're ever gonna stop needing, you know, oil to be to be I don't know when that's gonna happen, if it's ever gonna happen. So, I just you know, that's kinda where I stand. I don't know if I'm right. If I'm wrong, maybe I am wrong.
Speaker 15
I don't know. I'm okay with being wrong. On the other end, I I I do feel as well that the the piece is important because we don't wanna put ourselves in a situation of being leveraged and we've got to make sure that we protect California consumers. I need a little bit of more time to to support this measure, But so today, will not be supporting it, but I I hope that I can get there because I do feel and there is a need for accountability, and and I wanna make sure that I continue to have understanding and information coming from the author so that I can get myself there.
Speaker 2
Yeah. So I think the issue of whether we are or not in a mid stage transition and going to the opposition's first point, is demand isn't dropping for gas. It in a way that it's sort of a secondary point and it doesn't require that you believe that because the reality is that refineries, which is only one part of the oil landscape, the whole ecosystem of digging it up, refining it, crude, refined gas stations, all the different parts of that ecosystem, refineries are still closing. They're closing in California and they have closed. The prediction is that half of the oil refineries in The US will close in the next twenty years and then half of the remaining ones will close in the decade after that.
So when you look at the the landscape and see that that level is because oil is a global commodity and it is it is driven by market forces which is of course why we see what's happening with the Strait Of Hormuz affecting our prices so much. It it it's important to recognize that because they are closing they will be affecting communities like Benicia regardless of why or whether we are transitioning or in mid stage or not. It's that that part is actually changing And so this bill is getting at what what types of information do communities and workers and and those who care about the environment need to recognizing what is likely, what is coming. In the same way that I was speaking about doing estate planning, in the same way that you draft that will knowing that at some point you will die even if you're not close to dying, you're still drafting the will to say let me get my arms around everything and recognize what is it that I need to do to be prepared. And so it's that same it's just that's really that same framework.
Speaker 21
I don't disagree with you. I think there's got to be a will, right? And there's no way to know when when you're gonna die. But I also believe that you kind of gotta make sure that you continue to be healthy. Right?
Because you gotta go to the doctor. You gotta all be do all these things because you want to remain alive. But in this case, I think there's just gonna continue to be a need. So I, you know, I feel that in being okay with I'm struggling with being okay with just saying they're gonna yeah. They're leaving for whatever reasons, knowing that when they're leaving, we're California consumers are being leveraged because there's still that demand here.
I I don't know for how long, but it's here and in the process where Californians are paying the price.
Speaker 2
Can I just respond really quick? So, I mean, I completely agree with you that you still wanna go to the doctor and take your vitamins and do all these things, and this bill is not about that part. Right? It's not about the health of the refineries. That is bucket one and two.
That is what the vice chair, Sivagunda, was talking about. We have these three buckets, but what about the third bucket? That's the one where you're drafting the will. You're still doing all the things to keep the refineries here, which is what we are doing in California. We want it to be a healthy market.
We want it to be a short supply chain. There are a lot of different things that are happening in those that first bucket especially, but this is that third bucket. And so this bill is only about that. It's not about anything to do with the health of them, keeping them alive because that's happening in other policy work. This is only planning for what about the future when they do close.
Speaker 15
Thank you. So, I'm gonna be painfully redundant here. I'm going to also be just blatantly honest right now about where California is in this moment because it matters. We've lost 20% of our refining capacity in just the past couple of months. We're importing roughly nearly 70% of our crude.
We have, a problem with our pipeline infrastructure. We have completely, through policy, exposed ourselves to global shocks, and the reality is that the families in my district and all of our districts and some of the poorest communities are paying for this. They're paying for the policy that's that we've implemented right here in this body. So the question, though, today, though, isn't simply about what this bill intends to do. It's about what it does in this moment because the timing of this matters significantly.
And right now right now, this bill lands in the middle of a supply crisis. And I understand the intent. Transparency is important. Planning is important. Making sure taxpayers aren't stuck with the bill, and cleanup cost is is vitally important.
But this bill does something else and something bigger. It requires operating refineries to model their shutdown timelines, to publicly disclose liabilities, and a plan for closure even when they're still supposed to be producing fuel today, and that's not neutral. That's a significant signal. And we need to be honest about what that signal is. Because when government starts requiring you to plan your shutdown while layering on cost, exposure, and uncertainty, that does not stabilize the industry.
Speaker 6
And that's the conversation we should be having. What's the what stabilizing efforts are we moving forward right now? What this does is it accelerates exits, further destabilizing a market where Californians are already paying nearly a dollar 70 more per gallon of gasoline. So my question to the author here, is there any part of this bill, given that we've already lost 20% of our refining capacity, that you can is there any line in this bill that explains how this is gonna keep refineries in California?
Speaker 2
I mean, I'd say that bills are by their nature limited in their goals, and this is focused on something that's not your question. So there are a lot of efforts taking place in the state to keep refineries open and to have a good relationship with them and to make sure that we're able to continue to have a supply chain here locally in California. But this bill is focused specifically on the macro, the reality of what the what it looks like to have closures and what communities and workers experience when that happens.
Speaker 15
But the macro is also that it further destabilizes the industry. So to our, key witnesses in opposition here, would you agree that requiring refineries to submit detailed closure and cost plans while still operating signals that California expects these facilities to shut down?
Speaker 43
Again, I thank you. I'll take a first stab at that. Again, this to stick with the metaphor, isn't a will. It's an obituary. And in a time when, again, the state building construction trades council supports renewable energy, every expert, again, I'll repeat myself, says that it's decades away.
We needed to be doing everything we can to make sure that we're ensuring that we retain the supply here in California. So to your question, is it effective to to plan your your parameters of your obituary to a legal business that's deeply needed in the state? No. It doesn't make any sense. Doesn't make sense for the workforce.
Speaker 28
Doesn't make sense for the communities. And again, I participated in the informational hearing. I said there, this is a blueprint for a working class tax that the least among us can afford. It will put my workforce out of work and will put great pressure on the economy of California and, you know, as the fourth largest, I think we just came out as the fourth largest, therefore, the rest of The United States and the world. And again, the state building construction trades council offers to every member of this legislature the opportunity to sit down with us and talk about how we can encourage the continued refining of oil and fuels and energy here in the state of California.
Speaker 8
And I'll shortly add to that on the reason state or refineries in the state are closing are because of state policies that have been adopted over a decade, over the last five years, over two special sessions, that's the basis of their decision because it makes it too expensive to have a refinery in California and those are decisions that they will continue to look at and make. But to be clear, the demand is there, but the the the the added state policies and regional and local policies have made it very difficult to stay.
Speaker 15
So if you could just answer yes or no on this next question. Is this bill combined with existing regulation increasing the overall cost and risk of operating a refinery in California?
Speaker 8
The the committee analysis does acknowledge the cost of having a refinery collect all of this information. It it is costly, and it and it will be at it will add to the cost of operating a refinery in California. Yes.
Speaker 15
So when costs and risk go up in a market like California, what typically happens to capacity?
Speaker 1
Well, the pattern is capacity gasoline supply is threatened because, again, we had 30 refineries in the eighties. We have six now. Two have left within the last two years. Because of state policies that are pending now, we have refineries that are the six remaining refineries that have to make a decision relatively quickly. So it it it's it's a problem that goes beyond I mean, gasoline supply in the fourth largest economy in the world is threatened for in for California consumers because we become more reliant on the importation of that finished product, gasoline from these refineries that are far away.
Speaker 8
Guess what they're doing? They are holding on to their stock and product because of the uncertainty that's going on in The Middle East. So California is putting itself in a position of relying on the finished product coming from foreign government. Same same thing with crude.
Speaker 15
So I don't think anyone is arguing against accountability or responsible cleanup. That that really does matter, but we can't ignore reality. We've already lost 20% of our refining capacity. We're increasingly dependent on foreign oil, and families are already paying some of the highest prices in the country. So the real question isn't just what this bill says on paper.
It's the message that it sends, and that's what I am most concerned about. Because right now, the message to the last refinery standing is this, start planning your shutdown. And when they do, it won't be Sacramento. It's paying that's paying the price. It's our it's our families.
So I'll end on that note. And if we have a motion or senator Allen?
Speaker 31
I just I I guess I'm you're you're you're making the point that refineries have been shutting down, and then you're upset about having reports associated with refineries shutting down. So I'm I'm I'm not understanding the the I I I I I if if this is about sending a signal that we need to plan for refinery shutting down because and and the and the concern is that that that somehow could precipitate more refinery shutdowns. Is that is that the general concern?
Speaker 15
So I don't know that we do common back and forth committee. Okay. But but Or I
Speaker 31
Is that is that the kind of the the you think the reporting requirements are onerous, you've already got some existing reporting requirements, and you're worried about the signal this sends about refinery shutdowns, just as you keep talking about all these refinery shutdowns. Is that effectively am I understanding the contours?
Speaker 8
So our opposition is based on a, the necessity for the additional information, which we don't believe is is needed at this point. Our opposition is based on the potential cost to refineries to collect that information and and how it's done.
Speaker 8
there You would have to ask individual companies if these provisions will guide their decision on whether they should stay or go. We don't as an association, we don't make those. But I get I get your question.
Speaker 31
But you you think that that these report requirements will influence someone shutting down? Just just reporting on the environmental impacts of a decommissioning? I cannot I cannot speak
Speaker 8
to that because I'm not in individual company decision making processes. I think the senator was making a point that it's going to send not a good signal, but that's those are company decisions.
Speaker 31
Okay. Do are is there a like a less are there are there particular reporting requirements that you that you're focused on as being particularly duplicative or onerous that you think there's a some sort of scaled back version of this that that you could you could see being reasonable? That
Speaker 8
is a good question. Coming out of the gate, we thought a lot of it was repetitive. A lot of it was unneeded. As I said before, the decision making process of these companies on whether to stay or go on the refining side is done through a long term process. We one of the issues is that when we provide the notice, when a company has made the decision to leave, we have to provide an advance notice.
And within the the regulatory framework of when that process starts, both federal EPA, water board, CARB, the DTSC, local governments, they they they go into gear and they get the information at that point. That's the existing process that we don't think is broken.
Speaker 31
Yeah. Yeah. Okay. I I hear you. I I I understand you you don't want additional reporting requirements, which I you know, we're always trying to strike that balance between, you know, creating unnecessary work for a few people.
I also understand the kind of optics issue that's been raised, though I I will say the two arguments being advanced at the same time, which is, oh, we have all these refineries closing, so but please let's not talk about the implications of refineries closing. It seems counter counterproductive. Well, just just conflict internally conflicting. But with that, I I'm sure that, you know, in order for this bill to make any progress and and potentially get to the governor's desk, I'm sure that the author's gonna have to do significant work to, you know, continue to convince people that this is a reasonable, non duplicative, you know, not overly onerous set of reporting requirements.
Speaker 8
And I will speak to that. We did meet with the author and really appreciated that meeting. We'll continue to work with her on something that is less onerous and and perhaps a better product.
Speaker 31
Yeah. And and and ultimately focused on what we've just heard from our representative from local government, which is, you know, how do we make sure the local governments and and communities have the tools they need to understand the implications? Because these are this isn't like shutting down a, you know, small business. I mean, this is this is a serious up you know, this is serious implications when a refinery shuts down on so many levels, including environmental, and oftentimes our local communities are left holding the bag. And while, you know, the author herself has said that she's not welcoming shutdowns, it's just as you point out, senator, the 20% have shut down.
So we've it would be kind of foolhardy not to be thinking about and planning, you know, for for the for the possibility of additional shutdowns even as we try to stabilize our market, push back on federal policy that are currently squeezing the oil supply and raising crisis, and all those kinds of things, which I know that you care about too. With that, I'll support the bill, but I I know that I know the author's gonna have a lot of work to do because there are there's this complicated melange of of optics and and challenges associated with this very difficult energy market we face right now.
Speaker 34
Yeah. I I too wanna just say thank you to the author. I'm a proud coauthor of this bill. And I also I kinda came in here and was just really astounded by the different discussions that I thought was this the same bill we're talking about because this is not the bill that is before us, which requires refiners to report information concerning decommissioning and site remediation. I have long West Long Beach and, of course, share that with Carson and Wilmington who have a lot of refineries in their dis in in that side of the district, which is just outside of my district.
Speaker 32
But nonetheless, a lot of the workers are there. A lot of my constituents, are breathing that air. And there have been, you know, multitude of violations to the Clean Water Act, as I'm sure has been mentioned, indictments by p 66, six counts, in fact, in which refiners did not want to report that either to my community, which I felt very offended by. And then now you wanna leave the community and leave us with the workers being lost jobs with sales tax revenue not being afforded to those cities, income taxes not being afforded to those communities, and yet we're still fighting over the reporting, which I find is just astounding. You know, for someone that has not just represented this community, I grew up here.
Speaker 34
I always tell people my skyline was the refineries. It still is just in some cases. And so I would I would just urge the refiners. I get this. If you wanna tell us why we are doing such a bad job, I think this is your opportunity to do that in these reportings, is to be able to say in California why you're leaving California.
Why are the liabilities so great for you to be leaving this this amazing state? What what is it exactly? Can we have the truth? And I really appreciate senator Blake Spear for for calling for that. If you just took out the specific industry of this, if you just say it didn't say it was refineries I have card clubs in my district.
If you just took out the the industry and just said, hey. There is an industry here, not saying what it is, leaving the the the city that has an enormous, you know, market share in in terms of the sales tax, income tax revenue for that city, and they're leaving. I'd wanna know what the plan is. In fact, I'd wanna know that years beforehand so I can plan as a city manager, as a city council member, etcetera. So I don't think there's any problem in asking for this additional information.
And, yes, I hope I know she will continue to work with you to fine tune so there isn't duplicative efforts and data. Fine. If if that's the case, let's do that. But I think we owe it to our communities who've been pollution burdened for so long and who have not received reporting on so many other environmental impacts. This is one thing we could do.
This is one thing I think the refiners, you all, and the workforce you could do to align with us to actually have a future where we can understand better what your, economics are and how our economics for our cities and and state more importantly can fare or fare better. Respectfully ask for NIVO on behalf of senator Blakespeare.
Speaker 15
So I'll just, before before you close, senator, this bill tells our existing six refineries. It requires operating refineries to model their shutdowns. And that says that we're not asking them to stay. We're not giving them any certainty. We're saying you're closing.
Give us the timeline. That is the message on paper and when we should be talking about how do we get them to stay. Right? We're not against transparency and reporting, but we're telling them you're closing. Give us the plan.
So, senator, you may close.
Speaker 2
Okay. Thank you. Well, I really appreciate the robust discussion and engagement from the committee members and the witnesses on both sides here. You know, you can see that this is a bit of a live wire issue. And the bottom line is that what we're looking for is information that's both public and useful for locals to do planning.
And recognizing the the what senator Gonzalez was just saying about the importance of a local economy, I think that that is such an important lens. And then you add into it the pollution lens where refinery refineries are inherently polluting. And what we don't want is to have a situation where there's a bankruptcy and they up and leave and the local community and the state are left holding the bag. And there are many examples of polluting industries that have left locations that remain blighted and unremediated for decades and decades. And so recognizing where we are with this industry at this moment and and also learning lessons that we that we've seen from other refineries closing, I think that's such an important piece here.
And I'll just I'll close by referring to this this article, lessons learned from the Philadelphia refinery closure, which was an article that goes through the reality of what happened with this refinery, which is they received a lot of subsidies, both state and local, to stay in business. There was a transfer of ownership with private equity. There was a big disinvestment in refinery safety. There was an explosion. It blew up, and it went into bankruptcy.
And so, you know, recognizing that things happen as the opposition witnesses said, there is there are many years of planning that go into making the business decisions. And these articles I'm just gonna read that these sentences here at the very end that say, the sum up, looking to the future, the most important lesson from Philadelphia refinery is to start planning now. Urban planners looking at the future of Southwestern Philadelphia in 2016 simply assumed that the site would remain in its present or similar use for decades into the future. Nonprofit advocacy groups in the city lacked resources and capacity to engage in a long term process of building a shared vision to advocate for a better future after the refinery. And I think it goes to the point of we want to work together to make sure that every every piece of this pie is protected.
That refineries can be can stay open as long as are needed, that they are supported, but we are also being realistic and clear eyed about what the future holds for these communities that host refineries and for the refineries themselves and the workers who work in them and the environmental situation that will be left after they leave. And so this this is I'm very I've had many conversations with WISPA and Building Trades, and I appreciate the open dialogue we have. I understand that they are basically flat opposed to this bill, And, you know, trying to work through is there any solution any type of information that's more robust than what's currently provided that is not duplicative and not burdensome, but that would give communities going back to something that's public and useful for locals to do the planning. You know, that's really what we're looking for. So with that, I respectfully ask for your I vote.
Speaker 15
Do we have a motion? I think senator Gonzalez motioned, and the motion is due pass as amended to energy utilities and communications. Secretary, would you please call the roll?
Speaker 30
Senators Blakespeare? Aye. Blakespeare, aye. Valderas? No.
Valderas, no. Allen? Aye. Allen, aye. Dali?
Gonzalez? Aye. Gonzalez, aye. Hurtado? Menjivar?
Speaker 31
Okay. We're going to open the roll for various bills. Let's start with the consent calendar. Secretary, please call the roll.
Speaker 31
Okay. Is senator Dally coming? Okay. So we're gonna close the roll on that. That's six o.
Alright. We'll now go to Cabaldon. That's item three s b ten eighty seven.
Speaker 29
Senators Valadares? I'm sorry. SB ten eighty seven, the motion is amended do pass as amended to transportation. Senators Valderas? Dali?
Speaker 31
Okay. That bill is out. We'll close the roll on that. Five to zero. Okay.
Next, we'll go to item four, s b 1239 Jones. The motion is due pass to appropriations.
Speaker 31
Okay. That motion fails. Without objection, we'll grant reconsideration. Next, we go to item five, SB eleven twenty five Mengevar. The motions do pass to rules.
Speaker 31
That bill is out. Five to one. We'll next go to item six, SB eleven eighty. Allen, do pass as amended to appropriations.
Speaker 31
Alright. That's five zero. That bill is out. We'll go to item seven eleven sixty one, Valladares. I do pass as amended to appropriations.
Speaker 30
Senators Dali? Gonzalez? Aye. Gonzalez? Aye.
Gonzalez? Hurtado? Aye. 620. 60.
Speaker 31
Yeah. Exactly. Next so next we're gonna that's 60. 6 0, that's out. We'll go to Blake's SP nine fifty five item eight, due passes amended to appropriations.
Speaker 31
That is six zero. That's out. Let's go finally to item nine, s b twelve fifty nine. Blake Spear, do pass amendment to energy utilities and communications. Secretary, please call the roll.
Speaker 31
Oh, okay. Well okay. Alright. We're gonna recess. Alright.
We have to figure out okay. So you're just adding on to the Blake's Rule? Is that front? Okay. Alright.
So that's item nine? Okay. So we're gonna reopen the roll on s b twelve fifty nine, Blakespeare. The motion is due pass as amended to energy utilities and communications. Secretary, please call the roll.
Speaker 31
That's four to one. That bill is out. We will close this hearing. We wanna thank everybody so much, and we'll be back in a couple weeks. One week.
One week. Okay. Fantastic. Thanks, Eli. This this hearing is adjourned.
Thank you.
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