Senate Labor, Public Employment and Retirement Committee
No chapters available yet
Legend
Transcript markers
- text Sentence being played
- text Search result
- text Intervention cited by the link you opened
Click a sentence to play the video from that moment. Select text to quote it with the speaker, timestamp and link.
More options
Senate Labor, Public Employment and Retirement Committee California State Senate
Follow its sittingsSpeaker 2
That's evident by study after study here in the state of California. So, working in a bipartisan manner, they created a tax credit to accompany the overtime law in an effort to support the actual world use. The tax credit offered under my bill helps farm workers by creating a dollar for dollar credit on the time and a half paved of the overtime. So, let's just say it's $20 an hour. Let's go to I know it's not 10, but for easy calculation, if they get $10 an hour, they only get the credit on the $5, which is the half time on the overtime wages.
So calculate that at 20 because most of them make $20 or more an hour. The tax credit offered under this bill will help farmers achieve making sure that the employees can work overtime and get paid for overtime and help put money back into farmers' farm workers' pockets. This would be a form of a payroll tax credit, what they would receive and make their periodic tax payments to EDD. This is recorded on their DE six, which they would submit quarterly, that shows the wages, the overtime wages, and it's all tracked by the EDD department and the Franchise Tax Board. It's part of their EDD payment or their DE six payment of reporting.
If the employer is paying $20 an hour for normal wages and $30 an hour for overtime, the tax credit would only be on the $10 To be clear, the tax credit only applies to the overtime wages for farm workers. It does not affect the straight time wages in any way, shape, or form. It would not apply to management, administrative staff, or mechanics. Only the employees under wage order 14, which are those that are represented here in this building and in this conference room today that actually work in the fields, that pick the fruit to get it to our tables that we have and supply to our constituents every single day. In no way does nine twenty one make changes for the farm worker overtime law.
It actually supports opportunities for farm workers to earn overtime by making it more likely that employers can afford to pay the overtime. In my district, the top three food producing counties in the entire world, these are my people, and they're hurting because of October. And this is a mechanism to help these farm workers. They travel from often from county to county, but the majority of the work is done in Fresno, Tulare, and Kern Counties, and these farm workers need a break. We see that they're hurting.
They're coming to our office looking for food assistance. They're coming to our office looking for other assistance, and they weren't doing that when they were making sixty hours a week. $1,600 a month out of someone's paycheck is significant, and I'm asking for an I vote to help this bill get through the legislature so that they have some ability to recoup some of that money. Agriculture in my district is about producing food that we eat and keeping the food supply secure from foreign disruptions. It's also a way of life and creates jobs for thousands of people in my district, predominantly our Hispanic and Latino population.
And for those ag communities that are hanging on, farm workers face reduced hours and less compensation. SB nine twenty one will raise every farm worker out of poverty, and the bill is not an end all solution for our agriculture employees' problems, but it's definitely a good start. The grower that's on the edge of the edge needs overtime work and harvest to be picked in periods that will help. This bill will help, and it gets hours to the employees that need those wages. This is substantial loss of $1,200 a month for every hour.
Every average farm worker is really hurting our workers. This is a disconnect between many businesses that operate in our state. With me today to support SB nine twenty one is Emmanuel Torres, of Bar twenty Dairy in Fresno and Brian Little from the California Farm Bureau.
Speaker 3
Okay. So good morning. My name is Emmanuel Torres, and I'm here standing respectfully requesting your support for SB nine twenty one. So California's overtime laws were designed to benefit workers, but in the agriculture sector, they have unintended consequences. Rather than increasing earnings, these policies have often led to employers to limit employee hours in order to avoid overtime costs.
So as a result, many agricultural workers are experiencing reduced schedules and lowered overall take home pay. I've seen this impact firsthand when I began to work at Bart twenty Dairy in 2017. I had consistent opportunities to work extended hours and earn an additional income. Over the time, however, overtime opportunities steadily declined and schedules were adjusted to avoid triggering overtime pay requirements. So this reduction in hours significantly affected my income and ultimately required me to seek a second part time job just to make ends meet.
Speaker 18
So now as a role as a supervisor, I continue to see this pattern across the workforce. We receive at our dairy 10 to 15 applicants each month from agricultural workers in the area, and one of the most common questions applicants ask is overtime availability. Many share that they are seeking a new employment specifically because their current employers have reduced schedules to standard eight hour days, five days a week to avoid overtime obligations. SB nine twenty one offers practical solution by expanding access to overtime pay in a way that supports both the workers and employer. This bill can help restore opportunities for increased earnings, improve financial stability, and reduce economic stress for hardworking agriculture families.
Speaker 3
Agriculture workers are essential to our food supply and our economy, and many continue to struggle to earn enough support for their households. Supporting SB nine twenty one is an investment in these workers, our families, and long term strength of California's agricultural industry. Thank you for your time and consideration.
Speaker 4
Morning, Chair and Committee members. I'm Brian Little for California Farm Bureau, the largest general interest agriculture organization in our state. Our farm employers are committed to supporting our employees, and that's why we're cosponsoring SB nine twenty one. We're not here to debate whether overtime pay is a good idea. It's firmly established in law.
And I want to be clear, our farmer and rancher members are in full compliance with that law. But what overtime law has meant for employees is lost work hours and foregone income. Research from UC Berkeley found that take home pay for Ag workers has declined since the overtime law took effect. Democratic governors in Oregon and New York learned from California's experience and created tax credits to help employers cover the cost of overtime wages. They know that when an employer is losing money or is on the margins, overtime hours will be reduced.
This is basic economics. That's why several Democratic candidates for California governor agree that it's time to revisit this law to make it work for farm workers. A way must be found to fund overtime premium wages if you want to increase take home pay for farm workers. That was the expressed goal of the proponents of the overtime law, but that promise has yet to be fulfilled. SB nine twenty one addresses this problem by permitting agricultural employers to deduct from their payroll taxes an amount equal to overtime premiums they have already paid.
Speaker 5
The deduction can't be used until their employees have already received overtime wages. Last year, the legislature decided to help California's iconic film industry by providing global entertainment companies with substantial tax subsidies. One of those companies is currently negotiating a buyout valued at more than $110,000,000,000 nearly twice the value of California's annual agricultural output. Agriculture is an iconic California industry too, employing hundreds of thousands of people. But our workers were left behind last year when this legislature said no to farm workers and yes to billionaire entertainment companies.
Speaker 4
Every single dollar of the projected $300 to $400,000,000 cost of SB nine twenty one tax credit will go directly to California farm workers, helping them afford gas, electricity, groceries, clothes and shoes for their kids. If we can give tax breaks to Warner Bros, twentieth Century Fox, NBC, Netflix, and Amazon, can't we do this for farm workers? California Farm Bureau urges you to help us help our workers and support SB nine twenty one. Thank you.
Speaker 1
Thank you. Any other Me Too in support of this bill? Please step to the mic. State your name, affiliation, and position.
Speaker 16
Clifton Wilson, on behalf of Supervisor Townsend from the Tulare County Board of Supervisors, in support. Thank you.
Speaker 2
Good morning. Anna Moba with KSC on behalf of a number of agricultural organizations in support. Thank you. Good morning, Chairmembers. Melissa Kalsachuk with Western Growers in strong support.
Thank you.
Speaker 6
Kimberly Good morning. Kimberly Clark with the California Farm Labor Contractors Association in support. Thank you.
Speaker 15
Michael Miller, California Association of Wine Grape Growers. We're co sponsors of the bill. Thank the author for her leadership. Thank the committee for your, consideration. We support the bill.
Speaker 10
Also, I use a I was a tax auditor during her past life for EDD. If have you any questions about the administration of how this tax credit would work, I'm happily available to answer any questions you may have. You.
Speaker 1
Thank you. Okay. Seeing no other support, me too. Let's go to opposition. Opposition witnesses, please step forward.
Can you yeah. Let's transition.
Speaker 1
have enough seats. Thank you. Okay. Wonderful. Good morning.
You have two minutes.
Speaker 12
Madam chair, members, Sarah Flocks, California Federation of Labor Unions, and we are in respectful opposition of this bill. And to be clear, this is not a tax credit for farm workers. This is a tax credit paid for by the public, by the taxpayers of California for the employers. In 2016, California passed ten sixty six requiring employers to pay workers overtime just like every other employer in California is required to do. The state had to do that because in 1938, congress enacted the federal Fair Labor Standard Act, which explicitly excluded ag and domestic workers from wage and overtime, protections, codifying the rot of racism and the legacy of slavery in labor law.
California's law was passed to give farm workers not just the right to overtime pay, but also the right to be treated like a human and not a machine. For decades, ag employers have not had to meet the same overtime pay requirements as every other employer. The truck companies that ship produce, the companies that package produce, the grocery stores that sell it, the restaurants, cafeterias, hotels, schools, and hospitals, all must pay overtime to their workers. Farm workers did not get the same benefit, and their employers were not bound by the same responsibilities and obligations. Employers should be responsible to pay overtime or hire enough workers to not require overtime hours rather than shifting the burden onto taxpayers.
Workers are not machines. You can't just put more quarters in and expect them to work twenty four hours a day. It sets a dangerous precedent for taxpayers to subsidize certain employers for simply following the law. The senators on this dais author laws that you all intend and expect all residents and businesses to comply with regardless of economic or other circumstances. If not, you would exempt them.
This bill contains none of those protections, benefits, and guarantees and, undermines the sanctity of of the of our laws. For these reasons, we ask for a no vote today.
Speaker 1
Thank you. Any witnesses in opposition? Me too's name, affiliation, and position?
Speaker 1
Any other opposition? Me too. Seeing none, we will come to the dais. Members, Senator?
Speaker 7
Thank you, Madam Chair. I appreciate what the author is trying to do from the standpoint of the district that I come from, and I know the district that Senator Grob comes from, has significantly more agricultural employees. But it's kind of a well kept secret outside of Santa Clara County that we have 15,000 agricultural employees still in what we call South County, which is part of my district. And so I've had a little experience dealing with wage issues over the years, particularly going back before my time on the Senate for the twelve years I was on the Board of Supervisors, most of the cities in Santa Clara County, there's 15 of them, adopted some sort of a living wage policy. In the county, At the county we couldn't do that.
And that wasn't because it was a close vote, a three to two or something like that. It was unanimous that we could not do that countywide because of the agricultural employees. And it's not because we were worried about or treating the ag employers as a special interest, or someone that should be treated especially. It was because we're in a commodity, they're in a commodity market. And in Santa Clara County, where the cost of living is horrendous, as everyone knows, those employers, by and large, were already paying more than the city living wage and, of course, meeting overtime and whatnot.
But they were already they were struggling so much that we had over the years fortunately, I think for them and for the community made huge local subsidies in farm worker housing, for example, to try to help with that. When you're farming and you're growing cherries or apricots like we do in South County and you're paying as much as a couple $100 an acre foot for water and in the Central Valley they're paying $12 an acre foot and in Brentwood they're paying $60 an acre foot. You you don't get to go to the LA market with your fruit and say, I need a higher price because I pay more for water or I pay more for energy or I'm paying more for wages because I'm in Santa Clara County and nobody could survive there on, you know, on minimum wage. But so that said, it sounds like I mean I vote for the bill. I'm not, but there's a specific reason for that.
And that is I don't first of all, I think Labor California Labor Federation's point about setting up a precedent that looks like we're taking one industry at a time or one group of folks at a time and trying to essentially do a carve out. I know it's not a direct carve out on overtime. It's a credit. But certainly folks will be coming and looking for that. We've seen that with SB five and some other things.
It really puts a lot of pressure, I think, on the legislature and everybody involved to start trying to deal with that and try to do these explanations with folks. No, we can't do it for your industry because you're not in a commodity industry or whatever. So I do think, I do believe, and I'd actually be willing to try to work on it, obviously, if there's some kind of common ground at some point that can be negotiated to protect labor standards, but figure out a way where there's commodity markets like this to try to figure out how to make sure the wage standards are maximized. I mean, I'd like to see, you know, even more wages paid than they are in general, in the agricultural sector, of course, but even outside the agricultural sector. But in this sector where, you know, the LA market, the New York market, you know, the Chicago market, you know, is basically dictating what we can pay for labor because they're setting the price and they're going for the price that's really the lowest common denominator.
They're pushing our own labor standards into the lowest common denominator is what I'm saying. And so I think the Farm Bureau has an excellent point. I think this is the second year that they've tried to advance something like this. And again, Senator Grove, I appreciate you trying to thread that needle. But I'm leery about, as I said, opening up the floodgates.
And it's not it's selfish. I've served as a labor chair before. I have served on this committee for five and a half years, and we have to be super careful and really, really narrowly tailored if we're gonna try to do something for agriculture that helps with the situation I was just describing. And this bill goes a long way toward that, but not it doesn't completely close that loop. So that's where I'm at.
Thank you.
Speaker 1
Close? Okay. I appreciate, the comments, senator Cortese, and I I really wanna align my comments, sir, with with yours because the one thing I do see is that labor and the farm bureau are on the same page, and senator Grove on the same page. Farm workers deserve more. Wages, higher wages, better working conditions.
Speaker 28
And I think that is a starting point that we should recognize. I think we, are in this industry where and I appreciate the industry for keeping our food affordable so that people can afford, the groceries that are in their communities and be able, to, really understand the significance of senator Grove's district of this industry and what great service they give to Californians in providing, you know, the world's food basket. I do agree with senator Cortese that we do not wanna set a precedent of rolling back overtime pay. I really appreciate the historic context of how we got to overtime and who didn't get it for generations. I think about my family, tobacco farmers, and, you know, my great grandmother who had a Social Security of, I think it was, like, a $100 and a $130 because, you know, for most of her life, she did not have access to basic, workplace protections like overtime, workers' comp, those sorts of things.
Speaker 1
So we don't want to roll the clock back on these important benefits, but at the same time, we wanna figure out a way to ensure that there are living wages. I think there's a lot to be said about reforming our tax credit system. I think we don't use our tax credit system for good in the way that we could. I don't think we have enough creativity in that space. I think there are opportunities for us to, ensure that we are using that system in a way that helps to uplift workers and to be creative about what we can do, to invest in the workforce.
And I'm happy and would join senator Cortese in sitting down and thinking creatively about how we do it. I just don't think overtime is where we do it. I don't think we want to, in any way, infringe on all of the progress that's been made in overtime. And and for that reason, I cannot support the bill today. I think it sends the wrong message.
I think it sends the wrong message to all of the other sectors that when workers work extra time, that they wouldn't get extra pay. And I think that's that's not a narrative that we want here in California. I I do think also that the industry has been walloped by the administration's, erratic and destructive policies that tariffs on, tariffs off that has made this last eighteen months hasn't even been eighteen months, incredibly, challenging. And and we know in some instances, this is an industry that is seeing recessionary pressures because of it. And so we we have an obligation to look at that and to figure out what are the ways, that we may sit down and figure out a strategy that could involve tax credits that may bring some relief, again, but not touching, what I would call sacred policy of overtime pay, here in the state of California.
So I I really appreciate the dialogue. I appreciate the discussion. I appreciate, senator Grove, your tenacity, on this issue. I think now we've gotta match it with some creativity and figure out a way for us to sit down, labor, the industry, and figure out a way, to to strengthen our our farm workers. And I know that we can, because we have before, and, we will do it again.
And so, again, thank you for your tenacity. I will not be supporting the bill today, but I do have an open door to figure out ways to address the needs of farm workers. And with that, you may address any questions or concerns you might have. Senator Grob, in your close.
Speaker 2
Thank you. I wanna make sure that everybody on the dais and everybody in the room understands this is not in any way, shape, or form affect overtime pay. Over forty hours, like the chair said, that that shouldn't that you don't want it to affect overtime pay. It does not. The employees will still get the consistence with ten sixty six.
They'll work eight hours a day, overtime over eight, forty hours a week, overtime over 40, and but the pay and they'll get the overtime. This does not affect their overtime wages. It simply allows a tax credit for the farmer farmers, the growers that pay the employees overtime. There's a verification process. You have to submit the wages to your quarterly d e six report to the EDD department who will verify that it's it's not a it's not a an additional cost.
Every employer has to quarterly submit a d e six now. They will verify that those wages were paid just like they currently do. It this doesn't change an action for EDD, so there's not a cost measure there. The employers are now providing d e sixes based on any wages paid. It's requirement that employers in the state are required to have.
But it will allow them to take a tax credit on the overtime piece. So if they're making $20 an hour and they get paid $30 an hour on the overtime, they get a tax credit after taxes are paid. After overtime is paid, they get a tax credit. I would challenge each of you. My colleague in Santa Clara County, he says you have 15,000 farm workers in South County.
This is an opportunity to give them an opportunity to bring more pay home. And I have 500,000 farm workers in my district, and I'm the Guerra, the Gringa, and I'm fighting for these people that need extra wages in their paycheck. I challenge the opposition and the the the, like, almost dedicated loyalty, and I look at the opposition's letter for the film tax credit that they supported, adamantly support the film tax credit. Just last year, a b or just, a b eleven thirty eight Zabur adamantly is a sign these are their words. This is a signature industry.
Those people are a signature industry, and they deserve the same thing that we gave that you guys all voted for. You stood up and said that you don't wanna create a mechanism for exemptions. You exempted and voted for a tax credit for the film industry. These people produce our food that we eat every single day. And like my colleague from Santa Clara County said, $200 an acre $200 an acre foot for water.
You can't control those things. You can't control the regulatory process. You can't control the transition with ultra low carbon fuels and fuel carbon and the difference between engines that you have to put in the equipment that they use every single day to produce the food that we eat. In the support letter for the film industry from the opposition, This means that the program will first and foremost be a jobs program for the employees. This program, which is identical to the tax credit, will be a jobs program for stand up.
Please. We'll be a jobs program for these people, 500,000 of them in the district, 15,000 in your and I know you represent Los Angeles, but I know you have farm workers in your district as well. The same arguments they California Labor Federation local unions are are arguing against this bill are exactly what you guys did for film tax credits. That's all we're asking for. We prove they get the wages.
We prove they get the overtime. We increase their paychecks, and we get treated just like the film tax credit industry the film industry when we produce food. Now, we don't do movies. The argument in their bill was that these people will leave. Well, they can't leave.
The land is here. So we should have supported them before the film tax industry because we need them here. And maybe that's why we don't, offer support to our farm workers is because they can't leave. The land is here. They can't, you know, they can't pick up the land and move, but they have every opportunity.
They should have every opportunity in this state. And I listened to the arguments on several other bills, and every one of you say you care deeply about these people. You care deeply about the people that came here to testify. I represent 500,000 of them. This is my district, the district that I'm fighting for.
You have 15,000. Let's give them an opportunity to be able to earn overtime wages. It does not touch the overtime law ten sixty six. It simply allows a tax credit for our our, employers, the the farmers that produce the food or own the land. This is one of the only cost that they can control.
They can't control $200 an acre foot of water. They can't control Sigma. They can't control the regulatory process, but they can do this. They want to pay them more wages. It's not in the budget to pay more wages because sigma is the one of the biggest disasters our farmers have ever had as well.
And the legal fees that are included in that, it's a mess. And we're trying to save the agricultural industry. Do you know that agricultural farm worker or farmers are opting out of the Williamson Act on a tax credit to produce solar farms? I drive through my valley up 65, and there are beautiful acres of farmland that are totally destroyed by solar farms because they the only option they have is to do that, to retain the land that they owned. This is an opportunity for you to help 15,000 mark farmers in your district, 500,000 in my district, and it's the same thing that you guys voted on for the film tax industry for those jobs behind the camera to help them.
I realized the only difference is is that they're signatory, they're union. A lot of these guys aren't. They have the opportunity to join a union, but forcing them has caused massive disarray in the industry as well. Give them an opportunity to earn more money. That's all I'm asking for, and I respectfully ask for an I vote.
Speaker 1
Thank you for that, senator Grove. We are in a subcommittee, so we will take this bill up when the rest of our colleagues arrive.
Speaker 1
Okay. We see senator Perez in the audience. So we will move to file item number three, and that's s b ten eighty three. If you have witnesses in support, they can come and sit at the table.
Speaker 1
there are opposition witnesses, when the support witnesses are done, we'll switch out.
Speaker 13
Good morning, madam chair and members. SB ten eighty three built on the Safe Learning Environments Act, SB eight forty eight, which was enacted into law last year and established a statewide data system to track egregious misconduct by school employees. That law was an important step forward in improving transparency, strengthening accountability, and helping ensure that individuals allegations cannot quietly move between school sites without scrutiny. But as implementation has moved forward, additional refinements are needed to ensure the system operates with consistency, fairness, and fully protects students. First, classified employees do not currently have a clearly defined, impartial review process comparable to what is provided to certificated employees.
Speaker 7
Existing law ensures that teachers receive due process, including a hearing and the ability to appeal to an administrative law judge through the Office of Administrative Hearings. Without equivalent due process protections, investigations against them involving egregious misconduct can result in professional and personal consequences. SB ten eighty three addresses this by requiring an administrative law judge to determine whether a classified employee should be added to the statewide data system. The bill also requires the statewide system to immediately notify a current employer when an employee leaves a local education agency or private school before or during an investigation. This notice would inform the employer that preliminary report has been filed and an investigation is pending to ensure that future employers are aware of any unresolved concerns.
Speaker 13
Second, while the existing framework established accountability for permanent employees, gaps remain for independent contractors and nonpermanent individuals who interact directly with students. These individuals may have regular, unsupervised access to children yet are not always subject to the same standards. SB ten eighty three seeks to ensure that appropriate vetting measures apply to them as well. Together, these improvements strengthen the system, promote fairness, and ensure that all individuals working with students are held to consistent standards because student safety remains our highest priority. Joining me to testify in support of the bill is Navneet Perier with the California School Employees Association and Tristan Brown with the California Federation of Teachers.
At the appropriate time, I respectfully ask your I vote.
Speaker 4
Thank you. Good morning, Madam Chair, members of the committee. My name is Navneet Puryear, and I'm here today on behalf of the California School Employees Association, a union representing nearly 3,000 classified school employees across the state. We are proud co sponsors of SB ten eighty three. At its core, this bill is about fairness.
Speaker 14
Last year, the governor signed s b eight forty eight authored by senator Perez, which, among other things, created a permanent statewide database to track accusations and convictions of egregious misconduct by classified school employees. While SB eight forty eight is an important step towards guaranteeing our schools are safe places for children, it lacked important safeguards for innocent employees. It allows classified school employees to be placed into a permanent database based on an allegation of misconduct without any due process. Most of our members are women of color who make less than $40,000 a year. Their mothers, their grandmothers, and being wrongly placed into a database can ruin not only their professional careers but their personal reputations.
It is also inconsistent with the rights provided to teachers. SB ten eighty three would require an administrative law judge through the office administrative hearings to determine if a classified school employee in a t k through 12 school district should be placed into the egregious misconduct database. This bill would provide parity because classified school employees should not be denied due process rights granted to teachers. This measure reflects continued collaboration with the author to ensure that the implementation of last year's legislation both protects students and upholds fundamental due process rights for for school employees. For these reasons, we respectfully ask for your I vote.
Speaker 8
Good morning, Madam Chair and members. Tristan Brown with the CFT, Union of Educators and Classified Professionals. We'd like to extend our tremendous thanks to the author for providing us with this opportunity to refine an amazing bill that was passed last year, SB eight forty eight, which did wonders to help us prevent any kind of so called grooming practices and other nefarious activity that qualifies under egregious misconduct to be more preventative. Student safety is paramount to our members, and I'm sure everybody in the educational community. The bill went really far to actually try and make sure that anyone who would do harm to a student would be tracked, and any employer in the future would be able to know exactly what they were getting into.
Speaker 15
The refinement, though, is very necessary for the due process rights of our members, and we're appreciative that we're getting there with this bill so that we can both make sure anyone may be able to exonerate themselves in an instance where someone maybe was overzealous with what actually occurred, or, you know, sometimes people do make things up. It's very important to have that due process and to make sure that those who did not commit any egregious misconduct are able to exonerate themselves. And at the same token, force the investigation to complete. We do want to catch any baddies. We don't want them and anyone who would do harm to students to be working in our school system.
So, we're, again, very appreciative that the author has refined SB eight forty eight, and that we're working together to bring more protection, but also those due process rights are protected. So, with that, we ask for an I vote as well.
Speaker 1
Thank you very much. Do we have any opposition witnesses? Oh, I'm sorry. We're going support. I'm sorry.
Support Me Toos. We're not skipping that. Support Me Toos. Name, affiliation, and position.
Speaker 1
Thank you. Ms. Good morning, Madam Chair and members. Janice O'Malley, AFSCME California. We are proud co sponsors, and I urge your support.
Thank you. Okay. Any other support me to's? Okay. We'll move to opposition witnesses.
And while you come, we have a quorum, so we will ask ask the assistant to please call the roll.
Speaker 16
Smolt Cuevas present. Senator Strickland? Here. Strickland, here. Senator Cortez?
Here. Mr. Cortezi, here. Senator Drazo? Senator Laird?
Speaker 17
Ms. Thank you. Ms. Morning, Madam Chair and members. I'm Sarah Petrowski on behalf of the California Association of School Business Officials.
We want to thank Senator Perez for her leadership on the critical issue of preventing childhood sexual assault. Like the senator, we believe that every child deserves a safe, healthy environment and the resources needed to thrive. We are proud to support your efforts to pass SB eight forty eight last year. We are fully committed to working together to achieve that goal. However, we are concerned that specific provisions of SB ten eighty three would inadvertently undermine the protections recently established by SB eight forty eight.
Specifically, this bill creates additional and duplicative layers of due process in the investigation stage. Employees already have established rights to challenge disciplinary outcomes. By allowing a challenge to the investigation itself rather than the discipline, we risk inconsistency and delays in taking the actions necessary to protect students from childhood sexual assault. Furthermore, this proposed process could inadvertently restrict the flow of vital safety information currently permitted through the background check process. SB ten eighty three would also establish investigation timelines that conflict with established policies that reflect the need to begin an investigation immediately upon receipt of a complaint.
Speaker 29
While we support the goal of establishing parameters for how records are to be created and maintained in the statewide database established by SB eight forty eight, we must prioritize the prevention and elimination of childhood sexual assault above all else. We hope to collaborate on amendments that preserve the essential tools to prevent and eliminate childhood sexual assault that were provided for in SBA four-eight. Thank you.
Speaker 38
Good morning. Faith Borges on behalf of the California Association of Joint Powers Authorities, respectfully opposed to Senate Bill ten eighty three as currently drafted. Kajaba represents the risk pools throughout California that many public entities use, including school districts, to self fund their liability and manage their tort exposure. Our members are not only responsible for financing claims, but also for developing and implementing policies designed to prevent them, including the prevention of abuse. In recent years, public entities across California have paid billions of dollars to resolve claims alleging that institutions failed to adequately protect students and others in their care from abuse.
Speaker 18
These outcomes reflect both the profound human impact of such failures and the significant financial consequences borne by public agencies and taxpayers. In light of this reality, it's deeply concerning to consider any legislation that may reduce or weaken safety measures intended to prevent abuse before it occurs. While we recognize and respect the importance of due process protections for employees, Senate Bill ten eighty three, as drafted, risks a framework that prioritizes adult procedural protections at the expense of child safety. Of particular concern is the potential for the bill to establish inconsistent standards, one governing when an employer may act to discipline or report misconduct, and another, lower standard for determining liability for failure to prevent abuse. This misalignment creates uncertainty and undermines the ability of public employers to take proactive, preventative action.
Public agencies must be empowered to act decisively when credible concerns arise, without fear that doing so will conflict with a different standard applied after harm has occurred. A system that imposes liability for failure to prevent abuse while simultaneously constraining the ability to intervene early is not workable. We remain committed to working with the author and the sponsors to achieve our shared goal of an appropriate balance, one that preserves due process while ensuring the safety of children and vulnerable individuals that are paramount to our tasks. However, any approach that results in conflicting or diminished standards for prevention and accountability doesn't meet that goal. For these reasons, we're respectfully opposed to the bill today, but appreciate the opportunity to continue working together.
Speaker 1
Thank you. Any other opposition? Me too's, please step to the mic. Name, affiliation, and position, please.
Speaker 6
Good good morning. Dorothy Johnson on behalf of the Association of California School Administrators and also for my colleague from the Kern County Superintendent of Schools, respectfully opposed.
Speaker 2
Kaitlyn Zhang, on behalf of the School Employers Association of California, respectfully in opposition.
Speaker 1
Christina Sarasova, Riverside County Superintendent of Schools, in opposition.
Speaker 13
On behalf of the California Association of Suburban School Districts in opposition.
Speaker 1
Okay. So we have a motion from senator Strickland. I I wanna just say, you know, thank you for the work and collaboration on this bill. Cleanup is sometimes a difficult task, to do, but you're all doing it for the right reasons, which is to protect our children in our school districts. Coming from LA County, the issue of liability is a real one.
We've been talking a lot about that in LA County. And so, you know, I'm going to support the bill. I really appreciate that you're gonna be continuing to work with the opposition in good faith, to make sure we strike the right balance in this case and, balancing the protection of our workers, the protection of our students, the protection also of our institutions from crippling liability. I know you all want the most, and, that's why we're supporting this bill today. Senator Oh, senator Laird, do you want to make a comment?
Speaker 1
Okay. So I am done. You may make your comments. And then we'll go to the senator for close.
Speaker 20
Thank you. And this is I had this moment yesterday in committee where I got there just for the end of the discussion and and did not have the opportunity to hear anything up to that and you run the risk of stepping in it because you don't know what you all just said. But what I wanted to say, since I've been working on the issue of these delayed claims for the last year, is that one of the few bright spots of last year was Senator Perez's bill. And to go into the weeds for a second, when Assembly Bill two eighteen was passed in 2019 and signed, that removed the statute of limitations for five years on old sexual misconduct claims in public entities. It created the thing I think you were just talking about, which is the County Of Los Angeles has basically, for some units, put a 0% salary increase on the table.
The city of Santa Monica is having a rough time. A school district in Montecito, 60% of their budget was a settlement. These are happening in ways that there are horrible impacts on local governments. And in 2023, the legislature passed second bill by Assembly Member Addis removing the end of the statute of limitations. And so all our efforts last year to help cities and counties and school districts were looking backward, And it was looking to the old claims that were covered by that first bill.
Speaker 9
And yet, if there's to be liability heading forward, it is requires prevention programs to be able to mitigate that liability, and that's why the bill last year was so important. And my concern here is just when you read the analysis, it's sort of in the silo of equity and equity that classified employees get the same rights that certificated employees get in schools. And I think that is a matter of equity and is a matter of justice, but you have to have the backdrop of making sure that we're not backsliding on the bill from last year, that we're making sure that that prevention is out there and prioritized and done so that while we attempt to redress the past issues with local districts, that we mitigate against there being any future issues. So I appreciate the author's work on this. I intend to vote for the bill today.
Speaker 20
But at the same time, I want to make sure as this bill moves along, and I would have loved to have heard the testimony, as this bill moves along that if there are considerations to make sure that we do not step back from our commitment to prevention and everything it takes to do it, that we are not stepping back. So that was my concern. And catching the last thirty seconds of your comments, I think it mirrored some of the things that you said. So I appreciate everybody bearing with me. I was just the keynoter at the Budget Centers Conference with 500 people.
And your name came up.
Speaker 1
Well. Appreciate appreciate the comments. And Senator Uri, would you like to close and get back to your committee?
Speaker 13
Yeah, certainly. You know, I'll say a couple of things. One, you know, this is a very important issue for me. And I understand that there's been a lot of focus on this because of the report. And for me, my concern around this issue doesn't come from the FICMAT report.
It comes from being directly impacted, which is a very different experience, I think, than some of you here. I wanted to work on this issue two years before I got here to the Senate. When I was a student in high school, I had a school guard who attempted to groom me and asked when I was going to turn 18 because he wanted to be romantic with me. This was somebody that I looked up to, that I considered a mentor, and who wanted to take advantage of the relationship that we had because I was having challenges at home. I know multiple victims like this.
I got away. And fortunately, I know many people who didn't. I've convened conversations with survivors. I've had conversations with survivors who have told me about times that they've written documents outlining the pain that they've gone through. Identifying somebody on campus that has been assaulting them.
Harassing them. Giving those documents to other teachers, administrators. And have those documents be hidden. It's utterly terrifying, to hear so many of these stories, and it absolutely breaks my heart that this is something that has gone on for so long and that there's been so little protections here. And that's part of the reason why I wanted to do this bill.
When I met Mike Fine when I first got here to the legislature several years ago, you know, I told him that this was my top priority issue because I had seen so many bills be introduced in this space that had failed. And so, you know, what we're trying to do here, I think, is make sure we just don't have alignment, but also ensuring that we're including contractors as well and that it's very important that we do process. I recognize that, you know, placing somebody on a pending status list is something that I think makes everyone uneasy while an investigation is ongoing. But as I've spoken with several folks, it's also very critical. I cannot begin to explain to you how many victims I've spoken to.
When we identify the perpetrator, they have bounced around to two to three school districts, sometimes knowingly and sometimes unknowingly knowing their past and what they've done to other students. It is absolutely unacceptable. So, you know, for me, this is a very personal issue. I recognize that there's cost associated with trying to implement something like this, But it's super important that we get this right. There's the fiscal component of this, which I know we've had lots of conversations about.
Senator Lehrer certainly worked on a bill in that space. But, for me, there is a ton of work to be done here. And I'll be honest with you, I'm just getting started. So I thank you all so much, and I respectfully ask for your aye vote.
Speaker 1
Thank you. We have a motion from Senator Strickland. Assistant, please call the roll.
Speaker 16
Senator Small the motion is due passed to the Senate Committee on Appropriations. Senator Smalled Cuevas?
Speaker 16
Smolt Cuevas? Aye. Senator Strickland? Aye. Strickland, aye.
Senator Cortezi? Senator Durazo? Senator Laird? Aye. Laird, aye.
Speaker 1
We have a vote of three to zero. The bill is on call. Thank you. K. I see senator Richardson is with us.
So we will move on to file item number four, s b ten eighty nine. And if you have witnesses in support, they can sit at the table and we'll be ready for them. Okay.
Speaker 21
You may very much. Thank you, madam chair and members of the committee. And, senator Laird, since you said Senator Perez had the best bill that you saw last year, I'm committed to this being your best one for this year. So, I'm going to do my best at this. So, good afternoon, Madam Chair and members of this committee.
I'd like to start off by confirming my acceptance of the committee amendments, and thank the chair and staff for working with us, me and my team, to make SB ten eighty nine a true valued benefit to the state employees and, ultimately, all Californians. Today, I want to have a frank conversation about weight. Chronic weight disease is a serious problem in The United States. Of the thirty nine point five million people who live in California, approximately 24,500,000 adults between the ages of 18 and 64 are currently living in California with some sort of weight issue. Being overweight comes with many challenges, such as the predisposition that someone might have to cardiovascular disease, diabetes, neurological disorders, chronic respiratory diseases, and digestive disorders.
In addition to some of these chronic weight diseases that they can extend, when you look at this, beyond these diseases, but to actually leading to potential cancers. Thirteen have been identified. I'm only going to mention a few: colon and rectal cancer, excuse me, between let's see, I took TheraFlu, Sudafed, and now a lozinger all at the same time. So, if I mix a few words, you'll have to excuse me. Endometrial of the uterus, cancer, gallbladder, renal cell carcinoma, liver, ovarian, and thyroid cancer.
Further, in addition to increasing cancer risk, chronic weight disease is also associated with more than 200 comorbidity conditions, such as high blood pressure, heart disease, stroke, fatty liver disease, diseases of the gallbladder and pancreas, and kidney disease. More simply stated, what is GLP-1s? What do they do? They stimulate the insulin secretion by suppressing an appetite and delaying gastric emptying to promote a significant waste loss. Maybe let me state that a little more simply.
What that means is, is that a person, by suppressing an appetite and still feeling full, an individual is less apt to want to now say, Okay, two hours later, or four hours later, what am I going to have for lunch? What am I going to have for dinner? GLP-1s are demonstrating more and more the capacity to improve health in the areas beyond weight loss. Recent studies have also shown that by having assistance through GLP-1s, it can improve cognitive and behavioral health, lowering risk of heart attacks, stroke, liver disease, as already stated. And they're now looking at benefits, potentially, towards dementia and Alzheimer's.
Chronic weight management can be related to also reduced labor participation earnings, increased early mortality, absenteeism, disability, and healthcare costs in an excess of over $1,000,000,000 that impacts our California gross domestic product. So, why did SB ten eighty nine need to take place? So, I'm going to get into my personal story here. The reason why I brought forward S. B.
Ten eighty nine is because, even with the proven results that are coming forward, insurance companies are still not providing GLP-1s to people who need them, even if they're prescribed by their doctor. As a state employee, I'm a current state employee, and my insurance, we have some of the best insurance, I was told they do not offer, despite the fact that my BMI numbers, blood numbers, all the different things that they test individuals for, including being on the prediabetic level, I was still told that it was not available to me, even though it was prescribed to me by my doctor. That my insurance, and insurance here with CalPERS, does not offer it, only in the sense if a person is diabetic, is why those particular products are offered. So, when we talk about GLP-1s, it's important. The reason why I did SB ten eighty nine was to start with one of the largest employer groups, because the health plan said they will offer so I went to health plans and said, why aren't you offering something that could actually save you money in the end?
Because if I'm healthier, why would you want me to gain more weight, have comorbidities, have diabetes? All of that, that's going to cost you more money to provide health insurance for me. And, no answer. Basically, the answer was health insurance plans provide services that the employers require. So, that's why the first part of this bill is saying that CalPERS would have their health plans offer.
It's not requiring people, everyone isn't going to have to pay for something they don't need. I more envision it something like, I wear glasses, so maybe I pay more for the vision plan. Or you may have dental issues, so you pay more for a dental plan. Or you decide because you are you look at the history and say, I want to pay more for long term health planning. These are decisions that people, based upon their personal health history, should be able to have offerings that can help them to live better.
And so, by CalPERS offering as an option to their health plans, state employees are a good pool of people where we could frankly look at and see the potential need if people the value of having it with other health plans. The second piece of the bill, though, the number one issue with GLP-1s is accessibility. People being able to get it, and then the second piece is at an affordable price. When I first started paying for GLP-1s, and my doctor prescribed it, I ended up getting a compound. Because compounds are cheaper than actually getting the brand product.
And so, you have people out there who are getting compounds, which is a mixture of the drug that's not even the, you know, fully the end compound that you're getting is approved, but how that is formulated is debated of whether it is best in the same of getting a brand. So, for me, I started off, even with the compound, spending almost $700 a month. That's like a car payment. Most people, most Californians cannot afford to take out for their personal I want to live better, make that decision themselves to take away $700 a month. Even with the price reductions, I'm still paying out of pocket.
Speaker 39
Now I pay the brand direct, So, I pay about $75 more per month to pay for the brand instead of doing the compound, and I'm still almost paying almost $500 a month. And the question before you is whether state employees, and whether Californians should have to decide between sending their kids to a summer program, being able to do a car note, to be able to decide, hey, I need to live healthier, because I'm on the verge of becoming diabetic. And so this bill, the second part of it, the reason why we have the Cal Rx piece, is that the governor has already made movements in the insulin realm and some of those areas. And this would give all Californians, not just people who happen to work as state employees, but potentially CalRx could give all Californians the ability to purchase GLP-1s at a reasonable and affordable price. And so, with that, for this reason, SB ten eighty nine would require CalPERS to offer to be available, if needed, GLP-1s as a part of their health plans to reduce chronic weight management, to increase access for their workforce, and improve affordability, and maximize better health outcomes.
Speaker 21
Now, for the final part of the story, I started taking Zepbound in August. I have lost 43 pounds. You can't argue with results. I'm not someone who's six hundred pounds sitting in the basement playing video games. I'm a person who goes to work every day, seven days a week, busting my you know what, and still was having a challenge and seeing an increasing weight even though I was eating salads and trying to do the right thing.
So I think it's time for us to give state employees, number one, a person who people choose to work for the state because we believe in public service, not because we're trying to get rich. So certainly, employees, if there's a way for them to be healthier, and they're willing, and they know that, they should be able to do that at an affordable price, and not at the expense of their family. And then, finally, the second piece, as I stated, all Californians, frankly, deserve the right to have access to make things better. And so for that, I urge your I vote on this SB ten eighty nine. And today, I have with me individuals who are going to share with you from their professional perspective their knowledge that I hope will urge you to support this bill.
Speaker 22
Thank you, Madam Chair and members of the committee. My name is Sherri Gonzalez, and I have the honor of representing the American Diabetes Association. We are in support of SB ten eighty nine. We are not the bill's sponsor. It's very obviously author sponsored.
But we are in strong support and are grateful to the, the esteemed author. The bill ensures that California state and local government employees have access to GLP-one medications, treatments that represent one of the most effective tools we have to prevent and manage type two diabetes. These are not cosmetic weight loss drugs. They improve insulin sensitivity, reduce blood glucose, support healthy weight loss, and cut the risk of developing type two diabetes by as much as sixty percent in people with prediabetes. California faces a diabetes crisis.
More than three million residents already live with diabetes, with another ten million adults living with prediabetes. The toll is enormous over $40,000,000,000 a year in health care costs and lost productivity. According to the Department of Health Care Access and Information, twenty five percent of all preventable hospitalizations in California are diabetes related. Prevention is our best chance to reverse this trend, and GLP-one medications allow us to intervene before diabetes develops. Yet too many Californians who could benefit cannot access these treatments because insurers exclude or severely restrict coverage.
Speaker 20
This inequity worsens health disparities, especially in communities of color and among lower income families who are already hit hardest by diabetes. By requiring coverage for GLP-one medications, SB ten eighty nine would save lives, reduce health care costs, and move us toward true health equity. The science is clear: When people can access proven prevention tools, we prevent disease, not just treat it. On behalf of the American Diabetes Association, I therefore urge your I vote on SB ten eighty nine to give more Californians a fair chance to stop type two diabetes before it starts?
Speaker 1
Doctor. Thank you. Any more support me twos out there, please step to the mic, and state your name, affiliation, and position.
Speaker 16
Thank you, Madam Chair. Tim Madden, representing the California Chapter of the American College of Cardiology, and the California Rheumatology Alliance in support.
Speaker 6
Doctor. Good morning. Natalie Pita, on behalf of the California Academy of Family Physicians in support.
Speaker 1
Any other? Okay. Seeing none, we'll go to opposition. Are there any opposition witnesses? Please have a seat at the table.
You have two minutes.
Speaker 25
We'll need two minutes. Good morning, chair and members. We thank the senator for important work advocacy on this issue. We still have some concerns with the bill in print, but we're encouraged by the conversations we've already had with the Senator's office as a way to achieve these goals without harming patient access or innovation on life changing medications like GLP-1s. Thank you.
Speaker 1
Any other opposition me twos out there? Seeing none, we'll come to the dais.
Speaker 1
K. We have a motion by senator Strickland. Any others? I will just say oh, did you wanna say something, senator Laird, or were you just stretching? Okay.
Stretching.
Speaker 1
I just wanna thank you for acknowledging your acceptance of the amendments from the Health and Labor Committee, and I deeply support this bill. And we have a motion from senator Strickland. Would you like to close?
Speaker 16
The motion is due pass as amended to the senate committee on appropriations. Senator Smallwood Cuevas?
Speaker 16
Small Cuevas, aye. Senator Strickland? Aye. Strickland, aye. Senator Cortez?
Aye. Cortez, aye. Senator Durazo? Senator Laird? Aye.
Laird, aye.
Speaker 1
four to zero. That bill is on call. Thank you. Thank you. Okay.
We see senator Blake Spears in the audience. So Madam
Speaker 1
No. We are going to call we're gonna move on to file item while we have everybody. File item number two.
Speaker 20
I was just gonna suggest while she was moving to the mic that I would move the consent agenda.
Speaker 1
Oh, wonderful. We have a motion for senator Laird. Thank you, senator Laird. Let's call the roll in the consent calendar.
Speaker 16
Smolod Cuevas, aye. Senator Strickland? Aye. Strickland, aye. Senator Cortez?
Aye. Cortez, aye. Senator Terrazzo? Senator Laird? Aye.
Laird, aye.
Speaker 25
Okay. Well, thank you, madam chair. And members, I am here today to present SB nine fifty four, which provides thoughtful improvements to the CEQA exemptions that passed through the Budget Act last year in SB 131. Last year, the legislature passed SB one thirty one, creating over a dozen new CEQA exemptions. Many of these CEQA exemptions are sensible and promote needed development that doesn't harm the environment or jeopardize human health.
However, s p one thirty one created an exemption for advanced manufacturing that is so broad that it covers strip mining, lithium mining, and other activities that are known to be especially harmful to the environment. This undercuts California's long, proud tradition of protecting the environment and the spirit of CEQA, and it does not build the clean abundant future that Californians deserve. That is why so many senators and assembly members raised serious concerns about the policy when it was jammed through the legislature at the end of session. In response, senate leadership and the senate budget chair committed to revisiting the definition for advanced manufacturing and adding stronger protections for habitats for sensitive species and tribal resources. This bill, s p nine fifty four, follows through on the promises to clean up s p one thirty one and adds critical labor protections for advanced manufacturing projects that do get the CEQA exemptions.
SB nine fifty four preserves habitat for protected species and closes other loopholes in SB 131, And primarily, it starts the conversation that should have happened last year with stakeholders and legislators on where to draw the line about what actually is advanced manufacturing. Specifically, SB nine fifty four clarifies the intent of the legislature to refine what advanced manufacturing should be granted a CEQA exemption, and it adds important environmental guardrails, including that advanced manufacturing within 1,000 feet of a disadvantaged community must go through CEQA. It provides protections for tribal resources and for workers, including those who work in these advanced manufacturing facilities. The labor criteria require skilled and trained workforce and prevailing wage for construction. It is common practice to add labor provisions for construction when granting large scale CEQA exemptions.
Speaker 34
SB nine fifty four also goes further with labor protections compared to existing CEQA exemptions by requiring that project applicants meet high road employment standards, which include good wages above the local or regional living standard, commitments to invest in employee training, incorporating worker voice, and requiring safe and healthy working conditions. This is especially important for advanced manufacturing that gets a CEQA exemption because advanced manufacturing, as it's currently defined, can include severely polluting industries like semiconductors that have a history of harming the health of workers. There are still a lot of work that needs to be done in SB nine fifty four, particularly in identifying what types of facilities actually are going to count as advanced manufacturing and what aren't. I look forward to providing productive conversations with the opposition here today and beyond as this bill continues its way through the legislative process. Thank you.
Speaker 24
Thank you, chair members. Omar Lazarda with the California Federation of Labor Unions. First, again, we want to thank chair Blake Spear for SB nine fifty four's introduction. It is allowing us to have this public debate on the issue that has been deferred since the introduction of SB 131 from last year. We represent over 2,300,000 union workers in California, including thousands of skilled workers who build, maintain, operate and labor in manufacturing facilities in the state.
Speaker 26
Our unions fully support expanding California's manufacturing base, but we have to ensure that industry growth is accompanied with protections for workers, communities and the environment. SB 131 with its massive exemptions for broadly defined advanced manufacturing projects eroded labor standards for workers, environmental safeguards and public accountability in the process. Without any significant cleanup legislation, companies will continue to take advantage of the overly broad definition to skip over the public environmental and community review process to access building permits. This status quo allows companies to deprive workers, unions, and their communities of the opportunity to provide necessary input for large industrial projects that are sited in their own backyard. And as the EQ committee analysis clearly outlined and as the author outlined as well, the facilities that we're talking about here include incredibly toxic and dangerous project types like semiconductor facilities, fertilizer production, and rare earth mining that requires radioactive waste containment.
Workers are the first line of exposure to the carcinogens that are found in these projects, and building any large scale industrial facilities without safeguards that are traditionally required under CEQA increases exposure to unsafe conditions, accelerates timelines and compromises safety and removes oversight mechanisms that ensure that projects are built correctly the first time. With this in mind, we support SB nine fifty four. It is a great step towards establishing oversight over advanced manufacturing projects while prioritizing labor standards like skilled and trained workforce requirements, prevailing wage standards, high road job standards and community benefits agreements. We look forward to working with the author and stakeholders on the definition to allow for growth in the state's economy while also investing in safe middle class jobs for the workers propelling that growth and, of course, ensuring that the communities in which they live are protected. Thank you, and we request and I vote.
Speaker 3
Thank you, chair and members. My name is Raquel Mason with SEHA Action here today in support of SB nine fifty four by senator Blake Spear. I also wanna start and share our sincere thanks to senator Blake Spear and her team for all her work on this bill. Last year, when SB one thirty one was signed into law, it created a sweep b exemption for advanced manufacturing, removing facilities with known track records for water contamination and air pollution from any environmental review. This exemption applies to project types like strip mining, metal forging, and fertilizer production.
Speaker 27
Our communities rely on CEQUA as a tool for accountability and public participation. Without it, residents lose the ability to understand what is being proposed in their neighborhoods and the ability to advocate for safer alternatives. And under SB one thirty one, a broad swath of harmful project types can develop without any of the public processes we depend on. In environmental justice communities, we have seen CEQA work. Across our alliance, our members are using CEQUA to educate residents about projects coming into the communities, discuss the impacts these projects may have, and work to improve them.
SB nine fifty four takes important steps to restore safeguards by limiting the advanced manufacturing exemptions to projects that adhere to strong pollution limits, labored standards, and are located at safe distances from sensitive communities. These are necessary protections. At the same time, we need to ensure that the final definition for advanced manufacturing is narrowed to a limited and clearly defined set of projects that truly align with state climate and equity goals and do not create significant harm. We look forward to continuing to work with the author to continue strengthening this bill so we can ensure that no project moves forward without centering the people most impacted. With that, we respectfully request your I vote on SB nine fifty four.
Speaker 1
Thank you. Okay. We will hear support me to state your name, affiliation, and position.
Speaker 28
Madam Chair, members Scott Wetch on behalf of the California State Pipe Trades Council, the State Association of Electrical Workers, the Western States Council of Sheet Metal Workers, the California Coalition of Utility Employees, and the Elevator Constructors Union in support. Thank you.
Speaker 23
Morning, Alberto Taweco, behalf of the United Auto Workers, in support.
Speaker 5
Morning, Gabriel Toulson with the Planning and Conservation League, support, also registering support on behalf of the California Native Plant Society, Defenders of Wildlife, Pacific Forest Trust, National Parks Conservation Association, Environmental Protection and Information Center, Resources Renewal Institute, Environmental Defense Fund, California Coastal Protection Network, Environmental Action Committee of West Marin, Sonoma Land Trust, and Californians Against Waste. Thank you.
Speaker 2
Good morning. Maria DelRetro with Leadership Council for Justice and Accountability in support. Thank you.
Speaker 29
Good morning, Chair members. Conor Gutzman, behalf of Unite, here International Union and Teamsters California in support. Thank you.
Speaker 11
Judy Yee with the State Building Trades and also registering support for the United Auto Workers in support.
Speaker 1
Thank you. Any more support me twos? Okay. We will move to opposition. Are there opposition witnesses?
Please step to the table. Thank you. Thank you. You each have two minutes. Good
Speaker 21
morning, Madam Chair and committee members. My name is Luis Morante with the Bay Area Council. We represent about 400 of the region's largest employers. We are the first business we were the first business group in California to support AB32, and we believe California should lead the world in building the clean energy economy. But we are here to respectfully oppose this bill.
Speaker 31
I want to express our appreciation to the author and her team for working with us despite our opposition, but we are worried that the overlapping restrictions in this bill will render it less useful than it should be. We're here because this bill risks having the practical effect of repealing the advanced manufacturing exemption. California has some of the cleanest energy, highest energy efficiency standards, and cleanest fuels in the country. We should build the high-tech and green future we invent here in California. Preventing industrial leakage is also critical to convincing the world to adopting our broader climate system.
But in December, a Bay Area company called AnthroEnergy, which invented a cutting edge new battery with over $5,000,000 from the California Energy Commission, announced its first factory. It's in Louisville, Kentucky, where 78% of electricity comes from coal and where the factory will have a carbon intensity four times higher than it would in California just from the grid. This is a trend. California has lost 615,000 manufacturing jobs since 2000, in part because our environmental laws make the perfect the enemy of the good. The overlapping and strict requirements of this bill will likely lead to manufacturers continuing to walk away from California rather than initiate projects here.
For those reasons, we respectfully urge your no vote on SB nine fifty four. Thank you.
Speaker 14
Good morning, Chair and members. Adam Regley on behalf of the California Chamber of Commerce, which SB nine fifty four has been tagged as a cost driver. My colleague has outlined really the issue at heart here, which is does California want to attract manufacturing to a state that has championed climate change, energy efficiency, world class labor standards, and drive those out of California and other states. Not just new projects, but expansions and upgrades to facilities all can trigger CEQA. And year after year, we come and talk about, we need CEQA reform.
Speaker 32
It is an abused statute. It has very laudable intent to protect the environment, and it is very easy to utilize it to leverage for other things unrelated to the environment that has driven manufacturing to other states where time and the ability to permit in a global market is essential. And so, they choose other states regardless of how clean or how labor standards are here. They choose it because time is money, and money is what drives capital markets, which drives the ability to manufacture here. As my colleague noted, 600,000 jobs since 02/2000 manufacturing jobs lost since 2024.
And so we are seeing this trend continue, not decrease. And when we talk about CEQUA, it's really positioned as the end all, be all for environmental review. There are dozens and dozens of permitting and other environmental laws that are still required even without CEQA. And until you fix CEQA, it is one of the biggest impediments for why manufacturing doesn't come here, expand, or upgrade because of the fear that it triggers a statute that's abused. It's not the end all be all for environmental review, but it can be the end for projects coming, expanding.
And so, for those reasons, we respectfully oppose. Thank you.
Speaker 1
Thank you. Any opposition metos, please step to the mic, state your name, affiliation, and position.
Speaker 33
Good morning, Madam Chair and members. Skyler Wanakot, on behalf of the California Business Properties Association and NAEP California, as well as the California Business Roundtable in opposition.
Speaker 13
Elizabeth Escobel with the California Manufacturers and Technology Association, also in respectful opposition. Thank you.
Speaker 2
Sarah Polomu with the California Retailers Association, also in respectful opposition.
Speaker 34
Madam Chair, Chris McKeeley, on behalf of the Los Angeles Area Chamber of Commerce, respectfully opposed. Thank you.
Speaker 9
Matti Hayek from the Capital Business Alliance, opposed on the grounds we feel it's a high condition pathway that only higher, larger firms can afford to implement.
Speaker 1
Okay. Any other opposition? Okay. Seeing none, we'll come to the dais. Senator Strickland?
Speaker 19
Thank you, madam chair. Realize I'm probably in the minority here, I have deep respect for the author. And I know her passion for the environment. And she is one of the leaders in California with a passion for the environment. But I do believe that we need to start bringing about balance.
I think we can get balance between a good environment and a strong economy and jobs. I've seen, now many, many bills and exemptions through the legislature, on CEQA exemptions. And, a lot of them are, both Democrat and Republican asking for CEQA exemptions. And so I do think that we need CEQUA reform because I think the balance is not there. Clearly, the balance is not there.
We continue to lose manufacturing jobs. It's the first time in California history since the gold rush more people are leaving the state than coming in. In fact, if you look at the census, they're saying that, we might lose four congressional seats in 2030, in California, and a lot of it is because we are not business friendly. Jobs are leaving to Louisville, Kentucky. Jobs are leaving to Florida.
My brother lives in Jacksonville, Florida. He wanted to stay in California. We had to move where his job went. And I think there could be a balance here moving forward. You know, again, manufacturing is one of the main things that we need to fight for.
And we continue to lose manufacturing jobs, good paying jobs, to states like Kentucky, Florida, and Texas. And, again, personal note, we need to bring this balance back because when you look at California, we live in Oasis. I live in Huntington Beach, California. There's no better place, in my opinion, to live in the world than Huntington Beach, California. But people are leaving here to go to the cold weather in Montana, where it's frozen three months a year, or they're going to the humidity and the heat of Texas and Florida because we're not business friendly.
Speaker 13
And I do think that we can get the balance, and I'm hoping that we start bringing about balance here in California. And, again, with deep respect to the author of this, because I know your passion. But I guarantee you, we're gonna see more and more, bills coming from Democrats and Republicans asking for this exemption, that exemption. We need to look and and tackle the big issues in California, and I think there needs to be sequel reform. Again, as the testifier said here earlier, if even if there's sequel reform, there's other environmental standards that we have here that are are so above every other state in the in in the in the country.
Speaker 19
And we do need to preserve our environment, but I think we need to bring about more balance. And that's why I'm not supporting this bill today. Thank you.
Speaker 20
Thank you very much, Madam Chair. Actually, let me talk about why we're here this moment talking about this. That is because this was jammed through the legislature in a budget bill and not through the policy process last year. And when it was done, it had not addressed certain tribal issues. It did not address certain wetlands issues.
It did not address certain issues about advanced manufacturing. It did not address the part of advanced manufacturing that the witnesses testified for. And it is a thankless job that this author has stepped up to. Because which everybody said, oh, we will clean this up next year. And if there was ever an argument for not voting for a bill that people said at the time you were voting on it, it needed cleaning up, this is it.
Because then the testimony makes it appear if this is a one off. Oh, we're just looking at this as opposed to this was everything that fits together and this should have been in the bill last year and it is left to clean up this year to do it as if it's a stand alone thing with all these positive and negative issues on it. And so I know that the author will continue to work on these issues, but there really was those three issues that weren't included or addressed in the bill last year, and you're doing your damnedest to address them in this bill and I think another vehicle. And so, I know you'll continue to work on this, and at the appropriate time, I will be happy to move the bill.
Speaker 7
Thank you, Madam Chair. I'm proud to be a coauthor of the bill and had the opportunity to be involved in some of the discussions leading up to what it ended up being put in print by the author. And I appreciate all of that. Just have a question here. Listening to opposition, and I'm asking you for clarification.
Advanced manufacturing, as I understand it, so long as it's going into an industrial area, is still receiving benefits under the original 01/2031 concept, if you want to that's my way of characterizing it. But I just wanted to you could restate that if you want, but I want to make sure that we're clear in terms of the way the bill has been kind of framed by opposition that this is not getting in the way of what I would call day to day, you know, the bread and butter of putting advanced manufacturing into industrial areas in my district in Silicon Valley that are general planned that way in the first place?
Speaker 25
Right. Yes. Thank you. Yes. So, the way that the law is currently is, if there's an industrial zone, and there's a project that wants to claim that they are advanced manufacturing, and there are a long list of different types of businesses that have received a tax exemption as advanced manufacturing, which is the thing that leads us to say strip mining counts, because it has received this tax exemption, then they would proceed to apply for a CEQA exemption.
And then they would not have to do any of the things associated with CEQA. So that includes mitigation for the project. And some things that are mitigation are, for example, doing an assessment of what is happening in that land at that moment. And if it's, for example, a nesting habitat, a decision to do construction outside of nesting season. So that's the kind of thing that comes up as part of mitigation.
So there would be no mitigation required. There's, of course, also no litigation risk when you don't have to do CEQA. And then the labor standards would have to be negotiated in some other way, if there are any. And there are different laws that apply, of course, at different levels. But the reality right now of such a broad exemption means that there are all sorts of things that would be able to avoid doing any of the tribal consultation, the environmental mitigation, the discussion over labor standards.
And that is part of what we're trying to reestablish as part of this.
Speaker 7
Right. And just remember, there are distinctions between, for example, important ones here that, in essence, protects some of those interests that you're talking about in habitat conservation areas conservation areas you just mentioned, areas where there are habitat concerns. I know we're in the labor committee here, so I don't want to go down a rabbit hole in terms of things that have already been voted on and discussed in the other committee and so forth. But really want to get back to the risk as to manufacturing jobs. The lands that are industrial zoned in my district, as I understand it, are not going to be impacted in terms of their ability to provide employment should they want to still do manufacturing.
Most of industrial properties in our area are now R and D and just about everything but traditional manufacturing. But that said, the distinction when I try to apply this to my own district and did so as a critical thinking coauthor on this is that we're not impacting jobs in areas that are already protected in my area by green line initiatives, by urban growth boundaries, by habitat conservation plans and so forth. This bill and other cleanup legislation before it has now taken care of that, but still left the ability for job creation to occur in industrial zones. That's what I was trying to clarify.
Speaker 25
Yes, that's right. And also, just want to recognize that the opposition is making really good points about California's competitiveness. That we want to be the state of innovation. We want to keep companies that have incubated here. We want them to take the next generation and then the third generation to stay in California, providing those jobs, providing the creative economy and the energy future and the abundance that we're all looking for.
So the multifactorial assessment of why is it that companies are leaving California, what is it we can do to incentivize them, to me, there are many things that are layering on top of those decisions. And it's not only CEQA. So, and there are many different industries that we're also incentivizing, like Hollywood, right, which is not really implicated in this type of a bill about advanced manufacturing. But I think when this bill passed, as, Senator Laird said, it really was jammed through so quickly and in a forty eight hour period that I think there was a feeling that advanced manufacturing was just semiconductors, because sometimes those two words were used interchangeably. But then, in reality, once we actually looked under the hood and saw, oh, there's actually this definition of advanced manufacturing that's very broad and can include all these types of manufacturing.
And it could be argued almost anything that uses a computer could be classified, because it's promoting that mechanization in a way that could classify as advanced manufacturing. Of course, all this could eventually lead to litigation as well, but we don't want that. Right? We wanna have clarity around the law. What is it that has a CEQA exemption?
And to senator Strickland's point, I would love to do a bill, and I've already been trying to spitball what would comprehensive CEQA reform look like. And there are many sacred cows in the process that are difficult to figure out. What what do we do about who can be a plaintiff? You know? So some of the things right now, the barrier to entry for litigation is very, very low.
So anyone can sue for any reason on CEQA. And but it's like when you start to look at who should be a plaintiff, who could, how do we limit that, it just gets enormously complex. So that is something that I want to work on and that I think about. But this bill specifically is cleaning up what happened at the end of last year around the definition of advanced manufacturing and also the CEQA exemption in general as it was applied. So, there are multiple parts of this, including the labor part, which is why it's in your committee today.
Speaker 1
Yeah, and really important discussion and debate. And I just want to thank you for bringing this bill forward. It's a challenge when we talk about CEQA and we see the intersections of environmental, industry, and workers. Too often, those three are pitted against each other, and I think you're trying to figure out a way forward that allows us to accomplish the goals that I think the opposition raised at the same time, ensuring we're protecting those communities. And I just wanna be clear.
This exemption will not harm all California communities equally. I represent South Central Los Angeles. We are in a sort of thread of an industrial corridors down in in, the Southeast Side Of Los Angeles County, and our communities are definitely most impacted by industry, and we see the health effects of that. And, unfortunately, the history of where we build the dirtiest, most toxic industries are typically in black and brown communities, working class of color. So why these policies are important, why this this care that we're taking through this CEQA exemption process is is is, a really, complex and difficult but necessary is because we've got to figure out a way as we move deeper into the twenty first century and we figure out how we rebound our manufacturing sector here in California.
We do it not in the old way, but in the new ways, that protect, everyone. I also wanna say the labor conversations and where we landed in this bill is really encouraging to me because we're going beyond just the labor standards, but also talking about the future of work and what does it mean to have community benefits agreements that guarantee and prioritize those frontline communities, those vulnerable communities, in quality job creation. So I really want to applaud the author. I wanna thank her for continuing to work with the opposition on on this important work that is really the future of California, because we need strong industries to have strong workers, and we know that builds strong, communities. And so I will be supporting the bill today, and I think we have a motion from senator Laird.
Would you like to close, and and then we'll take the vote?
Speaker 25
Yes. Thank you. Thank you. I appreciate the support witnesses and the opposition witnesses and the dialogue from the committee. I think the the last word I'd like to say on this is that when we introduced the bill in its current stage right now is that advanced manufacturing is undefined in the bill.
So we are welcoming feedback, particularly from industry, about what are the environmental impacts that your industry is having if you are broadly in this category that could be considered advanced manufacturing so that we could try to chart something that can thread that needle to make sure that we're using an analysis that works, that is something that can achieve multiple goals. So it's really a broad invitation to reach out to my office, to the Environmental Quality Committee, so that we can take your feedback. So with that, I respectfully ask for your I vote.
Speaker 1
Thank you. And we have a motion from Senator Laird. Please call the roll.
Speaker 16
The motion is due pass to the Senate Committee on Appropriations. Senator Smaller Cuevas?
Speaker 16
Smaller Cuevas, aye. Senator Strickland? No. Strickland, no. Senator Cortez?
Speaker 1
We have a vote of three to one. That bill is on call. Thank you. Next, we will move on to file item number five, s b twelve ninety nine. I see senator Araqueen is with us.
Senator, please begin when you're ready, and your witnesses can sit at the table.
Speaker 8
Well, good morning, madam chair and members. It's my pleasure to present s b twelve ninety nine, the State Fire Marshal Fire Suppression Education and Training Safety Act. This bill is sponsored by the Sprinkler Fitters Association of California. SB twelve ninety nine ensures that California has a clear, enforceable framework for certifying and training fire sprinkler fitters. This bill will ensure that only properly trained and certified professionals perform this critical lifesaving work.
Prior to 2017, individuals installing fire suppression systems were not required to have specific qualifications. Despite the state fire marshal's long standing standards requiring knowledgeable and experienced installers. However, ultimately, the state fire marshal promulgated rules requiring specific qualifications and training. Unfortunately, a recent court decision struck down critical life saving regulations that were enacted after 2017 by the state fire marshal. And I just want to clarify, the court decision did not say that the policy was illegal, but said that the rulemaking did not follow the proper process under the Administration Procedures Act, and therefore, the regulations were invalidated.
Speaker 6
The Court, in its ruling, acknowledged that the certification program is necessary to protect public safety, validating the need for enforceable training standards. SB twelve ninety nine codifies and enacts these standards in state law to ensure that individuals working on these life safety systems are trained and qualified to do this work. Every Californian deserves to know that their fire suppression systems protecting their homes, their workplaces, and communities have been installed and maintained by qualified professionals. With me to testify in support of the bill on behalf of the Sprinkler Fitters Association of California is Scott Wetch.
Speaker 28
Madam Chair, members, Scott Wetch, on behalf of the Sprinkler Fitters Association of California and the California State Pipe Trades Council, SB twelve ninety nine closes a critical regulatory gap that currently undermines workforce standards and public safety in California's fire protection industry. Fire suppression systems are among the most important life safety features in residential, commercial, and industrial buildings. Their effectiveness depends entirely on proper installation, inspection, testing, and maintenance by individuals who possess the training experience and technical expertise required to perform this highly specialized work. The original legislation in 2011, the residential code of the International Residential Code, and therefore, the California Residential Code, was amended to require fire sprinklers in all occupancies, meaning single family homes, duplexes, places where they hadn't been required before. Out of an abundance of concern regarding if there is enough qualified folks to do that work, Then, Assemblyman Gordon, in 2013, passed AB four thirty three, which authorized the state fire marshal to adopt whatever standards and requirements that they saw fit to ensure the highest level of fire life safety in all occupancies.
As an outgrowth of that, a three year process was commenced to establish the Fire Sprinkler Certification Program, as it is known. As the senator mentioned, basically, a technicality that was recently key components were struck down, now we're seeking to codify that program that was very effective. Nationally, about 8% of residential fires have that have sprinkler systems have failures. In California, that figure is only three percent, in large part because we've done the training, we've done the work to ensure that these systems are properly installed. We're very concerned if this isn't reinstituted that we could go the opposite direction.
Speaker 27
And I'd just note finally that it's not just an issue of fire life safety, but the number one common claim on property insurance policies is water damage. And a significant portion of that is caused by fire sprinkler systems that are inappropriately installed. So you have pipes bursting, you have, you know, them inappropriately going off that creates a lot of damage, which is contributing to the insurance crisis that we have in California. Thank you.
Speaker 1
Thank you. Let's see. We'll move to Me Toos in support. Please step to the mic, state your name, affiliation, and position.
Speaker 1
Okay. We will move to opposition. Is there opposition witnesses here? Seeing none, any opposition me too's here? Seeing none, we'll move to the dais.
Speaker 1
Alright. Great. We have a motion from senator Strickland. Would you like to close, senator?
Speaker 16
Small Acquavers? Aye. Senator Strickland? Aye. Strickland?
Aye. Senator Cortez? Senator Dorado? Senator Laird? Aye.
Laird, aye.
Speaker 19
So members, we're now going to file on number eight SB ten twelve by the chair. And the chair can open when she is ready.
Speaker 19
Madam Chair, I believe there's support on both sides, just so you know.
Speaker 1
Thank you, Mr. Vice Chair. All right. Well, we are going to get started. Good morning, members.
I am pleased to present SB ten twelve. This is the Fire Camp to Career Act, which strengthens pathways to stable, skilled careers for incarcerated individuals with fire camp experience. For far too long, California has relied on incarcerated fire camp participants during some of our state's most dangerous emergencies, while failing to ensure that the same service can lead to long term economic opportunity once they return home. I want to ground this conversation in the workforce we're talking about. During the twenty twenty five Los Angeles wildfires, over 1,000 incarcerated individuals were deployed as first responders, working alongside professional firefighters to protect lives, homes, and communities.
Our professional firefighters put their lives on the line to contain those fires and protect our communities before the disaster could spread any further. And standing alongside of them was what I would call the forgotten labor force, our incarcerated fire camp participants. These individuals are not observing from the sidelines. The California Conservation Camp Program gives them an opportunity to do real work in real conditions, facing real danger. They fight wildfires, they clear hazardous vegetation, they support emergency response, they take on dangerous cleanup work, and they give homeowners who are facing disaster hope.
They gain hands on training, they build discipline, and they develop skills that clearly translate to careers in the fire service and the skilled trades. Again, they are working in real world conditions, gaining experience that many others do not have. And yet, when they come home, that training and experience too often does not count in any meaningful way toward a stable career. And I had the honor of being on rules committee when I first came to the senate, and we, you know, were able to appoint a number of folks in our parole board. And the one thing they that struck me is this this a statistic I will never forget.
They talked about how if an individual had a plan and a potential job, that recidivism was cut by 95%. So this is a win win win because ultimately, if we put our fire camp participants into quality career path, they're not coming back to prison, and that saves us money. California has made important investments in rehabilitation and post release employment outcomes, but the truth is that too many people are still living I'm sorry, leaving this program without a real bridge to opportunities that they have earned. As someone who has long worked on workforce equity and access to good jobs, including through my work on SB four twenty three last year, I care deeply about making sure that people our state relies on in moments of crisis are not forgotten and left behind afterward. If we are willing to rely on this workforce when California is endangered, then we should all be willing to stand up and to create a real path to economic stability when that service is over.
And that is what SB ten twelve does. It requires the Department of Corrections and Rehabilitation to connect participants who complete the California Conservation Camp Program to state approved apprenticeships. Recent author amendments clarify that SB ten twelve requires apprenticeship programs in the building and construction trades to consider prior fire camp training and work experience, so participants do not have to start from square one. And it ensures fire camp service is formally recognized so it can count toward apprenticeship eligibility. At its core, this bill is about fairness.
It's about recognizing the training, service, and sacrifice. And if someone is good enough to stand on the front lines for California in a moment of crisis, they should be good enough to have a real chance to build a stable union career when they come home. With me today to testify is James Thurwachar with the California State Labor Council of Laborers and Enrique Rico Marquez, a former fire camp participant and a graduate of Future Fire Academy.
Speaker 32
Thank you. Good afternoon. James Thoreactor with the California State Council of Laborers. I want to first thank the author for her continued leadership, both in workforce development and in in criminal justice reform. She's been a fierce advocate.
Speaker 35
We are honored to be able to work with her on this very critical issue. Our organization is comprised of about 80,000 men and women who proudly build California's infrastructure, And the opportunities that s b ten twelve seek to create stand to benefit not just construction crafts like the laborers, but also they bring enormous benefits to the state and to our local communities as well. We all know that positioning yourself in the middle class in California is a daunting challenge in and of itself. But for those with a criminal history, even those with very old convictions, those challenges often become insurmountable systemic barriers. The laborers firmly believe that your past should never preclude you from picking up a shovel and earning your way into the middle class.
Hard time can and should be transformed into career time when individuals are willing to work for it. SB ten twelve creates a direct bridge creates a direct bridge from the justice system into long term career jobs, all while reducing recidivism and strengthening our state's infrastructure. Ultimately, this bill is not just about jobs, but rather the dignity of being a provider. SB ten twelve takes the skills that these individuals have already proven in the field and gives them a fair shot at a pension, health care, and a steady career. You for your support.
Or thank you, and we I urge your support.
Speaker 22
How you guys doing? My name is Jacob Marquez. I wanna speak on part of the bill that a lot of people say, you know, it's a good paying job. It's great. It's really not that good paying job firefighting.
Speaker 36
The hard hours he works, not worth the money at all. For federal minimum wage job, it's not that great, but for a lot of people, it's not even about that. It's more giving back to your community and firefighting's more of a transformation. The hard work, the dedication, the long nights of serving someone else, serving your community is more than the highest. It's more than a good paying job, you know, get you a house.
It's more about finding yourself and getting yourself ready for what's out there for you next your next steps in life. So, I mean, for me, it was a big part in getting myself ready for coming out and just becoming a part of community and being a servant to my community. It's a lot bigger than just the pay and benefits and all that. And we urge you guys this. We ask you guys help with this.
You know, this would be a big step moving forward with this.
Speaker 19
Well, I wanna thank you for everything you do, and thanks for being here. I really appreciate it. Thank you.
Speaker 19
Any other witnesses, for identification purposes? Support. Dan Seaman on behalf of Californians for Safety and Justice and the Anti Recidivism Coalition, both in strong support. Thank you. Thanks for being here.
Speaker 33
Michael Molina, on behalf of the California Forestry Association, in support.
Speaker 23
Diego Amaro, on behalf of, Latino Caucus of California Counties, in support.
Speaker 34
Doyle Radford with Construction and General Labors Local one eighty five in strong support.
Speaker 19
Victor Del Toro with La Luna. I'm in full support of this, SB ten twelve because it gives people a second chance. Thank you.
Speaker 10
Lionel Bergen with Labors Local one eighty five in strong support. Thank you. Thank you for being here.
Speaker 10
Nicholas Brooks with Local one eighty five Labors, and I support. Thank you for being here.
Speaker 37
Alejandro Martinez, I'm with the Labors and in full support of ten twelve.
Speaker 7
Joe Cruz, on behalf of the Southern California District Council of Labors, we're proud to be standing with the author of this bill. Changing people's lives through hard work. It's important. Thank you.
Speaker 19
Thank you. Now, do we have witnesses in opposition? Any witnesses opposition for identification purposes? Seeing none, committee?
Speaker 1
Yes. I thank you very much, and I wanna thank, my witnesses and especially, our fire camp participant. I think what he said was so poignant about, how it's not about the money you make. This is more more important than that is finding yourself and knowing who you are and that and finding that in the work. I think that's what we all strive for in our work, and I think this is what ten twelve is about, reminding California who we are.
And with that, I respectfully ask for your I vote.
Speaker 19
that bill is four zero. We'll remain on call. Thanks again for being here. I really appreciate it. Thank you.
Now for everyone in the audience, now we're going to go to the chairwoman's next bill. It's file item number nine, SB twelve eighty four.
Speaker 1
Thank you, Mr. Vice Chair and members. I want to thank the committee staff always for their diligent and excellent work on this bill, but every bill that they work on. As a point of clarification, I previously accepted a number of amendments in the Senate Health Committee, which increased the employer threshold from 50 to 100, designate the State Department of Health Care Services to prepare the report, and added privacy protections. I will also be accepting amendments in this committee to close corporate loopholes and to add an anti discrimination protection language so workers are not penalized for assessing public benefits.
So, at its core, SB twelve eighty four is about affordability and transparency for Californians. It is about making sure that, right now, the more than 3,000,000 working Californians who rely on Medi Cal because their wages are too low or employer coverage is too unaffordable have access. Nearly one in five California jobs held by held by a Medi Cal enrollee representing more than $20,000,000,000 in public spending tied to the workforce. That means taxpayers are subsidizing gaps in employer provided coverage, even as large corporations remain highly profitable. And we know our taxpayers are struggling with paying mortgages and rent and food and gas and all of the issues that are causing the affordability crisis that we are all working to address.
On top of that now is subsidizing health care gaps for profitable employers. Under existing law, large employers are already required to offer affordable coverage. When full time workers still rely on Medi Cal, it signals a gap between what is required on paper and what is affordable in reality. And without transparency, taxpayers cannot see their dollar where their dollars are going or why costs keep rising. SB twelve eighty four does not assign blame.
It provides transparency, quite simply, so policymakers and the public can understand what is driving costs. In my district, I hear from workers who are doing everything right and still falling behind. And they are barely able, as I mentioned, to cover basic necessities. Now, this will help explain what is it that they are paying for. This bill raises a fundamental question about fairness.
At a time of budget strain and rising cost, it is fair is it fair let me ask the question again is it fair for taxpayers to subsidize corporate labor costs? SB twelve eighty four responds with a simple solution: transparency and accountability. It requires the Department of Health Care Services to publish the names of large employers with workers enrolled in Medi Cal, along with the estimated cost to taxpayers. This is about giving Californians clear information and delivering long overdue accountability. Over 70% of voters in red and blue areas of our state support requiring large corporations to take responsibility for their workers' health care instead of shifting the cost to taxpayers.
That is bipartisan. That's Democrats, Independents, and Republicans. Voters across the aisle see this for what it is, a matter of fairness and also potential relief for the taxpayer. SB twelve eighty four is a measured step forward because, without transparency, nothing changes. With me today to testify is Irene Green, President of the District Labor Council seven ninety, representing SEIU one thousand and Devon Gray, President of the In Poverty in California Organization.
Speaker 38
Good morning, Chair members. Thank you so much. My name, as Senator Smallbaugh says, is Irene Green, and I am the proud President of SEIU Local one thousand, District Labor Council seven ninety. District Labor Council seven ninety, along with several DLCs across the state, lift up the voices of more than 96,000 state workers, including the frontline DHCS employees who keep California's Medi Cal program running and serve millions of Californians daily. As state employees, when individuals are seeking public support and services, we want to make sure these programs are there for them.
And as taxpayers, state employees are like everyone else. We want to make sure our dollars are going to support those in greatest need. This is why we deeply believe SB twelve eighty four is needed now. For too long, working people have relied on Medi Cal for care. Why?
Because of poverty wages, because private employers have not offered affordable comprehensive coverage, and because workers have been held to part time hours just out of reach of employer sponsored benefits. In 2025, the Trump administration and GOP led Congress was quick to create false narrative that our nation's Medi Cal program was caring for the lazy, the unworthy, the other. We know better. We know these are our neighbors, our friends, and our family. But, if the Trump administration and GOP led Congress are committed to linking work and Medicaid, we must now recognize that employers have long relied on public benefits to care for their workforce.
Speaker 26
Now, as our members at DHCS are saddled with the herculean task of implementing work requirements, we need to do a better job of understanding this interplay of work in Medi Cal. Which corporations are relying on Medi Cal to care for their workforce and which are not? We need to look at the data at the employer level and understand the trends. With this information reported to the legislature, this body will be more effective in thinking through different policy solutions to hold employers and corporations accountable to address underlying policies to make sure our tax dollars are getting spent where they are needed, and to the end of the day, sure we have the right Medi Cal program designed and supported in the best way possible for those that need it. With that, I respectfully request your I vote.
Speaker 29
And good morning, Madam Chair and members. My name is Devin Graham, the president of End Poverty California, or EPIC for short. We're an advocacy and storytelling organization that was founded by the former mayor of Stockton, California, Michael Tubbs. And we're proud cosponsors of SB twelve eighty four. Last year, as we all know, the federal government signed H.
One into law, cutting nearly $1,000,000,000,000 for Medicaid over the next decade and stripping coverage from tens of millions of Americans. The justification being, of course, that Medicaid is surely full of people who just don't want to work. I think those of us in this work know that that is a fiction. Nearly two thirds of non disabled, non elderly Medi Cal adults in California are already working. 83 of Medi Cal adults in California are in a working family.
Speaker 1
And Medi Cal is so commonly used among workers in the state that nearly one in five workers overall in California are enrolled in Medi Cal. Work requirements don't move people into jobs. They move to work, they move to move working people off of their benefits. The real story is that California has the highest poverty rate in the nation, and some of our largest employers have simply decided that that is someone else's problem. And so what happens is workers show up often full time and still can't afford the coverage that their employers won't provide.
Speaker 29
And because these employers pay their workers' poverty wages, it's taxpayers that are left to fill the gap through Medi Cal every single year. We just don't track it by employer. We don't report it to the legislature. We don't really name it at all. And so this bill changes that.
It asks which large employers have the most workers' independence who are on Medi Cal, and what does that cost the state and taxpayers each year. The federal government wants to audit people in poverty. I think we should be auditing the system and employers that keep people in poverty. EPIC has spent the last four years traveling to 26 counties across the state talking with Californians who are living in poverty today.
Speaker 29
What we hear every day is that people are working. They're doing everything right. They can't get by, let alone get ahead. That's not a personal failure. That's an accountability and systems issue.
So respectfully, I ask for your I vote. Thank you.
Speaker 19
Thanks again for being here. Now witnesses are support for identification purposes.
Speaker 12
Sarah Flux, California Federation of Labor Unions, proud to support and cosponsor. Thank you.
Speaker 12
Good morning. Beth Malnowski with SCO California, also cosponsors. Proud support.
Speaker 29
Katie Good morning, Chair and members. Connor Gusman, on behalf of Teamsters California in support.
Speaker 19
you for being here. Now, witnesses in opposition? Can we can we make room? Thank you. I appreciate you being here.
Speaker 30
I am Andrea Lynch on behalf of the California Chamber of Commerce in opposition to SB twelve eighty four. We appreciate that this bill is framed as a transparency measure, and a genuine transparency measure would take a holistic approach accounting for every factor tied to Medi Cal enrollment. The bill's stated purpose is to, and I quote, ensure that public programs function as a safety net rather than a subsidy for employers. This same premise is deeply concerning because it assumes that any employer, including small businesses with workers on Medi Cal, is offloading obligations on to tax payers. Further, this premise is demonstrably false.
Medi Cal enrollment is driven by various factors, including workers who voluntarily choose Medi Cal over offered coverage, part time or seasonal workers ineligible for benefits under existing law, new hires still in waiting periods, and workers in households with family members enrolled for independent reasons. A full time worker at California's minimum wage earns nearly $35,000 a year, above the Medi Cal threshold for a single adult, add a child or a part time schedule, and that same worker qualifies. That is not an employer's fault. That is how the program is designed to work. Placing an employer's name alongside a Medi Cal enrollment count without any of this context implies the employer is solely responsible for a problem built by market forces, state and federal policy, and individual worker decisions that no employer has the legal authority to override.
Lastly, if transparency is truly the goal, this committee should consider why not a single public entity, such as a state agency, does not appear in this report while private employers are named and publicly ranked. Nearly one in five California workers relies on Medi Cal across all sectors, including the public sector, where millions work part time or in lower wage classifications to qualify for Medi Cal by income threshold alone and by no fault of their employer. Anything less than equal accountability is an incomplete picture and an unequal standard. For these and other reasons, we oppose SB twelve eighty four. Thank you.
Speaker 34
Mr. Chair, Chris McKaylee on behalf of L. A. Chamber. We share my colleagues' stated concerns about the measure and just wanted to highlight three additional ones.
Speaker 35
First of all, we have privacy concerns about the sharing of data amongst state entities and the ability to ensure the confidentiality in that data sharing. The second item is we think that this bill will have a disproportionate impact on both small and medium sized businesses. I understand in the last committee and being done here, an increase in the threshold from 50 to 100, of course, under The U. S. SBA definition of small business nationally is at 500 employees.
Speaker 34
There are so many significant ones that are even in the low 100s. And the last item in the set of amendments, we are adding a new labor code provision, which, of course, could be subject to enforcement through the Private Attorneys General Act, and we would prefer not to see additional potential for private enforcement of this legislation. Thank you.
Speaker 9
Matti Hyatt representing the Capital Business Alliance. We appreciate the author's amendments raising the threshold from 50 to 100 employees, but, we're going to remain opposed as the bill still publicly identifies employers and may invite conclusions that Medi Cal enrollment is caused solely by employer practices when many other factors can be involved, including dependence, household income, disability, temporary hardship, and workforce seasonality. Thank you.
Speaker 4
Brian Little, California Fire Bureau, in respectful opposition for the reasons articulated by the opposition witnesses.
Speaker 19
Thank you. Brian Thank you. Okay. Now, it goes back to committee. Okay.
The bill has been moved. Madam Chair, would you like to close?
Speaker 1
I thank you very much, Mr. Chair, and appreciate all of the testimony today. I think this is a common sense baseline bill that simply says, let's make sure we have a fair system of transparency to under so that the taxpayers understand, you know, where their tax dollars are going and, who is benefiting from those tax dollars. Simple disclosure bill, and I respectfully ask for your I vote.
Speaker 16
The motion is due pass as amended to the Senate Committee on Appropriations. Senator Smolutkuevas?
Speaker 16
Smolutkuevas, aye. Senator Strickland? No. Strickland, no. Senator Cortezi?
Speaker 16
We need a motion for it, and then we're gonna vote on it. And then we're gonna list call the other ones.
Speaker 19
I would like to I'd like to move, file item number one, s p nine twenty one by Grove.
Speaker 1
So we have a motion from senator Strickland on file line number one. Let's call the roll.
Speaker 16
The motion is due passed to the senate committee on appropriations. Senator Smolodkovas? No. No. Smallt Smallt Cuevas?
No. Senator Strickland? Aye. Strickland, aye. Senator Cortez?
No. Cortez, no. Senator Loudazo? Senator Laird? No.
Laird, no.
Speaker 1
Okay. We have a vote of one to three, and that bill is on call. We'll move on to file item number two, SB nine fifty four. Please call the roll. K.
Alright. So looks like we most of us are up on that bill. So we'll go to file item number three, s b ten eighty three.
Speaker 16
The motion is due passed to the senate committee on appropriations with the chair and vice chair voting aye, senator Cortezi. Cortezi aye, Durazo.
Speaker 1
K. Vote of four to zero. That bill is on call. So we'll go to file item number five, and that is s b twelve ninety nine.
Speaker 16
The motion is due passed to the senate committee on appropriations. Senator Cortezi. Then also Senator Durazo.
Speaker 1
of four to zero. That, bill is on call. Okay. Senate committee on labor, public employment, and retirement will recess for about ten minutes, and then we will back for final votes. Senate, Committee on Labor Public Employment Retirement convenes.
We are ready to go to our last file item of the day, and that is file item number seven, SB1319. It will be co presented by Senator D'Rosso and Senator Cortese. And you may begin when you're ready.
Speaker 7
Okay, thank you, Madam Chair and members. We are here to present SB1319, as you just indicated. It's referred to as the Private Equity Sunshine Act and it's joint authored, as you noted. So I'm here with Senator D'Arrazzo and I will make part of the presentation. I'm going to turn it over to her for some closing not closing, but some opening comments, and she will be introducing the witnesses.
California's 80 public interest funds manage over $1,400,000,000,000 in retirement assets on behalf of public workers. Those workers deserve to know how their deferred compensation is being used. For publicly traded investments, they do. But as alternative investments have grown, CalPERS alone now holds $212,000,000,000 or 35% of its portfolio in alternatives. A significant and growing share of worker retirement savings operates in a disclosure gap.
That's what this bill is trying to address. SB thirteen nineteen closes that gap with targeted practical transparency requirements. And I really want to emphasize it's a transparency bill. We'll certainly talk about concerns that would go beyond transparency, but it's a transparency bill. The bill does not restructure pension governance.
It does not override fiduciary authority. It does three things, basically. It requires a direct comparison of after fee private equity returns against public market benchmarks. And it establishes that that comparison has to be set up in advance of the investment. It requires disclosure of the companies controlled through these investments, and it requires disclosure of where those companies operate and the number and types of workers employed there.
So those three things are really what we're looking here looking for here in terms of what shows up in the transparency. Existing confidentiality protections for proprietary and trade secret information remain fully intact. The committee analysis raises three substantive objections, and each deserves a direct response. And I want to say that the committee analysis is thoughtful. There are real tensions to work through.
I think people would be surprised if it was otherwise on a bill like this. And we're open to amendments that address administrative burden concerns, particularly for smaller systems. But I do want to say that if for no other reason, clarification of what the intent of the bill is, And again, if we need to do something to further align, we're open to that. But on investment access, the analysis seems to suggest, at least as I read it, that managers will simply exclude California funds rather than comply. And this concern deserves consideration, of course.
And it's been brought up well before we got here to this committee. But CalPERS and CalSTRS, for example, are among the largest institutional investors on earth. And so the notion that top performing managers will walk away from that capital, rather than provide pretty standardized reporting and the limited transparency that we're asking for, we think overstates their leverage and understates ours. And when I say ours, I mean the public pension system. But again, we're interested in hearing more about that.
Fiduciary duty, the Constitution grants pension boards plenary investment authority, and this bill does not touch that. Disclosure requirements do not dictate investment decisions. And again, we want to land and keep landing this bill strictly on transparency and disclosure. None of that cuts into the discretion of a pension board by any legal definition or otherwise. They'll simply make their decisions with better information, as will the public they serve.
I suppose one could actually argue this transparency will make it easier for them to exercise their fiduciary duty because they'll have the additional information before them. And were they ever to be challenged on fiduciary duty, they'd be able to point to the rigors that they went through, including looking at the transparent information that this bill would provide. On the labor goals being impermissible, the committee analysis characterizes workforce transparency as an attempt or a potential attempt to conscript pension funds into labor policy. I'm not sure I totally understand that yet. Open to more information.
Speaker 11
But I would frame it differently. Workers contributing to a pension have a legitimate interest in knowing whether their retirement savings are financing companies that violate labor law. And some of the crashes that we've seen where there's been private equity investment around leverage and I would hold out a non California example, the Caesars bankruptcy actually impacted not just workers in the entity itself, but an ecosystem of employment in an area well around it geographically, economically, and otherwise. So, I know, in my own experience, as a city council member some years ago, serving for eight straight years on San Jose's Police and Fire Retirement Board they are not a CalPERS entity that labor seats were always provided, as well as a retiree seat on that board. And it was integral to the decisions that were made, I think, the due diligence that was required, and to some of the hands on transparency that was requested at the time.
Speaker 7
So we think we're squarely where we need to be in terms of the relationship to labor here and to our public pension funds relationship to labor. More transparency can do nothing except help everyone see what's going on, see who the employers are hiring and what they're doing. And where there are bad actors, sure, we want to see that in a transparent way as well. The bill is modest, I think, despite all my talking here in the presentation. It requires standardized comparable transparency on how worker retirement savings are performing and where they're deployed.
Public employees and retirees deserve no less, and I think, of course, we all agree on that. I'd like to turn it over to Senator D'Arrazzo, as I said, joint author on the bill, key to this bill moving forward, and she'll take it a little bit further and introduce our witnesses. Thank you.
Speaker 24
Thank you. I am so proud to present this bill alongside senator Cortezi and our sponsors. First time I've ever done this, so it's the it's the best bill to do that. Transparency is not a burden. It is a baseline.
California's workers have earned nothing less. California's public pension funds hold the retirement security of millions of workers who spent their careers in service to our great state. These workers earned their pensions. They deserve to know that their money is being managed wisely, transparently and in their best interest. An increasing share of this money is now flowing into private equity.
Unlike publicly traded securities, these investments operate in the dark, with limited standardized reporting, inconsistent disclosure and no required comparison showing whether they outperform the public markets. This bill changes that. This bill brings basic accountability to a corner of our financial system that has long avoided it. It requires pension funds to show in plain terms how private equity investments stack up against public market benchmarks. This is also about power.
Private equity firms make decisions about jobs, staffing, business operations, and workers are often the last to know what is who is really calling the shots, and this must be changed. So today, I'm proud to have with us here, if they would come forward, Justin Garcia, senior environmental scientist, vice president of UAW eleven fifteen, and a participant in CalPERS. Rocio Diaz, Unite Here, local eleven member at Sky Chefs at the Phoenix International Airport. Jordan available from Unite Here is available for questions. Courtney Alexander with United Food and Commercial Workers is also available for questions.
Speaker 1
Okay, so the technical witnesses? Technical answer questions? Hola. Okay. Is there an interpreter here?
Speaker 1
Okay. Perfect. Yeah. And is one more question. I don't know.
Is there someone that needs an ADA translation translator?
Speaker 1
Okay, perfect. Just wanted to make sure. Please proceed. You have two minutes.
Speaker 33
Hello. My name is Rocio Diaz. I'm here today from Phoenix, Arizona, where I work for Sky Chefs preparing meals for airlines at Phoenix Sky Harbor Airport. I'm a proud member of Unite Here Local eleven. Late last year, I learned that Sky Chefs had lost a contract to GAT Sky Cafe, a company owned by private equity firm Sterling Group.
My employer told me I was being laid off, but only temporarily. I was laid off on November 4. It was a terrible time because I was stuck in the house, I had no money, and I was very anxious. During the holidays, I waited and waited. I heard from my friends at work that many were being called back, including people with less seniority.
Meanwhile, I spent all my savings. I borrowed money from my sister. I tried to help my daughter because she's in school, but it was very hard. I consider myself lucky though because I have a union. When I went in on my own, Sky Chefs lied saying they had called me for a job when they hadn't and GAT Sky Cafe wouldn't hire me either.
Finally, on March 13, after fighting, I went back to my job at Sky Chefs. I won back pay, enough to pay back my sister. Many of my coworkers weren't so lucky and still haven't been called back to work by Sky Chefs or GATT Sky Cafe. And all the workers at GAT Sky Cafe, which is owned by private equity, don't have a union like the workers at Sky Chefs. It shouldn't have to be this hard.
I support SB thirteen nineteen because we need to know more about private equity firms like Sterling Group and the workers they employ. Thank you for listening.
Speaker 40
All right. Thank you. Thank you, chair and committee. My name is Justin Garcia. I work for the Department of Fish and Wildlife as a senior environmental scientist and participant in CalPERS.
I serve as vice president of CAPS UAW Local eleven fifteen, the Union of California State Scientists, and I'm here on behalf of my local and UAW Region six, which represents over 20 about 20,000 workers in CalPERS and UC pension funds to express our strong support for SB thirteen nineteen. As someone who spends a lot of time analyzing and collecting data, I think it is important to have strong disclosure from private equity firms about our retirement investments. It is also important that we be able to compare the returns from private investment after fees to what our returns would have been in public indices to evaluate whether we are getting what we pay from private managers. I think it's fair to hold private investment to the same standard of common disclosures as a publicly traded company, like where they have operations and employees, because that is one source of potential risk on our returns. It is important to know about potential issues with risky loans and private credit funds.
No one thought that home mortgages would have high defaults until it was too late in 2008. California led the way on transparency in 2016 when we passed AB 2,833 fee disclosure for private equity firms. Although some predicted that private equity firms would seek investment outside of California to avoid these disclosure requirements, what actually happened was CalPERS alternative investment portfolio increased from $59,000,000,000 in 2016 before AB 2,833 to $215,000,000,000 as of February. So at 20% of the total portfolio up to now 35% of the total portfolio. So private equity managers can't be the only ones who evaluate potential risks, given their interest in protecting their own fees.
Disclosure is a way to keep everyone doing their best for us, So I and UAW supports s b thirteen nineteen. Thank you.
Speaker 1
Thank you. Do we have any support? Me too, folks out there, please step to the mic and state your name, affiliation, and position.
Speaker 12
Madam Chair, members of Sarah Flox, California Federation of Labor Unions, in support.
Speaker 37
-Hello. My name is Omar Gallo, and I work at Mother's Market in Costa Mesa, which is owned by a private equity company, Mill Road Capital. We experience low pay, chronic understaffing, and erratic scheduling, and I believe public workers whose pensions are invested in private equity companies have a right to know where their money is invested. I'm in proud support of this bill. Thank you.
Speaker 31
My name is Justin Reichard. I also work at the Mothers Market in Costa Mesa, and I'm a proud supporter of this bill.
Speaker 1
Okay. Opposition witnesses, please come to the table. Thank you. Support witnesses. You each have two minutes.
Speaker 41
Madam Chair, members of the committee, my name is Eric Stern. I am the CEO of the Sacramento County Employees Retirement System down the street. I'm here on behalf of our statewide Association of County Retirement Systems, known as SACERS. We represent 20 independent county retirement systems across the state from L. A.
County up to Mendocino. Collectively, those county retirement systems invest more than $300,000,000,000 in pension assets on behalf of 800,000 public employees and retirees. While we support transparency, this bill goes too far. It requires disclosure of information that is often contractually protected and proprietary, putting retirement systems at risk of losing access to top performing investment funds. The scope of the bill is very sweeping.
Most of the investable universe is not in the stock market. It's in private assets and alternative assets. This bill reaches deeply into private markets in ways that could discourage investment in venture capital and startup companies, sectors that are critical to innovation and economic growth in California. Most importantly, it interferes with our Board's constitutional fiduciary duty by introducing factors that may limit investment options and increase costs. Over the last forty years, the voters of California, through various ballot initiatives, Prop one in 1984, Prop 162 in 1992, have continued to affirm our retirement board's authority and discretion to invest in the types of assets that are important to provide pension benefits to our members and retirees.
Speaker 36
A couple of things that are just unique about county retirement systems is we are varied in size, member demographics, investment portfolios, but the one thing we do have in common is that we only use external investment managers for our investments in large, diversified pooled strategies. That makes us limited partners with no ability to control or influence underlying company practices. This dynamic reinforces our Board's fiduciary focus on returns, risk, and diversification, not on corporate management. You know, just hearing from the bill supporters that, you know, for the sake of argument, if it seems like what the issue is, is there might be specific individual labor issues down at a company level or a site level. And this bill would significantly Or
Speaker 41
close Yeah, this bill would significantly impact, you know, more than $1,000,000,000,000 in pension assets across the state. And I think this just isn't the solution to dealing with those maybe site
Speaker 37
Eric Good morning, Chair and members. I'm Eric Lauzner speaking on behalf of the California State Association of Counties. Today, we are in respectful opposition. However, we look forward to continuing conversations with the author's office, sponsors, and stakeholders to discuss the shape of the bill. We appreciate the thorough analysis by committee staff, which addresses most of our, main concerns with this bill.
Speaker 42
We believe in transparency and accountable administration and governance of our, California pension systems. We believe current law accomplishes that balance. However, we have significant significant concern this bill could restrict investment opportunities for public pension systems and expose them to legal liability. Counties currently employ, well over 400,000 Californians and employed many more who are currently enjoying their well earned retirement. Under this law, pension systems in California will be faced with the impossible choice, breach contracts at the risk of litigation, disinvest from existing agreements and violate their fiduciary duty, or violate a state law.
California systems would be the only systems nationwide facing these restrictions, forcing them away from being an investor of choice and instead navigate a severely limited market. Lost investment revenue will directly impact the pocketbooks of public employees in California and raise costs for public agencies, counties, cities, schools, state agencies, and special districts. Further, with divestment, there is a lost opportunity for pension systems to engage through corporate governance. Instead, a new investor will fill the vacuum who may not have the values of California. It is not clear that bills like this will advance the goals of the sponsors.
What is clear is that it could cause direct harm to our public workforce and public agencies. For these reasons, we are opposed to SB thirteen nineteen. Thank you.
Speaker 1
Thank you. Okay. Let's move to opposition me too. Folks who want to speak in opposition of this bill, please step to the mic. Seeing none, we'll move to members.
Okay. Well, I wanna thank you both, for for bringing this, this bill forward. I think it's, unfortunate that we have always this tension between fiduciary responsibility and making sure folks have a sustained retirement for for all of our public sector workers, while at the same time making sure that we can grow pensions by making sure we have unionized high road standard and folks who are doing the right thing by unionized workers. I think it's this this bill is about transparency and making sure that our public pension fund disclosures align with those values, and that we have some way of understanding equitable and fair treatment of our workers and companies that are doing business, with our, our pension fund. So I I do have a question for the authors, and and and that question is and I think it was mentioned by the opposition.
If the bill passes, will it affect existing contracts or only new contracts going forward?
Speaker 7
Our understanding of the way the bill was put in print is this is on a going forward basis, not retroactive. But let me if you don't mind, Madam Chair, can I call on Courtney Alexander, who is our technical witness to this?
Speaker 39
Right there. Hi. Courtney Alexander with United Food and Commercial Workers Union. It's our understanding it would be going forward as well, you know, if we need to do something to address that.
Speaker 7
That needs to be clarified in print. You know, we're happy to work with the opposition on that. But I do I did pick up on the opposition's comments as well, talking about how this is going to disrupt existing relationships and agreements retroactively. I don't believe that's the intent reflected in the bill, but we'll talk to them and we'll make sure to go back to work with the sponsors and figure out where that line needs to be exactly. Any time you do something like this, obviously, there has to be a clear, bright line as to where the pipeline starts and where it stops, right?
Speaker 1
No. I appreciate that. And and we know moving forward, you know, part of our policy making is to make things better, in the future and and appreciate that conversation and you working with opposition on that. I'm prepared to support the bill today. I just need a motion.
Speaker 1
Thank you, sir. Thank you there. I have a motion from Senator Laird. Please close.
Speaker 7
Senator Laird: Thank you again. Thank you to the committee. Again, I do want to emphasize, irrespective of the clarifications I tried to make in my opening regarding some of the analysis, where the analysis is thoughtful. We appreciate the work. I know the expertise of this committee staff.
I've worked very closely with the committee in the past, going back my entire five plus years here. So thank you for the work on it. Thank you, Madam Chair, for your recommendation on the bill. Before I stop, I do want to say that both my public sector and private sector experience I had the good fortune before I ever joined the San Jose City Council on a full time basis. I referred to that in terms of my experience there on the Police and Fire Retirement Board when I was talking about the labor representation and the integration of labor into these pension processes, which goes back decades and decades and decades, if not to inception.
But I have never I do not recall ever in the eight years I served on that board, with all the due diligence that we did, including using basic techniques like flying out to Midwest states to look at private investments, to look at actual assets, to visit with employees, to see what was going on, because that's how we had to do it. We didn't have these kind of tools. We had to actively go out and do that kind of work as board members. We felt to do our due diligence on behalf of workers who were investing in the pension fund, who were vulnerable. And I don't remember anyone ever pulling out.
I don't remember anyone ever saying, We don't need your money. Nothing but cooperation. And as a private sector investor, I had the opportunity to build a multifamily in the San Jose area that was funded by pension funds, who had to go through a layer of complete disclosure that was required by FHA HUD in order to gain the credit insurance needed on the transaction. The investors that I represented made no qualms about that whatsoever. These are just ordinary how many people, how many people are be working on the site, what are your techniques going to be, what are your expenditures generally going to look like, actually far more information than we're requiring in this bill.
So my own experience, and one of the reasons I was extremely happy to work with Senator D'Arrozzo on this bill over many, many years I just covered a span of thirty years as quickly as I tried to do that has led me to believe that this is not only needed, but it will be well accepted by the industry. And until we see something more compelling about that, we'll keep moving forward. If we see something compelling that leads us to believe there'll be any kind of chilling effect on investment, then we'll try to make adjustments amendments to the bill. And with that, Senator D'Arroza?
Speaker 2
end by adding, you know, in all my decades of serving on either private sector or going to visit with members of pension boards, public sector pension boards, there is this in a bias that somehow giving more information is going to hurt the people that are represented by that that pension fund. There's a there's a bias that we don't know enough, so leave it up to certain people to make those decisions for us. And it's wrong. It's wrong. There's so much more that can be added to the discussion about what is favorable, how will this help make sure that the funds are there and expand the funds, make sure that we get our return on our investment.
Speaker 24
All of that could be the bright light on that could actually work in support of the members who get their rely on their pensions for it. So, you know, I've dealt with this my whole life. There's no reason why we should continue with that kind of attitude towards the people who are in the pension plan. So I respectfully ask your I vote.
Speaker 1
Thank you. Thank you, senators. And we have a motion by senator Laird. Assistant, please call the roll.
Speaker 16
Cortese, aye. Senator Durezo? Aye. Drazo, aye. My apologies.
The motion is due passed to the Senate Committee on Appropriations. Senator Laird? Aye. Laird, aye. Four zero, it is.
Speaker 1
With a vote of four to zero, that bill is out. Thank you, everyone. That can We have to meet you. Oh, no. We have to call.
No. We cannot.
Speaker 1
has to on her bill. On her bill call vote on her bills. Okay. Here we go. We're Okay.
We are gonna start then with file item number one.
Speaker 16
File item one, s B921. Motion is due passed to the senate committee on appropriations. Current vote is one to three. Chair voting no. Vice chair voting aye.
Senator Drazo? No. Drazo, no.
Speaker 1
One to four, that bill fails. Moving on to file item number two, s b nine five four.
Speaker 16
The motion is due passed to the senate committee on appropriations. Current vote is three to one with chair voting aye and vice chair voting no. Senator Drazo?
Speaker 1
The vote of four to one. That bill is out. Moving on to file item number three, SB ten eighty three.
Speaker 16
the Senate Committee on Appropriations. Current vote is four to zero with the chair voting aye and the vice chair voting aye. Senator Dulrazo? Aye. Dulrazo, aye.
Speaker 1
Five to zero. That bill is out. Moving on to file item number four, s b ten eighty nine.
Speaker 16
The motion is due pass as amended to the senate committee on appropriations. Current vote is four to zero with chair and vice chair voting aye. Senator Durazo? Aye. Durazo, aye.
Speaker 1
have a vote of five to zero. That bill is out. Moving on to file item number five, s b twelve ninety nine.
Speaker 16
The motion is due passed to the senate committee on appropriations. The current chair current vote is four to zero with the chair voting aye and vice chair voting aye. Senator de Raso?
Speaker 1
Five to zero. That bill is out. We're gonna move to the consent calendar now. Please call the roll.
Speaker 1
Okay. Vote of five to zero. Consent calendar is adopted. And then we are gonna move to, file item number eight, s b ten twelve.
Speaker 16
The motion is due passed to the senate committee on appropriations. Current vote is four to zero with chair and vice chair voting aye. Senator Dulazo? Aye. Dulazo, aye.
Five to zero is out.
Speaker 1
Okay. We have a vote of five to zero. That bill is out. And file item number nine, s b twelve eighty four.
Speaker 19
Motion is due pass as amended to the senate committee on appropriations. Current vote is three to one with the chair voting aye and the vice chair voting no. Senator Drazo? Aye. Drazo, aye.
Speaker 1
Okay. We have a vote of four to one. That bill is out. That concludes our hearing today for labor, public employment, and retirement. This session is adjourned.
Ask anything about this video — I analyse its transcript to answer.